On Tuesday, 8 May 2018, US President Trump will announce his decision on whether the US will renew the sanctions waiver under the international community's nuclear deal with Iran (JCPOA), and effectively on the future participation of the US in the deal.
Previously, the US President has stated that he was ready to withdraw from the JCPOA, if the agreement is not significantly changed by 12 May 2018.
While the EU has stressed its commitment to the JCPOA and willingness to continue the deal without the US, chances for survival of the deal following a potential US withdrawal are slim. This is particularly the case, since Iran has stated that "if sanctions are reinstated in whole or in part, Iran will treat that as grounds to cease performing its commitments under this JCPOA" - this intention is documented in the text of the JCPOA. In the last couple of weeks, European lobbying efforts in DC to salvage the deal have therefore reached unprecedented levels. After the high-profile visits of France's President Macron and Germany's Chancellor Merkel, last week, it was UK Prime Minister May's turn to try and keep the US on board.
In parallel, the Europeans, Iran, and the rest of the international community are developing alternative plans for the JCPOA to continue to function without the US. This essentially comes down to safeguarding international companies to continue to conduct business with and within Iran without being subjected to American sanctions.
The main concern for companies around the world is the possible imposition of sanctions by the US and the consequences of such action for business. US regulators are looking at reimposing a sanctions package that was suspended under JCPOA. One of the most significant concerns for companies outside of the US is the re-imposition of the US 'secondary sanctions', which apply to non-US persons and thus have an extraterritorial effect.
It is currently very difficult to predict what exactly the consequences will be for companies doing business with Iran if the US decides to reimpose the sanctions and if the JCPOA falls apart. While the EU has committed to protect the execution of contracts concluded after the implementation of the JCPOA and before the reimposition of sanctions, the US OFAC's position is that although there would be no retroactive prosecution, no grandfathering of contracts signed prior to the reimposition of sanctions would be provided.
No matter what the outcome of today's announcement, your clients are likely to be be affected as far as their business interests with regards to Iran are concerned. DLA Piper's Global Government Affairs and International Trade team with experts based in Brussels and other European Capitals, in the US, and in the Middle East, stands ready to provide advice on the (changes in) the current sanctions regimes and how these affect sectors and industries. We are in constant contact with foreign policy and sanctions decision-makers at EU-, US-, and other national levels, as well as with national sanctions authorities, and will be pleased to share our insights gained through these contacts for the benefit of DLA Piper's clients.