INSIGHT: Iran Sanctions

Insight
Updated: 13 October 2020

Latest changes & additions

Iran
On 8 May 2019 Iran has suspended its commitments under the JCPOA to
sell surplus of enriched uranium in exchange for natural uranium, and to
make excess heavy water available on the open market. Iran urged the E3,
Russia and China to fulfil their banking and oil commitments to Iran in the
next 60 days, otherwise Iran may not respect the current limits on uranium
enrichment and may take measures to modernise the Arak heavy water
reactor and suspend implementation of other obligations under the
JCPOA. More details in Press Release.

US

Latest developments
On 10 January 2020 US issued a new Executive Order imposing sanctions
against anyone (including non-US persons) who is engaged in owning,
operating, trading with, or assisting sectors of the Iranian economy
including construction, manufacturing, textiles, and mining or any other
sector of the Iranian economy as may be determined by the US
authorities. More information about the action is available in the Press
Release. As a result, trade with Iran in almost all industry sectors is now
barred except for trade in medicine/medical items and food and
agricultural commodities. The Executive Order also authorises sanctions
with respect to foreign financial institutions for transactions involving the
designated industries. On 8 October 2020, the Secretary of Treasury
determined that the financial sector of the Iranian economy would also
become subject to E.O. 13902, which provides OFAC with the authority to
designate any Iranian financial institution. 18 banks have been listed, and
will be subject to secondary sanctions. As a result, non-US persons will be
exposed to a risk of sanctions if they engage in certain transactions with
financial institutions sanctioned pursuant to E.O. 13902 or the financial
sector more generally. There is a 45-day wind-down period (ending 22
November 2020) during which non-US persons can wind down
transactions with sanctioned financial institutions and the Iranian financial
sector without a risk of sanctions. On 30 July 2020 the US State
Department has expanded the scope of the Iran metal-related sanctions
adding 22 materials determined to be used in connection with Iran's
nuclear, military, or ballistic missile programmes. Those who knowingly
transfer such metals to Iran may become subject to sanctions.

The US Treasury Department has added additional blocked individuals,

entities and vessels to its SDN List.

Period after 8 May 2019

The one year anniversary of the withdrawal from the JCPOA was marked
by a further significant escalation of US Sanctions against Iran, the target
on this occasion being the iron, steel, aluminium, and copper sectors
which the White House has described as Iran's largest non-petroleum
related source of export revenue. Executive Order issued on 8 May 2019
authorised blocking sanctions against persons engaged in any of a wide
range of activities which support these industries. The new measures apply
to "any person" and are not limited to US persons.

On 11 December 2019 OFAC issued two new FAQs clarifying the wind-
down period ending 8 June 2020, after that date transactions involving
Republic of Iran Shipping Lines and E-Sail Shipping Limited will be subject
to US sanctions under Weapons of Mass Destruction Proliferators
Sanctions. This prohibitions extends to non-US persons who knowingly
engage in certain transactions with these entities, including shipment of
agricultural commodities food and medicines.

On 31 October 2019 US further strengthened secondary sanctions against

Iran under by making two determinations. The first one makes
sanctionable the sale, supply or transfer, directly or indirectly, to or from
Iran of any raw and semi-finished metals, graphite, coal, and software for
integrating industrial processes if used in connection with the construction
sector. The second determination defines four strategic materials
("Strategic Metals") used in connection with the nuclear, military, or
ballistic missile programs of Iran and makes sanctionable the sale, supply
or transfer, directly or indirectly, of any Strategic Materials to or from Iran,
regardless of the end-user or end-use. On 16 December 2019 US issued
an advisory to "alert persons regardless of nationality or location to the
"significant" sanctions risk involved in transfers or exports to Iran of
graphite electrodes or needle coke". The risk is said to apply to
entities/individuals, including producers, exporters, port operators,
shippers, shipping companies, vessel operators, and owners, even when
the intended end-user is not in Iran's metal sector. The advisory states that
revenue from such materials may be used to advance Iran's proliferation
programme, regional aggression, and support for terrorist groups.

