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May 8, 2018

U.S. Withdraws from Iran Nuclear Deal

Pres. Trump announced today that the U.S. will withdraw from the Iran nuclear deal (officially, the Joint Comprehensive Plan of Action or JCPOA) and will begin re-imposing, following a wind-down period, the U.S. nuclear-related sanctions that were lifted pursuant to the JCPOA.  The Departments of State and 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 afforded under the JCPOA.  This means that the wind-down period ends August 6, 2018, or November 4, 2018, depending on the type of activities engaged in and the authorization under which the activities were engaged.  OFAC stated that, as soon as administratively feasibly, it intends to replace General License H and certain other general licenses with more narrowly scoped authorizations to allow U.S. persons and, as appropriate, U.S.-owned or –controlled foreign entities, to engage in all transactions ordinarily incident and necessary to wind down activities that were previously authorized pursuant to such authorizations.  Notice of the revocation of General License H and the issuance of the wind-down authorization will be published in the Federal Register.  For activities undertaken pursuant to General License H, OFAC’s newly-issued guidance confirms that effective November 5, 2018, OFAC 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. 

Additionally, the guidance confirms that for activities consistent with U.S. sanctions on Iran prior to May 8, 2018, the U.S. government will, among other things:

OFAC warns that the provision or delivery of additional goods or services and/or the extension of additional loans or credits to an Iranian counterparty after August 6, 2018, or November 4, 2018, as applicable, including pursuant to written contracts or written agreements entered into prior to May 8, 2018, may result in the imposition of U.S. sanctions unless such activities are exempt from regulation, authorized by OFAC, or otherwise not sanctionable.  Moreover, please be aware that any payments would need to be consistent with U.S. sanctions, including that payments could not involve U.S. persons or the U.S. financial system, unless the transactions are exempt from regulation or authorized by OFAC.