Iran nuclear program negotiations and sanctions

In April 2015, the US and EU announced the agreed framework for a Joint Comprehensive Plan of Action (the "JCPOA") regarding Iran's nuclear program. At the time of that announcement, the parties said that they intended to draft the final terms of the JCPOA by June 30, 2015. The parties have now announced that negotiations will continue for a further seven days.

We set out further details below but it is important to note that no steps have yet been taken by the UN, US or EU to introduce sanctions relief and so all previous sanctions remain in force.

EU announcement

The EU announced that it has prolonged the existing suspension of sanctions against Iran until July 7 "to allow more time for the ongoing negotiations to reach a long term solution to the Iranian nuclear issue".

The various suspensions of sanctions introduced in response to the Joint Plan of Action agreed with Iran in November 2013 were due to expire on June 30, 2015 (see Council Decision 2010/413/CFSP (as amended)). At the time of preparing this briefing, no amending Decision had been published in the Official Journal to extend this suspension; however, we expect a new Decision to be published shortly, confirming that the previously suspended measures will remain suspended until July 7.

Please see our previous briefing for details of the EU sanctions that are currently suspended.

US position

OFAC has published guidance confirming that its previous temporary sanctions relief has been extended to apply until 7 July and that all specific licenses with an expiration date of June 30 are authorized to remain in effect until this date.

In our previous briefing on the JCPOA, we referred to the bipartisan bill providing for Congress to review the terms of any agreement with Iran. The bill was passed in May 2015 as the Iran Nuclear Agreement Review Act of 2015 (the "Act"). The Act requires the President to transmit to Congress the details of any agreement with Iran; Congress will then have 30 days in which to review the agreement (the "Review Period"). During the Review Period, the President may not suspend, reduce, provide relief from, or otherwise limit the application of any sanctions imposed by Congress against Iran. If Congress passes a joint resolution of disapproval of the agreement during the Review Period, the restrictions on sanctions relief remain in place for an additional 12 days.

However, the Review Period is extended to 60 days if the agreement is provided to Congress between July 10 and September 7. We therefore expect that US participants in the ongoing negotiations will be keen to avoid a further extension giving rise to the risk that the Review Period is extended.

For further information, please contact Susannah Cogman, Partner, Scott Balber, Partner, Jonathan Cross, Of Counsel, Elizabeth Head, Senior Associate or your usual Herbert Smith Freehills contact.