United States: Implementation Day: Do The Rules Let You Play In The New Ballgame For Business In Iran?

After a twelve-year standoff that saw the United States and Europe ratchet up sanctions pressure on Iran, a diplomatic breakthrough has been reached. But robust trade between Iran and the West will not arise immediately, since the end of sanctions is a long way away.

As reported here, negotiators in Vienna announced early Tuesday, July 14 that the Joint Comprehensive Plan of Action agreement that will curb Iran's nuclear program in exchange for sanctions relief. Many of the agreement's operative elements – including lifting sanctions – will not become effective until Implementation Day: the day on which the International Atomic Energy Agency reports its verification of Iran's implementation of certain nuclear-related measures.1

On Implementation Day, the United Nations, European Union, and United States will all lift certain nuclear-related sanctions against Iran. As soon as sanctions are lifted and the gate is open, some businesses will expect to rush to play on the field they have been fenced out of for so long.

While we hate to ruin anyone's fun, we are compliance lawyers (and can't help it?) and we remind you that a good reading of the rulebook is in order before the games begin. We propose that companies planning their Iran entry also plan a strategy for compliance within the new regulatory framework. While many sanctions on Iran will be lifted, remaining restrictions on EU and U.S. companies mean that the game must still be played by strict rules. And you can bet the referees will be watching to see who steps out of bounds.

Most American Companies Still on the Sidelines

On Implementation Day, the United States will lift nearly all Iranian sanctions that it currently imposes on non-U.S. entities. Wait, non-U.S. entities? Does that sound odd to you? If so, you're not alone.

The headlines declaiming that all U.S. sanctions will be lifted have caused some to believe, well, that all U.S. sanctions against Iran will be lifted. That is not precisely true.

Nearly all the U.S. sanctions that would be lifted on Implementation Day are sanctions the United States currently imposes or threatens against non-U.S. persons. In fact, in the section of the agreement entitled "Effects of the Lifting of U.S. Economic and Financial Sanctions" states that when the sanctions are lifted they would no longer "apply to non-U.S. persons" who engage in the formerly sanctioned activity with Iran.

Sanctions imposed on U.S. persons and persons in the United States under the Iranian Transactions Regulations will generally remain in place. That means U.S. persons will generally still be prohibited from conducting transactions in Iranian property, with Iranian Specially Designated Nationals, and with the Government of Iran. U.S. persons and banks still will be generally prohibited from all dealings with Iranian companies, including investing in Iran (though we must note that the deal may allow importing Iranian carpets and pistachios in the future).

Further, the Agreement does not lift Section 218 of the Iran Threat Reduction and Syrian Human Rights Act (ITRSHRA), under which foreign subsidiaries of U.S. companies are prohibited from engaging in Iranian transactions to the same extent as their U.S. parents. Nor, it appears, will the "name and shame" provision of ITRSHRA Section 219 be lifted, under which issuers filing with the SEC must include sanctionable activities in their quarterly or annual reports.

Put Us In, Coach

Implementation Day will provide some opportunities as for U.S. exporters as, under the Agreement, the United States will be allowed to export civilian aircraft and parts to Iran. Where U.S. manufacturers see a country where the civil air fleet average age is 23 years, they see opportunity.

Non-U.S. Entities Back in the Game

In the past five years, the U.S. government took an increasingly aggressive jurisdictional approach to sanctions, rolling out the CISADA, the 2012 NDAA, the IFCA, and the ITRSHRA (we really do need a better acronym for that one).2  All those statutes provided for sanctions against non-U.S. companies for undertaking certain transactions with Iran. Under the July 14 agreement, nearly all the U.S. sanctions restrictions imposed by those statutes on non-U.S. companies that are not subsidiaries of U.S. parents will be lifted. Thus, non-U.S. companies will not be subject to sanctions for activities including the following:3

1. Finance and banking.

  • Engaging in financial and banking transactions with the Government of Iran, the Central Bank of Iran, specified Iranian financial institutions, the National Iranian Oil Company, Naftiran Intertrade Company, National Iranian Tanker Company, and certain other formerly sanctioned Iranian persons;
  • Providing to Iran loans, transfers, and accounts, including opening and maintaining correspondent and payable through accounts at non-U.S. financial institutions; as well as providing other financial instruments.
  • Purchasing or acquiring U.S. bank notes by the Government of Iran; and
  • Purchasing or facilitating the purchase of Iran sovereign debt.

