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Developments in U.S. Policy Toward Iran: OFAC Announces Conclusion of the 90-Day Wind-Down Period and the Reimposition of Sanctions

On August 7, 2018, the Trump administration reimposed the first round of sanctions on Iran that had been lifted or waived in connection with the Joint Comprehensive Plan of Action (“JCPOA”). In conjunction with this action, on August 6 the President issued a new Executive Order, “Reimposing Certain Sanctions with Respect to Iran,” located here. The Office of Foreign Assets Control (“OFAC”) also issued a revised statement and updated its Frequently Asked Questions (“FAQ”) Regarding the Reimposition of Sanctions Pursuant to the May 8, 2018 National Security Presidential Memorandum Relating to the Joint Comprehensive Plan of Action (JCPOA), located here. August 6 was the last day of the 90-day wind-down period for these sanctions. 

Among other issues, the revised and updated FAQ specifically address when and whether U.S. and non-U.S. persons can receive payments after the 90-day wind-down period, as discussed in more detail below.

Sanctions Snapped Back as of August 7

As discussed in our previous briefing, the following sanctions have snapped back as of August 7:

  • Sanctions on the purchase or acquisition of U.S. dollar banknotes by the Government of Iran;
  • Sanctions on Iran’s trade in gold or precious metals;
  • Sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite, raw or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
  • Sanctions on significant transactions related to the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
  • Sanctions on the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
  • Sanctions on Iran’s automotive sector.

In addition, activities previously allowed pursuant to the following licenses are now subject to OFAC enforcement actions:

  • The permissive Statement of Licensing Policy (SLP) for export and re-export of passenger aircraft and related parts and services to Iran, as well as the related General License I, authorizing contingent contracts for such exports.
  • The general license that authorized the import of Iranian-origin carpets and foodstuffs.

Outstanding Payments for U.S. persons or U.S.-Owned or -Controlled Foreign Entities

Of particular importance is the new FAQ 2.5, which states that U.S. persons and U.S.-owned or ‑controlled foreign entities cannot receive payments after August 6, 2018, for activities conducted pursuant to the wind-down authorizations that ended on August 6 and pursuant to a written contract or agreement entered into prior to May 8, 2018, unless that person or entity has received specific authorization from OFAC. OFAC states that it will evaluate such requests for authorization on a case-by-case basis, and that all requests should include sufficient details, including whether the relevant transaction complied with U.S. sanctions in effect at the time of the transaction, whether the activities were performed under a written contract or agreement entered into prior to May 8, 2018, and why the applicant could not receive payment prior to the end of the wind-down period.

Outstanding Payments for Non-U.S., Non-Iranian Persons

As explained in the earlier version of the FAQ, if a non-U.S., non-Iranian person is owed payment after the conclusion of the wind-down period on August 6, 2018, for goods or services fully provided or delivered to an Iranian counterparty prior to August 6, 2018, pursuant to a written contract or written agreement entered into prior to May 8, 2018, and such activities were consistent with U.S. sanctions in effect at the time of delivery or provision, the non-U.S., non-Iranian person can receive payment for those goods or services according to the terms of the written contract or written agreement. The same exception applies to a non-U.S., non-Iranian person who is owed repayment after August 6, 2018, for loans or credits extended to an Iranian counterparty prior to the end of the 90-day wind-down period, provided that such loans or credits were extended pursuant to a written contract or written agreement entered into prior to May 8, 2018, and such activities were consistent with U.S. sanctions in effect at the time the loans or credits were extended. Such payments must be consistent with U.S. sanctions, however, including that payments cannot involve U.S. persons or the U.S. financial system.

The revised FAQ explains that OFAC looks to the relevant industry standard to determine whether goods or services are considered “fully provided or delivered” prior to the expiration of the wind-down period. 

Authorization Not Affected by the Reimposed Sanctions

As discussed in our previous briefing, several authorizations and general licenses will remain in effect as they are unrelated to the JCPOA. These include general licenses related to the export of medical devices, medicine, and agricultural commodities.

Next Steps

On November 5, 2018, the administration will reimpose the remaining sanctions that were lifted or waived in conjunction with the JCPOA, following the conclusion of the 180-day wind-down period on November 4.  All activities conducted under now-revoked General License H will also be subject to OFAC enforcement measures starting on November 5.  For more information on these activities, please see our previous briefing.


U.S. businesses and their foreign subsidiaries should carefully review their activities that currently, or potentially, involve Iran, and continue the appropriate wind down of these activities. As the current administration continues to re-implement U.S. sanctions against Iran, it is important for U.S. businesses with subsidiaries or operations outside of the U.S. to continue to monitor any changes to the sanctions.  The full extent of the sanctions that the U.S. plans to reimpose against Iran is yet unknown, so businesses should prepare for the possibility that new restrictions may be added.

If you have questions as you address these complex matters, we recommend seeking the guidance of counsel.  Please contact any of the attorneys listed below or your usual Winston & Strawn LLP contact for assistance.