United States: End-Of-Year Changes In Iran, Russia Sanctions, Cyber Sanctions

In the final two weeks of 2016, the Obama Administration made changes to the U.S. Iran and Russia sanctions, including the imposition of cyber sanctions. Specifically, the Treasury Department's Office of Foreign Assets Control (OFAC) published guidance concerning the potential "snapback" of Iranian sanctions relief promulgated under the Iran nuclear deal (the Joint Comprehensive Plan of Action or JCPOA), modified the definition of Iranian origin goods in the U.S. Iranian sanctions regulations, made additional designations under the Ukraine/Russia sanctions, and imposed targeted cyber sanctions against Russia for its attempts to interfere with the 2016 U.S. elections. In making these changes, the Administration tacitly acknowledged that the Trump Administration is likely to alter the Obama sanctions policies.

I. OFAC Guidance on Reinstitution of Iran Sanctions

As part of the U.S. commitments under the JCPOA, the United States suspended certain secondary nuclear sanctions measures that had targeted economic activity in Iran by non-U.S. companies and foreign subsidiaries of U.S. companies. In apparent response to President-elect Trump's comments about re-negotiating the Iran deal, on December 15 OFAC issued new JCPOA guidance addressing the potential snapback of U.S. nuclear sanctions measures. The guidance states that OFAC will not prosecute companies engaged in lawful trade while the sanctions were suspended, and the agency would provide a 180-day wind-down period for persons to cease operations in Iran after any snapback, including allowing companies to be paid for goods and services provided to Iran before snapback.

II. Iranian Transactions and Sanctions Regulations

On December 22, OFAC modified the Iranian Transactions and Sanctions Regulations (ITSR) to revise the definition of Iranian-origin goods and expand the scope of the existing general license for medical and agricultural products.

Iranian Origin Goods

The ITSR generally prohibit U.S. persons from dealing in Iranian-origin goods, defined to include items grown, produced, manufactured, extracted or produced in Iran, as well as goods that have entered into Iranian commerce. Provided that regulatory conditions are met, the amendments will now allow items exported to Iran to be serviced and repaired outside of Iran, and for vessels with U.S.-origin goods en route to third-country destinations to stop at Iranian ports.

Specifically, in its revised definition, OFAC clarified that the term "Iranian-origin goods" does not include the following items, provided they were not grown, produced, manufactured, extracted or processed in Iran:

  • Items exported or reexported to Iran under an OFAC general or specific license, once those goods have left Iran; or
  • Items not destined for Iran onboard vessels or aircraft (as well as the vessels or aircraft themselves) that pass thought Iranian controlled territory en route to a third country, provided that the goods do not otherwise come into contact with Iran.
    • This exclusion from Iranian-origin goods includes goods that are temporarily offloaded from a vessel in Iranian territorial waters or at a port in Iran and reloaded onto the same vessel or another vessel in the same location en route to a destination outside of Iran.

Medical Devices and Agriculture

OFAC expanded the scope of the ITSR's medical and agricultural general licenses. For medical devices, OFAC revised its definition of medical devices to follow the definition of medical devices in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). OFAC also made changes to cover repair of medical equipment, recalls and use of software in medical devices. For agriculture, OFAC expanded the definition of agricultural commodities to include shrimp.

III. Ukraine/Russia Sanction Expansions

OFAC continued to enforce and expand its sanctions programs targeting Ukraine and Russia for Russia's occupation and annexation of Crimea. On December 20, 2016, OFAC added seven individuals, eight entities and two vessels to the Specially Designated National (SDN) list and twenty-six entities to the Sectoral Sanctions Identifications list. In a parallel action, the Commerce Department's Bureau of Industry and Security added twenty-three Russian and Crimean companies to the BIS Entity List.

IV. Cyber Sanctions

In response to the alleged Russian Government-backed attempt to manipulate the 2016 U.S. presidential election, including hacking into the Democratic National Committee emails, on December 28, 2016, President Obama for the first time used his authority to impose cyber sanctions against persons engaged in significant malicious cyber-enabled activities. The U.S. added five Russian intelligence agencies and six individuals associated with the agencies to the OFAC SDN list. The U.S. also expelled Russian diplomats and announced that additional covert measures would be imposed.

Russian President Putin said that for now he would not retaliate. However, a Vermont official blamed attempts to hack into the U.S. power grid on Russia, adding additional uncertainty to the situation.

V. Conclusion

The outgoing administration's expansion of authorizations for trading with Iran and increased targeting of Russian entities could be potentially inconsistent with sanctions policy statements made by President-elect Trump. It remains to be seen how the new administration will use sanctions as a tool to impact U.S. diplomacy, and whether the new administration will continue or seek to reverse President Obama's measures to ease restrictions with Iran and increase pressure on Russia.

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.

Authors
 
In association with
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
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.

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.

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.

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.

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.