On 28 August, the so-called E3 (UK, France and Germany) announced that they had initiated the "snapback" process under the Joint Comprehensive Plan of Action (the "JCPOA"), also known as the Iran nuclear agreement.
The JCPOA was entered into in 2015 and provided for extensive relief from EU and US sanctions against Iran in exchange for Iran meeting certain obligations in relation to its nuclear programme. Since then, the US has withdrawn from the agreement, re-imposing various sanctions measures, and Iran has ceased to implement its commitments in relation to its nuclear programme. Despite negotiations between the parties, the E3's announcement and parallel notification to the UN marks the triggering of the "snapback" mechanism contained in the JCPOA's dispute resolution provisions. This notification triggers the start of a 30-day period, at the end of which the pre-JCPOA UN sanctions on Iran will be re-imposed unless the UN Security Council passes a resolution to the contrary. Negotiations will remain ongoing during the 30-day period, such that the re-imposition of sanctions is not a given. However, companies with exposure to Iran should be cognisant of the risk that this may happen.
The UN measures that were previously in force, and were lifted with the introduction of the JCPOA, included trade sanctions restrictions relating to the nuclear and ballistic missile programmes and asset freezes on a range of Iranian individuals and entities associated with the nuclear programme.
The JCPOA dispute and snapback mechanism only covers sanctions imposed by the UN. At the time the JCPOA was entered into, the EU had imposed additional sanctions on Iran which went beyond those agreed at UN level, including for example specific measures targeting the Iranian financial and oil sectors. It therefore remains to be seen whether the EU would seek to re-introduce these measures post-snapback, or would simply implement the UN sanctions once reintroduced. The UK was, at the relevant time, part of the EU and the pre-JCPOA EU sanctions were automatically effective in the UK; this would of course not be the case post-Brexit, although the UK will be obliged to implement any measures re-imposed by the UN.
The E3's press release refers only to UN sanctions and does not expressly refer to the possibility of further EU (or indeed UK) measures being adopted. Companies with links to Iran should, however, continue to monitor the situation and be aware that the position is subject to change over the 30-day snapback period, and potentially beyond.
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