Sanctions compliance considerations have always been important for cryptocurrency companies, but several recent US government actions suggest regulators are increasingly focused on the intersection between digital currencies and economic sanctions.  This increased focus highlights the importance of sanctions compliance for blockchain-related companies, particularly for those considered to be US persons.

This intensified focus has been

On November 5, 2018, the US government reimposed the remaining sanctions on Iran that were previously lifted under the Joint Comprehensive Plan of Action (JCPOA) in 2016.  Treasury’s Office of Foreign Assets Control (OFAC) added over 700 Iranian entities, individuals, vessels, and aircrafts to the list of Specially Designated Nationals and Blocked Persons (“SDN List”), including scores of previously unlisted targets.  According to a statement from Treasury, these sanctions are “designed to disrupt the Iranian regime’s ability to fund its broad range of malign activities, and places unprecedented financial pressure on the Iranian regime to negotiate a comprehensive deal that will permanently prevent Iran from acquiring a nuclear weapon, cease Iran’s development of ballistic missiles, and end Iran’s broad range of malign activities.”

The new or reimposed SDN designations include nearly 250 persons and associated blocked property that had appeared on the so-called “EO 13599 list,” 50 additional Iranian banks and their subsidiaries, and over 400 additional affiliated targets in a range of sectors, including Iran’s shipping, energy, and aviation sectors, among others. OFAC has published a complete list of designated entities here.  Under the existing sanctions framework, foreign financial institutions and persons that facilitate or engage in transactions with designated entities are themselves potentially subject to US sanctions restrictions.
Continue Reading US Reimposes Sanctions and Then Some, as Iran Warns of “War Situation”

On October 3, 2018, the International Court of Justice (“ICJ” or the “Court”), the principal judicial organ of the United Nations, issued an Order ruling partly in favor of Iran on Iran’s request for provisional measures against the US for its May 8, 2018 withdrawal from the Joint Comprehensive Plan of Action (“JCPOA”) and re-imposition of sanctions on August 6, 2018.

On July 16, 2018, Iran instituted proceedings against the US with regard to alleged violations of the 1955 Treaty of Amity, Economic Relations and Consular Rights between the US and Iran (“Treaty of Amity”). On the same day, Iran submitted a request for certain provisional measures, including a request that the US “immediately take all measures at its disposal to ensure the suspension of the implementation and enforcement of all of the 8 May sanctions, including the extraterritorial sanctions, and refrain from imposing or threatening announced further sanctions and measures which might aggravate or extend the dispute submitted to the Court.” Iran’s filing essentially asked the ICJ to order the US to provisionally lift its sanctions in advance of more detailed arguments on the merits of the case.
Continue Reading US Withdraws from Treaty of Amity with Iran after International Court of Justice Imposes Limited Provisional Measures Against US Iran Sanctions

In response to President Trump’s Executive Order re-imposing certain Iran-related sanctions, summarized in our recent post, the EU has expanded the scope of the EU Blocking Statute to cover certain US Iran-focused sanctions.  On August 7, immediately following the US government’s re-imposition of certain Iran-related sanctions, the Commission Delegated Regulation (EU) 2018/1100 amending the annex to the EU Blocking Statute was published in the EU Official Journal and entered into force.

In addition to the Delegated Regulation, the following two texts relating to the application of the Blocking Statute were published in the EU Official Journal:

  • Commission Implementing Regulation (EU) 2018/1101 which sets out: (i) the process for applying to the Commission for an authorization permitting full or partial compliance with the relevant US sanctions; and (ii) a non-exhaustive list of criteria that the Commission will consider in assessing whether an authorization should be granted; and
  • The Commission’s Guidance Note with non-binding guidance on the application of the revised Blocking Statute. The non-binding guidance covers various aspects of the Blocking Statute, including persons/entities within the scope of the Blocking Statute, its temporal application, effects of the Blocking Statute, recovery of damages arising from the application of US Iran-related sanctions, authorizations to comply with US Iran-related sanctions, etc.


Continue Reading EU Blocking Statute Takes Effect to Counter US Re-Imposed Sanctions on Iran

President Trump issued an Executive Order today re-imposing and, in some cases, expanding sanctions on Iran that had been lifted under the 2016 nuclear deal (the “JCPOA”), as today marked the end of the first “wind-down” period of 90 days following the President’s May 8 announcement that the US would no longer honor its sanctions commitments under the JCPOA.  Some of the re-imposed sanctions will be effective tomorrow, August 7; others will come back into effect following the second (180-day) wind-down period ending November 4.  In addition, OFAC issued additional answers to frequently asked questions on Iran sanctions, including guidance on the circumstances in which payments from Iranian parties can be received after the end of the wind-down periods.  These actions are largely consistent with the President’s May 8 announcement and the earlier guidance that had been issued by OFAC on the re-imposition of Iran sanctions.

