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U.S. Reimposes Sanctions after Withdrawal from the Iran JCPOA

On May 8, 2018, President Trump announced his decision to withdraw the United States from the Iran Joint Comprehensive Plan of Action (JCPOA), the multilateral nuclear agreement signed on July 14, 2015, between Iran, the P5+1 (China, France, Russia, the United Kingdom, the United States, and Germany), and the European Union.  Implementation of the president’s decision to withdraw requires the Department of Treasury’s Office of Foreign Assets Control (OFAC) to amend its regulations to officially reimpose certain sanctions.  While the sanctions have been reimposed, OFAC has simultaneously provided short-term general licenses to permit industry to wind down activities that are once again prohibited.

Accordingly, on June 27, 2018, OFAC amended the Iranian Transactions and Sanctions Regulations (ITSR) to revoke pre-JCPOA sanctions relief involving exports of aircraft, activities of foreign subsidiaries of U.S. entities, and imports of certain food and carpets.  See 83 Fed. Reg. 30,335. Specifically, the reimposed sanctions include:

Revocation of General License I and the Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services

Pursuant to the JCPOA and associated sanctions relief, OFAC maintained a licensing policy that authorized U.S. persons to export commercial passenger aircraft and related parts and services (JCPOA SLP).  OFAC’s recently amended regulations now include a wind down general license at 31 C.F.R. § 560.536 that authorizes, “[a]ll transactions and activities that are ordinarily incident and necessary to the wind down” of activities that were previously eligible for authorization under the JCPOA SLP, but those must be completed by Aug. 6, 2018.

Revocation of General License H and Restrictions on Foreign Subsidiaries of U.S. Entities

Sanctions relief under the JCPOA also included authorizations under the previous General License H for wholly-owned non-U.S. subsidiaries of U.S. entities to engage in certain business activities in Iran.  General License H has been revoked, and OFAC has now amended the ITSR at § 560.537 to authorize transactions and activities necessary to wind down activities by an entity owned or controlled by a U.S. person that would have been authorized under GL H.  The regulations give entities until Nov. 4, 2018, to complete wind down activities.

Prohibitions on the Importation of Iranian Carpets and Foodstuffs

Under the JCPOA, OFAC had permitted the import of Iranian-origin foodstuffs, carpets, and textiles.  OFAC’s regulations have now been amended to eliminate this authorization.  Instead, ITSR § 560.534 now authorizes wind down activities related to previously permissible imports which must be concluded by Aug. 6, 2018.

In recently updated FAQs, OFAC stressed the need to complete all activities by the deadlines specified above, noting that failure to do so could subject companies to enforcement actions.  Entities that had conducted business under the three authorizations referenced above should review the regulations carefully and structure the closure of their Iranian operations accordingly. 

©2019 Greenberg Traurig, LLP. All rights reserved.

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About this Author

Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney
Shareholder

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....

202-533-2334
Sonali Dohale, Greenberg Traurig Law Firm, Washington DC, Environmental and International Trade Law Attorney
Associate

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 Export Administration Regulations (EAR), sanctions programs imposed by the Department of Treasury’s Office of Foreign Assets Control (OFAC), and U.S. import and customs laws. She also assists companies engaged in mergers and acquisitions with Exon-Florio filings before the Committee on Foreign Investment in the United States (CFIUS).

Prior to entering private practice, Sonali served as a law clerk in the Federal Mine Safety and Health Review Commission’s Office of Administrative Law Judges, where she researched and drafted decisions regarding a variety of health and safety issues arising under the Mine Act.

202-533-2381