On January 16, 2016, the United States lifted nuclear-related economic sanctions previously imposed on Iran, fulfilling obligations under the nuclear treaty agreed to last year by the P5+1 nations (United States, United Kingdom, France, Russia, China and Germany), the European Union, and Iran. But, the relaxation of sanctions, far from heralding a return to business as usual for US persons hoping to trade with or invest in Iran, leaves in place a variety of primary US sanctions including the general domestic trade embargo on Iran. With limited exceptions, US persons and companies continue to be broadly prohibited from engaging in transactions or dealings with Iran because the “secondary sanctions” now lifted had been directed largely toward non-US persons for specified conduct involving Iran that occurs entirely outside of US jurisdiction. These secondary sanctions had applied to:

  • Iran’s financial/banking, energy/petrochemical, shipping/shipbuilding, and automotive sectors
  • Iran’s port operators
  • The provision of insurance, re-insurance and underwriting services in connection with now-permitted activities
  • Iran’s trade in gold and other precious metals
  • Trade with Iran in graphite, raw or semi-finished metals such as aluminum and steel, coal, and certain software in connection with now-permitted activities
  • The provision of associated services for each of the above categories

The US also removed over 400 individuals and entities from OFAC’s List of Specially Designated Nationals and Blocked Persons, the Foreign Sanctions Evaders List, and/or the Non-SDN Iran Sanctions Act List. Non-US persons will no longer be subject to sanctions for conducting transactions with any of these individuals and entities. Secondary sanctions, however, continue to apply to non-US persons for conducting transactions with any of the more than 200 Iranian or Iran-related individuals and entities who remain or are placed on the SDN List.

Although US persons and companies continue to be broadly prohibited from engaging in transactions with Iran, the following limited activities previously prohibited are now authorized for US persons provided the transactions do not involve individuals and entities on the SDN List and are otherwise consistent with US law:

  • Case-by-case licensing of individuals and entities seeking to export, re-export, sell, lease, or transfer to Iran commercial passenger aircraft, and related parts and services, for exclusively commercial passenger aviation
  • The importation into the US of Iranian-origin carpets and foodstuffs, including pistachios and caviar
  • A new general license authorizing a non-US entity owned or controlled by a US person to engage in certain activities involving Iran, and also authorizing the US person to engage in limited related activities on behalf of the non-US entity. Not authorized, however, are transactions involving US-origin goods, technology, or services; any transfer of funds to, from, or through a US depository institution or a US-registered broker or dealer in securities; any person on lists of prohibited persons/entities; requiring a license under the end-use/end-user prohibitions of the Export Administration Regulations; a military, paramilitary, intelligence, or law enforcement entity of the Government of Iran; and various other activities that are the subject of sanctions still in place.

For US businesses, the lifting of nuclear-related sanctions brings only limited immediate change. Understanding the limited scope of sanctions relief, and the broad scope of sanctions still in place, is a compliance imperative.