US President Donald Trump has announced that he will withdraw from the nuclear agreement with Iran – a highlight of the Obama administration.
Going against the advice of his European counterparts, Trump decided to reimpose economic sanctions that were waived as part of the original deal.
In response to Trump’s decision, Iran is preparing to restart its uranium enrichment programme.
Nelson Dong is a senior partner and head of national security at international law firm Dorsey & Whitney. He shares his views on how Trump’s decision will affect both US and non-US companies.
These sharp regulatory changes will certainly affect a range of U.S. and non-U.S. companies, particularly but not exclusively in the commercial aircraft industry and its supply chain, in banking and finance and in the energy sector. Certain of the changes will come into force on August 6 (including the end of the SLP and General License I), and the balance of the changes will be effective on November 4 (including the end of General License H).
On May 8, President Trump announced his clear and unequivocal decision to withdraw the United States from the 2015 Joint Cooperative Plan of Action (JCPOA) that had been negotiated with Iran by the United States, the United Kingdom, France, Russia, China and Germany (the so-called “P5+1,” meaning the five permanent members of the United Nations Security Council plus Germany).
The Office of Foreign Assets Control (OFAC) in the U.S. Department of the Treasury then released a statement and some FAQs that indicate the Administration will be revoking the Statement of Licensing Policy (SLP) that had earlier allowed OFAC to consider, on a case-by-case basis, licenses permitting U.S. or other producers to export commercial civilian aircraft and aircraft parts and components to Iran and two of the key general licenses issued under the JCPOA.
General License H had allowed the foreign subsidiaries of U.S. companies to do limited business with Iran if such business were conducted only with non-U.S. personnel and non-U.S. goods and services, and General License I had allowed U.S. companies to negotiate contingent contracts with persons in Iran for which those companies could then seek specific license approvals from OFAC.
In addition, U.S. Treasury Secretary Steve Mnuchin said on May 8 that, in line with President Trump’s decisions to withdraw from the JCPOA, OFAC would also revoke the OFAC specific licenses that had previously been issued to Boeing and Airbus in September and November 2016. Those 2016 OFAC licenses would have authorized the sale and delivery of 80 civilian passenger aircraft from Boeing and 100 civilian passenger aircraft from Airbus to various Iranian air carriers.