In January 2014, both the EU and U.S. brought into force measures which temporarily suspended and relaxed (for a period of six months, to end on 20 July 2014) some of the sanctions in place against Iran. This reflected the Joint Plan of Action (JPoA) agreed between the E3+3 and Iran in November 2013. Those measures were discussed in our alert of 23 January 2014.
In light of continuing negotiations between the E3+3 and Iran, an agreement has been reached to extend all of these measures to 24 November 2014. The extension came into force on 21 July 2014, i.e. the day after the original six month period was due to end.
The suspension and relaxation of sanctions remains in place in identical form. No additional sanctions have been suspended.
The UK HM Treasury and U.S. Department of Treasury (OFAC) have both published guidance on their respective websites in respect of these latest developments:
HM Treasury guidance: https://www.gov.uk/government/publications/financial-sanctions-iran-nuclear-proliferation
OFAC guidance: http://www.treasury.gov/resource-center/sanctions/Programs/pages/iran.aspx
Health Warning! As previously, there are two key points to be aware of in respect of the extension of the JPoA measures:
- The EU and U.S. positions are not entirely in line. Caution must be exercised, as although the intended business may be clear from an EU perspective, it may remain subject to U.S. sanctions, e.g. if payments are made in U.S. dollars.
- U.S. guidance states that transactions under the eased restrictions must be “completed” by 24 November 2014. The EU legislation states that all relevant contracts must be “executed” within 24 November 2014. Prudence dictates that “executed” should be read to mean “completed”, i.e. all obligations under a contract falling within the eased restrictions must have been fully carried out by 24 November 2014.