On 4 September 2019 OFAC has listed additional 16 entities, 10 individuals

and 11 vessels pursuant to terrorism-related Executive Order (E.O.) 13224.
This action designates a shipping network comprising of officials, shipping
and insurance companies directed by the IRGC-QF. Please see OFAC
Notice for full list. Further information is available in OFAC Press Release
and Department of State Press Release. In connection with this action
OFAC has updated FAQ 296 and has published new FAQs, which relate to
the provision of bunkering services to Iranian and non-Iranian vessels.

OFAC also issued a new advisory to the maritime community to warn

against deceptive shipping practices and provide further clarification on
due diligence that should be considered to ensure sanctions compliance.
Advisory highlights the risk of secondary sanctions to non-US persons
"that knowingly own, operate, control, or insure a vessel that transports
crude oil exported from Iran ... could be subject to secondary sanctions". The
steps confirm that OFAC continues to focus on international shipping as a
means to implement the Iranian sanctions program."
On 7 August 2019 OFAC amended theIranian Sector and Human Rights
Abuses Sanctions Regulations
  to implement the Executive Order 13871, “Imposing Sanctions with
Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran”.

This amendment marks the end of a wind-down period expiring on 6

August 2019. Regulations also expand sanctions by blocking all property
and assets in the US of any entity/person:
- operating in iron, steel, aluminium or copper sector of Iran; or
- engaging in transactions for sale/supply/transfer to Iran of goods and
services used in connection with these sectors; or
- engaging in transactions for purchase, sale, transport, marketing from
Iran of iron, iron products, aluminum, aluminum products, steel, steel
products, copper, or copper products; or
- materially assisted, provided financial material or technological support
to such entities/persons.

The E.O. also opens for imposing sanctions on foreign financial institutions
if they have after 8 May 2019 conducted or facilitated any transaction
prohibited under the E.O.13871.
OFAC also published several new FAQs related to the E.O. 13871.

On 24 June 2019, President Trump issued a new Executive Order

implementing another set of sanctions targeting Iran.

The latest sanctions place the Supreme Leader of Iran, the Supreme
Leader's Office, certain individuals associated with it as well as a number
of senior Iranian military commanders on the SDN list. US property
belonging to the people and entities added to the SDN list is now
blocked, and foreign persons or financial institutions who transact with
these people or entities may also be sanctioned.

Period after 5 November 2018

On 25 March 2019, the US Treasury department published the OFAC
Advisory to the Maritime Petroleum Shipping Industry. This repeats the
US commitment to aggressively target those involved in activities which
are sanctionable under US law, highlights "Deceptive Shipping Practices"
and sets out its expectations regarding the risk mitigation measures.

The Advisory identifies deceptive shipping practices including disabling

Automatic Identification System (AIS). More information on AIS
monitoring including implications for P&I cover is available here.
OFAC issued an amendment to the Iranian Transactions and Sanctions
Regulations, 31 C.F.R. part 560 (ITSR), in furtherance of the President’s 8
May 2018 decision to cease the United States’ participation in the Joint
Comprehensive Plan of Action. This regulatory amendment became
effective from Monday 5 November 2018 which marked the end of 180-
day waiver period. The United States intends now to fully enforce the
sanctions that have come back into effect (that were waived or lifted in
connection with JCPOA). The regulation re-lists as SDNs individuals and
entities that were previously listed under E.O. 13599, including 50 banks,
NIOC; NICO or any entity owned or controlled by those. Full list of
designations made on 5 November 2018 is available here.

OFAC also issued updated FAQs relating to the end of 180-day wind-
down period. The provision or delivery of goods or services and/or the
extension of additional loans or credits to an Iranian counterparty after 4
November 2018 — even pursuant to written contracts or written
agreements entered into prior to 8 May 2018 — may result in the
imposition of US sanctions.

US also sanctions providing SWIFT banking/payment services to

sanctioned Iranian financial institutions. In practice, banks refuse to handle
any financial transactions with an Iranian nexus.

FAQ643 specifically addresses the issue of payment of (re)insurance claims

made after 5 November 2018 but arising from an incident that occurred
prior to that date. OFAC advises that such payments may create sanctions
exposure if for example they involve a sanctioned entity.

Exemptions/waivers
FAQs confirm that exemption for sale of agricultural commodities, food,
medicine or medical devices to Iran is valid.

