On January 16, 2016, the United States and the European Union (“EU”) significantly eased their sanctions against Iran, following verification by the International Atomic Energy Agency (“IAEA”) that Iran had carried out its commitments under the Joint Comprehensive Plan of Action (“JCPOA”), the multilateral agreement signed in mid-July 2015 in which Iran agreed to accept certain limitations on its nuclear program.

Specifically, the United States dramatically reduced—but did not altogether eliminate—its “secondary” sanctions, which target non-U.S. companies not owned or controlled by U.S. persons that engage in certain activities in or involving Iran.  In contrast, and as expected, the “primary” U.S. sanctions that prohibit U.S. persons and their owned or controlled non-U.S. affiliates from engaging in virtually any dealings with Iran (absent U.S. government licensing) will remain in place.  Significantly, however, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued general licenses and a statement of licensing policy that ease certain aspects of these “primary” U.S. sanctions.

Most notably, OFAC issued a general license that broadly authorizes non-U.S. companies owned or controlled by U.S. persons to trade and otherwise deal with Iran, subject to certain continuing restrictions on the involvement of U.S. persons and the provision of U.S.-regulated goods and technologies.  The OFAC general license also authorizes U.S. persons to engage in activities related to the establishment or alteration of policies and procedures of a U.S. company or its owned or controlled non-U.S. subsidiaries to the extent necessary to allow the non-U.S. subsidiaries to engage in otherwise newly permissible dealings with Iran.  The general license also permits U.S. parent companies to make available to their non-U.S. subsidiaries certain automated and globally integrated information technology systems necessary to process documents or information related to the non-U.S. subsidiaries’ permissible Iran-related dealings.

Additionally, consistent with the JCPOA, the United States removed more than 400 Iranian individuals and entities from its various sanctions lists, including the List of Specially Designated Nationals and Blocked Persons (“SDN List”).  As a general matter, U.S. persons and their owned or controlled non-U.S. subsidiaries still cannot deal with parties that remain on the SDN List (or entities owned 50% or more, individually or in the aggregate, by one or more SDNs) absent U.S. government licensing, and dealings with SDNs also may give rise to the imposition of various secondary sanctions that remain in place.

Further, on January 17, in a move underscoring that the sanctions relief implemented pursuant to the JCPOA was related only to Iran’s decision to curtail key aspects of its nuclear program, OFAC designated 11 individuals and entities involved in procurement on behalf of Iran’s ballistic missile programs.  These new designations come in the wake of ballistic missile tests conducted by Iran in October and November 2015.

Finally, as expected, the EU has eased its Iran sanctions program to a much more substantial extent than the United States.  Although a number of key EU restrictions remain in place, the EU has now removed most of its Iran sanctions program, including asset freezing measures against a number of major Iranian financial institutions and oil/gas companies, energy sector investment and related trade controls restrictions, notification / authorization requirements for certain transfers of funds to or from Iranian parties, and prohibitions against the provision of insurance and other financial services to Iranian parties.

Photo of Kimberly Strosnider Kimberly Strosnider

Co-chair of the firm’s International Trade Controls practice group, Kim Strosnider advises companies on the application of international trade controls, including export controls, economic sanctions, and antiboycott laws and regulations.

A vice-chair of the firm’s International Trade and Finance practice group, Ms. Strosnider…

Co-chair of the firm’s International Trade Controls practice group, Kim Strosnider advises companies on the application of international trade controls, including export controls, economic sanctions, and antiboycott laws and regulations.

A vice-chair of the firm’s International Trade and Finance practice group, Ms. Strosnider counsels clients across a range of industries on trade control matters, including resolving complex compliance, enforcement, licensing, and jurisdiction/classification issues. She regularly advocates for clients before the key trade controls agencies, including the U.S. Departments of State, Commerce, and Treasury.

Photo of David Lorello David Lorello

David Lorello is a partner in the firm’s London office and serves as a vice chair of the firm’s International Trade and Finance practice group.  Mr. Lorello advises clients concerning a range of international regulatory, white collar, and commercial matters under both European…

David Lorello is a partner in the firm’s London office and serves as a vice chair of the firm’s International Trade and Finance practice group.  Mr. Lorello advises clients concerning a range of international regulatory, white collar, and commercial matters under both European and U.S. laws.  Mr. Lorello is recognized in the leading peer review publications for his work on trade controls and anti-corruption compliance and investigations matters, with Chambers Global describing Mr. Lorello as a “compliance authority” in those areas.

Anti-Corruption Compliance and Investigations

Mr. Lorello regularly assists clients in investigating anti-corruption compliance issues arising under the U.S. Foreign Corrupt Practices Act (FCPA), the UK Bribery Act and other related U.S., UK, and European anti-bribery and anti-money laundering laws.Mr. Lorello has particular experience in managing corporate investigations and developing anti-corruption compliance programs for companies operating in Europe, including coordinating advice concerning parallel risks under U.S. and European anti-corruption laws, advising clients concerning European criminal enforcement and debarment risks, and ensuring compliance with European data protection and workplace laws in the course of investigations and compliance matters.

Mr. Lorello also regularly represents clients before the World Bank, and other international financial institutions, in debarment proceedings concerning allegations of corrupt practices in connection with contracts financed by those institutions. In addition, Mr. Lorello advises clients concerning the commercial liability risks arising from corrupt practices, including private rights of action that may arise for parties that suffer losses as a result of corrupt practices.

Export Controls and Economic Sanctions

Mr. Lorello regularly represents clients before the major agencies responsible for export controls and economic sanctions laws and regulations, both in the United States and European Union. He has assisted clients in export and sanctions licensing and compliance issues with regard to a variety of industries and products, including encryption and other computer technologies, satellites, oil and gas products, military items, and other goods and technology controlled for export due to national security reasons. Mr. Lorello has extensive experience assisting clients in developing effective export compliance strategies, including preparing export license requests, voluntary self-disclosures and intra-company agreements as well as policies necessary to ensure export controls and economic sanctions compliance.

Mr. Lorello has particular experience in assisting clients in economic sanctions matters relating to the financial services industry. He has represented financial services clients in various matters before U.S. and EU Member State regulators, and he has worked with financial services clients in developing tailored internal controls focused on economic sanctions compliance.