As described in our prior alert, November 5, 2018 marked the full return ("snapback") of U.S. Iran-related sanctions measures lifted or waived pursuant to the Iran nuclear deal (the Joint Comprehensive Plan of Action or "JCPOA"). This snapback followed termination of U.S. participation in the JCPOA on May 8, 2018.

Revisiting the five crucial points about snapback from our May 11 alert:

  1. Sanctions Measures Lifted or Waived Pursuant to JCPOA Are Back in Effect: As described in more detail below, the following Iran nuclear-related sanctions measures are now fully back in effect, as of August 6 and November 5, depending on the sanctions measure:

    • Application of suspended primary sanctions prohibitions to U.S.-controlled companies engaging in Iran-related activity and to certain previously exempt activities of U.S. persons themselves.
    • Secondary sanctions measures that authorize or mandate imposition of sanctions against non-U.S. companies for engaging in specified dealings related to Iran, including those involving Iran's financial, energy and shipping sectors.
  2. Revocation of General License Authorizations for U.S.-Controlled Entities: United States-controlled entities acting outside of the United States and their U.S. parent companies no longer have authorization under "General License H" to engage in business related to Iran. As of November 4, 2018, General License H beneficiaries were generally required to have terminated any activity lawfully undertaken under General License H.
  3. Revocation of Other Exceptions to Primary Sanctions: United States persons and U.S.-controlled entities are again generally prohibited from engaging in supply of civil aircraft and parts and components to Iran and related activities absent a flight safety-related specific license, as well as from importing Iranian-origin carpets and foodstuffs.
  4. Secondary Sanctions: Previously lifted or waived secondary sanctions measures addressing Iran-related activities in the following sectors of Iran's economy are fully back in force: (i) finance and banking, including activities such as provision of loans, investments, securities, foreign exchange services (including Iranian rial-related transactions), specialized financial messaging services and purchase, subscription to and facilitation of the issuance of Iranian sovereign debt, (ii) energy and petrochemicals, including activities such as investments, exports, acquisitions, sales, transportation and marketing, (iii) insurance, including provision of underwriting services, insurance and re-insurance, (iv) shipping, shipbuilding and ports, (v) gold and other precious metals, (vi) software and metals and (vii) the automotive sector. As has been widely reported, the Trump Administration has indicated that, for certain countries and to a limited extent, it will waive a general requirement to impose secondary sanctions in response to dealings regarding Iranian crude oil.
  5. SDN Designations: On November 5, 2018, in the largest Iran-related single-day sanctions action, the U.S. government added more than 700 individuals, entities, aircraft and vessels to the Specially Designated Nationals and Blocked Persons List ("SDN List") in connection with Iran. This includes nearly 250 persons and associated blocked property returned to the SDN List from other OFAC-administered sanctions lists.

    Given that U.S. persons remained generally forbidden to deal with Iranian and Iran-related blocked persons even following the relaxation of sanctions under the JCPOA, the designations are expected to primarily affect non-U.S. persons' risk under secondary sanctions measures. As described in our prior alert, non-U.S. persons may once again be exposed to U.S. secondary sanctions if they engage in certain dealings with Iranian or Iran-related persons added to the SDN List.

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