Sanctions That Remained, Sanctions That Were Lifted

In July 2015, Iran and six global powers reached an agreement on Iran's nuclear program, which many described as 'historic.' This agreement was implemented after Iran completed its commitments in January of the following year. In exchange for the limitations that Iran imposed on its nuclear program, some of the international sanctions that had been imposed on Iran due to its nuclear program were lifted. However, from the very first day of the agreement's implementation, many questions arose regarding the scope of the lifted sanctions, remaining sanctions, the possibility of investment in Iran, and Iranians' exchanges with the international community. If you are among those who want to know what opportunities and challenges lie ahead for economic activities, or if you want to have financial exchanges with a bank in Europe, or if you are an Iranian American looking to invest in Iran, we invite you to find answers to your questions in this area. What sanctions were lifted by the nuclear agreement or JCPOA? Which EU sanctions were lifted with the implementation of the JCPOA? Which US sanctions were lifted as a result of the JCPOA? What is the difference between primary and secondary US sanctions? Were any non-nuclear-related sanctions lifted by the US after the JCPOA? What happened to the UN Security Council sanctions? In total, how much of Iran's blocked assets were freed? Where did these assets come from? Does UN Security Council Resolution 2231 also impose sanctions on Iran? Now, what sanctions remain in place? What are the most challenging EU sanctions for Iran? And in the US? Which sanctions still remain? Why has Iran's connection to the global economy not returned to normal conditions despite the lifting of financial restrictions? Under what conditions will these issues, including the psychological atmosphere, be removed from Iran's economy? The report by Hana Kavyani on the Iran nuclear program agreement from Radio Farda. The list of lifted sanctions can be divided into three categories: EU sanctions, UN Security Council sanctions, and US sanctions. These sanctions were imposed due to concerns over Iran's nuclear program. These sanctions were lifted by the order of the US President and the issuance of related exemption documents, a new resolution in the EU, and UN Security Council Resolution 2231. However, since the complex network of sanctions has specific conditions and details, further information will be provided separately. With the implementation of the JCPOA, which EU sanctions were lifted? With the implementation of the nuclear agreement, the EU lifted sanctions in the following areas: finance and banking and insurance, oil and gas and petrochemicals, shipping and shipbuilding and transportation, gold and other precious metals, currency, nuclear technology-related matters, metals, software, and weapons. At the same time, Iranian banks and financial institutions, including the Central Bank, individuals and entities related to Iran's oil and gas industry, and individuals and entities under nuclear-related sanctions were removed from the EU sanctions list. One of the most important lifted restrictions was the reinstatement of access to SWIFT for Iranian banks, which had been banned since 2012. The list of lifted US sanctions is almost the same as that of the EU; however, it should also include the lifting of sanctions from the automotive industry or, for example, allowing Iranian nationals to study in US universities in fields related to nuclear energy and nuclear engineering. The lifting of these sanctions, which were mostly secondary sanctions related to the nuclear program, pertains to non-American individuals and entities. Additionally, as part of the agreement, over 400 names were removed from the list of individuals and entities under US sanctions, meaning that trade and relations of non-American individuals with these over 400 individuals and entities are no longer subject to sanctions. What is the difference between primary and secondary US sanctions? Primary sanctions were imposed following events such as the hostage crisis at the US embassy and the attack on a US military base in Lebanon, imposing strict limitations on American individuals and entities. Primary US sanctions, which have over two decades of history, directly target several groups. These sanctions focus on the activities of American individuals or non-American entities that are owned or controlled by Americans. However, Iranians who have permanent residency in the US (green card) or American passports are also considered 'American persons.' Under primary sanctions, if a non-American individual causes an American citizen to violate sanctions, that non-American individual is also sanctioned. Primary sanctions also include the transfer of goods and technology to Iran. The main part of primary sanctions, with a few exceptions that will be addressed later, remains in place after the agreement. However, secondary US sanctions, which have been imposed in recent years and have often been coordinated with the EU, were designed to prevent non-American individuals or entities from engaging in various sectors of the Iranian economy, including energy, automotive, and shipbuilding, most of which have now been lifted. Were any non-nuclear-related sanctions lifted by the US after the JCPOA? Yes! One of the oldest prohibitions that the US imposed on Iran, from the primary sanctions, related to the export, sale, leasing, and transfer of passenger aircraft and related services, which the US government lifted with the implementation of the JCPOA. Additionally, permits were granted for the import of Iranian carpets and food products, including pistachios, saffron, and caviar. A permit was also issued allowing companies that are not based in the US but have American managers or owners to engage in trade with Iran. This exemption includes American entities that have affiliated companies outside the US. This means that an affiliated company operating outside the US is not subject to primary US sanctions under specific conditions. However, this exemption does not apply to the parent company or its direct branch. What happened to the UN Security Council sanctions? A few days after the nuclear agreement was reached, the UN Security Council adopted Resolution 2231. This resolution was implemented on the same day the agreement was executed in January of the previous year. This new resolution revoked seven previous Security Council resolutions regarding Iran's nuclear program. These seven resolutions had provided the legal groundwork for imposing sanctions on Iran