On 8 May 2018, Trump announced the US’ decision to terminate the Joint Comprehensive Plan of Action (JCPOA), commonly known as the “Iran Deal”, i.e. the agreement on the Iranian nuclear program reached in Vienna on 14 July 2015 by Iran, the P5+1 (i,e. the five permanent members of the United Nations Security Council – China, France, Russia, United Kingdom, United States – plus Germany), and the European Union (see, on the Iran Deal, our previous alert).
Therefore, following a 90/180 days’ wind-down period, the US nuclear-related secondary sanctions (applicable to non-US persons) that were lifted according to the Iran Deal will snap back. The 90/180-days wind-down period will allow companies to bring their business with Iran to an end before being impacted by the reintroduced secondary sanctions.
The sanctions will target critical sectors of Iran’s economy, such as its energy, petrochemical, steel and financial sectors. The prohibited activities include, inter alia: trade in gold and precious metals; sale, supply or transfer of graphite, raw, semi-finished metals (i.e. aluminium, steel), coal, software for integrating industrial processes; investing in the automotive sector; processing petroleum-related transactions; transactions by foreign financial institutions with the Central Bank of Iran and other Iranian financial institutions; provision of underwriting services, insurance and reinsurance and investing in the energy sector.
Since the US does not have jurisdiction to impose “primary” or “direct” sanctions (i.e. fine and criminal penalties) over non-US persons, the enforcement of the above mentioned prohibitions is carried out indirectly, by limiting the access of the non-US person to the US market or/and financial system.
After the wind-down periods, the US is expected also to revoke the General License H (GL H) and issue a new authorization for US-owned or -controlled foreign entities, and to re-insert the persons identified as “Government of Iran” or “Iranian financial institutions” in the SDN List.