Preparations for Implementing Iran Agreement Begin

International Trade & Customs Update

Date: October 20, 2015

October 18, 2015 marked “Adoption Day” under the Iran Agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA). As summarized previously, the JCPOA was signed on July 14, 2015 by the United States, Russia, China, France, the United Kingdom and Germany (the P5+1 countries) and Iran. Under the JCPOA, Adoption Day is 90 days after the agreement is endorsed by the United Nations Security Council, which occurred on July 20, 2015. Beginning on Adoption Day, the parties to the JCPOA begin making the necessary arrangements and preparations, including legal and administrative undertakings, for the full implementation of their JCPOA commitments.

For its part, Iran must now undertake major changes to its core nuclear infrastructure. It must begin the process of removing thousands of centrifuges and associated infrastructure at its Natanz and Fordow facilities, reduce its enriched uranium stockpile and remove the core of the Arak heavy-water reactor, among other steps. Equally important, Iran will begin working with the International Atomic Energy Agency (IAEA) to put in place increased transparency measures for monitoring at its facilities and uranium mills to protect against any conversion and enrichment for any covert nuclear weapons program. Ultimately, under the JCPOA, the IAEA will have to verify that all of these steps have been taken by Iran before sanctions relief is offered.

The United States and the European Union (EU) members (Russia and China do not have sanctions against Iran) also now must begin preparations to implement their commitments under the JCPOA. President Obama has just issued a memorandum to the Departments of State, Treasury, Commerce and Energy, instructing these agencies to undertake the necessary arrangements and preparations for ultimately waiving and/or rescinding certain economic sanctions against Iran, once the IAEA has verified Iran’s commitment to the above-referenced nuclear and uranium reduction steps. The President has stated that the United States will be closely monitoring Iran’s adherence to its commitments, and working closely with the IAEA and the other JCPOA participants, to ensure Iran fulfills its commitments.

It is important to note that Adoption Day does not trigger the lifting of any sanctions; rather, it formally sets in motion the necessary steps the parties to the JCPOA must undertake to fulfill their commitments under the agreement. The sanctions relief under the agreement will be provided upon Implementation Day, an unspecified date under the JCPOA that will be reached only when the IAEA verifies that Iran has taken all necessary steps under its commitments to the JCPOA, and Iran agrees to adhere to an enhanced inspection regime. At that time, both the United States and the EU are obligated to suspend or terminate their nuclear-related sanctions.

The only easing of sanctions currently in effect remains that provided for under the Joint Plan of Action of November 24, 2013, as previously summarized. Until Implementation Day, all other U.S. sanctions remain in place. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has clarified that certain anticipatory activities involving Iran, such as entering into conditional contracts with Iranian entities that are contingent on the implementation of sanctions relief under the JCPOA, could expose the parties to sanctions.


For more information on these developments, please contact any of the individuals listed below:

James A. Losey

Brent Connor

Samir D. Varma

Scott E. Diamond

or any member of our International Trade & Customs group.

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