The White House has released a Fact Sheet outlining key aspects of the interim deal that was concluded on November 23, 2013 among Iran and the so-called “P5+1” powers (consisting of the United States, China, Russia, France, Germany and the United Kingdom). The deal sets in motion an interim program of six months’ duration, renewable by mutual consent among the negotiating nations. During this period, Iran must take steps to freeze and curtail aspects of its nuclear program, and the P5+1 have agreed to “limited, temporary, targeted and reversible” sanctions relief.

In sum, the temporary sanctions relief will not represent a material change in the existing US economic sanctions directed at Iran. At its core, any such relief would include relaxation of certain existing sanctions targeting non-US persons doing business with Iran’s automotive sector or dealing in Iranian petrochemical exports or gold or precious metals trade with Iran. Continuation of existing, reduced levels of Iranian crude oil sales to the six countries currently with US crude oil waivers will also be permitted. Sales of agricultural products, food, medicine and medical devices (already generally permitted or licensable) may be facilitated through additional financing arrangements or other steps intended to clear away perceived sanctions obstacles. In addition, new licenses may be available for US persons to engage in aircraft safety activities for non-SDN Iranian commercial airlines, as well as Iran Air. A key point to keep in mind at this stage is the temporary sanctions relief will not materially change the restrictions that currently exist on US companies and their foreign owned or controlled affiliates. The only expected change to those restrictions is the possibility of obtaining licenses for certain civil aviation safety activities, although there may be US statutory obstacles that limit the types of aviation products that can be supplied to Iran.

Furthermore, it is important to understand that no changes to current law have been made yet. Additional government-to-government discussions are anticipated over the coming weeks to decide when and how the limited relief will be implemented. In the next few weeks, the Administration will release more detailed guidance. Moreover, it should be noted that some of the existing restrictions are codified into laws enacted by the US Congress that cannot be relaxed by the President’s discretion alone. Any relief that is put into place is expected to involve only actions under the President’s independent authority.

What May Change In The Existing Sanctions

  • Efforts to require further reductions in Iran’s crude oil sales may be deferred, allowing the six countries that currently have “significant reduction” waivers from the US for crude oil purchases under the Fiscal Year 2012 National Defense Authorization Act to continue to purchase at the same average levels; EU sanctions and US secondary sanctions related to insurance and transportation services for crude oil may also be suspended, to the extent consistent with sales that fall within existing, reduced levels.
  • The P5+1 will seek to enable the repatriation of $4.2 billion in Iranian funds held abroad, in installments, subject to Iran’s continued compliance with its commitments.
    • According to the White House Fact Sheet, Iran is estimated to hold approximately $100 billion in inaccessible or restricted foreign exchange, and the Administration expects that nearly $15 billion will be added to Iran’s restricted overseas accounts during this period.
  • US secondary sanctions and EU sanctions on trade in and services associated with Iran’s petrochemical exports and gold and precious metals will be suspended during the six month period.
    • Associated services may include insurance, transportation or financial services that facilitate sanctioned transactions.
  • The US will suspend secondary sanctions on Iran’s auto industry and associated services, presumably thereby allowing foreign persons not owned or controlled by US persons or transferring items subject to US jurisdiction to conduct otherwise allowable trade with Iran.
  • The US may issue licenses for the supply to and installation in Iran of civil aviation spare parts, safety-related inspections and repairs, and associated services for non-SDN airlines, as well as Iran Air (currently an SDN).
    • There may be operative statutory restrictions under the Iran-Iraq Arms Non-Proliferation Act of 1992 and the Iraq Sanctions Act of 1990 that need to be considered in determining which items can be exported to Iran.
  • A financial mechanism will be established with specified foreign banks and non-designated Iranian banks to facilitate humanitarian trade using Iran’s oil revenues held abroad, including transactions involving food, agricultural products, medicine, medical devices, and medical expenses incurred abroad, the payment of Iran’s UN obligations, and direct transfers of government tuition assistance to foreign schools for Iranian students.
    • Any such facilitation would likely only pertain to humanitarian transactions already generally licensed or exempted under US law.

