United States: Despite The Fanfare, Iranian Sanctions Remain Largely In Place

To read many of the media reports, the United States has withdrawn sanctions on Iran and Iran is now open for business. Contrary to such reports, the United States sanctions on Iran remain substantially unchanged.

As part of the Joint Comprehensive Plan of Action between the United States, Iran and various other countries, the United States agreed to withdraw certain of its sanctions concerning Iran upon the International Atomic Energy Agency's ("IAEA") verification that Iran had implemented various measures related to its nuclear program. On January 16, 2016, Secretary of State Kerry confirmed that the IAEA had verified Iran's compliance. On that same day, the United States Office of Foreign Assets Control ("OFAC") issued General License H effectively withdrawing certain of the United States sanctions concerning Iran.

General License H authorizes entities "owned or controlled by a United States person and established and maintained overseas ... to engage in transactions, directly or indirectly, with the Government of Iran or any person subject to the jurisdiction of Iran...." In other words, foreign subsidiaries of United States companies are now authorized to trade with Iran. OFAC caveats this authorization, however, prohibiting foreign entities owned or controlled by United States persons from dealings with certain persons (i.e. Specially Designated Nationals, Blocked Persons, persons listed on OFAC's List of Foreign Sanctions Evaders and military, para-military, intelligence or law enforcement agents of the Government of Iran) and from dealings in certain areas (i.e. related to certain technology, the proliferation of weapons of mass destruction and nuclear activities).

While foreign subsidiaries of US persons are now authorized to trade with Iran, OFAC regulations continue to prohibit United States persons, themselves, from doing so. "[T]he exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology or services to Iran or the Government of Iran is prohibited." Similarly, OFAC continues to prohibit United States persons from exporting goods, technology or services to a third party if the United States person knows that "[s]uch goods, technology or services are intended specifically for supply ... predominantly to Iran," or that "[s]uch goods, technology or services are intended specifically for use in the production of ... goods, technology or services to be directly or indirectly supplied ... predominantly to Iran...."

General License H does, however, authorize United States persons to engage in "activities related to the establishment or alteration of operating policies and procedures of a United States entity or a U.S. owned or controlled foreign entity, to the extent necessary to allow a U.S. owned or controlled foreign entity to engage in transactions [with Iran]."

General License H also allows United States persons to "make available to those foreign entities that the U.S. person owns or controls ... automated and globally integrated computer, accounting, email, telecommunications, or other business support systems ... necessary to store, collect, transmit, generate or otherwise process documents or information" related to their foreign subsidiaries' activities vis-à-vis Iran. In other words, a U.S. company is free to revise its written operating policies as well as make available certain of its technologies, to allow its foreign subsidiaries to trade with Iran. U.S. companies should, however, proceed with caution.

In a related move, OFAC also revised its regulations to allow United States persons to import from Iran certain foodstuffs, carpets and textile floor coverings.

In short, foreign entities owned or controlled by United States persons are now generally authorized to trade with Iran, and United States persons can now import certain foodstuffs and carpets from Iran. And United States persons can import certain foodstuffs, carpets and floor coverings. With those exceptions, the United States sanctions remain in place. OFAC continues largely to prohibit United States persons from dealing, directly or indirectly, with Iran.

While not a change in its sanction regulations, OFAC, on January 16, 2016, also announced that it would favorably consider applications for validated licenses from United States persons and foreign persons to export commercial passenger aircraft exclusively for civil aviation use and spare parts and associated services to Iran.

Three notes of caution stemming from OFAC's recent actions.

  1. Do not be misled by media reports suggesting a widespread relaxation of United States sanctions against Iran. The sanctions remain in place with limited exceptions.
  2. Foreign entities owned or controlled by United States persons are now free to trade with Iran. OFAC continues, however, to prohibit foreign persons from re-exporting United States origin goods, technology or services to Iran unless they meet certain de minimus rules.
  3. While OFAC now allows United States persons to engage in "activities related to the establishment or alteration of operating policies and procedures" to allow their foreign subsidiaries to deal with Iran, it is not entirely clear what activities are allowed. OFAC offers as guidance that United States persons "may be involved in the initial determination to [have their foreign owned subsidiaries] engage in activities with Iran." OFAC states, however, that United States persons are not authorized to be "involve[ed] in ... on-going Iran-related operations or decision making" or in "Iran-related day-to-day operations." (See Frequently Asked Questions, OFAC website.) Between these statements, there is a significant room for ambiguity.

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
Proskauer Rose LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Proskauer Rose 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