Firms doing business in Iran “risk severe consequences” as Donald Trump’s first batch of secondary sanctions against the Middle Eastern country come into effect today.
August 6 is the first of two deadlines that the US president gave companies to “wind down” activities in Iran when in May he announced he was pulling the US out of the Iranian nuclear deal – officially known as the Joint Co-operative Plan of Action (JCPOA). Calling the JCPOA “a horrible, one-sided deal that should have never, ever been made”, Trump said the US would be instituting “the highest level” of economic sanctions against Iran.
The JCPOA was agreed between Iran and China, France, Russia, the UK, US and EU in 2015. While the US maintained its tough stance on US persons dealing with Iran, the JCPOA meant it agreed to lift its so-called secondary sanctions – those that apply to non-US persons and entities engaged in Iranian transactions. Those are the sanctions now being reimposed.
However, with the EU expected to enforce a so-called ‘blocking regulation’ – a statute that makes it illegal for any EU company or person to comply with those US sanctions – EU firms will be caught “between a rock and a hard place” when it comes to doing business in Iran and complying with the US requirements.
So says Leigh Hansson, partner at law firm Reed Smith, where she heads up the international trade and national security team. In an interview with GTR, she explains what changes will come into effect and how they will impact business.