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On May 8, 2018, President Trump announced that the United States will be withdrawing from the Joint Comprehensive Plan of Action (“JCPOA”), culminating months of uncertainty around the fate of the Iran nuclear deal. The announcement came ahead of a May 12 deadline for the renewal of a key sanctions waiver.  As described here, the last sanctions waiver occurred on January 12, 2018 amidst statements by President Trump that the waiver would be the last unless what President Trump considered “flaws” in the deal were fixed.  In his May 8 speech, President Trump announced that the United States would re-impose nuclear sanctions against Iran. 

Many of these sanctions, including so-called “secondary sanctions” that primarily target non-US companies engaging in business in or with Iran entirely outside US jurisdiction, were waived as part the US Government’s commitments under the JCPOA. By way of reminder, the sanctions relief under the JCPOA was mostly with respect to these secondary sanctions, whereas primary sanctions (applicable to US persons) were left intact, with the exception of a few general licenses and favorable licensing policies (which themselves will be revoked as a result of today’s announcement).

Following the President’s announcement, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) released guidance, including new FAQs, regarding the implementation of the President’s decision.  As described in this new guidance, the President’s announcement, as implemented by the US Treasury and State Departments, revokes any sanctions waivers issued to implement JCPOA sanctions relief, and has replaced them with temporary waivers to provide for the wind-down of previously-authorized activities in Iran in keeping with newly-established 90-day (ending on August 6, 2018) and 180-day (ending on November 4, 2018) wind-down periods for activities involving Iran.

Thus, it is critical for all companies, especially non-US companies, who may be engaged in business with Iran that is currently authorized (under General License H or otherwise) or not currently sanctionable (because relevant secondary sanctions were lifted under the JCPOA) to assess sanctions compliance risks and plan for wind down as needed to minimize risks of OFAC enforcement actions or secondary sanctions after the end of the wind-down periods.

Sanctions Wind-Down Periods

OFAC’s guidance indicates that it will implement 90-day and 180-day wind-down periods for Iran-related activities that were authorized under the US JCPOA sanctions relief. During the wind-down periods, OFAC will take steps to allow US Persons to wind down previously-authorized operations or business in Iran and to receive payments under agreements entered into before May 8, 2018 until the end of the applicable wind-down period (i.e., until August 6, 2018 or November 4, 2018).  OFAC has advised that it will consider whether any “new” Iran-related activities were engaged in during the wind-down periods when considering potential enforcement or sanctions actions with respect to activities engaged in after the expiration of the wind-down periods, effectively cautioning parties about entering into “new” business after May 8, 2018.

90-Day Wind-down Period Ending on August 6, 2018

The following sanctions will be re-imposed after the 90-day wind-down period ends (i.e., on August 7, 2018):

  • Sanctions on the purchase or acquisition of US dollar banknotes by the Government of Iran;
  • Sanctions on Iran’s trade in gold or precious metals;
  • Sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
  • Sanctions on significant transactions related to the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
  • Sanctions on the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
  • Sanctions on Iran’s automotive sector.

After the 90-day wind-down period ends, the US Government will also revoke the following JCPOA-related authorizations under US primary sanctions targeting Iran:

  • The importation into the United States of Iranian-origin carpets and foodstuffs and certain related financial transactions pursuant to general licenses under the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (“ITSR”);
  • Activities undertaken pursuant to specific licenses issued in connection with the Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services (“JCPOA SLP”); and
  • Activities undertaken pursuant to General License I relating to contingent contracts for activities eligible for authorization under the JCPOA SLP.

180-Day Wind-down Period Ending on November 4, 2018

The following sanctions, which are largely those relating to Iran’s oil and energy sector, will be re-imposed after the 180-day wind-down period ends (i.e., on November 5, 2018):

  • Sanctions on Iran’s port operators, and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines, South Shipping Line Iran, or their affiliates;
  • Sanctions on petroleum-related transactions with, among others, the National Iranian Oil Company , Naftiran Intertrade Company, and National Iranian Tanker Company, including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
  • Sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012;
  • Sanctions on the provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010;
  • Sanctions on the provision of underwriting services, insurance, or reinsurance; and
  • Sanctions on Iran’s energy sector.

