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Iran Sanctions ‘Snapback’ Finalized Nov. 5, 2018

President Trump announced his decision to withdraw the United States from the Iran Joint Comprehensive Plan of Action (JCPOA), and on June 27, 2018, OFAC issued amended regulations and general licenses implementing the withdrawal.

The Office of Foreign Assets Control’s (OFAC) re-imposition of Iran sanctions pursuant to the U.S. withdrawal from the JCPOA was set up in two phases, with the first set of Iran sanctions “snapping back” Aug. 7, 2018, and the final set of sanctions snapping back Nov. 5, 2018. The main changes to the Iran sanctions that became effective Nov. 5 include:

  • Foreign Subsidiaries of U.S. Entities Again Subject to Iran Embargo: While the United States was a party to the JCPOA, activities in Iran by non-U.S. subsidiaries of U.S. companies were generally permissible under OFAC’s General License H. After the U.S. withdrawal from the JCPOA, OFAC revoked General License H and required U.S. companies’ foreign subsidiaries to wind down most of their previously authorized Iran-related activities by Nov. 4. With the end of the wind-down period, U.S. companies’ foreign subsidiaries once again must comply with the restrictions and prohibitions of the U.S. embargo against Iran.
  • Re-Imposition of Secondary Sanctions in Certain Sectors of the Iranian Economy: Effective Nov. 5, non-U.S. individuals and entities that do business with certain sectors of Iran’s economy will again be exposed to U.S. sanctions, including dealings with:
    • Iranian port operators, shipping, and shipbuilding sectors
    • Petroleum-related transactions (including the purchase of petroleum, petroleum products, or petrochemical products from Iran)
    • Certain Iranian financial institutions (including the Central Bank of Iran)
    • Iran’s energy sector

In a press statement, the State Department indicated that it will grant temporary exemptions from the petroleum-related sanctions restrictions to eight countries – China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey – to allow them to continue to purchase oil from Iran.

  • Additions to the SDN List: Since May 8, 2018, OFAC has indicated it plans to relist persons and entities that were removed from the Specially Designated Nationals (SDN) List in January 2016 pursuant to the JCPOA. On Nov. 5, OFAC added over 700 persons to the SDN list, including parties that had been removed in connection with the JCPOA.

Even when the United States was a party to the JCPOA, U.S. persons remained prohibited from engaging in almost all dealings with Iran. However, the re-imposition of these sanctions represents a significant change in the permissibility of dealings in Iran undertaken by non-U.S. parties. In light of the changing legal landscape, it is important for businesses with international operations to assess compliance with these updated sanctions and ensure that non-U.S. parties understand the ways in which U.S. sanctions law may apply to them.

©2018 Greenberg Traurig, LLP. All rights reserved.

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Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney
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Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

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Renee Latour, Greenberg Traurig Law Firm, Washington DC, Corporate Law Attorney
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Renee A. Latour focuses her practice on international trade regulation with an emphasis on compliance with U.S. export controls and economic sanctions. Renee assists clients on matters related to international trade that arise under the jurisdiction of various U.S. governmental agencies, including the Departments of Commerce, State, Treasury, and Defense. She advises on U.S. export control laws, anti-boycott laws and special sanctions maintained by the U.S. Government against various countries including Iran, Cuba and Sudan.

Renee also assists clients with matters relating to issues arising under the anti-bribery and record-keeping provisions of the Foreign Corrupt Practices Act (FCPA), the OECD Convention and the United Nations (UN) Convention Against Corruption. Additionally, she assists clients in designing and implementing internal compliance policies and procedures and conducting cross-border export and sanctions regulatory due diligence, particularly in the context of mergers and acquisitions. Renee also counsels on the Exon-Florio provisions of the Committee on Foreign Investment in the United States (CFIUS), and assists clients in mitigating foreign ownership, control or influence (FOCI) under the applicable national industrial security regulations.

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Cyril Brennan, Greenberg Traurig Law Firm, Washington DC, International Trade Law Attorney
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Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s anti-boycott regulations. In addition, he represents clients before the Committee on Foreign Investment in the United States (CFIUS), and advises clients...

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Sonali Dohale, Greenberg Traurig Law Firm, Washington DC, Environmental and International Trade Law Attorney
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Sonali Dohale focuses her practice on compliance counseling, environmental due diligence and environmental litigation under state and federal statutes. Sonali’s experience at government regulatory agencies and her background in civil and environmental engineering help give her insight into both the legal and technical challenges faced by her clients.

In addition, Sonali assists clients engaged in international trade with a variety of federal regulatory issues, including matters related to the International Traffic in Arms Regulations (ITAR), the...

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