Well, Implementation Day has come and gone. Hassan Rouhani peaked out of his house, did not see his shadow, and his handlers declared that winter would soon be over … at least if you’re in Europe. If you’re in the United States, not so much, where the sanctions remain pretty much the same, albeit more confusing. Meanwhile half of the CEOs of European companies are booking first class flights on Air France to Tehran where they will sign lucrative contracts to sell their goods and services.
For U.S. persons, there are a few minor benefits to Implementation Day. U.S. companies can sell civil aircraft parts to Iran as long as they get a license from OFAC. And you can now enjoy Iranian foodstuffs such as Iranian caviar and pistachios. In addition, foreign subsidiaries of U.S. companies can deal with Iran as long as the parent company, its employees and all U.S. persons carefully tread the treacherous facilitation line where one misstep leads to immediate catastrophe, penalties and, maybe, jail terms for all.
The only other benefit of Implementation Day to anyone in the U.S. involves removals of certain persons and companies from the SDN List. But, but, but (surprise!) there are major caveats. The removed parties are still blocked and off-limits to U.S. persons if they are part of the Iranian government (including state-owned enterprises) as defined in section 560.304. Second, they can’t be an Iranian financial institution as defined in section 560.324.
Now this is where the fun begins. Many of the entries removed from the SDN List on Implementation Day were either Iranian government entities or financial institutions. So, OFAC now has a new list for you to check of people removed from the SDN list who are still blocked and off-limits to U.S. persons. That’s right: implementation day brought U.S. citizensyet another list to check. These are the entities marked with an asterisk in Attachment 3 to Annex II of the JCPOA which are now compiled in the new list, the E.O 13599 List, and which can be found here (at least until OFAC, to keep its web designers employed, reorganizes its website again and breaks all previous links).
But the fun doesn’t stop there. The federal government, aware of its own incompetence and keen to punish those who rely on it, says this in the otherwise excellent January 16 guidance on the effect of implementation day:
Please be advised that, under the ITSR, U.S. persons continue to have an obligation to block the property and interests in property of individuals and entities listed in Attachment 3 to Annex II of the JCPOA that do not have an asterisk next to their name and are not included on the E.O. 13599 List if such persons meet the definition of either the Government of Iran or an Iranian financial institution as set forth in section 560.304 or 560.324 of the ITSR, respectively.
In plain English, just because we screwed up and didn’t put a removed party on the 13599 List and that party is in fact related to the Government of Iran, we still get to fine you if you blithely assume that removed parties not on the 13599 List are safe to deal with. Heads we win, as they say, tails you lose.
Happy Implementation Day, everyone!