With the lifting of many on the sanctions imposed on Iran in January we explore the opportunity this spells for businesses and also highlight the key regulations to be aware of in order to make the most out of exporting. 

Impact of sanctions

Sanctions and export control regulations have the potential to affect significantly an organisation's exports and profits. As a result when exporting goods it is prudent that organisations are aware of and seek advice in relation to export controls.


On 16 January 2016, Implementation Day, following the International Atomic Energy Agency’s verification that Iran had completed all necessary steps set out under the Joint Comprehensive Plan of Action (JCPoA), most financial and economic sanctions against Iran were lifted. US nuclear-related financial and economic secondary financial and economic sanctions have also been suspended.

As a result activities and services such as banking, insurance, shipping, sale and supply of precious metals, oil, gas and petrochemicals activities are no longer prohibited under Council Regulation (EU) No 267/2012.

Following the lifting of the sanctions the UK government has stated it is committed to supporting and expanding trade relationships with Iran. UKTI will be engaging with UK businesses to provide support and assistance to help ensure UK business benefits from opportunities as they arise. Whilst this re-engagement spells opportunity for UK manufacturing and exporting, there are still restrictions which organisations will need to be aware of.

It is important to note that some goods such as, graphite and raw or semi-finished metals, nuclear related goods and enterprise resource planning software are no longer prohibited from sale, supply, transfer or export to or for use in Iran, but are subject to a UK export licence. Some activities remain prohibited under the proliferation-related sanctions such as, military goods and goods which might be used for internal repression.

Dual-Use Regulations

Independent of any sanctions regime is EU regulation of Dual-Use goods. Article 4 of Council Regulation 428/2009 is the main EU Dual-Use Regulation legislation which in the UK has been transposed into the Export Control Order 2008. In essence this legislation is a catch-all provision which is invoked where there are concerns that exported goods will be used in Weapons of Mass Destruction (WMD) programmes or for military purposes.

The Regulations impose a legal obligation on organisations to contact the Export Control Organisation and apply for an export licence if you know, or suspect, that your export will be used in a WMD programme or in a WMD delivery system.

For exports to countries outside the EU, if the Export Control Organisation (ECO) is concerned that a shipment will be used in a WMD programme or in a WMD delivery system or that a shipment is being made to an end user about whom they have concerns, they will make a decision on, whether to ‘invoke’ End-Use Control - ie the shipments will require an export licence, or whether to issue or refuse an export licence. Government Guidance recognises that the WMD End-Use Control can in theory be applied in a very wide range of cases where an end user is involved in WMD in a country outside the European Union.

Whilst exporting is a significant opportunity for businesses, breach of sanctions and End-Use Regulations will be damaging both commercially and to reputation. When exporting organisations should ensure they are fully compliant with all Regulations. If there is any ambiguity an organisation should conduct due diligence into the receiver of the goods and/or contact the Export Control Organisation.