JCPOA Implementation Day Guidance: Background

The JCPOA Implementation Day Guidance document consists of a background section, then 7 specialized sections. The whole is a 42 page PDF, so we'll break it up into those 8 pieces (and possibly more for Section II, which is particularly lengthy). For brevity, I'm leaving out the footnotes.

Here's the background:

On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and theUnited States), the European Union (EU), and Iran reached a Joint Comprehensive Plan ofAction (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful. The JCPOAbuilds on the foundation of the Joint Plan of Action (JPOA) of November 24, 2013, and thepolitical framework announced in Lausanne on April 2, 2015.

On January 16, 2016, upon confirmation by the Secretary of State that the International AtomicEnergy Agency (IAEA) had verified that Iran had implemented the nuclear-related measuresdescribed in sections 15.1 to 15.11 of Annex V of the JCPOA, the United States lifted the U.S.nuclear-related sanctions described in sections 17.1 to 17.2 of Annex V of the JCPOA.1Consequently, January 16, 2016 is the day referred to as “Implementation Day” in paragraph34.iii of the Main Text of the JCPOA.2 The U.S. Department of the Treasury’s Office of ForeignAssets Control (OFAC) has updated its website to notify the public of certain steps the UnitedStates has taken to fulfill Implementation Day sanctions commitments.

As set out in sections 4.1 to 4.7 of Annex II and section 17.1 to 17.2 of Annex V of the JCPOA,the United States government (USG) has lifted nuclear-related secondary sanctions3 on: Iran’sfinancial, banking, energy, petrochemical, shipping, shipbuilding, and automotive sectors; Iran’sport operators; the provision of insurance, re-insurance and underwriting services in connectionwith activities that are consistent with the JCPOA; Iran’s trade in gold and other precious metals;trade with Iran in graphite, raw or semi-finished metals such as aluminum and steel, coal, andcertain software in connection with activities that are consistent with the JCPOA; and theprovision of associated services for each of the categories above. As set out in section 4.8.1 ofAnnex II and section 17.3 of Annex V of the JCPOA, the USG also removed the individuals andentities listed in Attachment 3 to Annex II of the JCPOA from OFAC’s List of SpeciallyDesignated Nationals and Blocked Persons (SDN List), Foreign Sanctions Evaders List (FSEList), and/or Non-SDN Iran Sanctions Act List (NS-ISA List), as appropriate.

In addition, as set out in section 5 of Annex II and section 17.5 of Annex V of the JCPOA, onImplementation Day, the USG took steps to: (i) allow for the export, reexport, sale, lease ortransfer of commercial passenger aircraft and related parts and services to Iran for exclusivelycivil, commercial passenger aviation end-use; (ii) license non-U.S. entities that are owned orcontrolled by a U.S. person (“U.S.-owned or -controlled foreign entities”) to engage in activities that are consistent with the JCPOA and applicable U.S. laws and regulations; and (iii) license theimportation into the United States of Iranian-origin carpets and foodstuffs, including pistachiosand caviar. With the exception of the three categories of activities described above, none of thesanctions-related commitments outlined in this guidance apply to U.S. persons, and U.S. persons,including U.S. companies, continue to be broadly prohibited from engaging in transactions ordealings with Iran and the Government of Iran unless such activities are exempt from regulationor authorized by OFAC.4

To implement the commitments under sections 17.1 to 17.5 of Annex V of the JCPOA, the USG:(i) issued, on Adoption Day,5 waivers of relevant statutory sanctions authorities, which becameeffective on Implementation Day; (ii) removed, on Implementation Day, the individuals andentities set out in Attachment 3 to Annex II of the JCPOA from the SDN List, FSE List, and/orNS-ISA List, as appropriate; (iii) issued, on Implementation Day, an Executive order (E.O.) thatrevoked E.O.s 13574, 13590, 13622 and 13645, and sections 5-7 and 15 of E.O. 13628; and (iv)issued, on Implementation Day, a Statement of Licensing Policy and two general licenses.

After Implementation Day, the next major milestone in the JCPOA is Transition Day. TransitionDay will occur 8 years from Adoption Day or upon a report from the Director General of theIAEA to the IAEA Board of Governors and in parallel to the United Nations Security Council(UNSC) stating that the IAEA has reached the Broader Conclusion that all nuclear material inIran remains in peaceful activities, whichever is earlier. As set out in section 21 of Annex V ofthe JCPOA, on Transition Day, the USG will seek to terminate, or modify to effectuate thetermination of, relevant statutory provisions set forth in sections 4.1 to 4.7 and 4.9 of Annex IIand will remove the individuals and entities set forth in Attachment 4 to Annex II of the JCPOAfrom the SDN List and/or FSE List.6 The USG will issue additional guidance related to thesecommitments prior to Transition Day.

For additional information, please see section A of OFAC’s Frequently Asked Questions Relatingto the Lifting of Certain U.S. Sanctions Under the JCPOA on Implementation Day (JCPOAFAQs).

This guidance document is organized into seven sections. Section I contains introductory notesregarding the sanctions lifting under the JCPOA. Section II reviews the various nuclear-relatedsecondary sanctions that were lifted on Implementation Day, explains how those sanctions werelifted, and describes the effect of the sanctions lifting. Section III addresses the sanctions listremovals that occurred on Implementation Day, and what it means for parties engaging intransactions or activities with individuals and entities that were removed from the relevant sanctions lists. Section IV describes other U.S. commitments under the JCPOA, includingcommitments with respect to (i) exports of commercial passenger aircraft and related parts andservices for commercial passenger aviation, (ii) the ability of U.S.-owned or -controlled foreignentities to engage in activities that are consistent with the JCPOA and U.S. law, and (iii) importsof Iranian-origin carpets and foodstuffs into the United States. Section V addresses the U.S.commitment to terminate four E.O.s and part of a fifth. Section VI provides an overview of thewaiver determinations and findings with respect to certain statutory sanctions issued toimplement U.S. Implementation Day sanctions commitments under the JCPOA. Finally, SectionVII provides a list of key legal authorities that are outside the scope of the JCPOA and thatremain in place after Implementation Day.

Link:

JCPOA Implementaton Day Guidance document

 

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