Iran

Sanctions against Iran have a long history: the US first sanctioned the Iranian government in 1979 by freezing $12bn of Iranian bank deposits, gold and other properties following the American Embassy hostage crisis. The US has maintained and enforced sanctions against Iran since that time, with the most recent major legislation being the Iranian Transactions and Sanctions Regulations of 2012.

In contrast, the EU has only relatively recently implemented sanctions against Iran, mainly in response to Iran’s nuclear weapons development programme. The major item of legislation prior to 2010 was Council Regulation (EC) No. 423/2007, which introduced restrictive measures concerning dual use goods, and imposed asset freezes on designated entities.

The sanctions programme was expanded significantly with the entry into force of Council Regulation (EU) No. 961/2010 in October 2010, which impacted on the oil and gas sector, (re)insurance, and introduced a far stricter asset freeze regime. Council Regulation (EU) No 359/2011 imposed an asset freeze regime persons responsible for human rights violations and prohibited the sale of equipment which might be used for internal repression. Council Regulation (EU) No. 267/2012 imposed a ban on the import, purchase or transport of Iranian crude oil, petroleum products and petrochemical products, and banned the trade of gold, precious metals and diamonds with Iranian public bodies and the central bank; it was amended in December 2012 by Council Regulation (EU) No. 1263/2012 to include a prohibition on the vast majority of financial transactions between the EU and Iranian financial sectors. There are now reporting requirements for transactions with Iranian entities using non-Iranian banking facilities.

On November 24, 2013, China, France, Germany, Russia, the United Kingdom and the United States (sometimes referred to as the P5+1) reached an initial understanding with Iran, outlined in a Joint Plan of Action ("JPOA"), that aimed to halt progress on Iran’s nuclear program. Following the implementation of the first stage of the JPOA on 20 January 2014 there has been a limited easing of the sanctions against Iran.  The key areas affected by the limited relief from the EU sanctions are crude oil and petroleum products, petrochemical products, gold and precious metals and an increase in the thresholds for notification and authorisation of transfers of funds.  The US relief is more limited applying only to non-US persons (with limited exceptions). The first stage of the JPOA had an initial term of 6 months, expiring on 20 July 2014, with the option for further extension on all parties' agreement. The provisions of the first stage of JPOA, including the limited sanctions relief contained therein, were initially extended for a further four months until 24 November 2014 and have since been extended until 30 June 2015.

Key areas

  • Oil
  • Arms embargo
  • Dual use items
  • Marine assistance restrictions
  • Financial transaction restrictions
  • Other financial restrictions including ban on (re)insurance of government and companies
  • Asset freeze and travel ban for designated entities

Financial notification requirements in place

While relief under the JPOA remains in place, under the EU sanctions regime all transactions equal to or above €10,000 must be notified to the relevant competent authorities prior to the transfer of funds to or from an Iranian person, entity or body taking place. Please note that authorisation thresholds differ depending on the nature of the proposed transaction. There are also additional restrictions that apply where a transaction is between an EU financial institution and an Iranian financial institution.

Useful links

General Sanctions Links

  • Foreign and Commonwealth Office    Foreign & Commonwealth Office and Export Control Organisation - arms embargoes and trade restrictions
  • HM Treasury – Sanctions Index
  • OFAC – Sanctions Index
  • United Nations Security Council