Overview
Today, President Trump announced “that the United States will withdraw from the Iran nuclear deal” and issued a National Security Presidential Memorandum (NSPM) “to begin reinstating” the "highest level” of economic sanctions on Iran. Today’s action sets in motion the termination of all or nearly all of the sanctions relief offered by the United States that formed the cornerstone of the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). While the JCPOA is technically still in force, with the United States no longer a participating party, this move by the Trump Administration could lead to its unraveling in the near future. In the meantime, any activity relating to Iran is once again subject to a high level of risk and legal uncertainty.
While the narrow authorizations that arose out of the JCPOA for U.S. companies and their foreign subsidiaries to operate in or trade with Iran either will be revoked, it is less clear how the Administration will implement so-called “secondary sanctions” targeting non-U.S. companies’ activity in Iran. While those secondary sanctions are now back in effect (subject to 90-day and 180-day wind-down provisions described below), other countries remain united in their support for the deal, which could raise challenges for the U.S. Government’s efforts to restrain companies outside the United States from engaging in activity that is not only lawful, but in some cases encouraged, by their own governments.
There are numerous documents explaining these developments including:
- OFAC Frequently Asked Questions (FAQs)
- A statement from OFAC
- A Department of the Treasury press release
- A statement from Secretary of State Mike Pompeo
- The purchase or acquisition of U.S. dollar banknotes by the Government of Iran;
- Iran’s trade in gold or precious metals;
- The direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
- Significant transactions related to the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
- The purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
- Iran’s automotive sector.
- Iran’s port operators, and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates;
- Petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
- Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA);
- The provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA);
- The provision of underwriting services, insurance, or reinsurance; and
- Iran’s energy sector.
the nuclear deal with Iran is crucial for the security of the region, of Europe and of the entire world. The European Union is determined to preserve it. We expect the rest of the international community to continue to do its part to guarantee that it continues to be fully implemented, for the sake of our own collective security.Prime Minister Theresa May, Chancellor Angela Merkel and President Emmanuel Macron also issued a joint statement emphasizing their continuing commitment to the JCPOA, and the UK Office of Financial Sanctions Implementation has underscored that the UK will continue to implement the JCPOA. In this environment, it is difficult to imagine how the Trump Administration will be able to take significant action against non-U.S. companies under its newly restored secondary sanctions authorities without facing heated resistance from other governments. A “new deal” may be the best path forward for all parties, but it is not clear if that will be achievable.