United States: Parameters of Iran Sanctions Relief Announced

On April 2, 2015, the United States and its P5+1 negotiating partners, together with Iran, announced the key parameters of the Joint Comprehensive Plan of Action (JCPOA) regarding Iran's nuclear program. Further details are likely to emerge in the coming weeks as the parties aim to negotiate the full agreement and its technical annexes by June 30, 2015. Among these are the specific scope and timing of any sanctions relief for Iran, which in the United States will initially be based solely on Executive Branch action, although Congress may soon consider legislation that would allow it to review a final agreement for 60 days and prevent the Executive Branch from lifting sanctions during that period.  

Future Iran sanctions relief will be incremental, focusing on a rolling back of "nuclear-related" sanctions against Iran but leaving in place numerous other categories of restrictions. Initial relief will apparently focus on suspending certain so-called "secondary" sanctions against non-US firms. And by leaving in place the statutory architecture for Iran sanctions, the Obama Administration (or future administrations) could elect to quickly re-impose sanctions in the event of Iranian non-compliance with the JCPOA.

In the meantime, as the US Department of the Treasury's Office of Foreign Assets Control (OFAC) has underscored in recent guidance, the JCPOA does not "immediately relieve, suspend or terminate any sanctions on Iran," and Iran sanctions will "continue to be vigorously enforced."1 These factors suggest that Iran sanctions will lack certainty in scope and application during the months ahead and will continue to present an area of significant compliance risk to US and foreign businesses.  

Key Elements of the JCPOA 

According to the United States, there will be no sanctions relief until Iran "verifiably abides by its commitments," presumably after a final agreement is reached in June 2015.2 Key benchmarks for sanctions relief include the following: 
  • US and EU nuclear-related sanctions will be suspended after the International Atomic Energy Agency verifies that Iran has taken all of its key nuclear-related steps. If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place.  
  • The "architecture" of US nuclear-related sanctions on Iran will be retained for much of the duration of the deal.   
  • All past UN Security Council resolutions addressing the Iran nuclear issue will be simultaneously lifted with Iran's completion of nuclear-related actions addressing all key concerns.3  
  • Core provisions in the UN Security Council resolutions—those that deal with transfers of sensitive technologies and activities—will be re-established by a new UN Security Council resolution that will endorse the JCPOA and urge its full implementation. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.  
  • The JCPOA will include a dispute resolution process designed to resolve disagreements about the performance of JCPOA commitments.  
  • If an issue of significant non-performance cannot be resolved through that process, then all previous UN sanctions could be re-imposed.  
  • US sanctions on Iran for terrorism, human rights abuses and ballistic missiles will remain in place under the deal.

If the previous round of Iran sanctions relief from January 2014 (the so-called Joint Plan of Action (JPOA), which we previously summarized) serves as a guide for JCPOA relief, then the initial stages of further relief may consist of a suspension of the "nuclear-related" sanctions applicable to non-US firms but leave most restrictions for US firms in place. This approach would be consistent with the European Union's description of sanctions relief, which suggests that the United States would suspend nuclear-related "secondary economic and financial sanctions."4 In the event that secondary sanctions are lifted against non-US companies and foreign financial institutions with respect to Iran, it remains unclear whether associated dollar clearing through US financial institutions would be permitted.

Under the 2014 JPOA, sanctions relief targeted the petrochemical, automotive, precious metals, civil aviation, crude oil export and humanitarian sectors, and these could potentially be sectors for further relief. Although the United States will maintain several categories of sanctions tied to other non-nuclear foreign policy concerns, EU sanctions against Iran are linked principally to its nuclear program and could therefore be more comprehensively lifted.

Once the US and its partners decide on the specific terms of sanctions relief in the event of a final agreement, new licenses, regulations and policies could be established relatively quickly: the Executive Branch was able to implement the 2014 Iran JPOA sanctions relief approximately two months after it was first announced and to promulgate regulations implementing the 2015 Cuba sanctions relief in around four weeks.   

Given that the JCPOA parameters suggest that the "architecture" of US sanctions against Iran will be retained, the Obama Administration may decide—as it did in 2014—to use a combination of waiver authorities, statements of licensing policy and enforcement policy discretion to suspend certain sanctions but not to request Congressional repeal of various Iran sanctions statutes for much of the deal's duration.

Potential Action in Congress 

Congressional leaders have indicated that they will closely scrutinize the JCPOA and may soon consider legislation to assert Congress' own role in the Iran sanctions program. On April 14, the Senate Foreign Relations Committee is scheduled to vote on a bill that would assert Congress' right to formally review the final JCPOA for 60 days, during which period Congress would require that the President not waive or suspend the application of statutory sanctions against Iran.5 Although separate pending legislation would reverse sanctions relief and further expand sanctions under certain circumstances, its sponsors have recently suggested that a vote will be postponed until this summer.


1 US Department of the Treasury, Guidance Relating to the April 2, 2015 Announcement of Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, April 3, 2015, accessed at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/iran.aspx#guide

2 US Department of State, Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, April 2, 2015, accessed at http://www.state.gov/r/pa/prs/ps/2015/04/240170.htm

3 The US Department of State has indicated that these are JCPOA benchmarks regarding uranium enrichment levels, the Iranian nuclear facilities at Fordow and Arak, the IAEA's concerns regarding Possible Military Dimensions, and Iran's provision of transparency to international inspectors.

  4 See Joint Statement by EU High Representative Federica Mogherini and Iranian Foreign Minister Javad Zarif, April 2, 2015, accessed at http://eeas.europa.eu/statements-eeas/2015/150402_03_en.htm.

5 See S.615, the Iran Nuclear Agreement Review Act of 2015.

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.

Authors
Katrina Carroll
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
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 you may opt out by clicking here

    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.

    Disclaimer

    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.

    Registration

    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.

    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.

    Cookies

    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.

    Links

    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.

    Mail-A-Friend

    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.

    Emails

    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 .

    Security

    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.

    By clicking Register you state you have read and agree to our Terms and Conditions