US sanctions against Iran fully re-imposed

As of this week, all US sanctions against Iran previously lifted or waived in connection with the Iranian nuclear deal (the "JCPOA") are fully re-imposed. The return of the sanctions is a result of the US withdrawal from the JCPOA on 8 May 2018, when the US President announced that the necessary steps to re-impose the sanctions would be taken as soon as possible, and no later than following a 180 days wind-down period. On 5 November, the US completed the process by sanctioning more than 700 individuals, entities, aircraft, and vessels. This includes a significant number of new SDN listings.

As addressed in our previous newsletter "The US withdrawal from the Iran Nuclear Deal", the full reinstatement of the US sanctions will also have implications for non-US persons, including through the re-imposition of the notorious secondary sanctions regime. The US government will however allow certain exemptions for contracts entered into prior to 8 May 2018, by allowing non-U.S., non-Iranian persons – subject to certain conditions - to receive payment for goods or services provided or delivered to an Iranian counterparty prior to expiration of the relevant wind-down period.

The Faith of the JCPOA and the EU counter measures

Each of the remaining participants of the JCPOA, including Iran, have reconfirmed their commitment to the full and effective implementation of the nuclear deal, despite the US withdrawal.

The US rejected the EU's attempts to negotiate exemptions for EU business, but the EU has continued to demonstrate a will to prevent the US sanctions from affecting EU and Iranian trade relations. The EU added the relevant US secondary sanctions to the scope of the EU Blocking Regulations (no. 2271/96), which inter alia prohibits EU persons from complying with the blocked US measures.

Furthermore, the EU is also working on a special purpose vehicle ("SPV"), and recently announced that this work has been intensified. Further details on this SPV solution have yet to be provided, but according to a statement from the EU Foreign Minister it will involve "that EU Member States will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue trade with Iran, in accordance with European Union law, and could be opened to other partners in the world".

As far as counter measures go, Norway has so far remained on the fence, and has not implemented any blocking legislation. However, the Norwegian government has clearly stated that Norway supports the JCPOA, and the remaining participants' work to continue the same despite the re-imposition of US sanctions.

Meanwhile, while awaiting EU's SPV solution, Norwegian and EU companies involved in business related to Iran should continue to monitor the developments, and carefully assess how their business will be affected by the recent changes.

Please note that this newsletter is for information purposes only, and may not be relied upon or construed as a legal advice. In the event of any questions regarding sanctions, please contact one of the referenced lawyers.

Practice areas

Lawyers

Olav Kolstad
Nils Ludvig Dahl
Thomas Behné Ramsnes

Published

08. November 2018