Today, President Trump issued a statement on the status of the Joint Comprehensive Plan of Action (“Iran nuclear deal”) and the Office of Foreign Assets Control designated 14 individuals and entities in connection with serious human rights abuses and censorship in Iran, and support to designated Iranian weapons proliferators. Below, we provide notable highlights from the President’s statement.
January 16, 2016 was “Implementation Day” under the Joint Comprehensive Plan of Action (JCPOA), bringing into effect the sanctions commitments of the United States and European Union (EU). The International Atomic Energy Agency (IAEA) confirmed in Vienna that Iran had met its JCPOA milestones with respect to its nuclear program. The U.S. sanctions changes involve partial relief within a complex regime with continuing primary sanctions and designations on Iranian parties which carry secondary sanctions.
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued Implementation Day guidance describing the changes to the U.S. sanctions program for Iran, which largely reflect what had been expected under the JCPOA. This includes the ending of secondary sanctions on Iran related to nuclear weapons proliferation; delisting of over 400 Iranian and Iran-related Specially Designated Nationals (SDNs); issuance of general licenses for non-U.S. entities owned or controlled by U.S. persons to engage in certain activities in Iran, as well as for import to the United States of Iranian carpets and foodstuffs including pistachios and caviar; and adjustment of licensing policy to allow authorization of certain exports, sales, leasing and transfers of civilian passenger aircraft. Existing authorizations for agricultural commodities (including food), medicine, and medical supplies remain unchanged. Exports and reexports of U.S. origin products (as well as foreign-origin products with more than 10% U.S. content) still require a license, and U.S. persons still may not participate in business transactions with Iran unless licensed.
Following will be a series of posts on key aspects of the adjustments to U.S. and EU regulations relating to Iran.
On October 29, 2015, the U.S. and the EU took separate actions to ease their respective Belarus-related sanctions programs for six months. These measures follow the October 11, 2015 reelection of Alexander Lukashenko as President of Belarus, the regime’s decision to release certain political prisoners and hopes for an improvement of the political and economic relationship between Western countries and Belarus. While currently temporary in nature, the sanctions relief provided affords Western companies opportunities to engage in certain transactions in Belarus.
On October 18, 2015, both the United States and the European Union took action to prepare for future changes to sanctions policy which will be effective upon IAEA verification of Iran’s commitments under the Joint Comprehensive Plan of Action (JCPOA). This was a required step under the JCPOA, termed “Adoption Day,” scheduled to occur ninety (90) days after the JCPOA was endorsed by the UN Security Council via resolution 2231.
Importantly, Adoption Day does not bring about any immediate sanctions relief. OFAC reminded companies again about potential violations related to arranging agreements and contingent contracts with Iranian parties prior to Implementation Day.
Under the terms of the Iran Nuclear Agreement Review Act, Congress had until September 18 to reject President Obama’s promised sanctions relief for Iran agreed to under the Joint Comprehensive Plan of Action (JCPOA). Although the House of Representatives voted to reject the deal, Senate Democrats blocked debate on a similar resolution, thus preventing a vote in the Senate. Consequently, Congress took no action, which means that the JCPOA will continue to be implemented on a step-by-step basis (see our blog post here for full details). Looking ahead, there are several key issues for businesses contemplating entering the Iran market to consider.
On 19 June, the European Council extended EU sanctions against Russia pursuant to Council Decision (CFSP 2015/959). This follows a series of increasingly coordinated actions by the US and EU, such as the joint statement produced at the G7 meeting two weeks ago, to show a united front against continued Russian activity related to Ukraine. With this extension, EU sanctions will remain in place until January 31, 2016 unless there is a complete implementation of the Minsk Agreements before then.
However, looking forward, US and EU policymakers recently leaked to the media that they are pre-planning a series of coordinated sanctions against Russia should the situation deteriorate. These new measures could include new travel bans on Russian government officials and business leaders, but could escalate significantly to more broad-based sanctions against the Russian energy and financial sectors. In particular, these sanctions could target the sale of petroleum products from Russia and Russia-related financial transactions. Some western leaders are also supportive of utilizing these new sanctions should the status quo remain unchanged for much longer. Continue reading →
On Tuesday, June 8 in Pillsbury’s London office, Pillsbury and the Eurasia Group hosted the first event in their Sanctions & Market Opportunities Series entitled “Iran Sanctions, Investment and Trade: Preparing for Divergent Outcomes.”
During the event, panelists discussed the likelihood for a final agreement related to Iran’s nuclear program and the eventual easing of international sanctions. Panel members also discussed the current U.S. and EU sanctions regime and what may change in the event of an agreement or if talks fall apart. As part of these discussions, the panel detailed the U.S. congressional review process that will occur in event of an agreement and how this process is impacting the negotiations and may hinder sanctions relief.
The audience of senior European business leaders received several key takeaways, including: Continue reading →
The leaders of the G7 met for two days of discussions in Elmau, Southern Germany on 7 and 8 June 2015.
High on the agenda was the issue of Russian targeted EU and US sanctions over Moscow’s role in support of Ukrainian rebels.
Russia has already been excluded from what was formerly known as G8 following its annexation of Crimea in 2014.
Following talks between President Obama and German Chancellor Merkel in Elmau, reportedly over a traditional Bavarian meal of sausages and beer, the White House issued a statement confirming: “The duration of sanctions should be clearly linked to Russia’s full implementation of the Minsk agreements and respect for Ukraine’s sovereignty”. Continue reading →
The 17th EU-Ukraine summit took place in Kyiv, Ukraine on 27 April 2015, being the first summit taking place under the framework of the Association Agreement, the treaty between the EU and Ukraine that establishes a political and economic association between the parties.
The summit was an opportunity for the EU and Ukraine to discuss: (i) the implementation of the Association Agreement and the political and economic reforms in Ukraine including EU financial and other assistance; (ii) the crisis in Eastern Ukraine and the application of the Minsk agreements; and (iii) regional issues and the preparations for the upcoming Eastern Partnership summit in Riga.
During the summit, EU and Ukrainian leaders are reported to have agreed that the full implementation of the Minsk agreements, the ceasefire deal struck between Ukraine and pro-Russian rebels, remains the best chance to move towards a political solution, taking note of the European Council Conclusions of 19 March 2015 which called both for the swift and full implementation of the Minsk agreements, and for the duration of the restrictive measures against Russia to be linked to such implementation.
On March 6, 2015, Switzerland extended its measures to prevent the circumvention of sanctions issued by the EU. These correspond to the measures introduced by the EU in December 2014.
Switzerland has prohibited all foreign investment in Crimea and Sevastopol. There is a ban on services in several economic sectors, including investment and tourism. It also expanded the ban on exports of key goods to Crimea and Sevastopol to include additional articles, and it has been made more precise to incorporate the adjustments made in the EU sanctions.
Switzerland also added 28 additional names to the existing list of individuals and businesses with whom financial intermediaries may no longer enter into new business relationships. Persons in Switzerland with an existing business dealing with any of these entities are required to report this relationship.
Click here for the full announcement.