Following the announcement by the International Atomic Energy Association that Iran has met its commitments under the Joint Comprehensive Plan of Action nuclear deal, Australia has suspended all nuclear-related sanctions against Iran. Australian companies and individuals are now able to participate in a number of commercial activities previously prohibited; however, while many elements of Australia's Iranian sanctions regime have been suspended, others remain in place.

The Australian Government has followed the decision taken by the United Nations, the United States and the European Union and announced that it has removed certain sanctions against Iran. Australia’s Consolidated List of designated entities and individuals was updated on 22 January 2016 to reflect these changes.

Removal of certain United Nations Security Council sanctions measures

Following the receipt of the report from the International Atomic Energy Agency on 16 January 2016, United Nations Security Council Resolution 2231 provides for the termination of provisions of previous Security Council resolution on the Iranian nuclear issue.

As a consequence, the Australian Government has now also confirmed that the Charter of the UN (Sanctions – Iran) Regulations 2008 (Cth)(UN Iran Regulations) will be read down to reflect the termination of various UN Security Council sanctions.

This means that certain persons and entities will no longer be designated persons and entities under the Charter of the United Nations Act 1945 (Cth) and there will no longer be a prohibition on doing business with entities on the Iran Specified Entities List.

The UN Iran Regulations will be formally amended in due course.

Removal of certain autonomous sanctions measures

Australia will also make changes to certain autonomous sanctions in force against Iran under the Autonomous Sanctions Regulations 2011.

The designation of some additional persons and entities by Australia under this sanctions regime will be revoked and the prohibition on the import and export of certain goods, provision of certain services (including various marine services) and engagement in specific commercial activity will be suspended. For example, prohibitions in respect of equipment and technology for the oil and gas industry and the petrochemical industry, and on the supply of gold and precious metals have been suspended. In addition, various Iranian financial institutions will no longer be prohibited from opening representative offices in Australia or establishing an Australian branch or subsidiary.

The Australian Government has announced that these prohibitions will be permanently removed through appropriate legislative amendments as soon as possible and a new list of import and export sanctioned goods will be issued.

New opportunities for Australian business but caution required

In announcing the changes to the sanctions measures, Australia's Foreign Minister Julie Bishop stated that "the easing of these sanctions will ensure that Australian business is not disadvantaged in pursuing opportunities in Iran."  

The value of Australia’s exports to Iran is currently AUD360 million (excluding goods transshipped through other parts of the Middle East), with wheat accounting for over 90 per cent of total exports.  With Australian exports to Iran having previously peaked at approximately AUD1 billion, the lifting of sanctions is expected to see exports from Australia to Iran increase significantly across a range of goods and services.

However, as Australia's sanctions regime against Iran has not been lifted entirely, Australian entities are reminded to exercise caution, and seek advice before dealing with Iranian entities both in Iran or elsewhere in the world.

Australian sanctions against Iran remain in place against various designated persons and entities and in respect of Iran's ballistic-missile industry.

It should also be noted that Australian entities are still required to seek approval for transactions worth AUD20,000 or more to or from Iran pursuant to Australia's anti-money laundering and counter-terrorism legislation.

Australian entities should also consider whether their intended dealings with Iran would contravene any sanctions imposed by any other country. For instance, various Iranian sanctions imposed by the European Union and the United States remain in place.  For Australian entities, there may be issues with transfer of US dollars to Iranian entities with banks still unable to clear US dollars for Iranian business.