Implementation Day: Iran Sanctions Relief Officially Takes Effect

Ronald Oleynik and Jonathan Epstein are Partners and Farid Hekmat is an Associate in Holland & Knight's Washington D.C. office

IAEA Verifies That Iran Fulfilled Nuclear-Related Obligations Under the Joint Comprehensive Plan of Action

HIGHLIGHTS:

Pursuant to the accord reached between Iran and the P5+1 in July 2015 regarding Iran's nuclear program, the International Atomic Energy Agency (IAEA) has verified that Iran has fulfilled its nuclear obligations, and the United States and the European Union (EU) implemented wide-ranging sanctions relief for Iran effective Jan. 16, 2016. While the core U.S. sanctions prohibiting U.S. persons from engaging in most transactions with Iran remain in place, most extraterritorial sanctions involving non-U.S. persons engaged in Iran-related activity have been lifted. Non-U.S. entities owned and controlled by U.S. entities will be permitted to engage in most Iran-related activities A new favorable licensing policy will allow the sale/lease of civil passenger aircraft to most Iranian airlines Iranian foodstuffs and carpets can now be imported into the United States. Jan. 16, 2016, marked a significant milestone ("Implementation Day") as the International Atomic Energy Agency (IAEA) verified that Iran had fulfilled its nuclear-related obligations under the landmark Joint Comprehensive Plan of Action (JCPOA) entered into by Iran, the P5+1 (United States, Russia, China, United Kingdom, France and Germany) and the European Union (EU) in July 2015. Simultaneously with the IAEA's pronouncement, the United States and the EU implemented limited but significant sanctions relief as set forth in the JCPOA.

In general, the United States is lifting most secondary (sometimes referred to as "extraterritorial") sanctions on Iran. These measures - which targeted non-U.S. persons engaged in activity without a U.S. nexus - affected Iran's energy, maritime, automotive and financial sectors, and resulted in significant pressure on the Iranian economy as many non-U.S. companies and firms ceased, or significantly curtailed, commercial activities with Iran and Iranian persons. However, the core U.S. trade sanctions that prohibit U.S. persons from engaging in most commercial transactions with Iran remain in place, though with important exceptions discussed below.

The changes to U.S. sanctions regarding Iran involve a very complex set of executive orders, waivers, general licenses and other actions by President Obama, the U.S...