Worldwide: Iran Series Part 2: Iran Re-Joins The World Economy – What Sanctions Are Lifted? (May 2016)

Last Updated: 31 May 2016
Article by Mahgol Sharili

In the Iran Series Part 1, Mahgol Sharili, a Farsi speaking solicitor and the head of the  Iran Desk explored the recent history of sanctions in Iran and the country's diverse market. In this part, she explores what sanctions have been lifted and what it all means for international trade and business.

Timeline of Sanctions Relief

Following 'Adoption Day' on 18 October 2015, when the International Atomic Energy Agency (IAEA) started monitoring Iranian nuclear activity, on 'Implementation Day' 16 January 2016, the IAEA announced that Iran had fully complied with its obligations under the agreement to lift sanctions. The majority of the sanctions targeting Iranian persons and companies were then lifted.

'Transition Day' should take place by 2024; this will signal the dropping of remaining sanctions against Iran and will be triggered when the IAEA confirms that Iranian nuclear activity is fully compliant.

EU sanctions lifted

On Implementation Day, the EU started to lift the majority of its sanctions affecting Iran. The sanctions are being removed in stages, the first stage (which commenced on Implementation Day) focuses on liberating the most affected beneficiaries from sanctions in the financial, banking and insurance industries; oil, gas and petrochemicals; shipping and transport; metals and software sectors.

Finance and Banks

Almost all EU asset freeze measures on Iranian banks and financial institutions, listed persons and entities involved with the oil and gas, petrochemicals, transportation and shipping have been lifted. In connection with these sectors, it is now possible for Iranian persons and entities to transfer funds to the EU without obtaining prior consent.

The lifting of sanctions in the financial sector will enable Iran to access billions of dollars of its assets that were frozen around the world. It will also be permitted to use the international SWIFT banking transaction network to re-engage with the banking world and to open branches, enter in to joint ventures or setting up subsidiaries in the EU member states.

Foreign banks, including the UK's HSBC, that have previously avoided the country's financial system due to sanctions, will be able to provide financial support for trade with Iran including export credits, guarantees, insurance and loans to the government of Iran. The use of the SWIFT network and expanding involvement in the country's financial system will facilitate general trading and investment in Iran's oil and non-oil sectors.

Iran's financial sector is dominated by the state-owned banks, including Bank Melli and Bank Sepah. The UN Security Council has announced the removal of its sanctions on Bank Sepah; Bank Sepah and its UK subsidiary have now also been released from their EU sanctions. This means that the parent company and subsidiary will be able to resume normal banking activities in the near future.

The Central Bank of Iran recently announced that the Industrial and Commercial Bank of China (ICBC), the world's largest bank by total assets, has applied to open a number of branches in Iran. Austria and Italy have also made similar requests. The presence of foreign banks in Iran demonstrates the significant international interest in inward investment in Iran and is anticipated to grow the infrastructure of the banking system further.

Oil & gas sector

The sanctions on the import, purchase and transport of Iranian crude oil, petroleum and gas have been lifted. It is now possible to freely sell, supply and export technological equipment to the oil and gas industries. Iran began by exporting 700,000 barrels of oil per day to the European market when sanctions were first lifted. That figure has now reached 1.7 million barrels of oil per day and Iran is hoping to increase its oil export by another 1 million barrels per day.

Import and export restrictions on dealing in metals such as aluminium and steel for use in Iran have also been relaxed and this should help grow the country's manufacturing industries which, have suffered in the last few years due to the inability to import raw materials.

Some Iranian companies and individuals involved with the oil and gas, petrochemicals, transportation and shipping sectors had been subject to asset freezes and visa bans as a part of the EU sanctions regime. Almost all of these freezes and bans were removed on 'Implementation Day'. The last few freezes and bans will be removed on 'Transition Day', by 2024.

US sanctions lifted

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) administers a complex and comprehensive sanctions regime against Iran. On Implementation Day, the OFAC issued guidance about the roll back of US sanctions against Iran.

So-called "secondary sanctions", directed towards any non U.S. persons and companies who were involved in Iranian economy (financial, banking, insurance, energy, petrochemical, shipping and automotive sectors) were lifted on Implementation Day (although some new sanctions were imposed). Furthermore, some individuals and companies who had been specifically barred from doing business with Iran by the US were permitted to commence trade.

Automotive sector

Non U.S. persons and companies are now permitted to trade with and supply Iran's automotive industry without fear of secondary sanctions. However, the sanctions still prevent US made cars and car parts from being imported into Iran.

Metals and raw materials

Non-U.S. persons and companies are now allowed to trade with Iran (both import and export) in metals, raw materials and software.

Iran's trade in gold and other precious metals, raw or semi-finished metals such as aluminium and steel, and coal have been lifted.

Remaining sanctions

US citizens and companies are still not allowed to trade with Iran in any way, with very few exceptions.

Iranian banks still cannot use US dollars as a currency for trading. This causes logistical problems as many international transactions use US dollars. Even transactions passing through the SWIFT network cannot use US dollars if one of the parties is Iranian. This has a seriously inhibiting effect on the Iranian economy, which relies heavily on the US dollar as an unofficial secondary currency. Financial institutions will be penalised by the US if they breach these prohibitions.

The safest way for US entities to ensure that they are not in breach of any of these sanctions is to apply to the US Treasury department to obtain authorisation.

Because some sanctions still remain in force, it is important for potential investors and trade partners to study the current sanctions regime carefully before committing to any transactions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.