2. Insurance. Engaging in underwriting services, insurance, or re-insurance in connection with activities consistent with the Agreement.

3. Energy and petrochemical.

  • Purchasing, selling, or transporting petroleum products;
  • Investing in the petroleum or petrochemical sector in Iran; and
  • Providing goods and technology in support of the petroleum and petrochemical sector, including to NIOC, NITC, and NICO.

4. Shipping and shipbuilding. Owning, controlling or operating a vessel to transport crude oil or petroleum or providing goods or financial services to in connection Iran's shipping or shipbuilding sector.

5. Automotive. Conducting or facilitating transactions to provide Iran goods and services used in connection with the automotive sector.

6. Gold and other precious metals. Conducting transactions for the sale, supply, or transfer to or from Iran of gold or other precious metals.

7. Software and metals. Conducting transactions for the sale, supply, or transfer to or from Iran of graphite, raw or semi-finished metals, and software for integrating the industrial process in connection with activities consistent with the agreement.

Additionally, the Agreement would lift the sanctions on non-U.S. companies for doing business with persons designated as sanctioned under CISADA, 2012 NDAA, IFCA and ITRSHRA.

An Open Field for Europe

On Implementation Day, a significant proportion of the EU sanctions implemented against Iran in the past five years will be lifted. Primarily the lifted sanctions will be those related to:

  • financial and banking;
  • oil and gas; and
  • shipping

promulgated under Council Decision 2010/413 CFSP and Council Regulation (EU) No 267/2012.

With those sanctions lifted, EU companies should have a clear path to resume significant business with Iran. However, if an EU company has U.S. teammates – if they have U.S. person employees or executives, have U.S. ownership, or even a supply chain that draws from the United States – the EU company will need to understand what goods, money, technology, or services from the United States can and cannot be used as the company looks to resume business with Iran.

What Will Draw a Penalty

Of course companies stepping into Iranian business will want to play right up to the whistle. But how do they know what will and won't be a foul? For instance, if a German company that is partially owned by a U.S. company engages in transactions in Iran that are lawful in the EU, what is the potential liability for the U.S. company? What SEC disclosures are required of that U.S. company? Companies in the United States and Europe will do well to develop a compliance strategy early, so they are not caught flatfooted when the opening whistle blows.


1. Those nuclear measures are described in Sections 15.1 to 15.11 of Annex V to the Agreement.

2. For those keeping score at home, the full names of the sanctions laws discussed in this article are: The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), the 2012 National Defense Authorization Act (NDAA), the Iran Freedom and Counter Proliferation Act (IFCA), and the Iran Threat Reduction and Syria Human Rights Act (ITRSHRA).

3. The full list of activities on which sanctions are planned to be lifted can be found in Annex II to the agreement, Section 7.

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.

Events from this Firm
29 Nov 2017, Webinar, Los Angeles, United States

This webinar will cover issues that California employers must face when managing a remote workforce of employees who “telecommute” for work. Due to the growing number of employees that work from home, California employers must know how to manage this new remote workforce in order to offer competitive career opportunities for a new generation of employees, while also being careful not to violate the complex California employment laws that govern these work arrangements.

30 Nov 2017, Conference, Brussels, Belgium

The European Competition and Regulatory Law Review (CoRe), the Computer and Communications Industry Association (CCIA) and the Vrije Universiteit Brussel (VUB) are delighted to invite you to our joint conference discussing some of today’s most frequently asked questions: Does competition law enforcement require an update for online markets?

4 Dec 2017, Conference, Virginia, United States

The Government Contract Management Symposium (GCMS) is held annually by the National Contract Management Association (NCMA) in the Washington, DC metro area. Formerly intended for those in federal sector, it has grown to provide training for professionals in both government and industry contracting.

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.