On May 8, 2018, President Trump announced his decision to withdraw the United States from the Joint Comprehensive Plan of Action (JCPOA) and to reimpose on Iran a multitude of sanctions that were lifted in January 2016 under the JCPOA.
This so-called “snap back” of sanctions will be implemented by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State in a manner that permits affected parties to wind-down their affairs. The impact, however, will be immediate. All non-U.S. companies, but especially those owned by U.S. persons, must act swiftly to terminate their affairs in Iran by the specific deadline, or otherwise face substantial penalties—in some cases, blocking and other secondary sanctions.
The easing of sanctions under the JCPOA
When the United States implemented sanctions relief under the JCPOA in January 2016, the most consequential change was the easing of secondary sanctions—sanctions that apply to non-U.S. persons even when there is no U.S. nexus. Specifically, the U.S. ceased its “nuclear-related” secondary sanctions programs pertaining to Iran and lifted sanctions against non-U.S. persons for engaging in activities relating to energy and petrochemicals, shipping and shipbuilding, automotive, metals, financial and banking and insurance.
Sanctions related to Iran’s support for terrorism, proliferation missile activities, and human rights abuses remained in place. Additionally, with the JCPOA came the removal of more than 400 Iranian individuals and entities from its sanction lists.