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.
On December 15, 2016, the Office of Foreign Assets Control (OFAC) provided updated guidance on what companies can expect in the event of the “snapback” of sanctions under the Joint Comprehensive Plan of Action (JCPOA). Previously, OFAC Frequently Asked Questions (FAQs) had only offered the possibility of working with companies in the event of snapback. The guidance offers assurances of a 180-day wind down period. OFAC issued this clarification in response to many questions it received, but it is not intended to signal an expectation that the sanctions will snapback.
In addition, OFAC issued a new General License J-1 to replace General License J addressing the temporary sojourn of U.S.-origin aircraft in Iran. The updated general license authorizes the temporary sojourn of U.S.-origin aircraft as part of a code sharing arrangement with an Iranian air carrier. Our prior blog post on the issuance of General License J is available here.
Donald Trump’s victory in the 2016 Presidential election put the Republican Party in charge of the White House and Congress for the first time in a decade. President-elect Trump ran as an anti-establishment candidate who departed from many traditional Republican positions and promised bold and in some respects controversial reforms. How his administration will govern and the extent to which its policies will be supported in Congress are key questions facing companies and investors.
This report comments on aspects of international trade, sanctions and export control policies that are currently at the forefront of discussion.
Today, OFAC issued new General License J (“GL J”) authorizing non-U.S. persons to reexport certain “Eligible Aircraft” to Iran. Importantly, GL J only applies to temporary sojourns, meaning that any sales or leases (including wet leases) of aircraft to Iran would still require a specific license. Please click here to view OFAC’s new General License J.
With “Implementation Day” came the lifting of certain key U.S. and EU sanctions on the civil aviation industry. However, many prohibitions still remain, and licensing requirements may attach to U.S. persons or non-U.S. persons who seek to do business in Iran or operate airline services to/from Iran. Companies must continue to navigate this complex sanctions framework if seeking to engage in Iran’s aviation sector.
The front line of Iran sanctions compliance and enforcement has been the banking sector. With the arrival of “Implementation Day” under the Joint Comprehensive Plan of Action (JCPOA), financial institutions and persons engaging in financial transactions face an adjusted, but still complex, sanctions environment. Continue reading →
On January 16, 2016, known as “Implementation Day” under the Joint Comprehensive Plan of Action (JCPOA), the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License H, which allows foreign subsidiaries of U.S. companies to engage in business with Iran, but with strict limitation on the extent to which their parent companies can be involved. Prior to 2012, the U.S. embargo did not apply to companies incorporated abroad, including foreign subsidiaries of U.S. companies. Section 218 of The Iran Threat Reduction and Syria Human Rights Act of 2012 extended the reach of U.S. sanctions, making U.S. companies potentially liable if their foreign subsidiaries did business with Iran. As part of the JCPOA, the United States committed to rolling back this sanction.
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.
On Friday, May 8, the Senate overwhelmingly approved the Iran Nuclear Agreement Review Act, which would give Congress a role in approving any agreement with Iran concerning its nuclear program. The Senate approved the bill 98-1, with Sen. Tom Cotton (R-AK) the only dissenting vote. The House of Representatives could vote on the legislation as early as this week.
As discussed in a previous post, on April 2, 2015 representatives of the United States, Great Britain, France, Germany, China and Russia (collectively, the “P5+1” countries) announced that they had agreed with Iran on the Parameters for a Joint Comprehensive Plan of Action. The parties now have until June 30, 2015 to reach a final agreement. One of the major open issues is what sanctions on Iran would be removed and when. Complicating this negotiation, especially following passage of the Iran Nuclear Agreement Review Act, is President Obama’s authority to lift U.S. sanctions on his own authority.
Under the legislation passed by the Senate, Congress would have 30 days to review the agreement and the proposed sanctions relief plan (longer under certain circumstances). Congress may then enact a joint resolution in favor of the agreement, enact a joint resolution opposing the agreement, or take no action. If Congress approves the agreement or takes no action, the President may then grant sanctions relief in line with the authority that currently exists under relevant statutes. If Congress votes to disapprove of the agreement, the President can veto the joint resolution and, if Congress fails to override the veto, he can still move forward with sanctions relief. However, if that veto is overridden by a 2/3 vote of both houses of Congress, then the President would be prohibited from lifting sanctions. Continue reading →