In response to Iran’s nuclear activities, the UN Security Council as well as the E3+3 (United States, United Kingdom, Germany, France, Russia and China), and other countries, have implemented severe sanctions relating to Iran's nuclear, missile, energy, shipping, transportation, and financial sectors. These sanctions have been in place for a long period of time. The most recent constructive discussions between the E3+3 and Iran resulted on 2 April 2015 in a high-level agreement on key parameters of a Joint Comprehensive Plan of Action (JCPOA), which should ultimately result in lifting the sanctions against Iran.
According to the Joint Statement by the EU High Representative Frederica Mogherini and Iranian Foreign Minister Javad Zarif, the E3+3 and Iran have taken a decisive step by reaching solutions on key parameters of the JCPOA. These key parameters form the foundation upon which the final text of the JCPOA will be written. According to the US Department of State, important implementation details are still subject to negotiation.
The EU and US will most likely terminate or suspend all the nuclear-related sanctions against Iran after the International Atomic Energy Agency (IAEA) has verified that Iran has taken all of its key nuclear related steps, which will be formulated in the JCPOA. It should be noted that if at any time Iran fails to fulfill its commitments, these sanctions will ‘snap’ back into place. Furthermore, a new UN Security Council Resolution (UNSCR) will endorse the JCPOA, terminate all previous nuclear-related UNSCRs and incorporate a ‘procurement channel’ dealing with transfer of sensitive technologies and activities.
The JCPOA should be completed by 30 June 2015. Until that date the EU and US sanctions will remain in place, with exception of the limited sanction reliefs as agreed by the E3+3 and Iran in the Joint Plan of Action (JPA). One of the interesting relief examples of the JPA is the suspension of the prohibition on the import, purchase or transport of Iranian petrochemical products including related services (e.g. financing and insurance).
Where does this lead to?
The JCPOA should ultimately lead to the comprehensive lifting of all worldwide sanctions related to Iran’s nuclear programme. It should be stressed, however, that there is no certainty that a final agreement will be reached, as there are still questions with regard to the feasibility and scope of a final agreement. First of all because it is unclear how US Congress will respond to the JCPOA. Secondly, as stated above, the suspension of sanctions will heavily depend on IAEA verification. At this stage, it is unclear how much time the IAEA will need to verify whether Iran has taken all of its key nuclear-related steps formulated in the JCPOA. It is therefore difficult to assess when the sanctions will effectively be lifted. Despite these questions, the future looks promising.
What can your company do?
In the meantime companies can prepare and orientate on possible future opportunities on the Iranian market. It is important to note that even when the sanctions have been lifted, certain goods will remain subject to EU and/or US export controls regulations and therefore will still require prior export authorization from the relevant authorities (Military and Dual-Use items). Companies should bear this is mind and take necessary export controls compliance measures.
How can Meijburg & Co help?
We have specialists dedicated to sanctions and export controls around the world, ensuring that we are well placed to help understand the local and global operating commitments and requirements.
Meijburg & Co Contact Information
For additional information on our Trade and Customs Practice and its Export Controls & Sanctions Services, please contact your local Meijburg & Co Advisor or you may refer to our website: https://www.meijburg.com/trade-customs.