OFAC Implements JCPOA Withdrawal Revoking General Licenses and Prepares to Reimpose Sanctions on Delisted Parties

June 28, 2018 Advisory

Yesterday, the Department of Treasury's Office of Foreign Assets Control (OFAC) announced the revocation of three Iran-related general licenses (GLs) originally issued in January 2016 as part of the Joint Comprehensive Plan of Action (JCPOA or Iran Nuclear Deal), and the issuance of narrow new GLs to permit the wind-down of activities that were being conducted under the authority of the rescinded GLs. OFAC's action implements President Donald Trump's May 8 announcement that the U.S. would withdraw from the Iran Nuclear Deal, discussed in our previous alert.

Specifically, OFAC has now amended the Iranian Transactions and Sanctions Regulations (ITSR) to revoke the following general licenses, and has given companies the following periods of time to wind-down and cease activities under the general licenses:

General License

Wind-Down Authorization

31 C.F.R. 560.534-535: GLs authorizing the import into the United States of certain Iranian-origin carpets and foodstuffs, including pistachios and caviar, associated brokering, and processing of associated funds transfers, and letters of credit.

Until 11:59 p.m. eastern daylight time on August 6, 2018, 31 C.F.R. 560.534-535, as amended, will authorize all transactions and activities that are ordinarily incident and necessary to the wind down of transactions that were previously authorized under the revoked GLs. "Wind-down" authorization under the Iran sanctions does not include activities or transactions to maintain existing business or any new activities.

The new wind-down GL can be found here.

GL-I: authorizing transactions related to the negotiation of, and entry into, contingent contracts for licensable exports or re-exports to Iran of Commercial Passenger Aircraft and related parts and services.

Specific licenses issued under the prior statement of licensing policy for the export or re-export to Iran of commercial aircraft and related parts and components will be revoked at the end of the wind-down period. Until 11:59 p.m. eastern daylight time on August 6, 2018, 31 C.F.R. 560.536 will authorize all transactions and activities that are ordinarily incident and necessary to the wind-down of activities that were previously authorized under GL-I. "Wind-down" authorization under the Iran sanctions does not include activities or transactions to maintain existing business or any new activities.

The new wind-down GL can be found here.

GL-H: authorizing certain Iran-related transactions by foreign entities owned or controlled by U.S. persons.

Until 11:59 p.m. eastern standard time on August 6, 2018, new GL 31 C.F.R. 560.537 will authorize certain activities that are ordinarily incident and necessary to the wind-down of: activities related to the establishment or alteration of operating policies or procedures of a U.S. entity or a U.S.-owned or controlled foreign entity to operate under GL-H; or activities to make available to those foreign entities any automated and globally integrated computer, accounting, email, telecommunications, or other business support systems. "Wind-down" authorization does not authorize activities listed in 560.537(c), and does not include activities or transactions to maintain existing business or any new activities.

The new wind-down GL can be found here.


OFAC's announcement can be found here. An updated FAQ on the topic can be found here.

In addition to the revocation of the general licenses, by November 5, 2018 OFAC will re-impose sanctions on some or all of the 400 Iran-related entities – including many Iranian financial institutions and government entities – removed in January 2016 from the List of Specially Designated Nationals and Blocked Persons ("SDN List), the Foreign Sanctions Evaders List, and/or the Non-SDN Iran Sanctions Act List. The impact of these re-designations on U.S. persons may be limited, because U.S. persons have remained broadly prohibited from doing business with Iran. However, U.S. persons involved in the supply chain for commercial aircraft parts and components should check for and analyze the status of any Iran-related business previously authorized under the statement of licensing policy and associated specific licenses (e.g., those issued to Airbus and Boeing), while U.S. companies with foreign subsidiaries should carefully review any implementations of GL-H. Non-U.S. persons who moved back into the Iranian market after JCPOA will need to pay careful attention as sanctions are re-imposed, including to determine whether ongoing transactions with re-sanctioned entities carry a risk of secondary sanctions and whether the Fifty Percent Rule applies (extending the prohibition on transactions to entities 50% or more owned, individually or in the aggregate, by listed parties).