Worldwide: United States And European Union Ease Trade Sanctions Against Iran Pursuant To Nuclear Agreement

As widely reported, Saturday, January 16 was "Implementation Day" under the Joint Comprehensive Plan of Action (JCPOA), agreed to on July 14, 2015, by the P5+1 (China, France, Germany, Russia, the United Kingdom and the United States), the European Union (EU), and Iran. The United States and the EU have now taken far reaching steps to implement the JCPOA.


On July 14, 2015, following two years of negotiations, the P5+1 and the EU concluded a landmark agreement with Iran, the JCPOA, under which, in exchange for Iran's commitments relating to its nuclear programs, the P5+1 agreed to suspend all US, EU and UN nuclear-related sanctions imposed on Iran. The JCPOA established an Implementation Plan with defined trigger dates, the most important of which was "Implementation Day," the date on which the EU and the United States were to lift relevant sanctions contingent on the International Atomic Energy Agency (IAEA) verifying completion by Iran of its nuclear-related commitments.  Implementation Day has now been declared to be January 16, 2016.

US Sanctions

In line with its commitments under the JCPOA, the United States has lifted its nuclear-related sanctions against Iran.  These were primarily "secondary" sanctions applicable to non-US parties and covered:

  • Iran's financial, banking, energy, petrochemical, shipping, shipbuilding and automotive sectors;
  • Iran's port operators;
  • The provision of insurance, re-insurance and underwriting services in connection with activities that are consistent with the JCPOA;
  • Iran's trade in gold and other precious metals;
  • Trade with Iran in graphite, raw or semi-finished metals such as aluminum and steel, coal, and certain software in connection with activities that are consistent with the JCPOA; and
  • The provision of associated services for each of the categories above.

The United States also removed a large number of individuals and entities from applicable prohibited party lists, and took steps to (1) allow for the export, reexport, sale, lease or transfer of commercial passenger aircraft and related parts and services to Iran for exclusively civil, commercial passenger aviation end-use; (2) license non-US entities that are owned or controlled by a US person to engage in activities that are consistent with the JCPOA and applicable US laws and regulations; and (3) license the importation into the United States of Iranian-origin carpets and foodstuffs. 

With the exception of these three categories of activities described above, none of the sanctions that were lifted include "primary" US sanctions against Iran that apply to US persons. Thus, US persons, including US companies, continue to be broadly prohibited from engaging in transactions or dealings with Iran and the Government of Iran unless such activities are exempt from regulation or authorized by OFAC (e.g., selling food and medicine to Iran).

Of particular interest to many US companies is the second of the three listed items, i.e., the licensing of US-owned or controlled non-US entities "to engage in activities that are consistent with the JCPOA and applicable US laws and regulations." The US Office of Foreign Assets Control (OFAC) has implemented this item by issuing General License H (GL H), authorizing US-owned or controlled foreign entities to engage in "transactions, directly or indirectly, with the Government of Iran, or any person subject to the jurisdiction of the Government of Iran that would otherwise be prohibited by 31 C.F.R. § 560.215." GL H effectively authorizes US-owned or controlled foreign entities to engage in any transaction involving Iran that a non-US person may engage in, except transactions involving:

  • The direct or indirect exportation or reexportation of goods, technology or services from the United States (without separate authorization from OFAC);
  • Any transfer of funds to, from or through the US financial system;
  • Any individual or entity on OFAC's prohibited party lists, or any activity that would be prohibited by non-Iran sanctions administered by OFAC if engaged in by a US person or in the United States;
  • Unless authorized by the US Department of Commerce, activity prohibited by, or requiring a license under, part 744 of the US Export Administration Regulations (EAR) or a person whose export privileges have been denied pursuant to part 764 or 766 of the EAR;
  • Any military, paramilitary, intelligence or law enforcement entity of the Government of Iran, or any officials, agents or affiliates thereof;
  • Any activity that is sanctionable under certain enumerated executive orders relating to Iran's proliferation of weapons of mass destruction and their means of delivery, including ballistic missiles; international terrorism; Syria; Yemen; or Iran's commission of human rights abuses against its citizens; and
  • Any nuclear activity involving Iran that is subject to the procurement channel established pursuant to paragraph 16 of UNSCR 2231 (2015) and section 6 of Annex IV of the JCPOA and that has not been approved through the procurement channel process.

