Presenting a live 90-minute webinar with interactive Q&A Doing Business in Iran Amid Evolving Sanctions: Leveraging New Opportunities While Ensuring Compliance WEDNESDAY, MARCH 30, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Barbara D. Linney, Member, Miller & Chevalier Chartered , Washington, D.C. Nichola Peters, Partner, Addleshaw Goddard , London The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Doing Business in Iran Amid Evolving Sanctions: Leveraging New Opportunities While Ensuring Compliance presented by Barbara D. Linney Nichola Peters Member Partner Miller & Chevalier Chartered Addleshaw Goddard LLP March 30, 2016* Strafford Live CLE Webinar * This PowerPoint presentation covers developments through March 24, 2016, the cut-off date for submission to Strafford for distribution. Any subsequent developments will be covered during the live webinar. 5
Agenda 1. Sanctions: What’s Been Lifted And What Remains a. U.S. Sanctions b. E.U. sanctions 2. Licenses a. U.S. License Requirements & Procedures b. E.U./U.K. Licence Requirements & Procedures 3. Export Controls and Related Issues a. U.S. Export Control Regimes b. E.U./U.K. Export Control Regimes 4. Challenges Going Forward 6
U.S. Sanctions 7
U.S. Sanctions Prior to the Iran Nuclear Deal Primary and secondary sanctions regimes Primary sanctions = comprehensive embargo • U.S. persons prohibited from engaging in most transactions with or for the benefit of Iran or persons in Iran ‒ Limited exemptions ( e.g. , personal communications, travel, information and informational materials) and exceptions authorized by general or specific licenses ( e.g ., exports of agricultural commodities, food, medicine and medical devices) • Assets of Government of Iran and various specially designated nationals blocked under various programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) Secondary sanctions = actions against foreign persons who engage in sanctionable conduct • Most secondary sanctions authorized by legislation ( e.g ., Iran Sanctions Act, CISADA, NDAAs, etc .) • Some authorized by Executive Order ( e.g. , E.O. 13590) • Administered by the U.S. Department of State and/or OFAC 8
U.S. Sanctions Relief Under the Deal Joint Comprehensive Plan of Action (JCPOA) • Decided upon by United States, European Union, 3 E.U. Member States (France, Germany, United Kingdom), Russia, China and Iran • Aims to ensure peaceful nuclear program in Iran Became effective on October 18, 2015 (Adoption Day) Was implemented on January 16, 2016 (Implementation Day) • IAEA verified that Iran had met its nuclear-related commitments • UN Security Council terminated UN sanctions, subject to “snap back” until 10 years after Adoption Day in event of “significant non - performance” of Iran’s JCPOA commitments ‒ United States will not apply snap back retroactively but contracts entered into after Implementation Day but prior to snap back will not be grandfathered • United States implemented primary and secondary sanctions relief consistent with its JCPOA obligations 9
U.S. Sanctions Relief Under the Deal ( cont’d ) Secondary sanctions relief was implemented through the following actions effective as of Implementation Day: • Contingent waivers issued on Adoption Day took effect on Implementation Day upon confirmation by the Secretary of State that Iran had implemented certain nuclear related measures specified by the JCPOA • Various Executive Orders were terminated or amended • Numerous individuals and entities were removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), Foreign Sanctions Evaders List (FSE List) and the Non-SDN Iran Sanctions Act List • Many (but not all) Iranian state owned enterprises falling within the definition of the “Government of Iran” in Executive Order 13599 were transferred from the SDN List to a separate List of Persons Blocked Solely Pursuant to Executive Order 13599 (EO 13599 List) 10
U.S. Sanctions Relief Under the Deal ( cont’d ) Primary sanctions relief was implemented through issuance of general licenses and adoption of favorable licensing policies effective as of Implementation Day: • Export of commercial passenger aircraft and related parts and services by U.S. persons (Statement of Licensing Policy) (General License I authorized related contingent contracts as of March 24, 2016) • General license for importation of Iranian-origin carpets and foodstuffs into the United States (added to ITSR as 31 C.F.R. § 560.534 effective January 21, 2016) • Certain activities of foreign subsidiaries of U.S. persons (General License H) 11
Timing of U.S. Sanctions Relief Interim relief was put in place on January 20, 2014 • i.e. , certain relief under (1) U.S. secondary sanctions, and (2) favorable licensing policy for U.S. persons engaged in safety-related export of parts and services for Iranian commercial passenger aircraft • Licenses issued under the interim favorable licensing policy with expiration dates on or before July 14, 2015 were extended through May 31, 2016 Additional secondary and primary sanctions relief took effect on Implementation Day as noted on previous slide But sanctions will not terminate until “Transition Day” • Approximately eight years from now, when IAEA submits favorable report regarding Iran’s pursuit of only peaceful nuclear activities • Iran controls the precise timing of Transition Day: termination will occur only after the IAEA submits a favorable report U.S. Congress controls the termination of U.S. statutory sanctions 12
U.S. Sanctions After Implementation of the Deal U.S. “primary” embargo prohibiting trade with Iran by U.S. persons and their foreign subsidiaries remains in place, except for exempt activities or activities authorized by general or specific licenses • General License H authorizes many activities of foreign subsidiaries and certain related actions of U.S. parent entities but most restrictions on facilitation remain Secondary sanctions continue to apply to non-U.S. persons who conduct transactions with SDNs, including • Designation authority related to support for terrorism, human rights abuses, WMD proliferation, the Islamic Revolutionary Guard Corps (IRGC), persons on the FSE List, etc. ( i.e ., “blocking” or asset freezing) ‒ Sanctions imposed on two occasions following Implementation Day and U.S. Government has signaled its intention to continue to impose sanctions to counter Iran’s ballistic missile program and support for terrorism • Correspondent or payable-through account sanctions against foreign financial institutions who knowingly facilitate transactions with Iranian SDNs, the IRGC or SDNs designated for support for Iran’s proliferation of WMD or support for terrorism or involving certain raw materials or software and certain prohibited parties • “Menu - based” sanctions against persons who provide material support for the IRGC, engage in certain transactions involving SDNs in the energy, shipping or shipbuilding sectors or related insurance transactions involving SDNs, or engage in transactions involving certain raw materials or software • Sanctions outside the scope of the JCPOA U.S. arms embargo and export controls under the EAR and generally applicable statutes related to transfers of proliferation sensitive equipment and technology remain in place 13
E.U. Sanctions 14
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