On June 30, 2015, Iran and the “P5+1” states (consisting of China, France, Germany, Russia, the United Kingdom, and the United States) agreed to extend the Joint Plan of Action (JPOA) through July 7, 2015. The US Treasury Department, Office of Foreign Assets Control (OFAC) has implemented the extension through the publication of guidance (June 30 Guidance) on the OFAC website. The European Union announced the extension by issuing a press release.
Extension of US Sanctions Relief
As we have previously advised, pursuant to the JPOA as agreed in November 2013 and implemented in January 2014, the United States relaxed certain economic sanctions against Iran related to Iran’s export of petrochemical products; Iran’s auto industry; Iran’s purchase and sale of gold and other precious metals; the supply to Iran of spare parts in support of the safe operation of Iran’s civil aircraft; Iran’s export of crude oil to certain countries; and import of humanitarian goods into Iran as well as payment of medical expenses incurred by Iranians abroad. OFAC has implemented the JPOA through the publication of Guidance, Frequently Asked Questions, and a Statement of Licensing Policy.
According to the June 30 Guidance, the sanctions relief previously implemented by OFAC will remain in effect through July 7, 2015. Furthermore, the June 30 Guidance provides that effective July 1, 2015, all specific licenses that (1) were issued pursuant to OFAC’s Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry, and (2) have an expiration date of June 30, 2015, will remain in effect through July 7, 2015.
Extension of EU Sanctions Relief
As we have previously advised, on January 20, 2014 the European Union, pursuant to the JPOA, suspended the prohibitions of: (i) the provision of insurance, reinsurance, and transport of Iranian crude oil; (ii) the import, purchase, or transport of Iranian petrochemical products and the provision of related services; and (iii) the trade in gold and precious metals. The European Union also increased the authorization thresholds in relation to the transfers of funds to and from Iran. The suspension initially was for a period of six months from January 20, 2014 through July 20, 2014, “during which the contracts would have to be executed,” which meant that any activity would need to be initiated and completed during the six-month period. This period later was extended by mutual assent on July 19, 2014 and again on November 24, 2014.
Although the European Union has not yet adopted a Council Decision implementing the latest extension of sanctions relief, presumably it will follow past practice and extend sanctions relief without any change, so that the same activities or transactions would continue to be authorized as long as they are “executed” (i.e., initiated and completed) between January 20, 2014 and July 7, 2015.
The P5+1 states and Iran are continuing to negotiate towards a Joint Comprehensive Plan of Action (JCPOA), following the announcement of a framework for a JCPOA on April 2, 2015 (see our previous advisory). The extent of sanctions relief under a JCPOA remains unclear. The prospects for a final deal are subject to a complex set of factors, including domestic political pressures in Iran and the United States.
Should the parties agree to a JCPOA, President Obama would be required to transmit the agreement to Congress within five calendar days as required by the Iran Nuclear Agreement Review Act of 2015. Congress would have 30 days to review the JCPOA if it is transmitted before July 10, 2015, and 60 days if the deal is transmitted between July 10 and September 7, 2015. See our previous advisory regarding congressional review of the JCPOA under the statute.