General License H to be Revoked

OFAC’s guidance indicates that it will revoke General License H, authorizing US-owned or -controlled non-US entities to engage in certain Iran-related activities, as soon as administratively feasible. General License H will be replaced by a new general license authorizing the wind down of activities authorized under General License H (the “GL H Wind Down General License”). The GL H Wind Down General License will expire on November 4, 2018.

US-owned or -controlled non-US entities will be authorized to wind down operations or business in Iran conducted pursuant to General License H and to receive payments under contracts entered into before May 8, 2018. As above, OFAC effectively signaled caution with respect to “new” activities under General License H between May 8, 2018 and November 4, 2018.

Sanctions Designations

In short, it appears that all parties who were designated on the Specially Designated National and Blocked Persons List (“SDN List”) under the Iran sanctions program prior to the implementation of the JCPOA will be re-designated as SDNs after November 5, 2018. OFAC expects to move parties identified as meeting the definition of the terms “Government of Iran” or “Iranian financial institution” (as those terms are defined in the ITSR) from the List of Persons Blocked Solely Pursuant to E.O. 13599 (which, as described here, was introduced as part of the JCPOA sanctions relief) to the SDN List. In addition, parties that were removed from the SDN List as part of the JCPOA sanctions relief will be re-listed on the SDN List by no later than November 5, 2018. As was the case prior to Implementation Day of the JCPOA, effective November 5, 2018, non-US persons engaging in transactions with these parties could be exposed to US secondary sanctions.

Practical Implications for Financial Sector

As a result of the re-imposition of sanctions, financing and funds flows into/out of Iran will become extremely difficult, if not impossible. Iran will likely again be cut off from global financial messaging systems.  Non-US banks should be expected to take a harder stand against processing Iran-related funds transfers, capital investments, dividend and royalty flows to/from Iran out of fear of losing their US corresponding banking relationships and falling foul of US enforcers.

Initial Reactions of Other P5+1 Countries

The UK, France, and Germany issued a joint statement, available here reaffirming their commitment to the JCPOA and confirming that they will remain parties to the JCPOA.


Paul Amberg is a partner in Baker McKenzie’s Amsterdam office, where he handles international trade and compliance issues. He advises multinational companies on export controls, trade sanctions, antiboycott rules, customs laws, anticorruption laws, and commercial law matters.


Alison Stafford Powell has considerable experience counseling US and non-US companies on cross-border outbound trade compliance in the areas of export controls, trade and financial sanctions, anti-terrorism controls, anti-corruption and anti-money laundering rules, US anti-boycott laws, and US foreign investment restrictions under the Exon-Florio Provision. With a background also in EU and UK trade restrictions, she routinely advises non-US companies on reconciling US and EU trade regulations and on the extra-territorial impact of US trade restrictions. She is a dual US/English qualified lawyer and has worked in the Firm’s London, Washington, DC and Palo Alto offices since 1996.


Hannah N. Zarkar is an associate in Baker & McKenzie´s Washington, DC office. Prior to joining the Firm, she worked as a summer associate in 2012 at Baker & McKenzie’s Washington, DC and Buenos Aires, Argentina offices. In addition, she served as a law clerk at the American Red Cross National Headquarters’ Office of the General Counsel, focusing primarily on legal projects in the area of employment law. Ms. Zarkar also interned for Hamburg Coffee Company, Hacofco GmbH, in Hamburg, Germany, where she aided in the purchase and sale of coffee on the International Coffee Exchange (ICE).


Inessa Owens is an associate in the Washington, D.C. office and member of the Firm’s International Trade practice group. She focuses on outbound trade compliance issues, including compliance with the Export Administration Regulations, anti-boycott rules, and economic sanctions administered by the US Treasury Department’s Office of Foreign Assets Control, including those targeting Cuba, Iran, North Korea, Syria, and Russia. She has worked with clients in diverse industries that include finance, pharmaceuticals, and energy.