Reminder: Iran Sanctions Wind-Down Period Complete

November 9, 2018

As discussed in our August 2 Client Alert, effective May 8, 2018, the President announced his decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (“JCPOA”) and to re-impose the U.S. nuclear-related sanctions that were previously lifted, following two wind-down periods. The second wind-down period ended on November 4, 2018.

Wind-Down Periods

Pursuant to the President’s directive of May 8, 2018, the U.S. Departments of State and of the Treasury established wind-down periods for certain activities involving Iran: a 90-day wind-down period that ended on August 6, 2018 (which related to, for example, certain financial services and industrial activities) and a 180-day wind-down period that ended on November 4, 2018 (which related to, for example, certain shipping, banking, and insurance activities). Following November 4, 2018, all U.S. nuclear-related sanctions that had been lifted under the JCPOA have been re-imposed and are in full effect.

In addition, on Monday more than 700 persons were added to the Specially Designated Nationals (“SDN”) List, including persons that had been removed from the SDN List in connection with the JCPOA. Any U.S. persons doing business with those on the SDN List are subject to U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) sanctions.

OFAC previously advised that persons engaging in activity undertaken pursuant to the sanctions relief in the JCPOA should take necessary steps to wind down those activities prior to the above deadlines to avoid exposure to sanctions or potential enforcement action. As the wind-down period is now complete, clients should take note that certain sanctions have been re-imposed, including with respect to:

  • Iran’s port operators and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates;
  • Petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
  • 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 (NDAA);
  • 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 (CISADA);
  • Transactions by foreign corporations with Iranian entities in certain sectors (such as refined petroleum products and petroleum resources) over certain monetary thresholds that had been permitted under the JCPOA;
  • Provision of underwriting services, insurance, or reinsurance; and
  • Iran’s energy sector.

OFAC has published guidance stating that non-U.S. persons seeking payment after November 4, 2018 for goods or services provided during the wind-down period may still receive payment, provided that the goods or services were provided under a contract entered into before May 8, 2018 and as long as payment does not involve U.S. persons or the U.S. financial system. U.S. persons seeking such payments must apply for a specific license from OFAC, and must describe efforts to receive the payment before the wind-down period ended. Such requests will be considered on a case-by-case basis.

General License H

As discussed in our May 8 Client Alert, the President revoked general and specific licenses with respect to Iran, and activities under General License H, which authorized U.S.-owned or controlled foreign entities to engage in certain activities involving Iran, must have ceased no later than November 4, 2018.


With both wind-down periods now complete and sanctions re-imposed, both U.S. and foreign clients who do business with or contract with entities doing business with Iran should be particularly careful. We will continue to follow events in this space.

If you have any questions or concerns about U.S. sanctions against Iran, please contact Bruce G. Paulsen (212-574-1533), Andrew S. Jacobson (212-574-1477), Noah S. Czarny (212-574-1642), or Paul B. Koepp (212-574-1613) at Seward & Kissel.