On June 24, 2019, the President issued Executive Order 13876, “Imposing Sanctions With Respect To Iran” (“EO 13876”), which specifically imposes sanctions on the Supreme Leader of Iran (currently, Ayatollah Khamenei) and the Supreme Leader’s Office (“SLO”), authorizes the future designation of persons appointed by, or providing support to, the SLO, and designates certain additional senior Iranian Revolutionary Guard (“IRGC”) commanders. While a politically significant and symbolic move, by itself this latest action is unlikely to have much practical impact, except to increase the risk, yet again, of secondary sanctions for non-US parties (particularly financial institutions) that engage in transactions with the targeted parties.
On May 8, 2019, President Trump issued Executive Order 13871 (the “Iran Metals EO”) imposing sanctions on the iron, steel, aluminum, and cooper sectors of Iran subject to a 90-day wind-down period that will expire on August 6, 2019. Although the sale, supply or transfer to/from Iran of steel and aluminum is already targeted by Section 1245 of the Iran Freedom and Counter-Proliferation Act of 2012, the Iran Metals EO expands upon those sanctions and further targets the Iranian iron and copper sectors.Read more…
The High Representative of the European Union and the Foreign Ministers of France, Germany and the United Kingdom released a joint statement today (see here for the full statement) following Iran’s announcement yesterday that it would withdraw from certain commitments as agreed as part of the 2015 nuclear agreement (see our post here on this).
The statement urged Iran to continue to implement its commitments under the nuclear agreement, stating that Iran’s compliance would be monitored and verified. At the same time, the three countries recalled their own commitments and reiterated their determination to try and facilitate legitimate trade with Iran, including through the operationalisation of INSTEX.
Furthermore, the statement called on countries not party to the nuclear agreement to refrain from taking any actions that may “impede the remaining parties’ ability to fully perform their commitments”.
We note that the statement does not make explicit reference to the re-imposition of EU sanctions.
President Hassan Rouhani has announced that Iran will withdraw from certain commitments agreed in the 2015 nuclear agreement; this announcement comes a year after the agreement was abandoned by the US, leading to the re-imposition of US sanctions against Iran.
In today’s announcement, Hassan Rouhani declared that Iran will stop exporting its surplus enriched uranium. This decision is contrary to the agreement, under which Iran is required to sell its surplus enriched uranium abroad to ensure that it cannot be used to manufacture nuclear weapons. Hassan Rouhani also threatened that Iran will resume its production of higher-enriched uranium (which is currently capped) and begin developing its Arak heavy water reactor in 60 days, if the remaining signatories to the nuclear deal – Britain, France, Germany, China and Russia – fail to shield Iran from the impact of US sanctions on its oil and banking sectors.
In response, French Defence Minister Florence Parly has stated that France is still committed to the nuclear deal, but has warned that sanctions could be re-imposed if Iran does not adhere to its existing commitments.
As noted in our previous blog post, France, Germany and Britain have attempted to keep the nuclear deal alive despite the US’s withdrawal. They launched the special purpose vehicle Instex, a payment mechanism which allows European entities to continue engaging in “legitimate trade” with Iran in humanitarian goods such as medicines and food. So far, the system has failed to address sanctions against Iranian oil, Iran’s main source of foreign exchange, and has done little to alleviate the impact of US sanctions.