Are you ready for Iran?

Update on Relief of EU & US Sanctions Against Iran

German companies may finally take advantage of post-sanctions business opportunities in Iran. On Saturday, 16 January 2016, the International Atomic Energy Agency (IAEA) confirmed that Iran has completed the necessary steps required under the July 2015 Joint Comprehensive Plan of Action (JCPOA), an agreement between Iran and the P5+1 nations (United States, United Kingdom, France, Russia, China and Germany) along with the European Union, to restrict its nuclear program. 16 January 2016 therefore marked the "Implementation Day" on which numerous EU and US sanctions against Iran were lifted with immediate effect. 

However, certain sanctions remain in place, and companies considering ventures in Iran need to carefully assess the scope of the latest relief of both EU and US sanctions against Iran. Sanctions relief will not necessarily be permanent, so companies should also take all necessary precautions to protect their business and investments.  

EU Sanctions Relief since Implementation Day

On 18 October 2015, the EU adopted Regulations 2015/1861 and 2015/1862 as well as Council Decision 2015/1863 which provide for a lifting of sanctions as of Implementation Day (16 January 2016). The regulations modify Council Regulation 267/2012, terminating most EU economic and financial sanctions against Iran. EU nuclear-related sanctions and human rights/anti-torture-related sanctions stay in place as well as certain German restrictions on trade in military goods.

The activities listed below and associated services for each of these activities have become permissible as of Implementation Day:

Dual-use items
  • Export of the majority of dual-use items (goods, software and technology that can be used for both civilian and military application) and provision of technical assistance, financing, financial assistance or brokering services related to them, subject to general permit requirements

Financial, banking and insurance measures
  • Transfer of funds between EU parties and Iranian parties without authorization or notification, irrespective of the amount
  • Opening of new branches, subsidiaries or representative offices of Iranian banks in EU Member States
  • Establishment of new joint ventures or of new correspondent banking relationships between Iranian and EU banks
  • Opening of representative offices, subsidiaries, joint ventures or bank accounts in Iran by EU persons or EU financial and credit institutions
  • Provision of insurance or re-insurance services 
  • Supply of specialized financial messaging services to delisted Iranian financial institutions
  • Financial support for trade with Iran, including the granting of export credits, guarantees or insurance 
  • Entering commitments for grants, financial assistance and concessional loans to the Government of Iran 
  • Sale or purchase of public or public-guaranteed bonds to and from Iran 
  • Removal of several Iranian individuals and entities including major banks from the “black lists”

Oil, gas and petrochemical sectors
  • Import, purchase, swap or transport of Iranian crude oil and petroleum products, natural gas or petrochemical products and related financing
  • Sale, supply, transfer or export of equipment or technology and technical assistance, including training, used in the oil, gas and petrochemical sectors in Iran 
  • Granting of financial loans or credit for the acquisition or extension of a participation in, and the creation of, any joint venture with any Iranian person that is engaged in the oil, gas and petrochemical sectors in Iran or outside Iran

Shipping, shipbuilding and transport sectors
  • Sale, supply, transfer or export of naval equipment and technology for ship building, maintenance or refit to Iran or to any Iranian persons engaged in this sector
  • Design and construction of cargo vessels and oil tankers for Iran or Iranian persons
  • Provision of vessels designed or used for the transport or storage of oil and petrochemical products to Iranian persons, entities or bodies
  • Access to airports under the jurisdiction of EU Member States of all cargo flights operated by Iranian carriers or originating from Iran
  • Provision of bunkering or ship supply services to Iranian-owned/contracted vessels not carrying prohibited items and provision of fuel, engineering and maintenance services to Iranian cargo aircraft not carrying prohibited items

Gold, metals, other precious metals, banknotes and coinage
  • Sale, supply, purchase, export, transfer or transport of gold, precious metals, diamonds and provision of related brokering, financing and security services to, from or for the Government of Iran 
  • Sale, supply, transfer or export of graphite and raw or semi-finished metals, such as aluminum and steel to any Iranian person, entity or body or for use in Iran (in connection with activities consistent with the JCPOA)
  • Delivery of newly printed or minted or unissued Iranian denominated banknotes and coinage to or for the benefit of the Central Bank of Iran

