President Donald Trump has declared the denunciation of the suspended Iran sanctions. Most recently, the Joint Comprehensive Plan of Action (JCPOA) largely suspended Iran sanctions. German companies had slowly regained a foothold in the Iran business. Now the US government has announced that the Iran sanctions will be reintroduced.
With President Trump’s announcement on 8 May 2018, the timetable for reintroducing Iran sanctions has begun. The Secretary of State and the Secretary of the Treasury have been instructed to prepare for the reintroduction of Iran sanctions.
Transitional periods for the reintroduction of Iran sanctions
The US sanctions against Iran, which have been suspended by the JCPOA, are to be revived as soon as possible. However, there will be transitional periods to protect American and German companies from the too rapid resurgence of sanctions. There will be a 90 day and 180 day transition period. Companies worldwide have been called upon by the US government to reduce their Iran business within the transitional periods so that they do not violate US sanctions.
Which US-Iran sanctions will revive?
In principle, it should be noted that all sanctions suspended under the JCPOA should revive. After 90 days of transition, the situation will revive:
- sanctions for the purchase of US dollars by Iran or trade in Iranian currency
- Sanctions on gold trading
- Sanctioning trade in graphite, aluminium, steel, coal and software
- Trading in Iranian government bonds
- Sanctions in the automotive industry
In addition, the carpet trade will be restricted and certain permits for trade with Iran will be revoked.
After 180 days, the following sanctions in particular will come to life again:
- Sanctions against Iranian port operators, the maritime industry (including IRISL, South Shipping Line Iran or related companies)
- All sanctions relating to the oil industry and the companies National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC) and trade in petroleum or petrochemical products
- Sanctions on financial transactions between the Central Bank of Iran, other aforementioned credit institutions and foreign financial institutions
- Sanctions on insurance transactions with regard to Iran
- Sanctions in relation to Iran’s energy sector
Are you affected by Iran sanctions?
Companies should therefore urgently consider whether they are affected by the new sanctions against Iran. The US expects its sanctions to apply worldwide.
In this respect, even European companies can violate US law. The fact that the USA is not squeamish in the enforcement of its legal opinions has recently become apparent when high-ranking managers of the automobile group Volkswagen were arrested after their holidays in the USA. Nevertheless, companies should check whether they are not violating German or European law the other way round when complying with US sanctions.
Fulfilment of old contracts with Iran
Companies should also check whether they can or may still fulfil contracts already concluded with Iran. If necessary, it should be examined whether it is still possible to withdraw from long-term contracts or whether claims for damages by the customer in Iran are then threatened. There are also transitional arrangements for contracts already concluded.
It must also be recommended that all parties involved in the Iran business follow current developments closely. Several acts are expected to be adopted in the coming weeks and months to reintroduce US sanctions against Iran. Companies should also monitor the position of the European Union. It is conceivable that this will also follow suit with the sanctions, or will order that the US sanctions may not be complied with.
The US government has published a leaflet that answers the most important questions of companies with business in Iran from the US perspective. It can be downloaded here.
Do you do business with Iran? Get legal advice now on the new US sanctions for Iran