Relief is very limited and alleviates threat of sanctions regarding transactions by non-U.S. or foreign persons.

On January 30, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published guidance in the Federal Register on how the U.S. government would proceed to implement Iran sanctions relief while diplomatic negotiations unfold with Iran.

By way of background, on November 24, 2013, the United States and its partners in the P5+1 reached an initial understanding with Iran, outlined in a Joint Plan of Action (JPOA), that halts progress on Iran’s nuclear program. In return for Iran’s commitment to place limits on its nuclear program, the U.S. government committed to provide Iran sanctions relief for a six-month period. In furtherance of its commitments under the JPOA, the U.S. government has implemented limited sanctions relief relating to certain activities and associated services taking place exclusively during the six-month period beginning on January 20, 2014 and ending July 20, 2014. What follows below is a brief overview and general summary of the highlights of the most important aspects of the relief—note, however, that other sanctions relief that deals with autos, gold, and other precious metals is also addressed in the January 30 guidance.

Caveats

1. With the exception of civil aviation and humanitarian activities,none of the sanctions relief can involve a U.S. person or, as applicable, a foreign entity owned or controlled by a U.S. person.

2. Unless otherwise authorized, transactions may not involve persons identified on the OFAC List of Specially Designated Nationals and Blocked Persons (SDN List).

3. The U.S. government retains the authority to continue imposing sanctions during the six-month period for activities that occurred prior to January 20, 2014.

4. The U.S. government retains the authority to impose sanctions for activities occurring during the six-month period to the extent such activities are inconsistent with sanctions relief described in the JPOA.

5. During the six-month period, the U.S. government will continue to vigorously enforce other U.S. government sanctions against Iran outside the scope of the limited relief.

6. The U.S. government retains the authority to revoke this limited sanctions relief at any time if Iran fails to meet its commitments under the JPOA. It should be noted that no mention is made of any wind-down period for transactions undertaken but not yet completed, should the relief be revoked.

Sanctions Related to Iran’s Export of Petrochemical Products

The U.S. government will not impose correspondent or payable-through-account sanctions on foreign financial institutions that conduct or facilitate transactions that are initiated and completed entirely within the JPOA period by non-U.S. persons for exports of petrochemical products from Iran that are initiated and completed entirely within the six-month period. These include transactions involving the petrochemical companies listed in the Annex to the January 30 guidance with certain other restrictions.

The U.S. government will not impose blocking sanctions with respect to persons who, exclusively during the six-month period, materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, the petrochemical companies listed in the Annex to the January 30 guidance for exports of petrochemical products from Iran that are initiated and completed entirely within the JPOA period, provided that the activities do not involve persons on the SDN List other than the petrochemical companies listed in the Annex to the January 30 guidance.

Sanctions Related to Iran’s Export of Crude Oil

The U.S. government will not impose correspondent or payable-through-account sanctions with respect to foreign financial institutions that conduct or facilitate transactions exclusively during the six-month period by non-U.S. persons for exports of petroleum and petroleum products from Iran to China, India, Japan, the Republic of Korea, Taiwan, or Turkey, and associated insurance and transportation services, that are initiated and completed entirely within the six-month period, including transactions involving the National Iranian Oil Company (NIOC) or the National Iranian Tanker Company (NITC), provided that the transactions do not involve persons on the SDN List other than NIOC and NITC, with certain other restrictions.

The U.S. government will not impose blocking with respect to non-U.S. persons who, exclusively during the six-month period, materially assist, sponsor, or provide financial, material, or technological support for, or goods or services in support of, exports of petroleum and petroleum products from Iran to China, India, Japan, the Republic of Korea, Taiwan, or Turkey, and associated insurance and transportation services, including for activities involving NIOC or NITC, provided such activities are initiated and completed entirely within the six-month period and further provided that the activities do not involve persons on the SDN List other than NIOC and NITC, with certain other restrictions.

Civil Aviation

OFAC will issue a new Statement of Licensing Policy (SLP) that covers certain activities related to the safety of Iran’s civil aviation industry. The SLP will establish, during the six-month period, a favorable licensing policy regime under which U.S. persons, U.S.-owned or -controlled foreign entities, and non-U.S. persons involved in the export of U.S.-origin goods can request specific authorization from OFAC to engage in transactions that are initiated and completed entirely within the six-month period to ensure the safe operation of Iranian commercial passenger aircraft, including transactions involving Iran Air.

Humanitarian Transactions

The U.S. government and Iran will establish a new mechanism to further facilitate the purchase of, and payment for, the export of food, agricultural commodities, medicine, and medical devices to Iran; Iran’s payments for medical expenses incurred abroad by Iranian citizens; and Iran’s payments of an agreed-to amount of governmental tuition assistance for Iranian students studying abroad. Foreign financial institutions, whose involvement in hosting this new mechanism is sought by Iran, will be contacted directly by the U.S. Department of the Treasury and provided specific guidance.

Despite such new mechanism, transactions for the export of food, agricultural commodities, medicine, and medical devices to Iran generally may be processed pursuant to preexisting general license exceptions and are not required to be processed through the new mechanism.