In November 2018 Significant Reduction Exemptions (SREs) of 180 days'

duration were given to eight countries, China, India, South Korea, Japan,
Italy, Greece, Taiwan and Turkey, enabling them to continue to import of
petroleum and petroleum products from Iran pursuant to section 1245(d)
(4)(D) of the NDAA 2012. On 22 April 2019, the State Department
announced in a Press Statement that the SREs would not be extended and
will expire on 2 May 2019. Informal guidance provided by the State
Department suggests that voyages commenced before but not completed
by 2 May may not be protected by the SREs.
Period 8 May - 4 November 2018
On 7 August 2018 in light of US decision to cease participation in the
JCPOA as announced on May 8, 2018, the President Issued New Executive
Order «
Reimposing Certain Sanctions with Respect to Iran" OFAC haspublished
new FAQsrelating to today's Executive Order andupdated existing FAQs
. The 90-day wind-down period announced on 8 May 2018 expired on 7
August 2018 and the 180 period expired on 4 November 2018.

More information is available on US Treasury's website here.

8 May 2018 announcement

On 8 May 2018 President Trump announced his decision to end the US
participation in the JCPOA. It was apparent from the OFAC FAQs issued on
the same date that the administration intended to restore sanctions which
were in force prior to Implementation Day on 16 January 2016, reversing
the relief agreed to by the previous administration in the JCPOA. This
included the restoration of secondary sanctions against non-US entities,
and targeting of Iranian shipowners and ships, transactions involving
crude oil, petroleum products and petrochemicals and relisting over 400
entities individuals and ships on the SDN List. The wind-down period for
most shipping related sanctions expired on 4 November 2018.

Parties to pre-8 May contracts were expected to use this period to wind
down their Iran-related activity and "new business" entered into after 8
May mostly fell outside of the scope of the relief and owners seeking to
enter into contracts after 8 May were urged to seek specialist legal advice.

For more information please see IG Circulars dated 9 August 2018, 25 May
2018 and Alert published on 10 May 2018.

The remaining parties to the JCPOA (France, Germany, UK, EU, Russia and
China) pledged to support the Agreement – see EU below.

The snap back of US sanctions have had a major effect on shipowners and
their insurers.

The comments below and elsewhere in INSIGHT should be read in the

light of the important developments consequential upon the 8 May
announcement.
Articles post 8 May 2018:
ReedSmithUnited States fully reimposes secondary sanctions on Iran
13 November 2018

HFW
Iran sanctions: The English Court steers a course
16 October 2018

HFW
Iran Sanctions: Steering a course through difficult waters
30 August 2018

Gibson Dunn
The "New" Iran E.O. and the "New" EU Blocking Statute – Navigating the
Divide for International Business
9 August 2018

Freehill Hogan & Mahar

Executive Order  re-imposes the U.S. secondary sanctions against Iran
14 August 2018

ReedSmith
Sanctions and Iran: President Trump's 8 May 2018 announcement and
what this means for non-US shipping
15 May 2018

Freehill Hogan & Mahar

US withdraws from Iran nuclear deal secondary sanctions against Iran
re-imposed
14 May 2018

Blank Rome
Re-Imposing U.S. Sanctions on Iran: Key Issues for Global Business
11 may 2018

Clyde & Co
The JCPOA: The New US Position is Now Clear . . . Sort of
10 May 2018

ReedSmith
Trump pulls out of Iran nuclear deal: Sanctions reimposed
10 May 2018
Gibson Dunn
The Trump Administration Pulls the Plug on the Iran Nuclear Agreement
9 May 2018

HFW
Sanctions Update: US sanctions on Iran
8 May

EU
After announcement by President Trump on 8 May 2018, EU confirmed
that it continues to support JCPOA. On 6 June 2018 European Commission
published amended version of the Council Regulation (EC) No 2271/96.
The updated EU Blocking Statute came into force on 7 August 2018, see
Commission Delegated Regulation (EU) 2018/1100.

The Blocking Statute allows EU operators to recover damages arising from

the extra-territorial sanctions within its scope from the persons causing
them and nullifies the effect in the EU of any foreign court rulings based
on them. It also forbids EU persons from complying with those sanctions,
unless exceptionally authorised to do so by the European Commission in
case non-compliance seriously damages their interests or the interests of
the Union.

