United States: Impact Of Iran Accord On International Business

Jonathan Epstein is a Partner in Holland & Knight's Washington D.C. office

Briefing the "C" Suite on the Joint Comprehensive Plan of Action with Iran


  • On July 14, 2015, the United States, France, China, Russia, the United Kingdom, Germany and the European Union entered into the Joint Comprehensive Plan of Action with Iran after years of difficult negotiations.
  • Actual implementation of sanctions changes are likely several months away. However, even after implementation, most of the prohibitions on U.S. companies doing business directly or indirectly with Iran and Iranian entities will remain in place.

On July 14, 2015, the United States, France, China, Russia, the United Kingdom, Germany and the European Union (EU) entered into the Joint Comprehensive Plan of Action (JCPOA) with Iran after years of difficult negotiations. Iran agreed to a number of restrictions and oversight on its nuclear activities in return for the rollback of certain United Nations (U.N.), EU, and U.S. sanctions. Companies in a range of industries are eager to understand the implications of the JCPOA. While there is little information beyond the JCPOA document itself out yet, this alert summarizes and interprets the JCPOA's sanctions provisions by answering the following questions:

When do the JCPOA sanctions changes take effect?

Actual implementation of sanctions changes are likely several months away, as a number of implementation steps must occur. In particular, the International Atomic Energy Agency (IAEA) must verify that Iran has met certain nuclear-related commitments. For the U.S. to implement the JCPOA, in addition to the 60-day U.S. congressional review period, the Obama Administration will need to issue implementing orders/regulations.

What rules apply in the interim?

All U.S. sanctions will remain effective, including the suspensions under the current interim Joint Plan of Action (JPOA). The JPOA suspensions will continue until the JCPOA implementation.

Will U.S. companies be able to do business with Iran?

Even after implementation, most prohibitions on U.S. companies doing business directly or indirectly with Iran and Iranian entities will remain in place (e.g., those relating to terrorism, human rights violations and ballistic missile development). However, U.S. companies will be allowed to apply for licenses to sell or lease U.S. civil aircraft, parts and support to Iranian passenger aviation. U.S. companies also will be permitted to obtain licenses for the import of carpets and foodstuffs (including pistachios and caviar) from Iran.

Are restrictions on foreign subsidiaries of U.S. companies being lifted?

This is unclear. Non-U.S. companies owned or controlled by U.S. persons remain subject to U.S. sanctions. However, the JCPOA provides that the U.S. government may license such foreign subsidiaries of U.S. companies to engage in activities with Iran "that are consistent" with the JCPOA.

What is the impact for non-U.S. (non-U.S. owned) companies?

The U.S. has agreed to remove most of the "secondary" sanctions imposed on non-U.S. companies, not owned or controlled by U.S. persons, for engaging in certain transactions with Iran or certain Iranian entities regardless of U.S. nexus. For example, secondary sanctions relating to trade in oil, petrochemicals and precious metals as well as sanctions on the energy, shipping, shipbuilding and port sectors of Iran would be removed. Significantly, the restrictions on ownership and investment in Iran's petroleum sector first implemented by the Iran-Libya Sanctions Act will be lifted. In addition, secondary sanctions on foreign financial institutions and foreign insurers for engaging in or insuring, certain activities related to Iran will be largely lifted. This, in conjunction with lifting of EU sanctions, will likely lead to increased trade with Iran by non-U.S. companies.

Will U.S. dollar (USD) clearing transactions be allowed?

While there was some speculation that the U.S. would allow U.S. banks to clear transactions between third-country entities and Iran, the JCPOA does not directly address this issue. Further, although 10 years ago U.S. banks may have been comfortable with such dollar clearing transactions, the compliance landscape for banks has changed dramatically.

Is EU's sanctions removal broader than the U.S.?

Yes. The EU is removing many of the sanctions that significantly impacted Iran, including in the energy, financial and insurance sectors. Hence, in many, or even most sectors, EU companies will be able to engage in trade with Iran upon implementation of the JCPOA.

What is the impact of removing Iranian entities from blacklists?

The U.S. and EU have both agreed to remove many Iranian entities designated on sanctions lists. In particular, the U.S. removal of the Central Bank of Iran and many other Iranian banks from the Specially Designated Nationals List (SDN) will allow Iranian banks to process transactions and issue letters of credit, etc., for most international transactions (except those involving U.S. dollars and U.S. banks).

When will the U.S. government issue more guidance?

While we expect the U.S. government will provide some informal information over the next few months, we do not expect to see details regarding implementation of the sanctions changes until near the date of implementation – at which time we expect to see a new Executive Order and guidance from the U.S. Treasury Office of Foreign Assets Control (OFAC).

What is the "snap back" provision to which President Obama referred?

The JCPOA establishes a dispute resolution mechanism that sets an aggressive timeline for resolution of an alleged failure of a party to meet its commitments. If not resolved to the satisfaction of the complaining party, the complaining party could cease performing its commitments in whole or part and/or refer the matter to the U.N. Security Council. Hence, sanctions could rapidly be re-imposed. There is a "contract sanctity" provision for contracts entered into with Iran in accordance with the JCPOA. However, it is unclear whether this applies only to the U.N. Security Council resolutions, or whether it also would be binding on U.S. unilateral action.

What are the practical concerns in re-engaging with Iranian entities?

There are a number of practical issues and potential risks in potential transactions with Iranian entities. For example, third-party agreements such as loans, leases and supply agreements may prohibit transactions with Iran. As we have seen with Cuba, banks may be reluctant to re-engage with Iran, even in authorized transactions because of the compliance costs and risks.

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.

Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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