On 16 January 2016, the International Atomic Energy Agency (IAEA) issued its report confirming that Iran had fulfilled its first round of nuclear commitments under the Joint Comprehensive Plan of Action of 14 July 2015 (the JCPOA - often referred to as the Iran nuclear deal). This marked the much awaited Implementation Day on the JCPOA's timeline, which was anticipated by many to occur later in the year. Shortly after the IAEA's announcement, Implementation Day was introduced in a joint statement given by the High Representative of the EU for Foreign Affairs and Security Policy, Federica Mogherini, and the Foreign Minister of the Islamic Republic of Iran, Javad Zarif. As a result, nuclear-related sanctions on Iran issued by the UN Security Council, the EU and the US, as outlined in the JCPOA, have been lifted.
Following the US Secretary of State's recognition of the IAEA's announcement, the US Treasury Department's enforcement division, the Office of Foreign Assets Control (OFAC), issued a number of guidance documents and put in place a general licence regime authorising non-US subsidiaries of US companies to engage in certain types of transactions with Iran, as outlined in the JCPOA (summarised in our previous article). The US Department of State has also issued useful detailed guidance on the lifting of US sanctions following Implementation Day. As a result of Implementation Day and in accordance with the JCPOA, there have also been a number of JCPOA-related removals and updates to OFAC's Specially Designated Nationals (SDN) List, Non-SDN Iranian Sanctions Act List (NS-ISA List), Foreign Sanctions Evaders (FSE) List and the List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599 (13599 List).
The EU has also issued an information note on the sanctions lifted under the JCPOA, as a result of the conditional regulations issued by the European Council on 18 October 2015 (the EU Implementing Regulations).
A limited number of EU sanctions against Iran had earlier been suspended after China, France, Germany, Russia, the UK and the US, with the High Representative of the EU for Foreign Affairs and Security Policy, reached an interim agreement with Iran - the Joint Plan of Action (JPOA) of 24 November 2013. The lifting of EU nuclear-related sanctions on Iran as a result of "Implementation Day" will supersede the limited sanctions under the JPOA.
As a result of Implementation Day being reached, UK Export Finance (UKEF), the UK's export credit agency, has announced its re-introduction of cover (in both Pounds Sterling and Euros) to support UK companies seeking to compete for business in Iran. UKEF has announced that it will make available a £50m facility guaranteeing payments to UK professional advisory service providers advising the Government of Iran. UKEF's announcement indicates that this may cover advice on areas such as: accounting standards; capital market development; compliance with global regulatory requirements; accessing and reducing the cost of financing; and facilitating new trade. UKEF has also announced that it will consider applications for direct lending to purchasers of British exports to Iran.
Under the JCPOA, following Implementation Day Iran will be permitted to reconnect to the Society for Worldwide Interbank Financial Telecommunication (commonly referred to as SWIFT), which is based in Brussels and subject to EU regulations. As Implementation Day has now occurred, SWIFT has announced that it has informed the relevant stakeholders about the necessary measures needed to be put in place to make it possible for delisted banks to reconnect to SWIFT. As such, the Iranian banks mentioned in the EU Implementing Regulations are now able to reconnect to SWIFT, following the completion of SWIFT's normal connection process (which include administrative and systems checks, connectivity and technical arrangements), which may take some time. It should be noted that the EU Implementing regulations do not repeal all EU sanctions on all Iranian banks. Consequently, connection to SWIFT remains prohibited to the EU-sanctioned Iranian banks that remain listed under relevant EU Regulation.
We are currently reviewing the various guidance notes mentioned and will be issuing a more detailed note on elexica in the coming days. Contact Adrian Nizzola, Muneer Khan and Samir Safar-Aly for further details.
Related materials on elexica
Practical steps to take in order to get ready for the potential opening of the Iranian market
Iran nuclear sanctions update: a step closer to implementation
Doing business in Iran
Iran: Understanding the nuclear deal and its effect on sanctions
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.