US PRESIDENT RECERTIFIES IRAN NUCLEAR DEAL AND EXTENDS REVIEW OF SUDAN SANCTIONS

Iran Nuclear Deal Recertified with New Sanctions Imposed

On July 17, the US President certified Iranian compliance with the Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA). Under the JCPOA, Iran is reducing its nuclear capacity in exchange for nuclear-related sanction relief from the US, EU, and UN Security Council. This recertification comes despite the US President's statements that he did not want to certify compliance. The recent recertification signals the United States' continued willingness to maintain the sanctions relaxation implemented through the JCPOA, at least in the short term.

This is the second time that the new administration has certified Iranian compliance with the deal. However, the US has used other types of sanctions to push Iran to change its behavior.  As the most recent example, on July 18, the administration announced new (non-nuclear) sanctions on eighteen Iranian individuals and groups for supporting Iran’s ballistic missile program and for supporting Iran’s military procurement or Iran’s Islamic Revolutionary Guard Corps (IRGC), as well as an Iran-based transnational criminal organization and associated persons. The sanctions freeze these individuals and groups' assets and prohibit Americans from transacting business with them. US Treasury Secretary Mnuchin said that these "sanctions target procurement of advanced military hardware, such as fast attack boats and unmanned aerial vehicles, and send a strong signal that the United States cannot and will not tolerate Iran’s provocative and destabilizing behavior. We will continue to target the IRGC and pressure Iran to cease its ballistic missile program and malign activities in the region."

Parties conducting business with Iran should remain attentive to further developments. Herbert Smith Freehills' New York office continues to monitor these issues.

Sudan Sanctions Expiration Review Time Extended

On July 11, the President issued an Executive Order that provides additional time to review the revocation of sanctions against Sudan. This Executive Order extends the review time set by an earlier Executive Order, issued in January by former President Obama. That January order provided for the revocation of certain Sudan sanctions on July 12, 2017. The new order extends the review time until October 12, 2017.

The January order cited Sudan's positive actions over the preceding six months, including a reduction in offensive military activity and cooperation with the United States on addressing regional conflicts and terrorism. In light of those developments, the order provided for the revocation of various sanctions against Sudan on July 12, and temporarily suspended all Sudan sanctions while the review is pending.

The recent July Executive Order provides additional time for the review, but did not re-impose suspended Sudan sanctions.  However, it has been reported that the Sudanese government has frozen its negotiation with the US government in light of the extension, which may impact the review negatively.  Parties conducting business or planning to conduct business with Sudan should consider the risk from a US sanctions re-imposition, and should use contractual protection for such circumstances.  

Herbert Smith Freehills' New York office continues to monitor developments in this area.