To assist EU operators with the implementation of the updated Blocking

Statute, the Commission has published a Guidance Note to facilitate the
understanding of the relevant legal acts as well as a document explaining
its effect (EU Commission Q&As).

On 31 January 2019, France, Germany and the UK (together, the E3)

announced the creation of Instrument for Supporting Trade Exchanges
(INSTEX) – a Special Purpose Vehicle for facilitating legitimate trade
between European businesses and Iran.

The E3 Joint Statement notes that INSTEX will focus "initially on the sectors
most essential to the Iranian population – such as pharmaceutical, medical
devices and agri-food goods", and that its long term aim is for it to open
up to "economic operators from third countries who wish to trade with
Iran".

As the situation remains very complex, we encourage members

considering any transactions with Iranian element to carry out thorough
due diligence and seek legal advice.

Introduction
On 16 January 2016 International Atomic Energy Agency verified
implementation by Iran of the nuclear-related measures under the JCPOA
and the "Implementation Day" was announced.

In practice it means that most of the sanctions imposed by the EU on Iran

are now lifted, see Council Decision (CFSP) 2016/37 as well as "secondary
sanctions" imposed by the US, please see US announcement here.

The continuing primary sanctions against US reinsurers created a risk of a

potential shortfall on the International Group's reinsurance programme.
The IG arranged "fall-back" cover as a short term solution (see IG Circulars
published on 19 March 2016 and 14 April 2016). The removal of US
domiciled reinsurers from the IG programme from 20 February 2017
removed the need for fall-back cover. Resolving the risk of reinsurance
shortfall was greatly assisted by "General License H" which has been
revoked by OFAC on 27 June 2018 and replaced with a new general
license authorising wind down of transactions previously permitted under
General License H by 4 November 2018.

Main changes in the EU sanctions:

Prohibition on trading with Iran in dual-use equipment, precious and

other listed metals, diamonds and graphite replaced with prior
authorisation
Prohibition on transactions relating to Iranian oil & gas industry and
related services; provision of bunkering and supply services to Iranian
vessels and software has been removed
Prohibition on providing insurance and reinsurance in Iran and to
Iranian persons has been removed
Prohibition on fund transfers to and from Iran has been removed
Most of the listed companies and persons under Iran sanctions are de-
listed (from ca. 93 people and 467 entities to 29 and 94 respectively)
Please note that listings under anti-terrorism and human-rights sanctions
will remain in force as well as arms embargo.

Main changes in the US sanctions:

"Secondary sanctions" on Iran primarily targeting non-US persons

conducting business with Iran, including energy, banking, shipbuilding
and shipping sanctions are removed
Primary sanction for US persons and companies remain in place
(including USD clearance, provision of US origin goods). Exemptions
apply to few areas such as food, medicine and the aviation sector
Anti-terrorism, human rights sanctions as well as arms embargo remain
in place

As noted at the top of this page, the removal of secondary sanctions will
be removed in accordance with Trump's announcement on 8 May 2018.

US domestic law also required the President to certify Iran's compliance

with the JCPOA at 90 day intervals.

The EU and US reserved the right to "snap back" sanctions on Iran if Iran is
found to have violated its obligations under JCPOA.

As US retains its "primary sanctions", US insurers and reinsurers may be

unable to meet their obligations and pay a claim with an Iranian nexus.
This could apply to both Iranian vessels and any other vessel having a
casualty or claim in Iran, or with an Iranian connection. Under our Rules
and Terms & Conditions (Rule 32.6, Article 26.1.5 in Owners Fixed T&C;
25.1.6 in the Charterers T&C; 18.2 in Offshore T&C and 35.2 in Yachts
T&C), the shortfall from reinsurance is not recoverable - for mutual entries,
see IG information above.

Banks have historically adopted a very conservative approach when it

comes to Iran and this has continued even after Implementation
Day. Many banks refuse as a matter of policy from processing any
transactions with any kind of connection to Iran.

It is important to ensure appropriate due diligence measures are

undertaken before engaging in any activity. You should consider
whether transaction involves a designated person or entity; whether a
certain trade product or material is restricted, and how and to whom
payments will be made.
Iran will remain a difficult place to do business so if in doubt you
should seek legal advice. It is also recommended to consider
including a contract clause permitting either suspension or
termination of the contract in the event new sanctions are imposed.