by various countries. In total, how much of Iran's blocked assets were freed? The initial figure for Iran's blocked assets was estimated to be between 30 to 100 billion dollars, although both Iranian and American officials have stated this figure to be around 50 billion dollars. In one of the latest statements, US Secretary of State John Kerry said in April that Iran had only obtained three billion dollars of these assets. The head of Iran's Central Bank also stated that the country cannot utilize these assets as it wishes due to problems. Where did these assets come from? Iran's blocked assets are related to its revenue from oil sales to countries such as South Korea, Japan, China, and India. Although Iran was allowed to sell oil up to one million barrels during the sanctions, due to banking sanctions, the revenue from these sales remained in the banks of these countries. Does UN Security Council Resolution 2231 also impose sanctions on Iran? Yes. According to the resolution, the export and import of weapons still face a five-year ban, and Tehran has been asked not to engage in any ballistic missile activities capable of carrying nuclear weapons for eight years after the 'day of acceptance of the agreement' or until the final report of the agency regarding the peaceful nature of Iran's nuclear program is published. Iran, on the other hand, claims that its ballistic missile program is part of the country's defense system and is not designed for carrying nuclear weapons. Meanwhile, the US has recently added new individuals and entities to its list of sanctions against Iran. However, the Security Council did not impose sanctions on Iran after its recent missile test on March 8, 2016. Now, what sanctions remain in place? Although the JCPOA led to the lifting of sanctions related to Iran's nuclear program, significant sanctions remain in place from various countries related to Iran's non-nuclear activities. Dozens of individuals and entities remain on the sanctions lists of the US and the EU. These sanctions, which include areas such as human rights and support for terrorism, prevent Iran from fully integrating into the international economy. What are the most challenging EU sanctions for Iran? The EU still has dozens of individuals and entities on its sanctions list. Some of these sanctions are related to what is termed 'human rights violations in Iran,' while others relate to what is called 'Iran's support for terrorism.' Meanwhile, one of the most significant groups of sanctions from the perspective of economic relations and trade exchanges is related to companies affiliated with the Islamic Revolutionary Guard Corps, which remain on the EU sanctions list. How about in the US? Which sanctions still remain? The sanctions that remain in the US fall into three groups. The primary US sanctions impose strict limitations on American individuals and entities or non-American individuals and entities within the country. This includes prohibiting financial communications with Iran, Iran's use of the US financial system or the dollar in its transactions. However, the US Treasury Department has issued several general licenses that allow American citizens to conduct certain transactions with Iran, including food and agricultural products, medicine, and medical equipment. Medical equipment has never been subject to sanctions. The second group of remaining sanctions includes so-called targeted sanctions related to terrorism, human rights, and Iran's role in Syria and Yemen. The third group consists of some secondary sanctions against non-American individuals and entities that engage in transactions with individuals still on the US sanctions list. Why has Iran's connection to the global economy not returned to normal conditions despite the lifting of financial restrictions? Although sanctions related to Iran's nuclear program, including financial and banking sanctions, have been lifted, many sanctions remain in place, one of which is Iran's prohibition from using the US dollar in its international trade transactions. Meanwhile, although nuclear-related sanctions have been lifted, one of the issues that has been cited in the months following the agreement as a strength or weakness of the JCPOA is the issue of 'snapback' or the re-imposition of sanctions. Although this term is not directly mentioned in the text of the agreement, it is stated that if Iran does not adhere to its commitments, sanctions will be re-imposed. The issue of the re-imposition of sanctions, which has its own legal complexities and is conditional upon passing through the legal process in the UN Security Council, along with the remaining sanctions, forms part of the psychological atmosphere prevailing over financial institutions and international companies that hesitate to revive trade relations with Iran. Improving this psychological atmosphere is a prerequisite for normalizing trade relations. Mehrdad Emadi, an economic consultant residing in London, believes that 'in the labor market, investment, and trade, the prerequisite for doing business is a sense of calm. Calm means that no bad and unexpected event will happen, and this psychological atmosphere creates economic security. And in the case of Iran, this security has not yet been established.' To these issues, the US election campaign should also be added, where candidates make contradictory statements about the nuclear agreement, including Ted Cruz, a Republican candidate who has stated that he will tear up this agreement on his first day in office. Under what conditions will these problems, including the psychological atmosphere, be removed from Iran's economy? Iranian officials are asking the US government to take more active steps to improve this psychological atmosphere. Of course, the US Treasury has repeatedly commented on the lifting of sanctions and US laws in this regard and has issued statements. Analysts in this field believe that it is still too early for Iran to achieve its goals regarding the lifting of sanctions. Richard Nephew, who was once the chief US negotiator on sanctions against Iran, believes that expectations for the opening of Iran for trade were too high, and those knowledgeable in this field knew that improving trade conditions with Iran would be a lengthy process. Mr. Nephew also believes that 'only Iran can convince banks that this risk is worth it and that there are benefits they can gain from trading with Iran. Over time, this will happen. I think Iran has significantly damaged its position in this regard. Any statement made by the Treasury has been overshadowed by Iran's missile tests or hostile statements against Saudi Arabia.