The announcement by the International Atomic Energy Agency on January 16, 2016, that the Government of Iran has satisfied its commitments under the Joint Comprehensive Plan of Action (“JCPOA”), has triggered “Implementation Day” and the lifting of Iran sanctions as detailed in the JCPOA. With this development Iran can now reengage with the global economy, and non-U.S. companies can engage in business with Iran. In sum, as of Implementation Day:
- The European Union (“EU”) has lifted the substance of its economic and financial sanctions imposed in relation to the Iranian nuclear program and only a limited number of restrictive measures, including the listing of certain individuals and entities, will remain in effect under the EU Iran sanctions regime.
- The U.S. Government has lifted most “secondary” Iran sanctions, that is, U.S. sanctions applicable to non-U.S. persons engaging in Iranian transactions even when there is no U.S. nexus to the transaction. U.S. primary Iran sanctions applicable to U.S. persons (e., U.S. companies, U.S. citizens, and permanent resident aliens wherever located) will remain in effect, as will the prohibition on the use of the U.S. financial system, including overseas branches of U.S. banks, to effect Iran-related transactions. Under a General License, foreign subsidiaries of U.S. companies will be permitted to engage in certain business activities with Iran so long as there is no U.S. person involvement and no use of the U.S. financial system.
For further information, please see our Client Alert “Navigating Iran Sanctions after JCPOA’s Implementation Day”.