Parameters of Iran Sanctions Relief Announced

Parameters of Iran Sanctions Relief Announced

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On April 2, 2015, the United States and its P5+1 negotiating partners, together with Iran, announced the key parameters of the Joint Comprehensive Plan of Action (JCPOA) regarding Iran’s nuclear program. Further details are likely to emerge in the coming weeks as the parties aim to negotiate the full agreement and its technical annexes by June 30, 2015. Among these are the specific scope and timing of any sanctions relief for Iran, which in the United States will initially be based solely on Executive Branch action, although Congress may soon consider legislation that would allow it to review a final agreement for 60 days and prevent the Executive Branch from lifting sanctions during that period.

Future Iran sanctions relief will be incremental, focusing on a rolling back of “nuclear-related” sanctions against Iran but leaving in place numerous other categories of restrictions. Initial relief will apparently focus on suspending certain so-called “secondary” sanctions against non-US firms. And by leaving in place the statutory architecture for Iran sanctions, the Obama Administration (or future administrations) could elect to quickly re-impose sanctions in the event of Iranian non-compliance with the JCPOA. 

In the meantime, as the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has underscored in recent guidance, the JCPOA does not “immediately relieve, suspend or terminate any sanctions on Iran,” and Iran sanctions will “continue to be vigorously enforced.”1 These factors suggest that Iran sanctions will lack certainty in scope and application during the months ahead and will continue to present an area of significant compliance risk to US and foreign businesses.   

Key Elements of the JCPOA

According to the United States, there will be no sanctions relief until Iran “verifiably abides by its commitments,” presumably after a final agreement is reached in June 2015.2 Key benchmarks for sanctions relief include the following:

  • US and EU nuclear-related sanctions will be suspended after the International Atomic Energy Agency verifies that Iran has taken all of its key nuclear-related steps. If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place.
  • The “architecture” of US nuclear-related sanctions on Iran will be retained for much of the duration of the deal. 
  • All past UN Security Council resolutions addressing the Iran nuclear issue will be simultaneously lifted with Iran's completion of nuclear-related actions addressing all key concerns.3
  • Core provisions in the UN Security Council resolutions—those that deal with transfers of sensitive technologies and activities—will be re-established by a new UN Security Council resolution that will endorse the JCPOA and urge its full implementation. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.
  • The JCPOA will include a dispute resolution process designed to resolve disagreements about the performance of JCPOA commitments.
  • If an issue of significant non-performance cannot be resolved through that process, then all previous UN sanctions could be re-imposed.
  • US sanctions on Iran for terrorism, human rights abuses and ballistic missiles will remain in place under the deal.
    If the previous round of Iran sanctions relief from January 2014 (the so-called Joint Plan of Action (JPOA), which we previously summarized) serves as a guide for JCPOA relief, then the initial stages of further relief may consist of a suspension of the “nuclear-related” sanctions applicable to non-US firms but leave most restrictions for US firms in place. This approach would be consistent with the European Union’s description of sanctions relief, which suggests that the United States would suspend nuclear-related “secondary economic and financial sanctions.”4 In the event that secondary sanctions are lifted against non-US companies and foreign financial institutions with respect to Iran, it remains unclear whether associated dollar clearing through US financial institutions would be permitted.

Under the 2014 JPOA, sanctions relief targeted the petrochemical, automotive, precious metals, civil aviation, crude oil export and humanitarian sectors, and these could potentially be sectors for further relief. Although the United States will maintain several categories of sanctions tied to other non-nuclear foreign policy concerns, EU sanctions against Iran are linked principally to its nuclear program and could therefore be more comprehensively lifted. 

Once the US and its partners decide on the specific terms of sanctions relief in the event of a final agreement, new licenses, regulations and policies could be established relatively quickly: the Executive Branch was able to implement the 2014 Iran JPOA sanctions relief approximately two months after it was first announced and to promulgate regulations implementing the 2015 Cuba sanctions relief in around four weeks.    

Given that the JCPOA parameters suggest that the “architecture” of US sanctions against Iran will be retained, the Obama Administration may decide—as it did in 2014—to use a combination of waiver authorities, statements of licensing policy and enforcement policy discretion to suspend certain sanctions but not to request Congressional repeal of various Iran sanctions statutes for much of the deal’s duration.

Potential Action in Congress

Congressional leaders have indicated that they will closely scrutinize the JCPOA and may soon consider legislation to assert Congress’ own role in the Iran sanctions program. On April 14, the Senate Foreign Relations Committee is scheduled to vote on a bill that would assert Congress’ right to formally review the final JCPOA for 60 days, during which period Congress would require that the President not waive or suspend the application of statutory sanctions against Iran.5 Although separate pending legislation would reverse sanctions relief and further expand sanctions under certain circumstances, its sponsors have recently suggested that a vote will be postponed until this summer.

1US Department of the Treasury, Guidance Relating to the April 2, 2015 Announcement of Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran’s Nuclear Program, April 3, 2015, accessed at
2 US Department of State, Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, April 2, 2015, accessed at
3 The US Department of State has indicated that these are JCPOA benchmarks regarding uranium enrichment levels, the Iranian nuclear facilities at Fordow and Arak, the IAEA’s concerns regarding Possible Military Dimensions, and Iran’s provision of transparency to international inspectors.
4See Joint Statement by EU High Representative Federica Mogherini and Iranian Foreign Minister Javad Zarif, April 2, 2015, accessed at
5See S.615, the Iran Nuclear Agreement Review Act of 2015.