On 23 November 2013, China, France, Russia, the United Kingdom, the United States and Germany (the so called “P5+1”) the European Union and Iran reached an interim agreement, known as the Joint Plan of Action, regarding the Iranian nuclear program. Under this agreement, in return for Iran taking several steps to limit the progress of its nuclear program, on 20 January 2014 certain US and EU economic sanctions on Iran were eased, including an increase in the threshold amount (from EUR 40,000) to EUR 400,000 for transfers of funds between EU persons and Iranian persons that triggered a prior authorisation requirement.
On 14 July 2015, the P5+1, the EU and Iran reached a final agreement regarding Iran’s nuclear program, known as the Joint Comprehensive Plan of Action (“JCPOA”), which provides a long-term plan for limiting Iran’s uranium enrichment and related nuclear activities, extensive monitoring of those activities by the International Atomic Energy Agency (“IAEA”) and, in exchange, the suspension and eventual termination of nuclear-related UN, EU and US economic sanctions which apply to non-US persons.
On 16 January 2016 the IAEA confirmed that Iran had fully satisfied its obligations under the JCPOA. Accordingly, on the same day (referred to as “Implementation Day”), the United Nations, the European Union and the United States lifted the majority of their nuclear-related secondary sanctions. The JCPOA provides a dispute resolution mechanism that permits the parties to raise concerns about significant non-performance under the JCPOA and, if unresolved, allows for sanctions to “snap back”.
The changes in UN, EU and US sanctions against Iran were significant, particularly to the extent they previously related to non-US individuals and entities. US primary sanctions applicable to US persons (as defined below) remain largely in place. However, the European Union now permits most business with Iran, and there is no longer a general obligation to notify the EU authorities about payments to and from Iran or Iranian persons. However, such relief is partial (due to remaining sanctions) and provisional (due to the possibility of a snap- back).
