UK Foreign Secretary Boris Johnson, in response to a letter from the House of Commons Foreign Affairs Committee, has confirmed that after Brexit the UK will remain part of the JCPOA and continue to comply with it, and that the UK will:
- work closely with the EU to maintain Iran’s compliance and sanctions relief.
- carry over all existing EU sanctions regimes on Iran.
- “engage” at national and EU level to ensure that “business gets as much clarity and guidance as possible” on the EU blocking regulation.
- call on the US to “preserve the gains” the JCPOA has brought and to avoid actions “that would prevent the remaining parties from meeting their commitments to upholding the deal”.
The German government announced last week that it has set up an “Iran contact point” to advise companies on their business dealings with Iran, given President Trump’s recent decision to reimpose US sanctions on Iran. The government also stated that EU sanctions relief for Iran, one of the terms under the JCPOA, remained in place, and that government-backed export credit guarantees were still available.
Following the US decision to withdraw from the JCPOA and to reimpose sanctions on Iran, Nike has decided that it will not be providing sports equipment to the Iranian football team for the 2018 World Cup. Nike’s statement says “US sanctions mean that, as a US company, Nike cannot supply shoes to players in the Iranian National team at this time.”
The E3 have signed a joint letter addressed to US Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo saying that they regret the US decision to withdraw from the JCPOA and request EU and UK exemptions from the US secondary sanctions, namely:
1. Exemptions from US sanctions for EU companies that initiated or concluded their contracts after JCPOA Implementation Day (16 January 2016);
2. Exemptions for key sectors, such as energy, automotive, civil aviation and infrastructure;
3. Confirmation that secondary sanctions will not apply to the areas of pharmaceuticals and healthcare;
4. Exemptions to enable banking and financing channels with Iran to be maintained;
5. Extension and adaptation of the winding-down periods.
6. They also ask the US to prolong General Licence H (foreign subsidiaries of US companies to be able to continue business); and to reaffirm the exemption for Embassy bank accounts.
The letter is signed by Federica Mogherini (EU High Representative), Philip Hammond (UK Chancellor), Boris Johnson (UK Foreign Secretary), Bruno Le Maire (French Minister of Finance), Jean-Yves Le Drian (French Minister for Europe and Foreign Affairs), Olaf Scholz (German Minister of Finance and Vice Chancellor), Heiko Maas (German Minister of Foreign Affairs), and Peter Altmaier (German Minister for Economic Affairs and Energy).
The European Commission announced on 18 May 2018 that it would amend its Blocking Regulation to protect EU companies from the extraterritorial effects of US Iran sanctions reimposed after the US withdrew from the JCPOA (previous blog). This week (6 June 2018) the Commission published an amended version of the Blocking Regulation (see Regulation here and Annex here) (Council Regulation (EC) No 2271/96 of 22 November 1996) and the European Investment Bank (EIB) External Lending Mandate.
The explanatory memorandum explains that “some of the measures which the United States will reactivate against Iran have extra-territorial effects and… violate international law and impede the attainment of the Union’s objectives”. The EU will therefore amend the Regulation that previously related to the US’s Cuba and Libya measures to include Iran. The update to the EIB’s External Lending Mandate would make Iran eligible for investment activities by the EIB.
The European Parliament and the Council will now have 2 months for any objections to these measures before they enter into force. If there are none, the updated Blocking regulation will enter into force at the latest at the beginning of August 2018, by the time the first set of re-imposed US sanctions will take effect.
The EU has updated a number of entries appearing on its Iran sanctions list in relation to the non-proliferation of weapons of mass destruction (WMD). Although the EU lifted all of its Iran nuclear sanctions under the JCPOA, these proliferation-related measures and restrictions remained in place. See Council Decision (CFSP) 2018/833 and Council Implementing Regulation (EU) 2018/827. UK OFSI Notice here.
Advocate General Mengozzi has published his opinion stating that the European Court of Justice should in his view uphold the General Court’s judgment of 2 June 2016 (see previous blog) rejecting Bank Mellat’s challenge in case T-160/13 to the non-targeted parts of the EU’s former Iran sanctions regime. Link to his (non-binding) opinion is here.
Bank Mellat was seeking to challenge not the targeted asset freeze on it (on which it succeeded – see previous blog), but the wider restrictions on Iranian banks that had been imposed by EU sanctions pre-JCPOA. The General Court had held some of the application inadmissible on jurisdictional grounds. Other aspects were admissible but rejected on the grounds that the restrictions had a valid legal basis and were proportionate.
The Advocate General’s view is that the bank’s appeal is inadmissible because the sanctions under challenge were lifted by the JCPOA on 16 January 2016. In any event he considers that all the grounds of appeal against the General Court judgment should be dismissed, save that it erred in not having considered the effects of the JCPOA. The next step will be the final judgment of the Court of Justice.
Yesterday, OFAC designated, pursuant to Executive Order (EO) 13553, 2 Iranian entities – Ansar-e Hizballah and Evin Prison – for “committing serious human rights abuses on behalf of the Government of Iran”, and 3 “leaders” of Ansar-e Hizballah (Abdolhamid Mohtasham, Hossein Allahkaram, and Hamid Ostad).
OFAC also designated the Iran-based Hanista Programing Group, pursuant to EO 13606, for operating information or communications technology that “facilitates monitoring or tracking that could assist or enable serious human rights abuses by or on behalf of the Government of Iran”.
OFAC also designated, pursuant to EO 13628, 2 people Abolhassan Firouzabadi and Abdolsamad Khoramabadi, for “engaging in censorship activities that prohibit, limit, or penalize the exercise of freedom of expression or assembly by citizens of Iran”, and Abdulali Ali-Asgari (Director General of Islamic Republic of Iran Broadcasting (IRIB)), for “acting for or on behalf of an entity engaged in such censorship activities”.
See OFAC Notice and Treasury press release.