  • Sale, supply, transfer or export of software for integrating industrial processes to any Iranian person, entity or body for use in Iran (in connection with activities consistent with the JCPOA)

Remaining EU and German Sanctions

The following sanctions continue to apply:

  • Transactions with persons, entities and bodies listed in the respective Annexes to Regulation 267/2012 ("black lists") remain prohibited (but a considerable number have been delisted)
  • EU arms embargo
  • Prohibition of exports of goods and technology that could contribute to the development of nuclear weapon development systems and missile technology, proliferation-related goods and technology, and certain metals and software
  • Iran Human Rights Regulation 359/2011 and Anti-Torture Regulation 1236/2005
  • Sections 74 and 75 of the German Foreign Trade Ordinance (Außenwirtschaftsverordnung) on the sale, export and transit of military goods and the general prohibition of trafficking and brokering transactions relating to military goods
  • Dual-Use Regulation 428/2009 on the export of dual-use items fully applies to exports to Iran

The German Federal Office for Economics and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) has published guidance on the EU sanctions relief on its website. Further guidance is supposed to follow shortly.

US Sanctions Relief since Implementation Day

The US sanctions that have ceased to apply as of 16 January 2016 primarily affect the so-called secondary, or extraterritorial, sanctions that applied to non-US persons, i.e. foreign nationals or entities that are not owned or controlled by US persons, if these engaged in specific activities involving Iran. Primary sanctions for US persons largely continue to apply.

Secondary Sanctions

Since Implementation Day, non-US persons may engage in the following activities and associated services:

Financial and Banking Measures
  • Transactions with Iranian individuals and entities including the Central Bank of Iran and other specified Iranian financial institutions, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), National Iranian Tanker Company (NITC) and other individuals and entities identified as the Government of Iran by the Office of Foreign Assets and Control (OFAC)
  • Transactions in Iranian Rials
  • Provision of US banknotes to the Government of Iran
  • Purchase, subscription, facilitation of the issuance of Iranian sovereign debt, including government bonds
  • Financial messaging services to the Central Bank of Iran and delisted Iranian financial institutions 

  • Provision of underwriting services, insurance, or reinsurance (in connection with activities consistent with the JCPOA)

Energy and petrochemical sectors
  • Purchase of Iranian crude oil
  • Investment, including participation in joint ventures, goods, services, information, technology and technical expertise and support for Iran’s oil, gas and petrochemical sectors
  • Purchase, acquisition, sale, transportation or marketing of petroleum, petrochemical products and natural gas from Iran
  • Export, sale or provision of refined petroleum products and petrochemical products to Iran
  • Transactions with Iran’s energy sector including with NIOC, NICO and NITC

Shipping, shipbuilding and port sectors
  • Transactions with Iran’s shipping and shipbuilding sectors and port operators

Software and metals  
  • Iran’s trade in graphite, raw or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes (in connection with activities consistent with the JCPOA)
  • Iran’s trade in gold and other precious metals

Automotive sector
  • Sale, supply or transfer of goods and services used in connection with Iran’s automotive sector

Primary Sanctions

By contrast to the secondary sanctions, the so-called primary sanctions which are applicable to US persons as well as to US-owned or US-controlled foreign entities1 largely continue to apply. Those companies and individuals continue to be generally prohibited from conducting transactions with Iran. 

However, OFAC issued “General License H” that allows US-owned or US-controlled foreign entities to engage in transactions with the Government of Iran or any person subject to the jurisdiction of the Government of Iran. The license is not limited to specific economic sectors or industries but includes certain requirements which transactions have to comply with, in particular (i) the direct or indirect export or re-export of goods, technology, or services from the US (without separate authorization from OFAC); (ii) any transfer of funds to, from, or through the US financial system; (iii) any individual or entity on the OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List) or on the Foreign Sanctions Evaders List or any activity that would be prohibited by non-Iran sanctions administered by OFAC if engaged in by a US person or in the US. Furthermore the US also permitted the following categories of US-Iranian trade: the sale of commercial passenger aircraft and related parts and services to Iran and the importation of Iranian-origin carpets and foodstuffs into the US, subject to OFAC licenses.

