The United States has withdrawn from the JCPOA on May 8, 2018. The following authorizations do not apply to US persons after such time.
Sanctions Relief on Implementation Day
Most of the sanctions relief anticipated in the JCPOA will happen on Implementation Day. The United States has primarily agreed to provide secondary sanctions relief to Iran, meaning the United States has agreed not to sanction other countries for their dealings with Iran in several identified categories of business. Those include the automotive industry, the aviation industry, and the oil and gas industries when dealing with parties which might have been subject to nuclear-related sanctions. The primary US sanctions program targeting Iran will remain in effect.
However, in the EU, the JCPOA anticipates the lifting of all or most EU sanctions against Iran. Also being lifted on Implementation Day are most of the UN sanctions targeting Iran.
Duties and Obligations on Implementation Day
The main triggering event for the sanctions relief is the IAEA’s verification that Iran has completed its nuclear-related commitments detailed in the JCPOA. With the conditional sanctions waivers in place, IAEA verification should result in the automatic execution of the sanctions relief envisioned in the JCPOA.
Impact of Iran Sanctions Relief
The United States will cease application of some of its sanctions to some industries. Those are primarily the secondary sanctions. They will also remove the names of certain entities and persons from the SDN list, which is the Specially Designated Nationals list, which is maintained by OFAC. The United States is also committing to allow some activities related to Iran by license, primarily in the areas of aviation, certain imports of foodstuffs, and Iranian carpets.
Ongoing Business Deals
Given that most of the sanctions relief provided by the United States is limited to secondary sanctions, most transactions and deals between the United States and Iran will remain unlawful even after Implementation Day. As such, Implementation Day will likely not impact existing business deals and transactions because there should not be any. And if there are, they are already licensed pursuant to specific and general licenses.
Non-U.S. Companies and Individuals
Non-U.S. companies and non-U.S. persons stand to benefit the most from Implementation Day. For example, most EU sanctions against Iran will be lifted on Implementation Day. Companies only subject to EU regulations will then be freed to transact with Iran without fear of violating EU sanctions. Also, EU companies in finance, banking, energy and petrochemical, shipping, insurance, automotive, precious metals, and software industries will be free to transact with Iran without fear of the imposition of U.S. secondary sanctions.
Most companies will remain prohibited from engaging in business with Iran because the primary U.S. sanctions program targeting Iran will remain largely in effect even after Implementation Day. There will be some narrow exceptions for U.S. companies to import Iranian carpets and foodstuffs as well as some sanctions relief for U.S.-owned, foreign subsidiaries. The latter sanctions relief has yet to be defined by OFAC, but the agency has said that they will provide some guidance on that issue. European companies stand to benefit the most because their sanctions programs will be lifted almost in their entirety after Implementation Day.