Following much anticipation, Iran and the P5+1 states (the United States, United Kingdom, France, Russia, China and Germany) announced on Tuesday morning Vienna time the reaching of a landmark deal on Iran’s nuclear deal.
What does it include?
The basic parameters were agreed upon by the parties in early April. The official text suggests some interesting developments on the U.S. unilateral sanctions front. As you may recall, I had previously written that the bulk of the U.S. sanctions infrastructure as applicable to U.S. persons will remain intact. That said, there are some key changes, including the following:
1. Removal of a wide host of EU sanctions and secondary U.S. sanctions that can punish third country companies for trading with Iran.
2. Delisting of many Iranian entities, including a large number of banks.
3. Allowing the sale of US civilian aircraft to Iran and related services.
4.. Allowing the importation of certain Iranian luxury goods (like caviar, rugs, and pistachios – items whose importation was prohibited under the 2010 Comprehensive Iran Sanctions Accountability and Divestment Act of 2010, aka CISADA).
Although most U.S. sanctions limiting business activities by U.S. persons with Iran remain in place, areas already authorized by law (such as certain food, medicine, medical device, agricultural and IT sales) will very likely be made easier due to more third country companies entering the logistics fields (eg, banking, shipping, etc.) And many Iranian entities being delisted.
Notably, the laws have not yet fully changed and the relief will be phased in. As such, compliance should be at the forefront of all businesses’ minds. The sanctions are far from gone, but today’s accord is a formidable step towards Iran’s economic reintegration with the rest of the world.
This is of course just a sample of the potential sanctions relief granted Iran. I will write more on this in due course.