On November 24, 2014, the P5+1 (or, alternatively, E3+3) countries (the United States, United Kingdom, France, Germany, China, and Russia) announced that ongoing negotiations with Iran regarding its nuclear enrichment and development activities, along with sanctions relief agreed to by the United States and European Union, have been extended for up to an additional seven months.

One year ago, on November 24, 2013, the P5+1 and Iran reached a preliminary agreement, the Joint Plan of Action ("JPOA"). In exchange for Iran’s commitment to restrict its nuclear development activities, the P5+1 agreed to the much-discussed temporary and modest easing of certain international sanctions measures. Initially, the P5+1—and specifically, the United States and European Union—committed to the limited suspension of certain U.S. and EU sanctions measures for a six-month period between January 20, 2014 and July 20, 2014. When talks were extended at the end of July, the U.S. and EU committed to continuing the suspension of those specified sanctions measures until November 24, 2014.

Currently, the United States and European Union have, to varying degrees, suspended sanctions measures for certain activities, including those related to (i) crude oil exports; (ii) petrochemical exports; (iii) gold and precious metals; (iv) the automotive industry; and (v) civil aviation.

There are, however, several key limitations on this temporary sanctions relief. First, this sanctions relief applies only to conduct or transactions that occur while JPOA is in force. Any contracts or transactions, even if permitted, must therefore be initiated and completed during the limited period specified under the extended JPOA and should not rely on the presumption of any further extensions. Second, this sanctions relief may be revoked by the United States or European Union at any time if either determines that Iran has not fulfilled its obligations under the JPOA.  In that regard, the International Atomic Energy Agency will be asked to continue monitoring the voluntary measures under the JPOA. Third, with the exception of its temporary licensing regime for civil aviation, the United States has only suspended sanctions measures applicable to non-U.S. persons and entities. Consequently, all U.S. sanctions measures, including those otherwise suspended pursuant to the JPOA, continue to restrict or prohibit transactions involving U.S. persons and entities and any non-U.S. entities owned or controlled by U.S. persons. 

With the announcement that negotiations have once again been extended, the P5+1 and Iran have reaffirmed they will continue to implement their commitments under the JPOA.  In connection with the announcement of this extension, the U.S. Department of the Treasury and the U.S. Department of State issued revised guidance relating to the sanctions relief agreed to under the JPOA, reflecting the extension of the JPOA relief period through June 30, 2015. 

This guidance is substantively unchanged from guidance previously provided in connection with the extension period agreed to on July 19, 2014. 

Following the parties' announcement, however, some U.S. legislators have called for the imposition of further U.S. sanctions measures. While such calls may not result in any immediate changes, it seems evident that the U.S. sanctions measures targeting Iran will likely remain an active subject of debate, and possible change, for the duration of the extended negotiations.