US Treasury: New Guidance on Sanctions

August 10, 2015

On August 7, the U.S. Treasury issued guidance clarifying that Iran will continue to receive the limited sanctions relief specified by the 2013 interim nuclear deal, known as the Joint Plan of Action (JPOA). Once the final nuclear deal is implemented – likely not until early 2016 – the Treasury will issue new guidance on sanctions relief. The following are excerpts from the Treasury’s latest sanctions guidance and frequently asked questions.

Guidance relating to the continuation of certain temporary sanctions relief pursuant to the JPOA, prior to implementation of the JCPOA
 
On July 14, 2015, the United States and its partners in the P5 + 1 (China, France, Germany, Russia, and the United Kingdom, coordinated by the European Union’s High Representative) reached a Joint Comprehensive Plan of Action (JCPOA) with Iran that will verifiably prevent Iran from acquiring a nuclear weapon and ensure that Iran’s nuclear program will be exclusively peaceful. The JCPOA builds on the foundation of the Joint Plan of Action (JPOA), achieved in November 2013, and the political framework announced in Lausanne on April 2, 2015. Under the JCPOA, Iran will receive phased sanctions relief once the International Atomic Energy Agency (IAEA) verifies that Iran has implemented key nuclear-related commitments described in the JCPOA. The date on which sanctions relief under the JCPOA will commence is referred to hereinafter as “Implementation Day.” Prior to Implementation Day, the U.S. Government (USG) will issue guidance related to the implementation of the sanctions relief provided for under the JCPOA.
 
The P5+1 and Iran also decided on July 14, 2015 to further extend through Implementation Day the nuclear commitments and sanctions relief provided for in the JPOA. Accordingly, during the period from January 20, 2014 through Implementation Day (the “JPOA Relief Period”), the USG will implement the limited JPOA relief as set out below. This JPOA sanctions relief is the only Iran-related sanctions relief that will be in effect until Implementation Day.
 
The USG retains the authority to impose sanctions under the authorities outlined below to the extent such activities are materially inconsistent with JPOA sanctions relief as outlined in this guidance. The USG also retains the authority to continue imposing sanctions under other authorities, such as those used to combat terrorism, destabilizing regional activity, and human rights violations. During the JPOA Relief Period, the USG will continue to vigorously enforce our sanctions against Iran, including by taking action against those who seek to evade or circumvent our sanctions.
 
With the exception of civil aviation activities described in section IV and the humanitarian channel described in section VI below, none of the sanctions relief outlined in this guidance may involve a U.S. person, or, as applicable, a foreign entity owned or controlled by a U.S. person, if otherwise prohibited under any sanctions program administered by the USG.
 
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Frequently asked questions relating to the continuation of certain temporary sanctions relief pursuant to the JPOA prior to implementation of the JCPOA
 
Q. Will sanctions relief be provided to Iran after the announcement of the JCPOA?
 
Prior to Implementation Day, the only sanctions relief available is the JPOA relief, which was initially provided in January 2014 and has now been extended through Implementation Day. The sanctions relief described in the JCPOA will commence only after the IAEA verifies that Iran has implemented key nuclear-related commitments.
 
2. Q: What types of sanctions relief will be provided to Iran between the announcement of the JCPOA and Implementation Day?
 
On July 14, 2015, the USG committed to continue the sanctions relief provided for under the JPOA through Implementation Day. To implement this relief, the USG will continue to temporarily suspend certain sanctions involving Iran’s purchase and sale of gold and other precious metals, Iran’s export of petrochemical products, Iran’s automotive industry, and certain associated services1 regarding each of the foregoing. The USG will also continue to coordinate with Iran regarding the use of financial channels established in furtherance of the JPOA to facilitate Iran’s import of certain humanitarian goods to Iran, payment of medical expenses incurred by Iranians abroad, payments of Iran’s UN obligations, and payments of $400 million in governmental tuition assistance for Iranian students studying abroad. The USG will also continue its favorable licensing policy in connection with transactions related to the safety of Iran’s civil aviation industry. Finally, the USG will continue to pause efforts to further reduce Iran’s crude oil exports and will enable Iran to access an agreed amount of Restricted Funds2 in installments. Unless otherwise noted, these relief measures do not include transactions with persons on the U.S. Treasury Department’s Office of Foreign Assets Control’s (OFAC) List of Specially Designated Nationals and Blocked Persons (the SDN List) (http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx).
 
The USG will continue to vigorously enforce our sanctions against Iran that are not subject to the limited relief provided pursuant to the JPOA, including by taking action against those who seek to evade or circumvent our sanctions.
 
3. Q: How do the JCPOA and the extension of JPOA relief impact U.S. sanctions on Iran?
 
Except for the limited relief provided pursuant to the JPOA, all U.S. sanctions with respect to Iran, including financial sanctions, sanctions pertaining to the purchase of Iranian crude oil, and sanctions on investment in Iran’s energy and petrochemical sectors, remain in effect with respect to U.S. and non-U.S. persons until Implementation Day. Prior to Implementation Day, the USG will provide additional guidance regarding the phased sanctions relief to be provided under the JCPOA.
 
With certain limited exceptions, the relief provided in the JPOA only pertains to conduct and transactions fully completed during the JPOA Relief Period and involves only certain sanctions on non-U.S. persons not otherwise subject to section 560.215 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR) (hereinafter “non-U.S. persons not otherwise subject to the ITSR”), as described in more detail in these FAQs.3 U.S. persons and U.S.-owned or -controlled foreign entities continue to be generally prohibited from conducting transactions with Iran, including any transactions of the types permitted pursuant to the JPOA, unless licensed to do so by OFAC.
 
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