United States: Joint Plan Of Action Regarding Iran's Nuclear Program Announced

US sanctions are not immediately lifted due to the announcement.

On July 14, the United States, European Union, United Kingdom, France, China, Russia, and Germany (P5+1/E3/EU+3 countries) and Iran reached a Joint Comprehensive Plan of Action (JCPOA) deal regarding Iran's nuclear program. The JCPOA, if fully implemented, will provide Iran with phased US and EU sanctions relief upon verification that Iran has implemented key nuclear commitments outlined in the JCPOA.

Implementation Date

US sanctions relief is to be provided through the suspension (and eventual termination) of nuclear-related secondary sanctions. Under the JCPOA, the sanctions relief will be initiated after the International Atomic Energy Agency (IAEA) verifies that Iran has implemented key nuclear-related measures (Implementation Day). The estimated time frame for when Implementation Day will occur is December 2015. Of course, there is no certain date or assurance that the IAEA will be able to verify from Iran the necessary information to satisfy the conditions described in the JCPOA. The US government has stated it will publish detailed guidance related to the JCPOA relaxation of US sanctions prior to Implementation Day.

In the meantime, the P5+1 and Iran also decided on July 14 to further extend, through Implementation Day, the sanctions relief already provided for in the Joint Plan of Action (JPOA) of November 24, 2013 (as extended through July 2015). The JPOA sanctions relief—which has been in effect since November 2013—is the only Iran-related sanctions relief in effect until further notice. Therefore, the announcement of a deal with Iran does not result in any immediate change in US sanctions against Iran.

US Persons and Prohibition on Negotiating Executory Contracts

Notwithstanding the reaching of a deal regarding the JCPOA, "US Persons" are still currently prohibited from entering into executory contracts for Iran-related transactions until US sanctions are lifted after Implementation Day. The term "US Person" includes the following: any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States and an entity that is "owned or controlled" by a United States person and established or maintained outside the United States. An entity is "owned or controlled" by a United States person if it (i) holds a 50% or greater equity interest by vote or value in the entity; (ii) holds a majority of seats on the board of directors of the entity; or (iii) otherwise controls the actions, policies, or personnel decisions of the entity.

A US Person signing an executory contract involving Iran-related transactions before Implementation Day would constitute dealing in an interest in property involving Iran, which is prohibited. The current Iran sanctions regulations expressly state that such executory contracts are an interest in property because they involve "contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future, or contingent."

Action by US Congress

Under novel legislation that was recently enacted into law regarding any deal with Iran, the US Congress will now have a 60-day window in which to review the Iran deal. Under this legislation, Congress may (i) pass a resolution approving the deal with Iran, (ii) pass a resolution disapproving the deal, or (iii) do nothing. President Obama has stated that he will veto a resolution of disapproval. Congress would then need to override the President's veto with a two-thirds vote of each House of Congress.

Aside from US Congressional approval of the Iran agreement (or a failure to override the President's veto if Congress does not approve the deal), US Congress will need to repeal/terminate a number of statutes found in various Acts of Congress that impose sanctions on Iran. Repeal of such Acts requires affirmative steps by Congress and cannot happen automatically. Congress need not move to repeal the applicable statutes within any particular time frame, if at all.

US State and Local Sanctions

After Implementation Day, if a law at the state or local level in the United States is deemed to be preventing the implementation of the lifting of sanctions as specified in the JCPOA, the US government is supposed to take appropriate steps—taking into account all available authorities—to achieve such implementation. Accordingly, the US government will actively encourage officials at the state or local level to take into account the changes in US policy reflected in the lifting of sanctions and ask that states refrain from actions inconsistent with the policy change. As a result, some state and local Iran sanctions measures may not be lifted contemporaneously with the federal sanctions.

European Union Sanctions

Under Annex II of the JCPOA, the EU and EU Member States commit to terminate all provisions of Council Regulation (EU) No 267/2012 (as subsequently amended) that currently implement all nuclear-related sanctions or restrictive measures against Iran. These measures comprise various financial, banking, and insurance measures; remaining sanctions targeting the oil, gas, and petrochemical sectors; shipping, shipbuilding, and transport sectors; and sanctions on gold and precious metals, arms, and various nuclear proliferation-related measures.

Asset freezes and visa ban measures applicable to targeted individuals and Iranian institutions will also be lifted after Implementation Day. However, the EU states that "unless specifically provided otherwise, the sanctions lifting . . . does not apply to transactions that involve persons still subject to restrictive measures and is without prejudice to sanctions that may apply under legal provisions other than those referred to in Section 1 of Annex II." This means that individuals, institutions, and companies that are on the target lists for other reasons than the Iran sanctions will not benefit from the measures.

In January 2014, the EU partially suspended its Iran sanctions as a show of good will regarding the nuclear negotiations (certain exports of petrochemical products in the EU, trades with gold and precious metals, and money transfers up to a certain limit were already allowed).

United Nations Sanctions

A UN Security Council resolution endorsing the terms of the JCPOA was introduced on July 14 and is expected to take 7-10 days to be adopted. The JCPOA required such a resolution to be submitted promptly after the conclusion of the JCPOA negotiations for "adoption without delay." On Implementation Day, UN sanctions against Iran will widely be lifted through termination of the provisions imposed by the following UN Security Council resolutions:

  • 1696 (2006) (demanding that Iran suspend enrichment and reprocessing-related activities)
  • 1737 (2006) (imposing sanctions banning the supply of nuclear materials and technology and freezing assets of persons and companies related to Iran's nuclear program)
  • 1747 (2007) (imposing a ban on Iranian arms exports and freezing additional Iranian assets)
  • 1803 (2008) (expanding the freeze on Iranian assets, and calling for member states to monitor Iranian individuals and banks involved in Iran's nuclear program and inspect Iranian ships and aircraft)
  • 1835 (2008) (reaffirming previous sanctions resolutions)
  • 1929 (2010) (freezing Iranian Revolutionary Guard and Islamic Republic of Iran Shipping Lines funds, further restricting the activities of Iranian banks and of non-Iranian banks' activities in Iran and other "proliferation-sensitive activities," and tightening the UN arms embargo)
  • 2224 (2015) (extending the UN "panel of experts" mandate to report on issues related to the implementation of UN sanctions on Iran)

These UN sanctions are subject to re-imposition in the event of significant non-performance by Iran of JCPOA commitments, and specific restrictions, including restrictions regarding the transfer of proliferation-sensitive goods, will continue to apply. However, it is not clear whether such a re-imposition would be automatic, or might be blocked by a Security Council member veto.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

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
 
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