United States: Iran Nuclear Agreement & Sanctions Suspension

The November 23 "Joint Plan of Action" regarding Iran's nuclear program (the "Agreement") contemplates that the United States and the European Union ("EU") will suspend some sanctions measures regarding Iran. This advisory summarizes information that is generally available about the Agreement's implications for sanctions, how the agreement is likely to be implemented with regard to sanctions, and key uncertainties.

As has been widely reported, the permanent United Nations Security Council members (China, France, Russia, the United Kingdom and the United States) and Germany – the "P5 Plus 1" – entered into the Agreement with Iran as an interim arrangement to impose discipline on Iran's nuclear program. The Agreement provides for what the Obama Administration characterizes as "limited, temporary, targeted and reversible relief" from sanctions.

Two considerations stand out regarding the Agreement's effect on Iran sanctions. First, the Agreement does not provide detail about suspension of sanctions or even identify measures to be suspended. Second, Agreement commitments to relax sanctions measures will only be effective if, when and to the extent that they are implemented in U.S. and EU law.

In general, the Agreement probably will not lead to relaxation of the embargo on U.S. persons' dealings with Iran. The only apparent exception to this understanding relates to issuance of some licenses for aircraft replacement parts as needed for safety reasons. Otherwise, the Agreement will likely affect only "secondary" U.S. sanctions measures – U.S. statutes and executive orders that provide for sanctions against non-U.S. companies that engage in specified types of activities relating to Iran.

The Obama Administration has broad discretion to modify or withdraw executive orders. As to statutes that authorize or mandate secondary sanctions, the Administration would, absent statutory amendments, need to exercise waiver authority provided in the statutes to implement Agreement obligations to suspend sanctions measures.

A State Department press release emphasizes that the U.S. government intends to continue vigorous enforcement of remaining Iran-sanctions measures and to reimpose suspended sanctions if Iran fails to satisfy commitments under the Agreement.

Foremost sanctions-related provisions of the Agreement and initial comments about them are as follows:

  • For six months, the P5 Plus 1 are to "pause efforts to further reduce Iran's crude oil sales." For oil sales at current levels, the United States and the EU are to suspend "sanctions on associated insurance and transportation services."

    United States legislation enacted in December 2011 as part of the National Defense Authorization Act for Fiscal Year 2012 generally provides for sanctions against non-U.S. banks that knowingly conduct or facilitate significant financial transactions for the purchase of Iranian petroleum or petroleum products. There is an exception for banks the host countries of which significantly reduce their oil imports from Iran. China, India, Malaysia, South Korea, Singapore, South Africa, Sri Lanka, Turkey, Taiwan and other countries have secured exemptions on the basis of U.S. government findings of significant Iranian oil import reductions. It appears likely that the Obama Administration is prepared to exercise waiver authority under the legislation to avoid imposing sanctions under the statute notwithstanding that the countries' Iranian oil imports do not continue to fall.
  • The United States and the EU are to suspend sanctions on

    "Iran's petrochemical exports" and "associated services"

    "Associated services" encompass, among others, "insurance, transportation, or financial services." The agreement implies that suspension of the sanctions would extend only to the provision of "associated services" for "non-designated Iranian entities."

    A variety of U.S. measures, including the Iran Sanctions Act, authorize secondary sanctions against non-U.S. companies for trade in petrochemical products with Iran and related services in some circumstances. In addition, EU regulations impose limits on European petrochemical trade with Iran. It appears that U.S. and EU officials may plan to exercise waiver authority to suspend sanctions measures to facilitate trade with Iran in petrochemical exports and related services.

    Iranian entities would probably be deemed "designated" if they are on the U.S. Treasury Department's List of Specially Designated Nationals and Blocked Persons or similar EU sanctions "blacklists."

    "Gold and precious metals" and "associated services"

    This provision likely relates to portions of the Iran Freedom and Counter-Proliferation Act of 2012 that generally require secondary sanctions against non-U.S. companies that transfer precious metals to or from Iran. In addition, EU Regulation (EU) N. 267/2012 generally prohibits trade of gold, precious metal and diamonds involving the Iranian government in some circumstances. It appears that U.S. and EU officials may plan to exercise waiver authority to suspend sanctions measures to facilitate trade with Iran in precious metals and related services.
  • The United States is to suspend "sanctions on Iran's auto industry" and "associated services."

    This provision likely relates to the secondary sanctions measures in Executive Order 13,645, which the President issued in June 2013, authorizing sanctions against non-U.S. companies that, in some circumstances, supply goods or services for use in connection with the Iranian automotive sector. The Obama Administration has broad discretion to suspend or terminate these provisions.
  • The P5 Plus 1 are to "license the supply and installation in Iran of spare parts for safety of flight for Iranian civil aviation and associated services." The agreement implies that licenses are to be issued for such supply and installation for Iran Air and "non-designated Iranian airlines."

    United States and EU sanctions and export controls generally require licenses for exports of aircraft parts and components to Iran and, today, U.S. and EU authorities generally deny licenses for such exports. United States and EU authorities likely believe that they have discretion to provide licenses as contemplated by the Agreement. Withholding of export licenses for parts needed for air travel safety in Iran has been controversial.
  • The EU is to increase "authorisation thresholds for transactions for non-sanctioned trade."

    This provision apparently refers to the authorization thresholds provided for by Regulation (EU) N. 267/2012. Article 30(1) currently sets forth a value threshold of EUR 40,000 at or above which any transfer of funds to or from any Iranian person or entity and related to humanitarian transactions (i.e. transactions related to foodstuff, healthcare, medical equipment or other humanitarian purposes) requires a prior authorization from competent EU Member States' authorities. Moreover, the same provision contains a mandatory prior notification obligation to perform such humanitarian transactions where the value of the transaction is equivalent to or more than EUR 10,000, though prior authorization is not required in such cases. Humanitarian transactions below EUR 10,000 can be carried out without any prior authorization or notification obligation.

    It is understood that the Agreement will compel the Council to raise both the thresholds appreciably, but the exact amount is still to be set. The procedure for the notification of the transactions and the conditions for the authorization are not presumed to change since the Agreement only refers to the authorization thresholds.
  • The P5 Plus 1 are to "establish a financial channel to facilitate humanitarian trade for Iran's domestic needs using Iranian oil revenues held abroad."

    There are existing embargo exceptions that, on their face, permit supply of humanitarian items, including food and medical supplies, to Iran. But many have complained that western banks, citing financial sanctions measures, have declined to provide banking services needed to facilitate humanitarian trade. It appears that U.S. and EU authorities plan to make sanctions adjustments intended to ensure that certain forms of humanitarian trade with Iran actually occur.
  • The United States and the EU are generally to forgo new "nuclear-related sanctions" against Iran, and the P5 Plus 1 are to ensure against new UN Security Council "nuclear-related sanctions" against Iran. The Agreement appears to acknowledge that the Obama Administration cannot necessarily prevent the U.S. Congress from enacting new Iran sanctions legislation when it observes that the Administration will act "consistent[ly] with the respective roles of the President and the Congress."

    It is notable that many Republican and Democratic Members of Congress continue to call for expanded U.S. sanctions legislation regarding Iran notwithstanding the Agreement. An interesting twist is proposals to legislate new measures with an effective date at the end of the six-month period contemplated by the Agreement.

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 Mondaq.com.

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

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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 unsubscribe@mondaq.com 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.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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