International Trade Law News /title <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" ""> <html xmlns="" xml:lang="en" lang="en"> <meta name="verify-v1" content="6kFGcaEvnPNJ6heBYemQKQasNtyHRZrl1qGh38P0b6M=" /> <head> <title>International Trade Law News

« Home | Brian Nilsson is now Serving as Deputy Assistant S... » | US Issues Regulations Further Easing US Sanctions ... » | Iran Sanctions Compliance Considerations Under the... » | Registration Now Open for BIS Update Conference on... » | International Sanctions Lawyer Glen Kelley Joins J... » | World ECR Releases Special Report: "U.S.A. 2015: K... » | Questions and Answers on the Iran Nuclear Agreemen... » | U.S. GSP Renewal and Refund Update » | BIS Export Controls Update Conference to be Held i... » | BIS Issues Guidance on Due Diligence to Prevent Un... » 

October 19, 2015 

US and EU Mark "Adoption Day" of Iran Nuclear Agreement

While US and EU Mark Adoption Day of the Iran Nuclear Agreement, Current Sanctions Regime on Iran Will Remain in Effect Until Implementation Day

By Glen Kelley, Doug Jacobson and Michael Burton, Jacobson Burton Kelley PLLC

We continue to follow the gradual progress by the United States, the EU, Iran and other countries towards the implementation next year of sanctions relief under the July 2015 agreement with Iran, formally called the Joint Comprehensive Plan of Action (“JCPOA”).

Our most recent post on Iran sanctions compliance for US and non-US companies under the JCPOA can be found here

Adoption Day and Implementation Day

Yesterday, October 18, the United States and the EU marked “Adoption Day”, a milestone that follows several initial steps by the US, EU and Iran, pursuant to the phased timeline set out in the JCPOA.

Iran must now satisfy its extensive obligations to scale back its nuclear activities, and the US and EU have formally begun preparing to ease sanctions next year if Iran verifiably meets those commitments. To this end, on October 18 both the US and EU released a number of legal and guidance documents relating to the planned sanctions relief.

It is important to note that none of the sanctions relief will be effective until Iran has satisfied its nuclear-related commitments under the JCPOA.

Once Iran has satisfied its JCPOA conditions and this is verified by the IAEA, the next JCPOA milestone known as “Implementation Day” will be reached. While Iranian officials have ambitiously announced they intend to fulfill their commitments within a few months, this is not widely expected to occur until at least mid-2016.

As we noted in our previous alerts, even if the JCPOA is fully implemented, very little will change with respect to the broad US embargo of Iran. In practical terms, most transactions with Iran, its government, and many targeted Iranian companies will remain prohibited if US persons, US products or US dollar payments are involved.

If the JCPOA is implemented next year, the EU will lift the majority of its sanctions on Iran, and the US will lift the majority of its “secondary” (extraterritorial) sanctions that apply to non-US companies and banks. However, a number of EU sanctions and US secondary sanctions will remain, presenting compliance challenges for many otherwise-permissible transactions by non-US persons.

Key US and EU Documents
The principal legal instruments and guidance issued on October 18 in relation to the anticipated US and EU sanctions relief are as follows:
  • The US Treasury Department's Office of Foreign Assets Control (“OFAC”) issued guidance on frequently asked questions (“FAQ”) related to JCPOA implementation. These are available at
  • The US State Department issued “contingent waivers” of the US secondary sanctions covered by the JCPOA, which will not become effective until Implementation Day. These are available at
  • A Decision and two implementing Regulations issued by the Council of the European Union, setting out the precise parameters of the EU sanctions that will be lifted if Implementation Day is reached. These are available at

Sanctions Compliance Issues Worth Noting

There is little that is new or unexpected in the documents released by the US on October 18, 2015. However, the following points are worth noting:
  • Until Implementation Day, non-US persons could be penalized by the US government for entering into certain types of contracts with Iran, its government or sanctioned Iranian persons. The OFAC FAQ guidance indicates that this could include contacts “that are contingent on the implementation of sanctions relief under the JCPOA”, meaning contracts that will not be performed until applicable sanctions are lifted.
  • If US sanctions relief occurs next year, many entities owned or controlled by the Iranian government will be removed from the primary US sanctions list (the list of Specially Designated Nationals, or “SDN List”). However, all Iranian government entities will remain “blocked”, and OFAC officials have publicly stated that those removed from the SDN List likely will be included in a special new list of blocked entities.
  • Many of these Iranian government entities play an important role in the Iranian economy, so it will be important to know whether they can be involved in transactions carried out pursuant to any JCPOA sanctions relief that is implemented next year. The new State Department guidance suggests that these entities could be involved in transactions that are authorized pursuant to the JCPOA, including any export from the US of commercial passenger aircraft or related equipment and services that is specifically licensed by OFAC.
  • On the other hand, it appears from the State Department guidance that the US secondary sanctions to be suspended on Implementation Day will remain in effect for transactions involving entities or individuals that remain on the SDN List. This could complicate US sanctions compliance for non-US persons after the JCPOA is implemented. It is possible non-US persons with no ties or connections to the United States could still be penalized under US secondary sanctions for engaging in certain activities relating to Iran, such as support for the Iranian oil and gas, shipping or shipbuilding sectors, or for providing insurance or reinsurance related to those activities, if any person on the shortened SDN List is involved.
  • The Joint Commission called for under the JCPOA, consisting of high-level representatives of the US, EU, Iran and the five other countries party to the JCPOA, has been formed and will have its first meetings this week. The commission may soon begin hearing complaints from both sides that actions are falling short of commitments, for example by Iran regarding the anticipated US sanctions relief, and by the other parties regarding Iranian action to dismantle its nuclear program and other Iranian actions. The US will be represented on the Joint Commission by, among others, Ambassador Stephen Mull, who heads up a new State Department office for JCPOA implementation.

OFAC has reiterated on numerous occasions that it intends to publish on its website detailed guidance on the implementation of US sanctions relief under the JCPOA. We expect this to be posted several weeks before Implementation Day occurs next year.

We will continue to monitor the sanctions relief under the JCPOA and will issue further updates when significant developments occur.

Labels: , ,



Subscribe to our confidential mailing list

Mobile Version

Search Trade Law News

International Trade and Compliance Jobs

Jobs from Indeed




  • This Site is presented for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed when you use this Site. Do not consider the Site to be a substitute for obtaining legal advice from a qualified attorney. The information on this Site may be changed without notice and is not guaranteed to be complete, correct or up-to-date. While we try to revise this Site on a regular basis, it may not reflect the most current legal developments. The opinions expressed on this Site are the opinions of the individual author.
  • The content on this Site may be reproduced and/or distributed in whole or in part, provided that its source is indicated as "International Trade Law News,".
  • ©2003-2015. All rights reserved.

Translate This Site

Powered by Blogger