Earlier today, the United States, China, France, Russia, UK, and Germany (the “P5+1” nations) reached a historic final agreement with Iran to limit its nuclear program in exchange for sanction relief: the Joint Comprehensive Plan of Action Agreement (JCPOA). President Obama hailed this as a step toward a “more hopeful world” and Iran’s President Hassan Rouhani said it proved that “constructive engagement works.” Congress has 60 days to review the JCPOA and President Barack Obama has stated that he will veto any bill blocking the implementation of the agreement.

As what has been described as “one of the longest, most complicated ‘to do’ lists the international community has seen in a while,”[1] the JCPOA spans 159 pages, including several annexes that dive deep into technical detail of implementation and sanctions related commitments. Key provisions include:  

  • Iran has agreed that “under no circumstances will Iran ever seek, develop or acquire any nuclear weapons,” but it maintains its right to peaceful nuclear energy under the Nuclear Nonproliferation Treaty.  
  • The United Nations, the European Union, and the United States will lift nuclear-related sanctions on Iran, including those that target Iran’s financial and oil sectors. These sanctions will be lifted in progressive steps as Iran completes its obligations towards dismantling its nuclear program.  
  • The United Nations will lift its arms embargo, which includes conventional weapons, such as tanks and aircraft, against Iran.  
  • Iran will continue to work with the International Atomic Energy Agency (IAEA) to address issues related to its past alleged research on nuclear weapons. This plan requires that Iran meet its commitments by mid-October, and by mid-December, the IAEA chief must offer an assessment. Additionally, to monitor whether Iran is meeting is commitments under the JCPOA, the IAEA will also have significant access to Iranian sites including, “monitoring of uranium ore concentrate produced by Iran from all uranium ore concentrate plants for 25 years.”  
  • A Joint Commission, which includes members from Iran, China, France, Germany, Russia, Britain, the United States and an EU representative, will oversee implementation of the JCPOA. The Commission is tasked with resolving disputes over whether Iran or the six world powers are violating the JCPOA.  
  • The JCPOA provides for several milestones. “Implementation Day” will occur when the IAEA verifies that Iran has fulfilled its nuclear-related obligations, as well as the UN and other negotiating parties fulfilling their agreed-upon obligations. “Transition Day” will occur eight years from adoption of the JCPOA or upon a report from the IAEA indicating that all nuclear material in Iran remains in peaceful activities. At that time, the negotiating parties will effectuate termination of remaining sanctions stemming from Iran’s nuclear activity.

 US Government Position

Although the US government has yet to publish guidance on the JCPOA and its specific sanctions implications, the Treasury Department’s Office of Foreign Asset Control (OFAC) has released the following Statement:

  • On July 14, 2015, the P5+1 and Iran reached a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful. Building on the key parameters for a JCPOA announced on April 2, 2015, the JCPOA will provide Iran with phased sanctions relief upon verification that Iran has implemented key nuclear commitments.  
  • US sanctions relief will be provided through the suspension and eventual termination of nuclear-related secondary sanctions, beginning once the International Atomic Energy Agency (IAEA) verifies that Iran has implemented key nuclear-related measures described in the JCPOA ("Implementation Day"). The US government will publish detailed guidance related to the JCPOA prior to Implementation Day.  
  • The P5+1 and Iran also decided on July 14, 2015 to further extend through Implementation Day the sanctions relief provided for in the Joint Plan of Action (JPOA) of November 24, 2013, as extended. This JPOA sanctions relief is the only Iran-related sanctions relief in effect until further notice. The US government will issue revised guidance on the continued JPOA relief shortly.  
  • Effective July 14, 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 on or before July 14, 2015, are hereby authorized to remain in effect according to their terms until Implementation Day.

 The White House has also issued a release of the “Key Excerpts” of the JCPOA.

Current Sanctions Relief: Continuing Joint Plan of Action Sanctions Relief

OFAC clarified that the Joint Plan of Action (JPOA), initially signed on November 24, 2013, and previously extended, is the only Iran-related sanctions relief at this time and will be continued until “Implementation Day.” The JPOA sanctions relief suspended secondary sanctions in the following areas:  

  • Iran’s exports of petrochemical products
  • Iran’s auto industry
  • Gold and other precious metals
  • Civil aviation
  • Iran’s export of crude oil
  • Facilitation of humanitarian and certain other transactions

For more information on the JPOA sanctions relief, please see our prior Iran Sanctions Alert.

US Treasury Secretary Jack Lew also clarified that, “[a]ll current sanctions will remain in place until such steps have been verified, with the only exceptions being the limited sanctions relief that has been in place since negotiations began,” and “[n]o new U.S. nor international sanctions are being relieved today.”