Iran and the Western powers have agreed to agree again. On April 2, 2015, the so-called P5+1 (the United States, the UK, China, France, and Russia) along with the EU, have joined Iran in announcing that they have reached a set of broad “parameters” to be negotiated in detail between now and June 30, 2015, regarding Iran’s nuclear program.
One of the parameters is that Iran will receive sanctions relief if it verifiably abides by its commitments under the final agreement. Sanctions structures would remain in place such that sanctions would “snap back” immediately if Iran breaches its commitments.
Importantly, however, such sanctions relief will not be given until after a final agreement is reached (now targeted for June 30) and not until the IAEA has verified compliance by Iran.
Temporary limited sanctions relief remains in place: Since November 2014, the U.S. Government has temporarily suspended certain sanctions involving Iran’s purchase and sale of gold and other precious metals, Iran’s export of petrochemical products, Iran’s automotive industry, and certain other activities. Those temporary suspensions remain in place at this time.
U.S. Republican members of Congress have called the deal “alarming” Iranian hard-liners are equally alarmed. Those stakeholders may be expected to add to the difficulty the parties face in negotiating the final agreement.
As the next phase of negotiations gets underway, between now June 30, 2015, no new action on sanctions is being taken. If a final agreement is reached, there is a possibility that Iran sanctions may be phased out, but only if Iran verifiably fulfills all its obligations under the agreement. Moreover, since many aspects of the Iran sanctions are codified in US statutes, acts of Congress will be needed if sanctions are to be completely eliminated. And in any event, the principles announced April to leave room for certain areas of terrorism-related sanctions to remain in place indefinitely.
The breadth and complexity of the principles announced on April 2 powerfully illustrate the difficulty of the negotiations. The next phase will bear close watching. The Iran sanctions lawyers here at the Sheppard Mullin global trade law team will continue to monitor the details.