Remaining US Sanctions

  • Business with Iranian persons who remain on the SDN List continue to carry sanctions consequences for US and non-US persons (even though a number of SDN have been removed from that list). 
  • US and non-US companies must continue to avoid all unlicensed transactions with Iran within US jurisdiction.
  • US persons may not facilitate the actions of foreign persons, if the actions would be prohibited to the US person (e.g., US persons working for a non-US company must recuse from any Iranian business, US shareholders of a foreign subsidiary must not initiate, support or approve Iranian business).
  • Any transactions must not involve a US bank and must not be denominated in US dollars.
  • New travel restrictions apply to nationals of participating countries of the so-called Visa Waiver Program (including Germany) which allowed these persons to travel to the US without a visa for stays of 90 days or less. They are no longer eligible for the Visa Waiver Program, and require a visa issued by a US embassy or consulate, if they have visited Iran, Iraq, Sudan, or Syria since March 1, 2011, or hold dual nationality with one of the countries. Waivers for a visa might be granted for different categories of travelers, including individuals who traveled to Iran for legitimate business-related purposes following the conclusion of the JCPOA (on a case-by-case basis).

Further Milestones of the JCPOA

Transition Day

Transition Day will occur if Iran continues to fulfill its obligations under the JCPOA, in October 2023 or earlier, if the IAEA has reached the conclusion that all nuclear material in Iran remains in peaceful use. As of Transition Day, the EU will terminate all sanctions related to proliferation-sensitive nuclear activities (goods and technology including investment and specialized training), including related designations and metals, software and arms. Further EU-listed individuals and entities will also be removed from the black lists. 

Furthermore, the US will seek legislative action to terminate nuclear-related sanctions and the President will refrain from re-introducing or re-imposing the secondary sanctions.

UNSCR Termination Day

In October 2025, Termination Day will mark the end of the verification of Iran's program and the UN Security Council would no longer be seized of the Iran nuclear issue. The EU would terminate all remaining sanctions imposed on Iran.

Challenges for Future Business

In the case of arising disputes concerning compliance with a party’s obligations under the JCPOA, a sophisticated dispute resolution mechanism comes into force. If a dispute cannot be settled the JCPOA provides for a re-imposition of sanctions as a last resort. Accordingly, the EU legislation states that the commitment to lift sanctions is without prejudice to the reintroduction of restrictive measures in the event of significant non-performance by Iran of its commitments under the JCPOA. The re-imposition of the sanctions would not be retroactive and would not affect dealings entered into as of Implementation Day. The EU has given some assurances to businesses who engage in Iran as Council Regulation 2015/1861 provides that in case of re-introduction of restrictive measures, adequate protection for the execution of contracts concluded in accordance with the JCPOA while sanctions relief was in force will be provided consistent with previous provisions when sanctions were originally imposed.

Similarly, US sanctions may “snap back” and re-apply as prior to the JCPOA. The US government has, however, indicated that it will not grandfather preexisting Iran-related agreements concluded between Implementation Day and the snap back. 


When starting or restarting business with Iran now that most EU sanctions and US secondary sanctions against Iran have been lifted, companies should make sure to include in their agreements a right to withdraw from or terminate the agreement in case the sanctions snap back and render the transaction unlawful, including exclusion of liability in case of non-performance or late performance due to sanctions. Further, any agreement should contain an arbitration clause, which provides for a place of arbitration outside of Iran, following an internationally acknowledged set of arbitral rules, and appropriate choice of law clauses. 



An entity is “owned or controlled” by a US person if the US person holds a 50 percent or greater equity interest by vote or value in the entity, holds a majority of seats on the board of directors of the entity or otherwise controls the actions, policies, or personnel decisions of the entity.