How individual members will be affected will depend on a wide

variety of factors and it is not possible for this website to provide
comprehensive or conclusive advice. The intention is to provide some
general comments, convenient access to relevant materials and news
of latest developments. Members should not act in reliance solely on
the information provided here. They must make their own enquiries
and take legal advice which can take account of their circumstances.

Members should also note that any loans granted on the security of
their vessels are likely to include a requirement that insurance is at all
times maintained on conditions acceptable to their bank.

JCPOA

JCPOA - Joint Comprehensive Plan of Action - July

2015
On 14 July 2015, the six states involved in negotiations with Iran (US,
Russia, China, UK, France and Germany together with the EU - known
initially as "P5+1" and later as "E3/EU+3") announced a diplomatic
agreement on a Joint Comprehensive Plan of Action (JCPOA) which opens
the way for the restoration of trade activates with Iran by lifting the trade,
energy, insurance and banking embargoes that have been incrementally
imposed by the EU and US since 2009.

The Plan provides for extensive relief from existing sanctions and details
are set out in Annex II of the JCPOA. However, the lifting of sanctions will
happen in stages and subject to certain requirements being met. On 18
October 2015 all the parties to JCPOA have formally adopted the deal
("Adoption Day"). Details of the implementation process are contained
in Annex V of the JCPOA.

On 16 January 2016 after verification by the International Atomic Energy

Agency of nuclear-related measures implemented by
Iran, Implementation Day was announced. It means that Iran has met its
commitments under the deal and the EU and US lifted the sanctions as
agreed under JCPOA.

In practice it means that most of the sanctions imposed by the EU on Iran

are now lifted, see Council Decision (CFSP) 2016/37 as well as "secondary
sanctions" imposed by the US, please see US announcement here.

For more details on changes in EU and US sanctions see respective tabs

"US" and "EU".

It is important to remember that JCPOA contains a snap-back provision,

allowing the EU and US to reinstate sanctions related to Iran nuclear
program. The snap-back will not be introduced momentarily as JCPOA has
an inbuilt Dispute Resolution Mechanism. Sanctions will not apply with
retroactive effect. In case of snap-back contracts concluded while relief
was in place, will be allowed some time to wind down, however, there will
be no grandfathering of contracts enter before snap-back.

The next milestone in JCPOA is Transition Day, which will occur either (a)
eight years from Adoption Day (that is to say eight years from 18 October
2015) or (b) upon a report from the IAEA, together with confirmation from
the UN Security Council, that all nuclear material in Iran remains in
peaceful activities, whichever is earlier. Transition Day will mark the next
stage in the easing of sanctions, when further terminations and
amendments will be made.

'UN Security Council Resolution (UNSCR) Termination Day' will occur ten

years from Adoption Day (that is to say ten years from 18 October 2015),
provided that the provisions of previous resolutions have not been
reinstated. On this day, all provisions and measures imposed by the UN
Security Council will terminate, and the UN Security Council will no longer
be seized of the Iran nuclear issue.

Within this timeframe, the E3/EU+3 (or the P5+1) will meet at the
ministerial level every two years, or earlier if needed, in order to review
and address progress and to adopt appropriate decisions.

United Nations (UN)

On 20 July 2015 the Security Council unanimously adopted Resolution
2231/2015 endorcing the JCPOA.
Resolutions 1696 (2006), 1737 (2007), 18093 (2008), 1835 (2008), 1029
(2010) and 2224 (2015) are now recalled but can be reinstated in the event
commitments under JCPOA are not complied with.

Resolution 2231 (2015) shall terminate ten years from Adoption Day, i.e.
on October 18, 2025 when UN Security Council will conclude
consideration of the Iranian nuclear issue.

More information can be found here.

EU
As a party to JCPOA, EU is following the schedule outlined in the
agreement. On 16 January 2016 ("Implementation Day") EU has
announced lifting of sanctions in consistency with Annex V of the JCPOA -
see Joint statement by EU High Representative and Iranian Foreign
Minister. In spite of President Trump's refusal in October 2017 to certify
Iran's compliance with the JCPOA as required under US domestic law, the
EU has made clear its determination to stand by the Agreement as
demonstrated by this statement published on 16 October 2017.

