President Trump announced yesterday that the United States is withdrawing from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). The White House subsequently issued a Presidential Memorandum, Ceasing U.S. Participation in the JCPOA and Taking Additional Action to Counter Iran's Malign Influence and Deny Iran All Paths to a Nuclear Weapon, outlining the next steps it expects to take, particularly with regard to sanctions.

The decision to withdraw from the deal is consistent with the President's strong position against the agreement, which he did not believe was in the United States' best interests. The agreement signed under President Obama was intended to close off the potential for Iran to build a nuclear bomb by curbing nuclear research and development activities the United States and other partners considered most troubling. In exchange, Europe lifted most sanctions on Iran, while the United States lifted most "secondary sanctions," which apply to non-U.S. persons and companies that access the U.S. market, as well as certain primary sanctions, including those affecting the importation of specific Iranian goods into the United States.

Administration officials said the United States will be reinstating all sanctions and secondary sanctions against Iran that had been waived as part of the JCPOA. Impacted U.S. and non-U.S. businesses and banks currently dealing with Iran will be granted statutory waivers lasting between 90 and 180 days to wind down existing ties with Iran, depending on the particular type of transaction. Additionally, sanctions intended to reduce other countries' purchases of Iranian oil will be reinstated. The Administration is also looking to impose additional economic penalties, which have not yet been announced.

On the European side, French President Emmanuel Macron, UK Prime Minister Theresa May, and German Chancellor Angela Merkel urged Iran to "continue to meet its own obligations under the deal," despite the American withdrawal, and have indicated that Europe intends to remain in the JCPOA. The extent to which European countries can protect EU companies from the application of U.S. secondary sanctions remains to be seen and is likely to be a point of contention between the EU and the United States in the coming weeks and months.

As noted, while all sanctions have been reinstated with immediate effect, statutory waivers are in place to allow affected companies to wind down existing business with Iran.