Effective August 7, the following sanctions that were lifted pursuant to the JCPOA, have been reimposed, including sanctions on certain support for and services related to the activities below:
Continue Reading Certain Iran Sanctions Reimposed after 90-Day “Wind-Down” Period Ends

Since President Trump’s announcement, on May 8, that the United States would withdrawal from the Joint Comprehensive Plan of Action (“JCPOA”) and re-impose previously lifted sanctions against Iran, the remaining JCPOA signatories have been scrambling to save the agreement. On June 4, officials from the UK, Germany, France, and the EU sent a letter to Secretary of State Mike Pompeo and Secretary of the Treasury Steven Mnuchin seeking a number of exemptions to US secondary sanctions scheduled to come back into effect later this year in order to facilitate the continued economic engagement between the EU and Iran that is a key part of the JCPOA. (See our previous advisory on the United States withdrawal from the JCPOA here). The letter from EU officials outlined a number of specific requests:

  • grant exemptions from US sanctions for EU companies that initiated or concluded their contracts after JCPoA Implementation Day (16 January 2016).
  • give public confirmation of areas of business that are exempt from US secondary sanctions, such as pharmaceuticals, healthcare; and grant exemptions to allow for economic relationships in key sectors, in particular in the fields of energy, automotive, civil aviation and infrastructure.
  • grant exemptions to maintain banking channels and financing channels with Iran. This notably includes maintaining links with the Central Bank of Iran as well as with the other Iranian banks that are not sanctioned by the European Union and the preservation of financial messaging services (SWIFT) to these banks.
  • grant extended and adapted winding-down periods according to the necessary time to properly wind down affected projects for companies that may eventually choose to withdraw from Iran.
  • prolong General License H (foreign subsidiaries of US companies to be able to continue business).
  • reaffirm the exemption for Embassy bank accounts.


Continue Reading US Rejects European Requests for Exemptions to Iran Sanctions

Effective yesterday, as part of the President’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA), the Office of Foreign Assets Control (OFAC) revoked several general authorizations that had been issued as part of the JCPOA, and amended the Iranian Transactions and Sanctions Regulations (ITSR) to implement “wind down” periods for persons who had previously relied on these authorizations.   In addition, OFAC updated its Frequently Asked Questions (FAQs) providing guidance on the JCPOA withdrawal, although these minor updates do not add much insight.

Yesterday’s action primarily impacts certain US companies, as well as non-US companies owned or controlled by US persons. The most significant change is the revocation of OFAC’s General License H, which had provided sanctions relief pursuant to the JCPOA for foreign subsidiaries of US companies conducting business with Iran.  In its place, OFAC has issued a new general license authorizing the wind down of business with Iran by foreign subsidiaries until November 5, 2018.  Yesterday’s action also revokes OFAC’s general licenses authorizing imports into the United States of Iranian-origin carpets and foodstuffs and the entry into contingent contracts related to sales of commercial passenger aircraft and related goods and services, which have been replaced with similar wind down provisions requiring that all such activity cease by August 7, 2018.  
Continue Reading OFAC Revokes General License H and Takes Other Steps to Continue to Implement the US Withdrawal from the JCPOA

On June 6, and in furtherance of its May 16 announcement, the European Commission adopted a delegated act to amend the annex to the EU Blocking Statute by adding within its scope US Iran-related secondary sanctions that have extra-territorial application.  The delegated act will enter into force once it is published in the EU Official Journal – probably well before the August 16 deadline set out for the re-imposition of the US secondary sanctions – unless the European Parliament or the Council (the Member States) object within a two-month scrutiny period.

List of US Secondary Sanctions Newly Targeted

The revised annex sets out the third-country measures to which the statute applies should it enter into force. The revised annex includes the same references to US sanctions laws that have previously been included in the annex, namely those that target US sanctions on Cuba.  But it also lists the following new US sanctions laws and regulations specifically to address the reimposition of US sanctions pursuant to the US withdrawal of the JCPOA:
Continue Reading EU Extends the Scope of EU Blocking Statute to Protect Against Extra Territorial Application of US Re-Imposed Sanctions on Iran

In addition to our previous updates, Steptoe recently published an in-depth advisory on President Trump’s May 8, 2018 decision to withdraw the United States from the Joint Comprehensive Plan of Action (JCPOA). The JCPOA is an agreement reached in July 2015 between Iran, the United States, the United Kingdom, France, China, Russia, and Germany in

On May 18, the Commission announced the launch of the formal process to activate the EU “blocking statute” (Council Regulation (EC) 2271/96) by updating the list of US sanctions on Iran falling within its scope.

The Commission starts the formal process after receiving unanimous informal support from the leaders of the EU Member States to a package of measures that the Commission has proposed to protect the interests of EU companies investing in Iran and to demonstrate the EU’s commitment to the Joint Comprehensive Plan of Action (JCPOA). As part of that package, the Commission:

  • Launched the formal process to remove obstacles for the European Investment Bank (EIB) to finance activities in Iran, under the EU budget guarantee.
  • Will continue and strengthen the ongoing sectoral cooperation with and assistance to Iran, including facilitating financial assistance through the Development Cooperation or Partnership Instruments.
  • Is encouraging Member States to explore the possibility of one-off bank transfers to the Central Bank of Iran which would allow the Iranian authorities to receive their oil-related revenues.


Continue Reading A Brief Explanation of the EU Blocking Statute Process in Support of the JCPOA