The parties also agreed that there would be no new nuclear-related sanctions by the UN Security Council or the EU, and that the United States would refrain from imposing new nuclear-related sanctions, subject to congressional action.

What Will Not Change

The White House Fact Sheet emphasizes that the “overwhelming majority” of the current sanctions regime will remain in place and that enforcement will be robust during this six-month phase. Enumerated below are some of the key aspects of the current sanctions regime that we believe will remain in effect during the interim period (see our earlier advisories on Executive Order 13645, the Iran Freedom and Counter-Proliferation Act of 2012 (IFCPA) and other recent measures for a useful overview of the current regime).

  • Broad restrictions on nearly all dealings related to Iran by US persons and their owned or controlled foreign affiliates (as set forth in the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560).
  • Extraterritorial sanctions on foreign, non-US persons that export petroleum products to Iran or invest in or support Iran’s energy sector (as set forth in certain provisions of the Iran Sanctions Act (ISA), as amended, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA), and IFCPA).
  • Sector-specific measures, including those targeting shipping, shipbuilding, port operators and trade in graphite, raw or semi-finished metals, coal and industrial software supporting the shipping, shipbuilding, port and energy sectors (as set forth in certain provisions of Executive Order 13645 and IFCPA).
  • Restricted access to the US financial system, including sanctions against the Central Bank of Iran and other Iranian financial institutions, and secondary sanctions on foreign financial institutions that engage in certain restricted transactions (as set forth in certain provisions of CISADA, as amended, the Iranian Financial Sanctions Regulations, 31 C.F.R. Part 561, and Executive Order 13599).
  • Certain sanctions relating to financial services and insurance, except to the extent relaxed as described above.
  • Sanctions on Iran’s military program, the blocking of over 600 individuals and entities for supporting Iran’s nuclear or ballistic missile programs and other targeted sanctions related to state sponsorship of terrorism, human rights and Iran’s activities in Syria.
  • All UN Security Council resolutions calling for sanctions against Iran.
  • The EU crude oil embargo.


It is important to note that no changes to current law have been made yet. However, we would expect the President to issue executive orders or other measures in the near future to begin to implement the terms of the agreement and relax certain provisions of the currently broad-reaching US economic sanctions regime. At the same time, businesses should keep in mind certain aspects of this temporary and quite limited relief from sanctions:

  • The six month period has not yet begun. That clock is expected to start to run only after an understanding is reached with Iran regarding implementation of the commitments.
  • The Obama Administration has emphasized that the relief is “reversible” and will depend on Iran’s fulfillment of its obligations under the agreement. The possibility of a full reversal of the temporary relief should not be discounted.
  • While the six month period for temporary and limited sanctions relief is renewable by mutual consent, one cannot count on that occurring at this time. Businesses that wish to take advantage of the temporary relief measures should be careful to structure their commercial commitments so as to be able to exit those commitments at the end of the six month period.
  • The US Senate continues to consider imposing additional sanctions measures, after the House of Representatives passed such a bill in late July of this year. Iran’s foreign minister has indicated that the imposition of new sanctions would scuttle the November 23 deal.
  • Any final deal will likely be limited in scope. It seems that the P5+1 only envision the possibility of lifting sanctions related to Iran’s nuclear program, which would leave intact the extensive US and other sanctions related to Iran’s human rights abuses, support for terrorism, activities in Syria, and other matters of concern to the United States and its allies. It is likely that major restrictions on the ability of US companies and their foreign owned or controlled affiliates to do business in Iran will remain in effect for the foreseeable future.

Because of the limited, reversible nature of the expected changes, US and foreign companies will find it prudent to maintain their existing broad-based Iran sanctions compliance programs. However, carefully-calibrated modifications may be appropriate for certain companies involved in gold or precious metals trade, the automotive industry, the petrochemical sector, or civil aviation support, depending on the details of the modified sanctions as they are implemented. Opportunities remain for trade in food, agricultural products, medicine and medical devices. One of the key questions over the coming weeks is the extent to which the Administration will lift restrictions on related service providers (e.g. insurance, transportation and finance), without which any sector-specific openings will be less meaningful. The implementation details of any such changes will be critical, because administering them in the context of the larger sanctions framework could prove daunting.