EU also issued Council Decision (CFSP) 2016/37 confirming that Decision

(CFSP) 2015/1863, Decision (CFSP) 2015/1862 and Decision (CFSP)
2015/1861 apply from 16 January 2016.

In practice it means that the following is now permitted:

Transactions relating to Iranian oil and gas industry and related services
(including provision of vessels, P&I insurance)
Provision of insurance and reinsurance in Iran and to Iranian persons
(including the Government of Iran)
Provision of bunkering, technology, repair and classification services to
Iranian-owned or Iranian-contracted vessels
Fund transfers to and from Iran (without any prior notification or
authorisation)
Provision of guarantees to Iranian entities
Most of the listed companies and persons under Iran sanctions are de-
listed

Prior authorisation is still required from the competent authority of the

relevant EU Member State for:
 The sale, supply, transfer or export of:
- Goods and technology for military, missile, nuclear use or that could
contribute to nuclear activities - listed in Annexes I or II of Council
Regulation 267/2012
- Software designed specifically for use in Iran's nuclear or military
industries - listed in Annex VIIA of Council Regulation 267/2012
- Graphite and raw or semi-finished metals listed in Annex VIIB of
Council Regulation 267/2012
whether or not originating in the EU, to any Iranian person/entity or for
use in Iran
The purchase, import or transport from Iran of goods and technology
listed in Annexes I or II of Council Regulation 267/2012, whether or not
originating in Iran
The provision of (i) technical assistance or brokering services and (ii)
financing or financial assistance, related to:
- Goods and technology listed in Annex I or II Council Regulation
267/2012
- Software listed in Annex VII Council Regulation 267/2012
- Graphite and raw or semi-finished metals listed in Annex VIIB Council
Regulation 267/2012
to any Iranian person/entity or for use in Iran
Before entering into any arrangement with an Iranian person/entity or
any person/entity acting on their behalf or at their direction that would
enable them to participate in or increase its participation in commercial
activities involving
(i) uranium mining,
(ii) production or use of nuclear materials listed in Part 1 of the Nuclear
Suppliers Group list (set out in Regulation 1861) or
(iii) technologies listed in Annex II Council Regulation 267/2012

Please note that certain sanctions related to arms embargo, nuclear-

related activities, anti-terrorism and human rights violations are still in
place:

The sale, supply, transfer or export to Iran, of all military goods and
technology
The sale, supply, transfer or export of missile-related goods and
technology and provision of bunkering or any other servicing of vessels
carrying cargo as listed in Annex III of Council Regulation (EU) 267/2012
The import from Iran of military and missile-related goods and
technology
 Investment in Iranian enterprises engaged in manufacture of military
goods, and a ban on investment by an Iranian person in a commercial
activity related to production or use of missile-related goods
Measures concerning inspection of cargoes to and from Iran and those
relating to provision of bunkering and ship supply services for items that
remain prohibited are still in place
The sale, supply, transfer or export of equipment which might be used
for internal repression as listed in Annex III of Council Regulation (EU)
264/2012

In addition, restrictive measures remain in place against individuals and

entities who remain listed in Council Regulation 267/2012 and in Council
Regulation 264/2012, as well as under EU terrorism and other EU sanctions
regimes.

Further guidance on EU measures can be found in the Information Note

on EU sanctions.

The UK Treasury maintains a Consolidated List of parties subject to

sanctions under EU and other Regulations. The List can be found here and
is the most convenient way of checking whether individuals or entities are
named in EU Regulations. The List is regularly amended and it is essential
that members include as part of their risk assessment a check of the up to
date Consolidated List. It is also important to note that the restrictions
apply to funds and economic resources "belonging to, owned, held or
controlled by" by listed persons or entities. The restrictions therefore may
apply if assets are owned by an entity which is not on the list but are
nonetheless under the control of a listed person or entity.

US
As noted at the top of this page President Trump has announced that US
participation in the JCPOA will cease.

In pursuance of the tougher US policy towards Iran, the Administration

has designated the Islamic Revolutionary Guard Corps (IRGC) and four
other entities.

On 16 October 2017, the EU issued a statement confirming its

determination to stand by the JCPOA. While expressing concerns about
ballistic missiles and increasing tensions in the region, the EU reiterated
that these should be addressed outside the JCPOA.

