OFAC May 8, 2018 Iran Sanctions FAQ: General Questions

1.1. Effective May 8, 2018, what sanctions snap back into place?

On May 8, 2018, the President announced his decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA), and to begin re- imposing, following a wind-down period, the U.S. nuclear-related sanctions that were lifted to effectuate the JCPOA sanctions relief. In conjunction with this announcement, the President issued a National Security Presidential Memorandum (NSPM) directing the Secretary of State and the Secretary of the Treasury to prepare immediately for the re- imposition of all of the U.S. sanctions lifted or waived in connection with the JCPOA, to be accomplished as expeditiously as possible and in no case later than 180 days from the date of the NSPM.

To implement the President’s direction, the Departments of State and of the Treasury will take steps necessary to establish a 90-day and a 180-day wind-down period for activities involving Iran that were consistent with the U.S. sanctions relief provided for under the JCPOA. FAQs 1.2. and 1.3. below set out in further detail which sanctions will be re- imposed in which time frame.

Pursuant to the NSPM, the State Department revoked certain statutory waivers issued to implement the JCPOA sanctions relief, issued the necessary statutory sanctions waivers to provide for a wind-down period, and plans to take appropriate action to keep such waivers in place for the duration of the relevant wind-down periods. Following November 4, 2018, OFAC expects that all the U.S. nuclear-related sanctions that had been lifted under the JCPOA will be re-imposed and in full effect.

Persons engaging in activity undertaken pursuant to the U.S. sanctions relief provided for in the JCPOA should take the steps necessary to wind down those activities by either August 6, 2018, or November 4, 2018, as applicable, to avoid exposure to sanctions or an enforcement action under U.S. law. [05-08-2018]

1.2. Which sanctions will be re-imposed after the 90-day wind-down period ending on August 6, 2018?

After the 90-day wind down period ends on August 6, 2018, the U.S. government will re- impose the following sanctions that were lifted pursuant to the JCPOA, including sanctions on associated services related to the activities below:

 

i. Sanctions on the purchase or acquisition of U.S. dollar banknotes by the Government of Iran;

ii. Sanctions on Iran’s trade in gold or precious metals;

iii. Sanctions on the direct or indirect sale, supply, or transfer to or from Iran of

graphite, raw, or semi-finished metals such as aluminum and steel, coal, and

software for integrating industrial processes;

iv. Sanctions on significant transactions related to the purchase or sale of Iranian

rials, or the maintenance of significant funds or accounts outside the territory of

Iran denominated in the Iranian rial;

v. Sanctions on the purchase, subscription to, or facilitation of the issuance of

Iranian sovereign debt; and

vi. Sanctions on Iran’s automotive sector.

In addition, following the 90-day wind-down period that ends on August 6, 2018, the U.S. government will revoke the following JCPOA-related authorizations under U.S. primary sanctions regarding Iran:

i. The importation into the United States of Iranian-origin carpets and foodstuffs and certain related financial transactions pursuant to general licenses under the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR);

ii. Activities undertaken pursuant to specific licenses issued in connection with the

Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services (JCPOA SLP); and

iii. Activities undertaken pursuant to General License I relating to contingent contracts for activities eligible for authorization under the JCPOA SLP.

Persons engaging in the activities listed above undertaken pursuant to the U.S. sanctions relief provided for in the JCPOA should take the steps necessary to wind down those activities by August 6, 2018, to avoid exposure to sanctions or an enforcement action under U.S. law. (See FAQ 2.1. below for a description of activities that would not be prohibited or sanctionable during the wind-down period). [05-08-2018]

1.3. Which sanctions will be re-imposed after the 180-day wind-down period ending on November 4, 2018?

Following the 180-day wind-down period ending on November 4, 2018, the U.S. government will re-impose the following sanctions that were lifted pursuant to the JCPOA, including sanctions on associated services related to the activities below:

i. Sanctions on Iran’s port operators, and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates;

ii. Sanctions on petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran;

iii. Sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA);

iv. Sanctions on the provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA);

v. Sanctions on the provision of underwriting services, insurance, or reinsurance; and

vi. Sanctions on Iran’s energy sector.

In addition, effective November 5, 2018, the U.S. government will revoke the authorization for U.S.-owned or -controlled foreign entities to wind down certain activities with the Government of Iran or persons subject to the jurisdiction of the Government of Iran that were previously authorized pursuant to General License H. (See FAQ 4.4. below).

Furthermore, no later than November 5, 2018, the U.S. government will re-impose, as appropriate, the sanctions that applied to persons removed from the List of Specially Designated Nationals and Blocked Persons (SDN List) and/or other lists maintained by the U.S. government on January 16, 2016.

Persons engaging in the activity listed above undertaken pursuant to the U.S. sanctions relief provided for in the JCPOA should take the steps necessary to wind down those activities by November 4, 2018, to avoid exposure to sanctions or an enforcement action under U.S. law. (See FAQ 2.1. below for a description of activities that would not be prohibited or sanctionable during the wind-down period.) [05-08-2018]

1.4. Are the sanctions lifted via Executive Order 13716 reinstated as of May 8, 2018?

OFAC expects the U.S. government to take action to re-impose relevant provisions of Executive Orders 13574, 13590, 13622, 13628, and 13645, by the end of the relevant wind-down period, i.e., August 6, 2018, or November 4, 2018, depending on the activity involved (see FAQs 1.2. and 1.3.). The provisions of Executive Orders 13574, 13590, 13622, 13628, and 13645 that were revoked by Executive Order 13716 have not yet been reinstated as of May 8, 2018. Persons engaging in activity undertaken consistent with the U.S. sanctions relief as specified in the JCPOA should take the steps necessary to wind down those activities to avoid exposure to sanctions or an OFAC enforcement action under U.S. law after August 6, 2018, or November 4, 2018, depending on the activity. [05-08-2018]

1.5. Do the FAQs and Guidance posted on OFAC’s website relating to the JCPOA sanctions relief remain in effect?

As noted above, the President has directed the Secretaries of State and of the Treasury to re-impose U.S. sanctions that were lifted or waived to effectuate the JCPOA sanctions relief as set out in sections II, III, IV, and V of the Guidance Document at the end of the applicable wind-down period. Furthermore, although the sanctions waivers described in section VI of the Guidance Document are no longer in place, they have been replaced with waivers that will allow for the orderly wind-down of activities as specified above. Persons engaging in activity undertaken pursuant to the U.S. sanctions relief provided for in the JCPOA should take the steps necessary to wind down their activities between May 8, 2018 and August 6, 2018, or between May 8, 2018 and November 4, 2018, as applicable, to avoid exposure to sanctions or an enforcement action under U.S. law. The JCPOA Guidance and JCPOA FAQs issued on January 16, 2016, as amended, remain available on OFAC’s website only to assist persons in determining which activities were not sanctionable or prohibited between January 16, 2016 and May 8, 2018, and to determine how best to wind down such activity. To the extent there are inconsistencies between the JCPOA FAQs, including guidance on wind-down, and other guidance provided by the Department of State or the Department of the Treasury on or after May 8, 2018, the later-issued guidance should be treated as governing. [05-08-2018]

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