US trade sanctions and export controls targeting Iran have attracted increasing attention from Chinese companies doing business in Iran or with Iran counterparties. This client alert aims to provide a high-level overview on US trade sanctions and export controls targeting Iran, their implications (particularly in terms of their extraterritorial application), and the potential penalties that can be imposed on companies and their executives and employees in the event of violations.
On November 5, 2018, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) took several actions to finalize the re-imposition of sanctions against Iran in response to President Trump’s May 8, 2018 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (“JCPOA”). See our previous blog posts here regarding the President’s May 8, 2018 decision to cease the United States’ participation in the JCPOA and here regarding Executive Order (“EO”) 13846, issued on August 6, 2018, which consolidated and reissued several sanctions provisions that had been suspended or revoked while the JCPOA was in effect.
On August 6, 2018, President Trump issued Executive Order 13846, “Reimposing Certain Sanctions with Respect to Iran” (the “New Iran EO”), which formally reimposes certain sanctions on Iran that had been suspended or revoked as part of the United States’ commitments under the Joint Comprehensive Plan of Action (“JCPOA”). The New Iran EO, which was issued to coincide with the end of the 90-day wind-down period announced on May 8, 2018 and detailed in our previous blog post, reimposes a wide range of sanctions on Iran that were in effect prior to the implementation of the JCPOA pursuant to pre-existing legal authorities, and also expands the scope of those sanctions, as described below.
Executive Summary Effective May 8, 2018, the US Government withdrew from the Joint Comprehensive Plan of Action (“JCPOA”). The US Government will re-instate the sanctions that were lifted or waived following the implementation of the JCPOA. This action has a greater impact on non-US persons because most of the lifted or waived sanctions were secondary sanctions targeting activities of non-US companies occurring outside of US jurisdiction. The sanctions will be re-instated on August 7,…