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On September 19, 2020, the United States announced that virtually all United Nations (UN) sanctions on Iran were being re-imposed. President Donald Trump and Secretary of State Mike Pompeo have taken the position that the United States can trigger the &ldquo;snapback&rdquo; provisions of UN sanctions under UN Security Council resolution 2231 pursuant to the Joint Comprehensive Plan of Action (JCPOA) that was implemented by Iran and the P5+1 countries (China, France, Germany, Russia, the United Kingdom and the United States) on July 14, 2015. The United States, however, withdrew from the JCPOA on May 8, 2018. Nevertheless, on August 20, 2020, the United States notified the President of the UN Security Council of Iran&rsquo;s &ldquo;significant non-performance of its JCPOA commitments,&rdquo; thus claiming to have triggered the 30-day process leading to the snapback of previously terminated UN sanctions. On September 19, 2020, the United States unilaterally announced the snapback of the UN sanctions and Secretary Pompeo released a press statement stating that:
The United States took this decisive action because, in addition to Iran&rsquo;s failure to perform its JCPOA commitments, the Security Council failed to extend the UN arms embargo on Iran, which had been in place for 13 years. The Security Council&rsquo;s inaction would have paved the way for Iran to buy all manner of conventional weapons on October 18. Fortunately for the world, the United States took responsible action to stop this from happening. In accordance with our rights under UNSCR 2231, we initiated the snapback process to restore virtually all previously terminated UN sanctions, including the arms embargo. The world will be safer as a result. The United States expects all UN Member States to fully comply with their obligations to implement these measures.
The remaining parties to the JCPOA have taken the position that the United States cannot trigger the snapback provision of UN sanctions under the JCPOA given that it withdrew from &ndash; and is no longer a party to &ndash; the agreement.
In addition, on September 21, 2020, the State Department announced a series of new sanctions against Iran. The sanctions include:
<ul>
<li>Issuance of a new <a href="https://home.treasury.gov/system/files/126/20200921_eo_iran-con-arms.pdf" target="_blank" rel="noopener noreferrer">Executive Order</a> targeting Iran-related conventional arms transfers, claiming that the UN arms embargo on Iran &ldquo;is re-imposed indefinitely&rdquo; and that the United States &ldquo;will ensure that it remains in place until Iran changes its behavior.&rdquo;</li>
<li>Designation on the Department of the Treasury&rsquo;s Office of Foreign Assets Control (OFAC) SDN List of Iran&rsquo;s Ministry of Defense and Armed Forces Logistics (MODAFL), Iran&rsquo;s Defense Industries Organization (DIO) and its Director, Mehrdad Akhlaghi-Ketabchi, pursuant to the new Iran Conventional Arms Executive Order noted above.</li>
<li>Designation on the SDN List of Nicolas Maduro, the leader/ruler of Venezuela, for conventional arms-related activities and assisting Iran in circumventing the UN arms embargo pursuant to the new Iran Conventional Arms Executive Order noted above.</li>
<li>Designation on the SDN List of six individuals and three entities associated with the Atomic Energy Organization of Iran (AEOI) pursuant to earlier implemented Executive Order 13382 pertaining to WMD proliferators. These entities and persons are involved in Iran&rsquo;s nuclear research and development.</li>
<li>Addition of five individuals affiliated with the AEOI to the Department of Commerce&rsquo;s Entity List, and imposing export control restrictions on these individuals. Each individual is associated with Iran&rsquo;s JHL Laboratory, and AEOI, and have been involved in Iran&rsquo;s nuclear weapons development program.</li>
<li>Designation on the SDN List of three individuals and four entities associated with Iran&rsquo;s liquid propellant ballistic missile organization, the Shahid Hemmat Industrial Group (SHIG) pursuant to Executive Order 13382. These entities are responsible for the integration, final assembly, testing of liquid propellant ballistic missiles and space launch vehicles.</li>
</ul>
The Department of State has issued a detailed <a href="https://www.state.gov/sweeping-u-s-measures-to-support-return-of-un-sanctions-relating-to-irans-nuclear-missile-and-conventional-arms-programs/" target="_blank" rel="noopener noreferrer">Fact Sheet</a> on these actions.
The Department of the Treasury&rsquo;s Office of Foreign Assets Control (OFAC), as noted above, added certain persons and entities to its Specially Designated Nationals (SDN) List, available <a href="https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20200921" target="_blank" rel="noopener noreferrer">here</a>. As a result, all property and interests in property of the identified persons and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC&rsquo;s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons. In addition, persons that engage in certain transactions with the Iranian individuals and entities designated may themselves be exposed to sanctions or subject to an enforcement action. Furthermore, OFAC has made clear that unless an exception applies, any foreign financial institution that knowingly facilitates a significant transaction for any of the individuals or entities designated today could be subject to U.S. sanctions.
The Department of Commerce&rsquo;s Bureau of Industry and Security (BIS), as noted above, added certain individuals to its Entity List, available <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-18515.pdf" target="_blank" rel="noopener noreferrer">here</a>. As a result, BIS has now imposed a license requirement for all items subject to the Export Administration Regulations (EAR), with a license review policy of presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to the entities being added to the Entity List.
Secretary Michael R. Pompeo, Treasury Secretary Steven Mnuchin, Defense Secretary Mark Esper, Commerce Secretary Wilbur Ross, U.S. Representative to the United Nations Kelly Craft, and National Security Advisor Robert O&rsquo;Brien held a brief press conference to discuss these actions toward Iran. A transcript is available <a href="https://www.state.gov/secretary-michael-r-pompeo-and-treasury-secretary-steven-mnuchin-defense-secretary-mark-esper-commerce-secretary-wilbur-ross-u-s-representative-to-the-united-nations-kelly-craft-and-national-sec/" target="_blank" rel="noopener noreferrer">here</a>.
The Thompson Hine SmarTrade Blog will continue to closely monitor today&rsquo;s actions and report on any official responses issued by Iran and the parties remaining in the JCPOA.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

U.S. Government Issues Significant New Sanctions on Iran, Unilaterally Triggering “Snapback” UN Sanctions on Iran