As business activity picks up after the summer, we offer a summary of some of the stories we're following at the Arab Bankers Association.
"Implementation Day" and Iranian Sanctions: a King & Spalding Report
The International Atomic Energy Agency's announcement, on 16 January, that Iran had fully implemented its nuclear-related commitments under the Joint Comprehensive Plan of Action (JCPOA) brought about "Implementation Day" of the agreement, which in turn led to the lifting of many of the economic sanctions imposed on Iran.
However, as King & Spalding explains in a new report, trade with Iran remains subject to many restrictions. The full report is attached below.
The impact of sanctions relief will be felt mainly in the European Union (EU) where many nuclear-related sanctions will be almost entirely withdrawn. However, in the US much of the existing sanctions regime will remain in place. The principal changes to US sanctions will lie in the ending of some secondary sanctions applicable to non-US persons (that is, i. individuals who are not US citizens or Green Card holders, ii. companies that are not incoporated in the US, and iii. people who are not located in the US).
Effect of Implementation Day on US Sanctions: key points inlcude
Many entities and companies have been removed from the sanctions list. However, US persons may not engage in transactions with entities that are still defined as part of the Government of Iran or as Iranian financial institutions. The US Office of Foreign Asset Control (OFAC) has published a list (the 13599 list) to help people identify such institutions that remain blocked.
Non US persons will now be able to conduct financial transactions with certain financial entities, including the Central Bank of Iran. However, US dollar denominated transactions may not be be cleared through US financial institutions.
US persons (including Green Card holders) remain prohibited from engaging in transactions involving Iran unless authorised by OFAC under a specific or a general license.
OFAC has issued "General License H" that authorises certain transactions by entities that are owned or controlled by a US person.
Effect of Implementation Day in the EU
Within the EU prohibitions that have been removed include prohibtions on trading in oil and gas products, and provisions of engineering and maintenance services to cargo aircraft. Many of the persons and entities that were subject to asset freezes under EU sanctions have now been removed from removed.
King & Spalding's note was published on 19 January, just three days after Implementation Day. The firm will continue to monitor the progress of the JCPOA and its impact on both EU and US sanctions. A full contact list is attached to the report.
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