There has been much coverage in the press recently about
Iranian sanctions being relaxed or even lifted. We summarise where the process
stands today. As you will see, there is a way to go before sanctions are
lifted. However, many businesses with an interest in the region will already need
to take early advice on next steps.
What is the deal?
The UK, US, China, France Germany, Russia, the EU and Iran have agreed on a Joint Comprehensive Plan of Action (JCPOA) by which sanctions against Iran will be lifted subject to Iran’s agreement never to seek to develop or acquire nuclear weapons.
The text of the JCPOA can be found here.
What does the deal achieve?
If the JCPOA is fully implemented, it will result in the comprehensive lifting of all UN Security Council sanctions as well as multilateral sanctions relating to Iran’s nuclear programme.
Which EU sanctions will be terminated as a result of the JCPOA?
The EU will adopt a Regulation terminating all of its Iranian nuclear sanctions. These are currently contained within Council Regulation (EU) No 267/2012 (the Iran Regulation) and Council Decision 2010/413/CFSP (the Iran Decision). The types of sanctions currently in place include restrictions on:
- transfers of funds between EU persons and certain named entities and individuals in Iran;
- financial support for trade with Iran; and
- export of key equipment or technology for the oil, gas and petrochemical sectors.
Will EU sanctions be terminated immediately?
No. Annex V to the JCPOA sets out the timetable for the lifting of sanctions. The key date is the “Implementation Day”. This will occur upon verification by the International Atomic Energy Agency (IAEA) that Iran has implemented the nuclear-related material measures described in the JCPOA. Simultaneously, the EU will terminate the Iran Regulation and the Iran Decision. It is unclear how far off the “Implementation Day” is, although it is unlikely that we will see any lifting of the EU sanctions before early 2016.
What about UN and US sanctions?
The UN Security Council has already endorsed the JCPOA by adopting Resolution 2231. As with the EU sanctions, UN sanctions will not be lifted until “Implementation Day”. Similar timing constraints apply to the lifting of US sanctions, although this is subject to further legislative action being taken to terminate or modify the US sanctions in force.
Can I start exploring potential business opportunities with Iran?
Since EU and other sanctions will not be lifted until the “Implementation Day”, where those sanctions apply, they must continue to be strictly adhered to until then. A breach of EU sanctions legislation attracts criminal liability and it is likely that enforcement authorities will continue to enforce the EU sanctions until they are lifted. Following the execution of the JCPOA, HM Treasury has stated that sanctions against Iran are unchanged and that its guidance, making clear that the UK does not encourage trade with, or investment in Iran, remains in force.
What happens next?
We will continue to monitor the situation and provide further updates when the scaling back of Iran sanctions becomes clearer. In the meantime, should you have any queries or concerns, please do make contact with our expert team.