On November 24, 2013, the United States and its negotiating partners, China, France, Germany, Russia, and the United Kingdom (the P5 + 1), reached an initial understanding with Iran concerning its nuclear program, the Joint Plan of Action (JPOA). Part of this initial understanding includes the United States’ commitment to provide sanctions relief to certain activities and associated services in Iran. The initial sanctions relief ended July 20, 2014, but was extended through November 24, 2014.
On November 25, 2014, the Office of Foreign Assets Control (OFAC) within the Department of the Treasury announced the sanctions relief would be further extended through June 30, 2015. It issued updated guidance, including FAQs, on the sanctions relief.
The United States committed to temporarily suspend certain sanctions involving Iran’s purchase and sale of gold and other precious metals, its export of petrochemical products, its automotive industry, and certain services associated with those industries. The United States also committed to facilitate the release of a large amount of Iran’s restricted funds to facilitate Iran’s import of certain humanitarian goods, payment of medical expenses for Iranians abroad, payments of Iran’s UN obligations, and tuition payments for Iranians studying abroad. Finally, the United States provided for a pause in the reduction of imports for Iranian crude oil for current purchasers of the crude oil.
It is extremely important to note that the actions taken by OFAC do not suspend sanctions on the activities listed above for U.S. persons subject to the Iranian Transactions and Sanctions Regulations (ITSR). In other words, U.S. persons and U.S.-owned or controlled foreign entities will continue to be generally prohibited from conducting transactions with Iran, unless licensed to do so by OFAC. As part of the JPOA, though, OFAC has committed to facilitating the licensing of transactions by U.S. persons and U.S.-owned or controlled entities related to the safety of flight for Iranian civil aircraft. In addition, there is already a license exception for U.S. persons to provide humanitarian products to Iran, such as food, agricultural commodities, medicine and medical devices.
It is also important to note that, unless otherwise specified, the sanctions relief does not include transactions with persons or entities on OFAC’s List of Specially Designated Nationals and Blocked Persons (the SDN list). In addition, associated services include any necessary service, such as insurance, transportation or financial service, that is ordinarily incident to the underlying activity for which sanctions relief was provided. However, sanctions relief for services related to Iran’s export of crude oil only includes insurance and transportation services.