Introduction
The United States, along with the EU, the P5+1 partners and Iran, have agreed for a second time to extend the Joint Plan of Action (“JPOA”) for an additional seven months until June 30, 2015.
Additional Seven-Month Extension of the Temporary Agreement
On November 24, 2013, the United States, along with the EU, the P5+1 partners and Iran entered into the JPOA, and agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a six-month period. In July 2014, a few days prior to the deadline, the parties agreed to extend the JPOA to November 24, 2014.
On November 24, 2014, unable to reach an agreement, the parties declared a further extension of the JPOA target date to June 30, 2015. In describing the status of the negotiations, U.S. Secretary of State John Kerry expressed that “real and substantial progress” had been made although “some significant points of disagreement” remain.
Negotiators are hopeful that a substantive agreement will be reached by March 2015 but added that they would need until the end of June 2015 to finalize the technical details. Negotiations are scheduled to resume next month although it is currently unclear where such talks will take place.
Under the extension, all parties have agreed to uphold their commitments under the JPOA. Iran will continue to receive approximately $700 million a month from Iranian oil revenues frozen in overseas accounts as part of the economic relief agreed to under the JPOA.
Consequences of the Extension
Under the latest extension, non-U.S. persons may engage with Iran under the circumstances set forth in the JPOA for an additional seven months. It is important to acknowledge that the JPOA relates only to activities that are initiated and completed within the lifespan of the JPOA agreement, now ending June 30, 2015.
As we explained in our previous client alerts, any conduct or transaction that is undertaken before or after such date, regardless of whether the activity is undertaken pursuant to a contract entered into during the JPOA period, may be sanctionable. The U.S. retains the authority to impose sanctions for activities that are materially inconsistent with the sanctions relief described in the JPOA. Any transaction done pursuant to the JPOA must be carried out with caution as if at any time Iran fails to fulfill its obligations under the JPOA, the U.S. retains the power to revoke all relief, potentially making certain transactions previously allowed under the temporary agreement sanctionable. Sanctions with respect to U.S. persons remain unchanged.
If you have any questions or concerns about U.S. sanctions against Iran, please contact Bruce G. Paulsen (212-574-1533)or Michael W. Broz (212-574-1272) at Seward & Kissel.