On 2 August 2017 President Trump signed into law the "Countering

America's Adversaries Through Sanctions Act" (CAATSA).

CAATSA did not introduce significant changes to the Iran sanctions

program, focusing on sanctions targeting Iran's ballistic missile and
weapons of mass destruction programs (and any support to it) and further
enforcement of sanctions against Islamic Revolutionary Guard Corps.
CAATSA also limited the President's ability to waive sanctions against Iran.

On Implementation Day (16 January 2016) US met its commitments under

JCPOA by lifting "secondary sanctions" (i.e. against non-US persons). The
sanctions lifted by the US on Implementation Day were with respect to:

Purchase, acquisition, transport of Iranian gas, petroleum, petroleum

and petrochemical products as well as services related to development
of petroleum resources of Iran, production of refined petroleum
products in Iran
Financial, material, technological or other support as well as goods and
services for any activity within energy, shipping and shipbuilding sector
of Iran (including National Iranian Oil Company, the Naftiran Intertrade
Company, National Iranian Tanker Company)
Sale, supply or transfer to and from Iran of precious metals or specified
metals such as aluminium, steel, coal (unless linked to military or nuclear
use)
Insurance, re-insurance, brokering, transportation, financial services
required for the above activities (including to NIOC, NITC and IRISL or
their affiliates)
Transactions with Iranian banks, including the Central Bank of Iran and in
Iranian currency as well as Iranian financial instruments
Provision of port, bunkering, inspection, classification, lease and other
services for Iranian vessels
NB! Tidewater, a port operating company on the SDN List that is owned
by Iran's Islamic Revolutionary Guard Corps (IRGC), remains on the SDN
List after Implementation Day, and transactions by U.S. and non-U.S
persons with Tidewater continue to be sanctionable.

US persons remain prohibited from engaging in any business with Iran

with the exception of:
1. export, re-export, sale, lease or transfer of commercial passenger aircraft
and related services exclusively for civil use
2. US controlled or owned foreign entities that are licensed under General
License H (see more info below) to engage in activities consistent with
JCPOA
3. Import of Iranian-origin carpets and foodstuffs

In practice it means that US origin goods (10% or more of US origin)

cannot be directly or indirectly traded to Iran and transactions in US
dollars for any Iran-related business is prohibited.

Secondary sanctions continue to apply to trade in graphite, raw and semi-

finished materials where these will be used in connection with the military
or ballistic missile program of Iran or if the materials have potential
nuclear end-use, unless approval is received in accordance with
procedures set out in the JCPOA.

Certain persons and entities (including but not limited to company linked
to IRGC and some Iranian banks) remain on the SDN list and any
transactions with them remain prohibited both for US and non-US
persons.

Sanctions related to support for terrorism, human rights abuse in Syria

and otherwise, ballistic missile programs remain in force, meaning that
new sanctions and listing can be added.

OFAC has also issued several General Licenses related to JCPOA

Implementation. General License H (See Iran General Licence H)
authorises certain transactions by foreign entities owned or controlled by
a US person. General License H also authorises US persons to establish or
alter their corporate policies and procedures to the extent necessary to
allow US-owned or controlled foreign entities to engage in transactions
involving Iran that are permitted under the general licence. OFAC has
published guidance stating General License H is intended to allow senior
management, board members and employees of the US parent to be
involved in initial decision-making regarding whether to engage in
activities with Iran, as well as establish or alter their policies and
procedures. At this stage, it is unclear what consequences the tougher
Trump policy on Iran will have for General License H.

General License H does not authorise US-owned or controlled foreign

entities to engage in any transactions involving:
1. The direct or indirect export or re-export of goods, technology, or
services from the United States (without separate authorisation from
OFAC)
2. Any transfer of funds to, from, or through the US financial system
3. Any entity on the SDN 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 United States
4. Any military, paramilitary, intelligence, or law enforcement entity of the
Government of Iran, or any officials, agents, or affiliates thereof

With the primary sanctions against Iran in place and continued effective
US trade embargo against Iran, members are therefore strongly advised to
evaluate US "involvement" in their transaction, including a 
check of the SDN List
 and continue to apply due diligence protocols in respect of trade with
Iranian interests.

Useful checklist is published by Holman Fenwick Willan (HFW).

