The Great Fire of London was finally extinguished 350 years ago today. New insurance structures emerged in the aftermath of the Great Fire – which bear striking resemblance to some of ...05 September 2016
Sanctions Update – Historic nuclear deal struck with Iran: What does this mean for sanctions?
Currently, EU and US sanctions prohibit a wide range of (re)insurance activities connected to Iran and impose sweeping asset freezes on various Iranian persons and entities, which prohibit most transactions with or for the benefit of those persons.
The recent envisages a significant winding back of these sanctions, in return for Iran's winding down of its nuclear programme and confining it to civilian power generation.
Under this agreement Iran will take certain steps in respect of its nuclear programme and the International Atomic Energy Agency (IAEA) will verify that it has done so. At that point the economic sanctions against Iran will begin to be lifted via a phased approach.
There has however been no immediate change (beyond an extension of the limited relief that has been in place since November 2013 under the prior “Joint Plan of Action” until 14 January 2016, or until Implementation day (see below) in the case of the US) to the sanctions or other restrictive measures against Iran – all existing sanctions will remain in force until the IAEA has verified that Iran has taken the actions that it has agreed to under the JCPOA. The key dates from the JCPOA are set out below:
Iran has accepted a so-called "snapback" plan that will restore sanctions in 65 days if it violates the agreement, as set out in Section 36 and 37 of the JCPOA. This would involve:
- the complaining participant refers their issue to the Joint Commission (Day 0)
- the Joint Commission then has 15 days within which to resolve the issue. Any participant could refer the issue to Ministers of Foreign Affairs in lieu of the Commission (Day 15)
- the complainant could refer the issue to a three member Advisory Board (two party appointed members and a third independent member). The Advisory Board should provide a non-binding opinion within 15 days (Day 30)
- if the issue is not resolved, the Joint Commission may consider the opinion of the Advisory Board for up to 5 days. If the issue still has not been resolved, the complainant could treat the unresolved issue as grounds to cease performing its JCPOA commitments and/or notify the UN Security Council of significant non-performance (Day 35)
- the Security Council will then vote on a resolution to continue sanctions relief. If a resolution is not adopted within 30 days of the notification, the provisions of the old Security Council resolutions would be re-imposed, unless the Security Council decides otherwise (Day 65)
The UN arms embargo will remain in place for five years and UN missile sanctions will stay in place for eight years.
The EU+3 has agreed to lift all nuclear-related sanctions imposed by EU Council Decision 2010/413/CFSP and Council Regulation 267/2012 (as amended). In addition, economic and financial sanctions will be lifted, including:
- Restrictions on the provision of (re)insurance services to Iranian persons;
- Restrictions on the provision of financial assistance, including certain (re)insurance services in respect of the following transactions:
o Import and transport of Iranian oil, petroleum products, gas and petrochemical products;
o Export of key equipment or technology for the oil, gas and petrochemical sectors;
o Investment in the oil, gas and petrochemical sectors; and
o Export of gold, precious metals and diamonds;
o Design and construction of cargo vessels and oil tankers;
o Export of graphite, raw or semi-finished metals such as aluminium and steel, and export or software for integrating industrial processes; and
- The asset freezes imposed against certain persons and entities under the EU Iran programme.
The EU has also committed to exploring further areas of cooperation with Iran, namely to considering the use of available instruments, such as export credits to facilitate trade, project financing and investment in Iran.
As a result of the JCPOA, the EU has extended until 14 January 2016 the suspension of certain EU restrictive measures agreed in the JPOA in November 2013.
Annex II to the JCPOA commits the U.S. to take certain steps with respect to both U.S. primary sanctions and nuclear related secondary sanctions, though the commitments with respect to primary sanctions are more limited.
The JCPOA may ease primary sanctions measures relevant to subsidiaries of U.S. entities located outside the United States – the wording states that the U.S. will “license non-U.S. entities that are owned or controlled by a U.S. person to engage in activities with Iran that are consistent with this JCPOA.” The JCPOA clarifies that “U.S. persons and U.S.-owned or -controlled foreign entities will continue to be generally prohibited from conducting transactions of the type permitted pursuant to this JCPOA, unless authorized to do so by the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC).” It remains to be seen how this licensing commitment will be implemented b OFAC.
The JCPOA does have some language specifically addressing certain secondary sanctions measures related to the insurance industry and indicates that the U.S. will lift “sanctions on the provision of underwriting services, insurance, or reinsurance in connection with activities consistent with this JCPOA, including activities with individuals and entities set forth in Attachment 3 to this Annex” (some of these points may already be available for relief under the JPOA but would become permanent under the JCPOA).
We await the publication of draft regulations from the EU and US to implement the sanctions relief required by the recent deal.
Provided that Iran adheres to its commitments and sanctions are lifted, the UK Government will help the business and financial sector take advantage of the opportunities that will arise and to promote trade and investment between the UK and Iran. However, it will remain a challenging environment in which to conduct business and commercial decisions will have to be taken by businesses as to whether to trade or invest in Iran.
The full text of the agreement is available at http://eeas.europa.eu/statements-eeas/docs/iran_agreement/iran_joint-comprehensive-plan-of-action_en.pdf
The Insurance Act 2015 (the "Act") comes into force tomorrow. It represents a fundamental departure from existing insurance law. The changes impact on a number of key areas which are...11 August 2016
The Supreme Court published two judgments on how dishonesty affects insurance claims before the end of the most recent Trinity term:10 August 2016