Newsflash: President Trump announces withdrawal from JCPOA


Cologne, 09th May 2018


On 8 May, President Trump announced that the USA would be withdrawing from the Joint Comprehensive Plan of Action (JCPOA). The Office of Foreign Assets Control (OFAC) simultaneously published a Guidance which stated that sanctions were going to be re-imposed against Iran upon the expiry of so-called “wind-down periods”.

With the JCPOA dated July 2015, countless sanctions imposed by the UN, the EU and the USA had been relaxed. In return, Iran undertook to curb is nuclear programme. This agreement is now being terminated by the USA.

To be borne in mind in this connection is that the withdrawal of the sanctions on the US side primarily concerned the so-called secondary sanctions, that is to say those sanctions which were aimed at non-US persons. Accordingly, the re-imposition of the sanctions will affect enterprises outside of the USA the most.

The concept is such that, depending on the concrete sanctions at issue, a wind-down period of 90 or 180 days will be granted in order to wind up ongoing business. According to the USA’s understanding, these periods already started to run on 8 May.

The OFAC has also commented in its usual form of FAQ on several important aspects. The link to the FAQs can be found here.

An important aspect for the European subsidiaries of US enterprises is that General Licence H is being withdrawn. This enables non-US subsidiaries of US enterprises to conduct business with Iran subject to certain conditions. This possibility will now no longer exist.

Of relevance to US enterprises is the fact that it can be assumed that exemptions for transactions with Iran will either not be granted at all or only subject to greater restrictions than has previously been the case.

Further Guidance Notes of the OFAC can certainly be expected.

It would seem that the complex dispute resolution mechanism, which is fundamentally envisaged in the JCPOA, is not being put to use.

From the German and European viewpoint, this – once again – raises the question of the significance of the anti-boycott provisions, namely EU Regulation 2271/1996 and Sec. 7 Foreign Trade Regulation [Außenwirtschaftsverordnung, AWV]. The EU Regulation, in particular, directly targets unilateral American actions concerning Iran; it prohibits European enterprises from following unilateral sanctions of the USA against Iran (and Cuba). Irrespective of numerous unclear legal questions in connection with these provisions, the anti-boycott provisions of the EU were ultimately and primarily characterised by the fact that they were not executed. It remains to be seen whether this position will be confirmed within the scope of handling the most recent unilateral activities of the USA.

In all events, enterprises will have to reappraise their business engagement in Iran. 




















Stephan Müller


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