In March 2016, ZTE Corporation and ZTE Kangxun (collectively ZTE) were placed on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Entity List after corporate documents revealed alleged failure to comply with U.S. sanctions against Iran. While placement on the Entity List would ordinarily result in a ban on conducting business with the U.S., President Obama issued a Temporary General License (TGL) on March 24, 2016, which authorizes the export, reexport and transfer (in country) of items to ZTE. The TGL was implemented by amending the Export Administration Regulations (EAR) with the addition of Supplement No. 7 to part 744.
The Department of Treasury’s Office of Foreign Assets Control (“OFAC”) has taken two unrelated sanctions actions against Iran over the past several days:
SDN Designations in Response to Ballistic Missiles Tests
Effective February 3, 2017, OFAC imposed sanctions against 13 individuals and 12 entities with ties to Iran’s ballistic missile program. OFAC added these individuals and entities to its list of Specially Designated Nationals (the “SDN list”) freezing all of their assets held in the U.S. and prohibiting persons subject to U.S. jurisdiction from engaging in trade with the sanctioned individuals and entities. These sanctions also apply to non-U.S. persons on a secondary basis. In a press release, OFAC Acting Director John E. Smith stated “Iran’s continued support for terrorism and development of its ballistic missile program poses a threat to the region, to our partners worldwide, and to the United States” and also added “We will continue to actively apply all available tools, including financial sanctions, to address this behavior.”
The Department of Treasury’s Office of Foreign Assets Control (OFAC) has announced new rules, which will take effect December 23, 2016, amending the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). The revised rules expand the scope of medical devices and agricultural commodities that may be exported or re-exported to Iran without specific authorization, pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).
On December 15, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) revised their Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA), clarifying procedures related to the potential “snapback” of the JCPOA and the subsequent re-imposition of sanctions.
On July 14, 2015, following nearly twenty months of talks, international negotiators from seven countries (the United States, the United Kingdom, China, France, Germany, Russia, and Iran) announced that they reached a landmark nuclear agreement to limit Iran’s nuclear program. While this is a historic agreement long in the making, it is important to note that there is no immediate lifting of sanctions against Iran. U.S. government officials have indicated that for now it is status quo for those focused on sanctions compliance.
On June 30, the United States, together with its partners in the P5+1, the EU and Iran, agreed to a seven day extension of the Joint Plan of Action (JPOA), which currently halts progress on Iran’s nuclear program in order to continue negotiations towards establishing a comprehensive and enduring solution. The initial agreement, reached in November 2013, stipulated that the P5+1 (comprised of the United States, the United Kingdom, France, China, Russia, and Germany) would implement narrow and targeted sanctions relief in return for Iran’s continued commitment to limit its nuclear program.