After the deal with Iran was announced today, a colleague asked me whether I’d have any work left to do. At that point, I had not yet read the Joint Comprehensive Plan of Action (“JCPOA”). Now that I have, it seems clear that if you were hoping that the JCPOA would reduce legal compliance costs, you are going to be disappointed.
One key point to realize is that Executive Order 13059, which was signed by President Clinton in 1997 and which banned the exportation of all goods and services to Iran, stays in place. The ban on imports, first adopted in Executive Order 12613, also is not going anywhere. What the JCPOA does is carve out various sectors that will be exempted from this ban, including the energy and petrochemical sector, the shipping, shipbuilding and port sector; gold and other precious metals, raw and semi-finished metals, the automotive sector, and aircraft and parts. In addition, what appears to be most Iranian SDNs, including individuals, companies, ships and aircrafts, will be removed from the SDN List.
None of this is going to happen immediately, of course. To begin with, lifting these sanctions depends on endorsement of the JCPOA by the U.N. Security Council. Additionally, the IAEA will need to verify that Iran has taken the agreed steps with respect to its nuclear program and the U.N. will have to terminate the various Security Council Resolutions relating to Iran, including the arms embargo, subject to their reimposition if Iran does not keep its commitments with respect to its nuclear program.
How long will it take before the sanctions are lifted? It’s hard to say. There is an initial 90-day delay between the endorsement of the JCPOA by the parties involved and the United Nations Security Council and the first steps towards implementing the obligations under the JCPOA. After that, the IAEA needs to verify Iran’s compliance, and there is no way to tell how long that will take. And, of course, OFAC has to adopt new rules which, of course, if history is any guide, might take quite some time.