Trade Compliance Flash: More Mixed Messages on Iran: Latest Sanctions Waivers Accompanied by Additional Sanctions
On September 14, 2017, the Trump administration announced the extension of waivers of various secondary sanctions against Iran while simultaneously sanctioning an additional 11 entities and individuals for activities in support of Iran. At the same time, administration officials emphasized that the U.S. Iran policy remains under review and declined to predict how the United States intends to handle the upcoming October deadline for certifying to Congress that Iran is in compliance with the Joint Comprehensive Plan of Action (JCPOA) agreed to with Iran in 2015.
The waivers, which originally took effect on January 16, 2016 ("Implementation Day" under the JCPOA), have been renewed every 180 days since that time. The secondary sanctions waived were imposed under various pieces of legislation enacted in 2012 and were due to "spring back" into force absent a further waiver. Failure to extend the waivers would have exposed non-U.S. persons doing business with Iran to sanctions (including asset "blocking" or "freezing") for continuing to engage in transactions with Iran now permitted by the laws of their own countries as a result of the JCPOA.
Implementation of the JCPOA was accompanied by sanctions under authorities not impacted by the JCPOA and the Trump administration has continued that tradition by imposing additional sanctions simultaneously with both the May 17 and September 14 waiver renewals. The May renewal was accompanied by designations of Iranian defense officials and a China-based network as Specially Designated Nationals and Blocked Persons (SDNs) for supporting Iran's ballistic missile program. SDNs are cut off from the U.S. financial system and U.S. persons are prohibited from having any dealings with them. The September 14 waiver renewals were accompanied by designations of supporters of Iran's Islamic Revolutionary Guard Corps and networks responsible for engaging in cyber-attacks on the U.S. financial system. These designations, pursuant to sanctions authority related to non-nuclear-related weapons proliferation, terrorism, and cyber-attacks, is consistent with the terms of the JCPOA, under which the United States agreed to lift only those sanctions related to Iran's nuclear weapons program.
In announcing the waivers and new designations, administration officials emphasized that their Iran policy remains under review. Some in the administration, including President Trump himself, continue to express frustration with the JCPOA and have left open the possibility that the United States will withdraw from the deal. Although the latest waiver buys the administration some additional time to review and develop its Iran policy, the next test for the JCPOA is already on the horizon. By October 15, 2017, the administration must certify to Congress that Iran remains in compliance with the JCPOA. Failure to certify Iran's compliance could lead to the re-imposition of U.S. nuclear-related sanctions on Iran. The impact of such an outcome will fall heavily on non-U.S. entities that have re-entered the Iranian market post-Implementation Day.
For more information please contact:
Barbara D. Linney*
Patrick M. Stewart*
*Former Miller & Chevalier attorney
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