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Key Update on Iran Sanctions Webinar
 

Key Update on Iran Sanctions Webinar

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  • This needs an updated map for all of Dentons (Canada and Europe) with offices, associate offices and facilities in purple and the associated firms in black. Everything should be updated – some of the Africa associate countries have changes so please be sure to make current.

Key Update on Iran Sanctions Webinar Key Update on Iran Sanctions Webinar Presentation Transcript

  • Dentons US LLP Unpacking the JPA Sanctions Compliance from the Inside Out for Global Companies Webinar February 5, 2014 Michael Zolandz, Partner, Dentons US LLP Peter Feldman, Managing Associate, Dentons US LLP Inna Tsimerman, Chief Privacy & International Trade Counsel, Marsh & McLennan Companies, Inc.
  • Overview • Context for the JPA (or "JPOA") • Key Sectors of Relief • "Associated Services" – The Challenges of Compliance for the Insurance Industry • Outlook • Questions and Answers February 5, 2014 Dentons US LLP 2
  • Context for the JPA • Longstanding concern about Iran's nuclear program • Framework of international sanctions nuclear, terrorism, human rights • Rouhani Government • US, China, France, Russia, UK and Germany (P5+1) negotiations • Groundswell of support in US Congress for new expansion of US sanctions February 5, 2014 Dentons US LLP 3
  • Context for the JPA Interim agreement announced on November 23, 2013 • First part of a two-part "deal" intended to establish framework for negotiating comprehensive accord • Iran agrees to suspend parts of its nuclear program and permit increased inspections and monitoring of its nuclear facilities • In exchange, the P5+1 agreed to provide targeted sanctions relief to certain sectors February 5, 2014 Dentons US LLP "limited, temporary, targeted and reversible relief"" • Limited relief, which does not affect the vast majority of existing sanctions • Temporary in duration -- 6 months, but renewable • Targeted to certain sectors • Contingent upon Iranian performance; can be revoked or reversed by P5+1 without advance notice 4
  • Context for the JPA • Became effective on January 20, 2014 • Requires national-level implementation (and EU) • Approximately two months between JPA agreement and implementation • Implementing agreement not public • January 20, 2014 Guidance from US Government • Guidance document • Answers to FAQs • Statement of Licensing Policy February 5, 2014 Dentons US LLP 5
  • JPA Key Aspects Relief is for Non-US Persons JPA is temporary and conditional February 5, 2014 Dentons US LLP Blacklisted parties remain blacklisted mostly Major sanctions architecture remains 6
  • Key Sectors for Relief • Banking and Insurance • Release $4.25 billion in frozen Iranian assets in several tranches • Establish a "humanitarian channel" for food, medicine, and medical device exports • US Treasury will notify any institution permitted to participate in these activities • Exports of Iranian Crude • Only to China, India, Japan, South Korea, Taiwan and Turkey • Limited to maintenance of "current average levels" • Authorizes transactions with NIOC and NITC • Tidewater ports remain blacklisted and off-limits • "Associated services” February 5, 2014 Dentons US LLP 7
  • Other Key Sectors for Relief Petrochemicals Gold and Precious Metals Iran's Auto Sector Commercial Passenger Aviation February 5, 2014 Dentons US LLP 8
  • "Associated Services" "Any necessary service including insurance, transportation or financial service - ordinarily incident to the underlying activity” February 5, 2014 Dentons US LLP 9
  • Compliance Challenges JPA contains strict limitations that will make compliance a challenge • Duration of relief • JPA only covers activities and "associated services" that take place exclusively within the 6-month period (January 20, 2014 - July 20, 2014) • No grandfathering - sanctions automatically reimposed upon lapse of JPA • Can be revoked at any time, without advance notice • Scope of relief • Does not provide amnesty or safe harbor for pre-January 20, 2014 activities • Does not permit transactions with SDNs, unless specifically authorized • Does not cover activities sanctionable under other authorities (e.g., counter-terrorism) • Does not apply to US Persons, other than for commercial passenger aviation and humanitarian channel February 5, 2014 Dentons US LLP 10
  • "Associated Services" - Challenges for the Insurance Industry • Non-US P&I clubs and other insurers remain cautious about Iran • Many appear not to be changing their position on Iran despite the JPA relief • As a practical matter, insurance and reinsurance for export of Iranian crude and petrochemicals, for example, may be unusable even during the JPA period • Insurers may continue to be subject to sanctions if claims are paid after July 20, 2014 • Reinsurance may not be available for claims that involve Iranian risk either because: • Claims could fall outside the JPA period; or • There is US participation in reinsurance February 5, 2014 Dentons US LLP 11
  • Outlook • Uncertain policy landscape -- and uncertain JPA implementation • Enforcement expected to remain a key priority • Existing sanctions not covered by JPA • Compliance with terms of JPA relief • Global context - potential for inconsistent implementation • Other significant risk factors February 5, 2014 Dentons US LLP 12
  • Questions? February 5, 2014 Dentons US LLP 13
  • Global Presence CONFIDENTIAL February 5, 2014 Dentons US LLP 14
  • Thank you Dentons US LLP 1301 K Street, NW Suite 600, East Tower Washington, DC 20005-3364 United States P +1 202 408 6400 F +1 202 408 6399 © 2014 Dentons Dentons is an international legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see dentons.com for Legal Notices.