Iran Sanctions: Implications of Implementation Day
Implementation Day, which is 16th January 2016, marks the day on which it was verified that Iran implemented its nuclear-related commitments of the JCPOA. The Club and International Group are examining what this actually means in reality for Iran's oil, gas, shipping, petrochemicals, insurance and financial sectors, and importantly for those owners/operators wishing to engage business with Iran.IG Circular
The Club has published Circular 18/15 in common with all Clubs in the International Group:
For more detailed advice see the paragraphs below.US Sanctions relief
The US Treasury has published an FAQ relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA) on Implementation Day:https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf
Guidance from the US Treasury on the lifting of certain U.S Sanction is available to download here:https://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf
The US has broadly lifted "nuclear-related secondary sanctions" which had targeted non-US companies/persons dealing with Iran's energy, shipping, financial, shipbuilding and automotive sectors, Iran's port operators, providers of related insurance, Iran's trade in gold and other precious metals, and trade with Iran in graphite and raw or semi-finished metals, such as aluminum, steel and coal.EU Sanctions relief
Full guidance on the termination or suspension of nuclear related financial and economic sanctions by the EU under the JCPoA is available on the UK Government Websitehere
. Brussels has published a Note on the EU sanctions to be lifted following implementation day:http://eeas.europa.eu/top_stories/pdf/iran_implementation/information
However, not all of the EU and US sanctions against Iran are being lifted. There are still residual asset freezes in place against individuals and entities linked to Iran's ballistic missile program and human rights violations. In fact, despite the announcement over the weekend the US has imposed fresh sanctions on Iranian companies and individuals over a recent ballistic missile test. The new sanctions prevent 11 entities and individuals linked to the missile programme from using the US banking system. Furthermore, the US "primary" sanctions will continue to prohibit US persons in general from carrying out business with Iran outside the few exempted areas such as food, medicine and the newly liberalised aviation sector. Banks are therefore likely to be weary in clearing US dollars transactions for Iran-related business for the foreseeable future.
Anyone proposing to engage in business in Iran will still be required to carry out proper due diligence on their counterparts before concluding contracts.
The following checklist, reproduced courtesy ofHolman Fenwick Willan
, identifies some of the issues that should be considered:
- Are any US persons involved?
- Do any payments need to be made in US dollars?
- Does the transaction involve the supply of any US origin goods or goods with US content?
- Is your Iranian counterparty, or any other party involved in the transaction (e.g. a port operator or agent) still included on an applicable sanctions list (or is owned or controlled or acting on behalf of such an individual or entity)?
- Have you checked that the cargo is no longer subject to any restrictions?
- Can you document and evidence the checks which you have carried out?
- Do you have any pre-existing banking covenants or other contractual warranties or restrictions (e.g. trading limits or policy restrictions) which limit your ability to trade with Iran?
- Have you spoken to your bank and confirmed that they are prepared to support the transaction in respect of payment?
- Have you checked with your insurers and confirmed cover?
We will of course provide further details and guidance from the International Group once available.
For more information please contact Nigel Carden (firstname.lastname@example.org
Regional Director for Japan
You may also be interested in:
Members will have noted the decision by President Trump announced on May 8 to withdraw the USA from participation in the JCPOA (Joint Comprehensive Plan of Action) agreed between Iran, the EU, and the P5+1 (the five permanent members of the United Nations Security Council - China, France, Russia, United Kingdom, United States - plus Germany), and to re-impose US nuclear-related sanctions.
Following the President's May 8, 2018 decision to withdraw from the JCPOA and to begin re-imposing the U.S.
The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has continued to focus on international shipping as a means to implement the Iranian sanctions program and has now turned its attention to the bunkering of vessels engaged in Iranian trade or involving Iranian vessels.