June 28, 2018 – On June 27, 2018, the U.S. Treasury Department, Office of Foreign Assets Control (“OFAC”) announced that it was revoking certain general license authorizations that had been issued as part of the United States’ commitments under the Joint Comprehensive Plan of Action (“JCPOA”), commonly known as the Iran nuclear deal. OFAC is concurrently replacing these revoked general licenses with temporary authorizations to conduct wind-down activities. OFAC’s actions follow its announcements on May 8, 2018, that it would revoke JCPOA-related authorizations “as soon as administratively feasible.”
The general licenses revoked by OFAC include:
General License H, which authorized certain transactions involving Iran by U.S. owned or controlled foreign entities;
General License I, which authorized transactions related to the negotiation of, and entry into, contingent contracts involving Iran for commercial passenger aircraft and related parts and services; and
The general license codified at 31 C.F.R. §§ 560.534 and 560.535, which authorized the importation of Iranian-origin carpets and foodstuffs, as well as related credit and brokering services.
OFAC is contemporaneously revising the Iranian Transactions and Sanctions Regulations (“ITSR”) to provide temporary authorizations to wind-down the activities previously permitted by the JCPOA-related general licenses. Specifically, OFAC is amending §§ 560.534 and 560.535 (relating to Iranian-origin carpets and foodstuffs), and creating new sections 560.536 (relating to activities under General License I) and 560.537 (relating to activities under General License H). OFAC also amended its JCPOA-related FAQs 4.3, 4.4, and 4.5, issued on May 8, 2018, to reference these temporary wind-down authorizations. The temporary authorizations pertaining to General License H will expire at 11:59 p.m. eastern standard time on November 4, 2018. The temporary authorizations pertaining to General License I and Iranian carpets and foodstuffs will expire at 11:59 p.m. eastern daylight time on August 6, 2018.
The temporary authorizations provided in §§ 560.534-560.537 generally mirror the authorizations in the JCPOA-related general licenses, except the authorized activities are limited to “transactions and activities that are ordinarily incident and necessary to the wind down” of the previously authorized activities. However, it remains unclear at this time what the scope of permissible wind-down activities would cover. Until OFAC issues guidance on the breadth of activities allowed under the temporary authorizations, companies attempting to wind-down business in Iran would be advised to take a conservative approach with robust compliance efforts.