On 14 July 2015, the Joint Comprehensive Plan of Action (JCPOA) was agreed between the E3/EU+3 (or the P5+1, comprising the United States, Russia, China, the United Kingdom, France and Germany), together with Iran. This was set out in our client alert of 15 July 2015.

Under the JCPOA, actions and commitments regarding the lifting of sanctions against Iran are due to be carried out in accordance with the timeline and detailed arrangements specified in the JCPOA.

In accordance with the JCPOA (and being 90 days after the parties agreed the JCPOA), 18 October 2015 marked 'Adoption Day'. On Adoption Day, the JCPOA becomes effective and the JCPOA participants begin to make the necessary arrangements and preparations for implementing their JCPOA commitments.

There is no immediate change to the sanctions position; rather, the only easing of sanctions in effect continues to be that provided for under the JPOA of 24 November 2013 as extended. These measures were considered in detail in our client alert of 23 January 2014.

Joint statement by EU High Representative and Iranian Foreign Minister: The joint statement issued by the EU High Representative Federica Mogherini and the Iranian Foreign Minister Javad Zarif describes their continued commitment to the JCPOA: "We have respected the timetable set out in the JCPOA, which demonstrates our collective will to stick to its provisions [...] All sides remain strongly committed to ensuring that implementation of the Joint Comprehensive Plan of Action can start as soon as possible. To this end, we will make all the necessary preparations."

EU Position On 18 October 2015, the EU published the following documents, which set out the legislative framework for lifting the EU nuclear-related economic and financial sanctions on Iran:

When effective, Regulation 1861 terminates certain provisions of Regulation (EU) No 267/2012, as amended. This covers sanctions and restrictive measures in areas including:

  • Transfers of funds between EU and Iranian persons and entities (including financial institutions
  • Banking activities
  • The provision of insurance and reinsurance
  • Financial support for trade with Iran
  • The import and transport of Iranian oil, petroleum products, gas and petrochemical products; the export of key equipment and technology for and investment in these sectors
  • The export of graphite, raw or semi-finished metals
  • The export of key naval equipment and technology, the design and construction of cargo vessels and oil tankers, and the provision of flagging and classification services

When effective, Regulation 1862 removes the designation of 331 entities and individuals subject to an asset freeze and/or visa ban, set out in Regulation (EU) No 267/2012, as part of the staged de-listing of those designated under the EU nuclear-related sanctions programme.

Both Regulations will only apply from the "date on which the Council has noted that the Director-General of the IAEA has presented a report to the IAEA Board of Governors and to the UN Security Council which confirms that Iran has taken the measures" specified in the JCPOA, in other words, 'Implementation Day' of the JCPOA.

The commitment to lift all EU nuclear-related sanctions in accordance with the JCPOA is "without prejudice to the dispute resolution mechanism specified in the JCPOA and to the reintroduction of EU sanctions in case of significant non-performance by Iran of its commitments under the JCPOA". However, the EU makes clear in its Decision that if EU sanctions are reintroduced, adequate protection for the execution of contracts concluded in accordance with the JCPOA will be provided consistent with previous provisions when sanctions were originally imposed.

U.S. Position The Department of the Treasury's Office of Foreign Asset Control (OFAC) announced that in connection with Adoption Day, President Obama has issued a memorandum directing the U.S. Secretary of State, the Secretary of the Treasury, the Secretary of Commerce, and the Secretary of Energy to take all appropriate preparatory measures to ensure the prompt and effective implementation of the U.S. commitments set forth in the JCPOA upon Iran's fulfillment of the requisite conditions.

In addition, the Secretary of State has issued contingent waivers of certain statutory sanctions provisions with respect to the Iran Secondary Sanctions. These waivers are not currently in effect and will only take effect on Implementation Day. The waivers relate to various provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Iran Freedom and Counter Proliferation Act, and National Defense Authorization Act for FY 2012.

Immediate next steps The latest measures adopted on Adoption Day make the necessary legal preparations for sanctions to be lifted on Implementation Day, when the IAEA verifies that Iran has met its own obligations under the deal.

Only once this has occurred will the lifting of sanctions as specified in the JCPOA take place. Currently, there is no specification as to a timeframe within which Implementation Day will or must occur.

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.