The U.S. government re-imposed sanctions that were lifted pursuant to the Joint Comprehensive Plan of Action (hereafter "JCPOA"), including sanctions on associated services related to further activities.
4 November 2018 was marked as the final day of the 180-day wind-down period following the President’s announcement to cease the USA's participation in the JCPOA. On 5 November 2018, the U.S. Department of the Treasury's Office of Foreign Assets Control (hereafter "OFAC") reintroduced the sanctions on Iran. These are said to be the toughest U.S. sanctions ever imposed on Iran, as they will target important sectors of Iran's economy, such as the energy, shipping and shipbuilding, and financial sectors.
The provision or delivery of goods or services and/or the extension of additional loans or credit to an Iranian counterparty after 4 November 2018 may result in the imposition of U.S. sanctions unless such activities are exempt from regulation, authorized by OFAC, or otherwise not sanctionable.
The USA maintains authorisations and exceptions under U.S. sanctions that allow for the sale of agricultural commodities, food, medicine, and medical devices to Iran by U.S. persons and non-U.S. persons. However, these authorisations and exceptions do not apply to transactions involving persons on the Specially Designated Nationals and Blocked Persons List (hereafter "SDN list") that have been designated in connection with Iran's support for international terrorism or proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (hereafter "IRGC"), or activity that is subject to other sanctions.
As part of the re-imposition, over 700 persons have been designated, identified and added to the SDN list, including persons that had been removed from the SDN list.
Germany, France, the United Kingdom, Russia and China nevertheless want to maintain the nuclear agreement with Iran.
The following sanctions that were lifted pursuant to the JCPOA, including sanctions on associated services related to the activities below, were reintroduced:
- Sanctions on Iran's port operators, and the shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines, South Shipping Line Iran, or their affiliates;
- Sanctions on petroleum-related transactions with, among others, the National Iranian Oil Company , Naftiran Intertrade Company, and National Iranian Tanker Company, including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
- Sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012;
- Sanctions on the provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010;
- Sanctions on the provision of underwriting services, insurance, or reinsurance; and
- Sanctions on Iran's energy sector
In a nutshell
The situation in Switzerland concerning Iran is unchanged by the decision of the USA. However, the reintroduction of US sanctions against Iran will have economic implications for Swiss companies with business links to Iran. We recommend that companies that maintain business relations with Iran assess its business model, monitor the developments regarding the sanctions against Iran and seek for advice if any uncertainties arise.