Consequences of the US withdrawal from the Iran nuclear deal: compliance approach

On 8 May 2018, US President Donald Trump announced the Unites States’ withdrawal from the « Joint Comprehensive Plan of Action » (« JCPOA ») and that the US government will reinstate the US nuclear-related sanctions waived as part of the JCPOA, after specific transition or wind-down periods.

As a reminder, US economic sanctions such as the Iranian Transactions and Sanctions Regulations (« ITSR ») generally prohibit US persons and US-owned or -controlled foreign entities from conducting transactions with the Government of Iran or Iranian individuals or entities.

The JCPOA did not remove the US “primary” sanctions (affecting US persons), except for (1) the import of, and dealings in, certain foodstuffs and carpets of Iranian origin and related services and (2) the export and re-export to Iran of commercial passenger aircraft and related parts. These limited authorisations will be revoked after on 6 August 2018.

In addition, after 4 November 2018, the US government will revoke the JCPOA-related authorization for US-owned or -controlled foreign entities to engage in certain limited activities with the Government of Iran or persons subject to the jurisdiction of the Government of Iran that were previously authorized pursuant to General License H.

The United States will reinstate “secondary” sanctions (affecting non-US persons) on 6 August for currency, metals and automotive activities, and on 4 November for maritime, oil, bank, insurance and energy activities.

After 4 November 2018, all US nuclear-related sanctions that had been waived under the JCPOA will be reinstated.

Those persons engaging in activities pursuant to the US sanctions relief provided as part of the JCPOA should take all necessary steps to wind down those activities by either August 6, 2018, or November 4, 2018, as applicable, to avoid exposure to US sanctions or an enforcement action under US law.

Additionally, in light of the United States’ decision, the reputation of European companies who engaged in activities previously authorized under the JCPOA may now be increasingly challenged by certain activist and nongovernmental organizations (« NGOs ») that promote a confrontational US stance towards Iran, particularly with respect to Iran’s nuclear program. These types of NGOs may make direct contact with such European companies in order to dissuade them from maintaining their Iranian business relationships, and may threaten to expose these European companies as allegedly “collaborating with the Iranian regime”.

These recent events will require not only strong legal and compliance measures, but also an effective communication strategy from international operators, at both national and EU levels.

DS Customs & Trade Team in collaboration with its long-term partner, the US-based law firm Holland & Hart LLP, are pleased to share their compliance skills and their specially dedicated offer to companies wishing to anticipate the consequences of the reinstated US sanctions against Iran.


The Customs & Trade team of DS Avocats and its partner Holland & Hart are at your disposal to provide you with any additional information.



Categories: China Regulations