The E3/EU+3 (China, France, Germany, the Russian Federation, the United Kingdom and the United States, with the High Representative of the European Union for Foreign Affairs and Security Policy) announced an agreement today with the Islamic Republic of Iran to limit Iran's nuclear programme in exchange for sanctions relief.

Under the new Joint Comprehensive Plan of Action ("JCPoA") agreed in Vienna, Iran has reaffirmed that under no circumstances will it ever develop or acquire any nuclear weapons. If fully implemented, the JCPoA will result in the comprehensive lifting of all UN Security Council sanctions as well as multilateral and national sanctions related to Iran’s nuclear programme, which will allow access to Iran's trade, marine, technology, finance, and energy sectors.

However, a number of hurdles remain to be cleared before any sanctions are lifted.

The UN must adopt a resolution to approve the JCPoA and put in place the framework to remove the UN Security Council sanctions. It is believed that it will only be a matter of days before the UN Security Council considers such resolution.

Under the Iran Nuclear Agreement Review Act of 2015, the US Congress will have an opportunity to review the JCPoA and, if it passes a joint resolution of disapproval, may prohibit granting relief from US statutory sanctions.  The US will only provide relief under the JCPoA from nuclear-related sanctions, not from sanctions imposed on Iran in connection with terrorism, ballistic missiles and human rights issues.

Although the JCPoA will come into effect once all of the participants have approved it, there will be no relief from sanctions at that stage. Instead, Iran must first begin implementation of the agreed "roadmap" to address past and present issues of concern relating to its nuclear programme as previously raised in a report by the International Atomic Energy Agency ("IAEA"). This includes Iran allowing the IAEA to monitor the implementation.

Only once the IAEA has verified that Iran has taken the agreed steps to reduce its nuclear programme, will sanctions begin to be lifted. It is understood that JCPoA sets out a ten year programme for Iran to continue with a peaceful nuclear programme before the complete removal of UN Security Council resolutions in respect of the Iran nuclear issue. The JCPoA is also reported to include provisions allowing the IAEA to continue monitoring activities in Iran for up to 25 years.

As had been widely expected as part of the agreement, President Obama has confirmed that if Iran violates the agreement the "sanctions will snap back into place". The exact details of how the sanctions will be lifted and the ability to re-impose sanctions in the event of Iran failing to comply with the agreement are expected to be set out in the JCPoA.

For those wishing to engage in trade with Iran today's announcement will bring excitement and opportunity and today is seen as a historic moment between Iran and the international community. However, the note of caution is that until the various implementation hurdles are overcome, the UN, EU and US sanctions remain in force.

Once the JCPoA has been published, Clyde & Co will produce further updates on the possible easing of Iranian sanctions.