As broadly reported, on July 14, 2015, the “P5 + 1” countries (China, France, Germany, Russia, the United Kingdom and the United States) reached agreement with Iran on a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be solely for peaceful purposes. The JCPOA will provide Iran with phased sanctions relief upon verification that Iran has implemented key nuclear commitments. Although sanctions relief could provide business opportunities for companies, the agreement is not final: all the countries involved in the negotiation of the JCPOA must formally accept it in accordance with their respective national processes.

U.S. Review and Acceptance Process

For U.S. companies, whether U.S. sanctions against Iran are eased depends initially on whether the United States formally accepts the JCPOA. Under the terms of Iran Nuclear Agreement Review Act of 2015, within five days of the adoption of the agreement, the President must submit certifications to Congress, including a verification assessment on Iranian compliance and a certification that the agreement meets U.S. non-proliferation objectives and does not jeopardize U.S. national security. Congress will then have 60 days to review the agreement. If Congress opposes the agreement, it may adopt and send to the President a resolution of disapproval – which the President has already stated he would veto. A two-thirds vote by each house of Congress is required to override a Presidential veto.

No Immediate Lifting of Sanctions

After the JCPOA enters into force, the sanctions will be phased out only after Iran takes the necessary steps to ensure, as confirmed by international inspectors, that it will not develop nuclear weapons. Until then, all current sanctions remain in place, with the only exceptions being the limited sanctions relief and relaxed licensing policy that have been in place since negotiations began in 2013, as described in our previous publication. Further, all specific licenses that: (1) were issued pursuant to the U.S. Department of the Treasury’s Office of Foreign Assets Control’s (OFAC’s) Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry, and (2) have an expiration date on or before July 14, 2015, remain in effect.

As the JCPOA is implemented, OFAC will provide guidance on the changes to U.S. sanctions on Iran.