On November 24, 2014, the US, UK, France, China, Russia and Germany (collectively the "P5 + 1") and Iran announced that they would extend to June 30, 2015 the validity of their "Joint Plan of Action" or JPOA. The P5+1 and Iran had previously agreed that the JPOA would expire on November 24, so as to set a time frame on their negotiations to achieve a comprehensive settlement regarding Iran's nuclear program. Although this did not occur, the P5+1 and Iran decided to continue the JPOA for seven months – until June 30, 2015.

UK Foreign Minister Philip Hammond stated that although the new deadline for a deal is July 1, 2015, the parties were aiming to reach a “headline” agreement by March 1, 2015. This headline agreement would outline the terms of a final deal, but it is not clear whether there is a discrete set of issues such a headline agreement would need to cover or with what precision. US Secretary of State John Kerry stated that the talks remained "tough" and it remained an open question whether the parties would reach any final agreement.

To implement this extension of the JPOA under US law, on November 26, 2014, the US Treasury Department released updated guidance.

The Treasury’s updated guidance has three components: (i) an updated Guidance document on "Certain Temporary Sanctions Relief"; (ii) a set of answers to "Frequently Asked Questions" about the sanctions relief; and (iii) a Second Amended License, which extends the previous Statement of Licensing Policy with respect to civil aviation until the new deadline of June 30, 2015.

Pursuant to the guidance, the US is simply rolling over the JPOA and is not making any changes to the scope or terms of the JPOA's sanctions relief. There is, however, one exception. Between now and June 30, 2015, the US has agreed to release another $4.9 billion in blocked Iranian oil sale proceeds in installments of approximately $700 million per month. (This would result in a total of $11.9 billion released since the commencement of the JPOA on January 16, 2014.) Previously, the US released Iranian oil sale proceeds in blocks of approximately $500 million per month.

As noted in our earlier Client Alert on this matter (“US Implements the P5+1 Joint Plan of Action with Iran”) the Treasury Guidance and related materials offer meaningful detail about the terms of the JPOA -- but also raise the potential for challenging compliance issues. The JPOA is limited to its terms and contingent upon Iran's compliance with international obligations: as such, the JPOA can be suspended or reversed without advance notice. The past 10 months have demonstrated, moreover, that the US is prepared to impose sanctions on persons who operate outside of the limited scope of relief and that the full sweep of other US sanctions against Iran remain in place and subject to enforcement.

Furthermore, because the P5+1 countries (as well as the EU) each have to implement the JPOA through their own legal systems, there is a significant potential for inconsistent regulations across key jurisdictions. Firms currently trading with Iranian entities, or with plans to trade with Iranian entities, pursuant to this extended window of relief should therefore be mindful of this regulatory framework, and of the fact that the vast majority of US sanctions -- including extraterritorial measures -- remain on the books and a focus for enforcement efforts.