In connection with reaching Implementation Day, US has issued several

documents:

Executive Order 13716 revoking E.O. 13574, 13590, 13622, 13645 and

sections 5-7 of E.O. 13628
FAQs relating to lifting of certain US sanctions under JCPOA on
Implementation Day
General License H
Guidance relating to the lifting of certain sanctions under JCPOA on
Implementation Day

Charterparties

Consequences for Charter Parties?

A. Sanctions clauses and the snap back provision
BIMCO and INTERTANKO sanctions clauses should remain in charter
parties.

However to take care of any snap back provision in the sanction regime
the BIMCO Sanctions clause may need to be amended or a new clause
added to specifically cater for what happens to the charter party and
obligations in the event of a snap back situation.

If members are considering now to do business in Iran and Syria, members

should consult lawyers to review any proposed contracts and advise on
amended clauses to deal with this and the compliance obligations in
general.

B. Payment of hire or freight what currency?

Given the difficulties outlined above that USD may attract, members may
wish to explore payment made in a different currency. However this is a
commercial matter for members to consider and is also one which an
eternal lawyer specialized in sanctions can assist with.

Rules and Cover

Insurance
Members absolutely MUST do their own due diligence and the position
remains that while Skuld can give guidance ultimate responsibility for
compliance rests with members.

Our Rules contain exclusion of liability for liabilities, costs or expenses

where payment by the Association or the provision of cover in respect
thereof may expose the Association to the risk of being subject to a
sanction, prohibition or any adverse action (Rule 30.4.6).

We also continue to exclude the liability of the Association towards the

member when there is a shortfall due to an inability to recover reinsurance
or pool contributions from other insurers or P&I Clubs which are
themselves unable to pay due to sanctions legislation (Rule 32.6). In
addition we have a provision giving the Association the right to terminate
cover where, in the opinion of the Association, the member has exposed
or may expose the Association to the risk of being or becoming subject to
a sanction, prohibition, restriction or other adverse action by a state or
international organisation or competent authority (Rule 3.3.2a). The same
provisions are also included in the Terms & Conditions governing Skuld's
fixed premium covers.

Reinsurance
US primary sanctions can cause possible shortfall due to irrecoverable
reinsurance contributions from US reinsurers. If there is no liability under
an LOU or blue card, as per Rule 32.6 and equivalent in fixed T&Cs, the
member will be unable to recover from the Association and the member
bears the shortfall.

US Global Maritime Advisory

Articles post 8 May 2019

Reed Smith
The United States imposes sanctions on the Iran financial sector
12 October 2020

Freehill Hogan & Mahar LLP

Additional steps in the sanctions targeting Venezuela and Iran
8 June 2020

Holland & Knight

New sanctions advisory highlights compliance risks for shipping
industry
18 May 2020

Debevoise & Plimpton

Pressure mounts on Iran as US expands sanctions and EU States
trigger Iran nuclear deal snapback mechanism
22 January 2020

Freehill Hogan & Mahar

New Iranian Sanctions Issued Today
10 January 2020

Freehill Hogan & Mahar

OFAC extends General License K related to the designation of
COSCO
19 December 2019

Freehill Hogan & Mahar LLP

Recent sanctions developments
12 December 2019

Baker&McKenzie
US targets Iran construction sector and metals industry with new
sanctions
6 November 2019

Holland & Knight

Navigating the Recent U.S. Sanctions on COSCO (Dalian) and Other
Chinese Companies
8 October 2019

Freehill Hogan & Mahar

United States designates foreign shipping entities to the SDN list
25 September 2019

Freehill Hogan & Mahar

United States imposes new sanctions on Iran – minimal impact on
shipping
23 September 2019
ReedSmith
OFAC issues new guidance clarifying the impact of its Iran
sanctions on bunker service providers
10 September 2019

Freehill Hogan & Mahar

The United States ratchets up its focus on shipping for enforcement
of Iranian sanctions
9 September 2019

Debevoise & Plimpton

New US Sanctions Target Non-US Firms' Transactions with Iran's
Metal Sector
13 May 2019

ReedSmith
Donald Trump Imposes Secondary Sanctions on Iran's Iron, Steel,
Aluminum, and Copper Sectors
9 May 2019

Freehill Hogan & Mahar LLP

New US sanctions against Iran affect metals sectors
9 May 2019