Update on what the easing of sanctions in Iran means for international business which, if all goes well, will provide investment opportunities in oil as well as areas such as financial services, aviation, and infrastructure development, to name but a few

1. 22 October 2015
Zia Ullah
Partner, Eversheds LLP
SHINE Webinar –
Iran and the JCPOA
Sharing expertise

2. Eversheds LLP | 28/10/2015 |
1979 US – Embassy crisis
1995 US – Clinton bans US companies investing in oil sector
1996 US – First set of extraterritorial sanctions
2001 US/UN/EU
2006 UN – UNSCR relating to nuclear materials
2007 US/UN – Further UNSCR and tougher US regime
2008 US/EU – U-turn exemption ends
2010 UN/US/EU – secondary sanctions extended
2011 US – further secondary sanctions
2012 US/EU – other sectors targeted
2013 US/EU/P5+1 – first set of relaxations
2014 P5+1 – extension
2015 P5+1 – finalised agreement of plan
Historical basis of Iranian sanctions
SHINE Webinar – Iran and the JCPOA

3. Eversheds LLP | 28/10/2015 |
International sanctions: The UK Regime
SHINE Webinar – Iran and the JCPOA
Sources Targets Impact Obligations Penalties
• UNSCR
• EU regs
• UK regs
• CTA 2008
• TFA 2010
• Individuals:
• assets
• travel
• Entities:
• assets
• Sectors:
• oil and gas
• precious
metals
• Governments
• UK citizens
• UK
incorporated
bodies
• Extraterritorial
effect
• Freeze funds
• No economic
resources
(directly/indir
ectly)
• No
circumvention
• Individuals:
• imprisonment
and/or
unlimited fine
• Corporate
entity:
• unlimited fine

4. Eversheds LLP | 28/10/2015 |
International sanctions: The US Regime
SHINE Webinar – Iran and the JCPOA
Sources Targets Impact Obligations Penalties
• UNSCR
• IEEPA
• CFR
• Executive
Orders
• TWEA
• CISADA
• NDAA
• ITRSHA
• Jurisdictions
• Individuals:
• assets
• travel
• Entities:
• assets
• Sectors:
• oil and gas
• precious
metals
• Governments
• US citizens
• US
incorporated
bodies
• USD
transactions
• Extraterritorial
effect
• Freeze/Block
• Report
• Notify
transgressions
• Information
requests
• NB “owned or
controlled
50%
aggregate
rule
• Civil: $250k
(or x2 gain)
per unlawful
act
• Criminal: $1m
fine (x2 gain)
per conviction
• Individual 20
years

5. Eversheds LLP | 28/10/2015 |
The JCPOA
SHINE Webinar – Iran and the JCPOA
− Joint Plan of Action agreed in 2013 and implemented in January 2014.
− On 14 July 2015 Iran and the P5+1 (China, France, Russia, UK, USA +
Germany) agreed on the Joint Comprehensive Plan Of Action.
− It will provide Iran with further phased sanction relief once it has been
verified that certain commitments have been met.
− Most EU sanctions will be lifted outright after the IAEA has verified
that Iran has taken the agreed steps.
− UNSC nuclear-related sanctions and US secondary sanctions will
simultaneously be suspended but those sanctions will be retained for
the remainder of the deal and may be re-applied immediately in the
event of non-performance, the “snap-back” mechanism.
− US primary sanctions on Iran will remain in place.

6. Eversheds LLP | 28/10/2015 |
The JCPOA
SHINE Webinar – Iran and the JCPOA
− Iran’s compliance is required to be verified after 8 years and again
after 10 years, depending on the specific condition, in order for
sanctions relief to be maintained and for sanctions finally to be
terminated
− Sanctions relief will begin on “Implementation Day”, as yet undecided
– and estimates vary widely, between 3 and 12 months away
− US congress reviewed the terms of JCPOA in September 2015 but due
to legislative procedures, failed to halt progress
− On 21 July 2015, the foreign ministry of Iran released a statement
expressing their willingness to implement the commitments detailed
in the plan

7. Eversheds LLP | 28/10/2015 |
The JCPOA
SHINE Webinar – Iran and the JCPOA
− On 7 August 2015, OFAC updated its guidance in relation to
conducting trade with Iran to reflect the progression of the JCPOA
− On 2 September 2015, President Obama received sufficient support
that his veto would not be overridden if Congress disapproved of
the JCPOA
− The Iranian parliament approved implementation of the JCPOA on 12
October 2015
− The UK Foreign Office has updated its guidance on doing business
with Iran.
− But note potential ‘Snap-back’ provisions……

8. Eversheds LLP | 28/10/2015 |
The future?
SHINE Webinar – Iran and the JCPOA
Divergence Convergence
Convergence Divergence

9. Eversheds LLP | 28/10/2015 | SHINE Webinar – Iran and the JCPOA
Enormous interest in Iran
− large trade delegations from major European countries
− sophisticated market
− opportunities in all sectors, e.g:
• oil and gas
• telecommunications
• automotive
• financial services
The future?

10. Eversheds LLP | 28/10/2015 | SHINE Webinar – Iran and the JCPOA
Until Implementation Day:
− EU sanctions remain in place, unchanged since relief
granted pursuant to JPOA
• Restrictions on transfers of funds to and from Iran and Iranian
persons and entities (SWIFT, authorisation and notification regimes)
• Prohibition on transfers of funds to designated persons and entities
• Prohibition on purchases of crude oil, natural gas
• Prohibition on providing finance to, or entering into JVs with, Iranian
entities in oil and gas sectors
− US primary and secondary sanctions remain in place
• Risks for EU entities undertaking transactions that are authorised
under EU sanctions
What can businesses do now?

11. Eversheds LLP | 28/10/2015 | SHINE Webinar – Iran and the JCPOA
Following Implementation Day:
− EU sanctions will mostly be lifted
• Freedom of transfer of funds to and from Iran and Iranian persons
and entities
• SWIFT services will be reinstated
• Certain persons and entities will remain designated
• Prohibitions on most types of business will be lifted
− US primary sanctions remain in place
• Persons and entities subject to U.S. jurisdiction will continue to be
prohibited from entering into Iran-related transactions
• This includes non-U.S. subsidiaries owned or controlled by U.S.
persons or entities – but possibility of licensing
− US secondary sanctions will be suspended
What can businesses do now?

12. Eversheds LLP | 28/10/2015 | SHINE Webinar – Iran and the JCPOA
“Snap-back”
− Provision in JCPOA and UNSCR:
• possibility of reinstatement of sanctions if Iran is held not to be
complying with JCPOA
• reinstated sanctions do not apply with retroactive effect to contracts
signed in the interim
• differing interpretations, but serious risk that such contracts could no
longer be performed legally
− Finally, what about the major clearers?
Risks and practical issues

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