US Joins International Community in Easing Iran Sanctions, But It’s Probably Too Early to Celebrate

“[C]ommitments to relax sanctions measures will only be effective if, when and to the extent that they are implemented in U.S. and EU law.” (Harry Clark and Clark McFadden of Orrick)

Late last month, the US, along with the four other US Security Council members – China, France, Russia, and the United Kingdom – and Germany, entered into an agreement with Iran that would suspend some of the international sanctions currently in place against the country.

But it may be too early for US companies to celebrate, write attorneys at DLA Piper:

“While this agreement is undoubtedly an historic diplomatic coup for the Western diplomacy, the interim Geneva deal remains limited, covering a 6 month period only at this stage and is intended as a first step in a process aimed at a permanent resolution to the global impasse over Iran’s nuclear programme.”

Three reasons why:

1. Congress could still reject the plan:

“Congress could resist these changes.  Some members of Congress have suggested that Congress should further tighten U.S. sanctions against Iran, despite the U.S. commitment in the deal to refrain from new nuclear-related sanctions.” (Jay Griffiths, Ann Nagele, Richard  Oehler, David Townsend of Perkins Coie)

2. Most sanctions are still in effect:

“The vast majority of the comprehensive Iranian sanctions regime will remain in place. These sanctions broadly prohibit trade, investment, services, technology transfers, facilitation and banking. The provisions relating to subsidiary liability and SEC reporting on certain activity relating to Iran remain in place, as does the extensive list of Iranian Specially Designated Nationals and blocked parties.” (Stephan Becker, Nancy Fischer, Aaron Hutman, and Christopher Wall of Pillsbury)

3. Federal officials promise continued enforcement of remaining sanctions:

“A State Department press release emphasizes that the U.S. government intends to continue vigorous enforcement of remaining Iran-sanctions measures and to reimpose suspended sanctions if Iran fails to satisfy commitments under the Agreement.” (Harry Clark and Clark McFadden of Orrick)

The updates:

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