In addition, GL H authorizes US persons to engage in certain activities otherwise prohibited by OFAC's regulations, namely activities related to the establishment or alteration of corporate policies and procedures to the extent necessary to allow US-owned or controlled foreign entities to engage in transactions involving Iran that are authorized under GL H, and making available to foreign entities they own or control certain automated and globally integrated business support systems.  With the exception of activities authorized in GL H, the prohibition on facilitation by United States persons under section 560.208 of OFAC's regulations remains in effect.

EU Sanctions

In accordance with the JCPOA, the EU lifted most of its economic and financial sanctions imposed in connection with Iran's nuclear program. Although several restrictions on doing business with Iran remain in place, the EU's new measures considerably enhance the scope for EU and Iranian companies to do business by opening up opportunities in a number of key areas, including oil, gas and petrochemicals; finance; and trade in gold and precious metals.

Like the United States, the EU removed a number of individuals and entities, including the Central Bank of Iran and the National Iranian Oil Company, from its restricted parties list, lifting asset freezes and visa bans.  More broadly than the United States, the lifting by the EU of its nuclear-related sanctions against Iran removed EU sanctions, with limited exceptions, on the following activities, including associated services:

  • Financial transfers to and from Iran. The transfer of funds between EU persons and non-listed Iranian persons is now permitted, and no authorization or notification of transfers is required.
  • Banking activities, including the establishment of new correspondent banking relationships and the opening of branches, subsidiaries or representative offices of non-listed Iranian banks in the EU. 
  • EU financial and credit institutions are allowed to open representative offices, branches, subsidiaries or joint ventures, as well as banks accounts, in Iran.
  • The supply of specialized financial messaging services (including SWIFT).
  • Insurance and re-insurance activities.
  • Financial support for trade with Iran, including export credit, guarantees or insurance.
  • The sale or purchase of public bonds from Iran.
  • The sale, supply, transfer and export of key equipment/technology (including equipment in the oil, gas and petrochemical sectors), and the import or purchase of crude oil, petrochemicals and gas (originating in Iran or having been exported from Iran);
  • The sale, purchase, supply, transfer, import, and export of gold, precious metals, and diamonds;
  • The sale, supply, transfer, and export of naval equipment and technology for ship building, maintenance or refit;
  • The provision of vessels for the transport or storage of oil and petrochemical products; the provision of bunkering or ship supply services, or any other servicing of vessels (not carrying prohibited items); and the provision of fuel, engineering and maintenance services to Iranian cargo aircraft (not carrying prohibited items);
  • The grant of financial loans or credit to Iranian persons active in the oil and gas sectors.

"Associated services" include transactions necessary and ordinarily incident to the foregoing, including technical assistance, training, insurance, re-insurance, brokering, transportation and financial services.

Reports indicate that EU interests will promptly move to take advantage of Iranian business opportunities opened by the lifting of sanctions.  For example, the European Commissioner for Climate and Energy, Miguel Arias Cañete, publicly stated that the European Commission will undertake a first "technical assessment mission" in February 2016 to explore energy ties with Iran. It is widely reported that the technical assessment mission will likely be followed by a visit by high-level Commission staff, possibly with a business delegation.

While the majority of EU sanctions concerning Iran's nuclear program have been lifted, certain restrictions remain in place.  Notably, certain proliferation-related activities now require an advance authorization from the relevant EU Member State, including certain proliferation-sensitive transfers and activities; the supply, transfer or export of certain software; and the sale, supply, transfer or export of certain graphite and raw or semi-finished metals and the provision of associated services.  Certain other EU sanctions against Iran also remain in place, including an arms embargo and the prohibition on the supply, transfer, export or procurement of certain missile technology.  Certain Iranian persons and entities remain subject to EU sanctions, including several Iranian banks.  Also, human rights- and terrorism-based sanctions remain in place, including the listing of 84 persons and one entity, and a ban on exports to Iran of equipment that may be used for internal repression and monitoring telecommunications.

Thus, although EU sanctions have been significantly relaxed, companies will still need to conduct proper diligence when conducting business with Iran and Iranian persons.


The easing of US and EU sanctions under the JCPOA opens significant new opportunities for business with Iran. However, because the sanctions that were lifted may "snap back" into place in the event that Iran fails to uphold its nuclear commitments under the terms of the JCPOA, businesses are well advised to proceed with caution and to continue to monitor related trade compliance developments closely.


Following are links to OFAC's Guidance on Implementation Day and General License H:

Following are links to EU Council Notice (2016/C 15I/01), the EU Financial Sanctions relief notice, and the EU's External Action Service Information Note on EU sanctions to be lifted:

United States and European Union Ease Trade Sanctions Against Iran Pursuant to Nuclear 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

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 (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

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’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 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.


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

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

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

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