On January 16, 2016, two NFL playoff games and a historic revision of U.S. foreign policy took place. Many of us enjoyed the first two (did you see that last-second touchdown pass?!) but did not pay close attention as the United States lifted many of its secondary sanctions against Iran. Even those normally attentive to sanctions news had already heard that things were not going to change that much for U.S. persons.

Well, (and those in New England, Wisconsin, the Carolinas, and Denver are excused from the following imperative through next week) SIT UP AND PAY ATTENTION:

U.S. persons will be allowed to participate in trade with Iran in certain, limited ways, including selling commercial aircraft, purchasing certain items imported from Iran, and owning, directing, and providing certain support services to U.S.-owned subsidiaries dealing with Iran. (Oh, hey, championship-bound football fans, we thought you’d come back to learn more. This news has all the intensity of an overtime finish).

This change will generate great trade opportunities for some U.S. businesses, but there is reason to be cautious and, therefore, to read the caution at the end of this article. But first, the good news:

The Jets (not the New York Jets) are Back – Commercial Aircraft

U.S. persons may now obtain licenses from OFAC for sales of commercial aircraft and aircraft parts to Iran, including aircraft services such as maintenance and repair.^[1] This is an immense opportunity for U.S. aircraft manufacturers. Some 77 million Iranians have just been reconnected to much of the outside world’s economy and they are currently served by aircraft with an average age of about 25 years (about the average age of those players still in the playoffs). That means U.S.-based sellers, with the approval of OFAC, can sell directly into, or to OEMs who sell to, a large market with a voracious need for aircraft, replacement parts, and repair.

There are, of course, some limitations on the sales. For instance licenses do not permit you to sell to Specially Designated Nationals or other denied parties. However, the activity that can be licensed is broad:

1. Export, re-export, sell, lease, or transfer to Iran commercial passenger aircraft for exclusively civil aviation end-use,

2. Export, re-export, sell, lease, or transfer to Iran spare parts and components for commercial passenger aircraft, and

3. Provide associated services, including warranty, maintenance, and repair services and safety-related inspections, for all the foregoing.

That is quite a lot to sell to a plane-starved nation. Applications may be submitted online here, but, of course, we recommend you consult with your compliance officer or outside counsel to be certain your business is not the first to test OFAC’s boundaries and enforcement (see The Catch below).

Carpets, Caviar, and Pistachios – Imports from Iran

A general license to be published in the Federal Register will amend the Iranian Transaction Sanctions Regulations to authorize the importation into the United States of Iranian-origin carpets and foodstuffs, including pistachios and caviar (imagine how much swankier that will make your Super Bowl party!) Further, U.S. banks and brokers are authorized to process payments for the purchases of Iranian goods.

However, the general license does not lift the prohibition against the sale of goods to Iran, and U.S. persons are still barred from dealing with SDNs or other denied parties. in addition, U.S. financial institutions may not credit or debit a payment for the imported goods to an Iranian bank account.

As with the aircraft regulations, the limitations and exceptions do not swallow this rule. The general license for the import of certain Iranian goods opens the U.S. market to a range of products that have been near-impossible to obtain for decades.

A Big Kahuna Burger in Bandar Abbas? – U.S.-Owned Subsidiaries

Under a new General License, a U.S.-owned or U.S.-controlled entity established or maintained outside the United States may do business directly with Iran. Additionally, U.S. persons may participate in activities related to establishing or altering certain operating policies of the subsidiary. That is, they can generally alter or establish  policy to the extent required to allow the subsidiary to engage in authorized business. They may not, however, manage day-to-day operations of that subsidiary.

Further, U.S. persons may provide certain support to the subsidiary doing business with Iran. They may participate in activities to make the company’s globally-integrated email, telecommunications, servers, or other business support available to the subsidiary participating in the now-authorized business.

The General License does not authorize U.S. persons to do business directly with Iran nor for U.S. origin goods or technology generally to be exported to Iran. It is not a blanket sanctions lift. However, it is probably the widest-ranging of the new authorizations. U.S.-owned global businesses formerly completely barred from transactions with Iran, may now carefully consider how their foreign subsidiaries may enter the Iranian markets.

Application of the new General License in practice, however, will be fraught with pitfalls. Care is warranted to ensure that the business activities of the subsidiary and that the policy and support activities of the U.S. owner are within the permitted categories.

The Catch (not by a wide receiver) – Increased OFAC Enforcement

It would be politically imprudent for the administration to loosely enforce the boundaries of these revised sanctions. The United States lifted certain sanctions in exchange for a reduction of Iran’s nuclear program. However, sanctions for human rights abuses and state-sponsorship of terrorism remain in place against Iran, and new SDN listings were added by OFAC 24 hours after the announcement of the lifting of sanctions under the JCPOA. In fact, we anticipate that OFAC has every incentive to police businesses trading under the licenses described above and, if necessary to make an example of anyone who crosses the line. Although we believe the U.S. government is providing opportunities to American business in good faith, we also believe that the enforcers will not take lightly any abuse of the new rules. In other words, the refs will be all over this one.

As ever, we recommend strong strategic planning and consultation those who are experts on the regulations. Put your team on the field, but make sure they are well-coached and disciplined so you avoid fines and penalties.

All the best to those with teams still in the playoffs as well as those with teams taking part in new business opportunities related to Iran.

_{[1] And, where jurisdiction dictates, non-U.S. persons may also apply for such licenses.}