The Nuclear Deal With Iran: The Lifting Of Sanctions And Implications For Business

On July 14, 2015, after two years of sometimes intense negotiations, the United States, the United Kingdom, France, Germany, Russia, and China (known as the "P5+1" countries), along with the European Union, signed a Joint Comprehensive Plan of Action (JCPOA) with Iran in Vienna, Austria, to address concerns about Iran's nuclear program. The JCPOA is designed to curb that program in return for certain relief from sanctions imposed by the United States, the European Union, and the United Nations.

As a threshold matter, BakerHostetler attorneys have extensive experience in evaluating the impact of the Iranian and other sanctions' developments on individual businesses. We know the law and regulations in this area very well and have reviewed this agreement in detail. Our Partners have many years of experience, using our knowledge and relationships, in effectively representing clients before OFAC, the Department of State, and the other U.S. Government agencies involved in these and related international trade matters.

The following is a review of the sanctions relief to be provided, its timing, and its implications for business. In this regard, readers need to understand that no sanctions have yet been lifted, and none is likely to be lifted until sometime after January 1, 2016. As explained below, even then, not all sanctions will be terminated, and companies, particularly U.S. companies, need to tread carefully to make sure they do not violate those sanctions that remain in place.

Existing U.S. Sanctions Against Iran

Over the last 28 years, the United States has implemented a broad web of sanctions against Iran. This sanctions web includes a direct or primary embargo of Iran, which covers exports to, and imports from, Iran, business activities by U.S. persons with Iran, including investments in that country, as well as U.S. person financial transactions with Iran. Since 2012, the definition of U.S. persons has included foreign entities owned or controlled by U.S. persons. In addition to the above restrictions, many Iranian persons, entities, vessels, and aircraft have been identified as Specially Designated Nationals (SDNs) or have been put on the Foreign Sanctions Evaders List ("FSE List"), resulting in a prohibition on U.S. persons entering into any transactions with them.

The U.S. restrictions on exports to Iran have covered not only exports from the United States, but also reexports of U.S.-origin items from foreign countries, as well as foreign-made items containing, in most cases, more than a de minimis amount of controlled U.S. content (10 percent, by value), and in some cases, containing any U.S. content. Shipments of food, medicine, and certain medical devices are not generally subject to the broad export restrictions.

In addition to the direct or primary embargo, the United States also can impose sanctions against foreign companies that engage in certain types of transactions of concern with Iran, including transactions involving the Iranian energy...

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