By: Bruce Leeds, Senior Counsel

January 16, 2016 was Implementation Day for reduced international sanctions with Iran. Now you can freely carry on trade with Iran – right?  Well….you can import pistachios and carpets, but beyond that most of the sanctions are still in place.

What happened on Jan. 16 is that many of the “secondary” sanctions were lifted.  The United States eased the following:

1. Financial and banking related sanctions
2. Sanctions on the provision of underwriting services, insurance, or re-insurance in connection with activities that are consistent with the international agreement on sanctions
3. Sanctions on Iran’s energy and petrochemical sectors
4. Sanctions on transactions with Iran’s shipping and shipbuilding sectors and port operators
5. Sanctions on Iran’s trade in gold and other precious metals
6. Sanctions on trade with Iran in graphite, raw or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes, in connection with activities that are consistent with the international agreement on sanctions
7. Sanctions on the sale, supply, or transfer of goods and services used in connection with Iran’s automotive sector
8. Sanctions on associated services for each of the categories above

“Eased” means that they didn’t necessarily all go away. A license from the Office of Foreign Assets Control (OFAC) may still be required.  There could be other restrictions on the party you propose doing business with in Iran.  This is a risky area so one must check the rules thoroughly before implementation.

In addition to the above easing of sanctions the U.S. issued:

• A Statement of Licensing Policy allowing for the case-by-case OFAC licensing of individuals and entities seeking to export, re-export, sell, lease, or transfer to Iran commercial passenger aircraft and related parts and services used exclusively for commercial passenger aviation;
• An OFAC general license authorizing U.S.-owned or controlled foreign entities to engage in certain activities involving Iran and:
• An OFAC general license authorizing the importation into the United States of Iranian-origin carpets and food stuffs, including pistachios and caviar.

Some previous OFAC general licenses permitting limited exports to Iran remain in place. For example, U.S. persons continue to be authorized to export agricultural commodities (including food), medicine, and medical supplies to Iran.

In addition to the above secondary sanctions, on Jan. 16 the United States removed over 400 individuals and entities from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), the Foreign Sanctions Evaders List (FSE List), and the Non-SDN Iran Sanctions Act List. These lists did not go away, and more than 200 Iranian individuals and entities remain on the SDN list.  Anyone contemplating a transaction involving Iran will need to screen the parties against the SDN and other “blacklists” to ensure that no business is conducted involving a sanctioned or embargoed party.

So, some things have changed for trade with Iran, but most things have not. Bigger changes will await developments on the political and diplomatic fronts.  In the meantime, limited opportunities exist for some industries and commodities.  Insofar as trade with Iran is concerned, keep your hopes up but your expectations down.