Iran: Revocation of General License H - 27 June 2018
With President Trump’s announcement on 8 May 2018 of the US withdrawal from the JCPOA, OFAC confirmed that it would take steps to revoke certain general authorisations that had been issued as part of the JCPOA, and to amend the Iranian Transactions and Sanctions Regulations (ITSR) to implement “wind down” periods for persons who had previously relied on these authorisations.
One of those licenses is General License H. Non-US entities owned or controlled by US persons are prohibited from knowingly engaging in transactions involving Iran that their parent are prohibited from engaging in. General License H authorised such non-US entities owned or controlled by US persons to engage in certain transactions involving Iran. In addition US persons were authorised to establish or alter policies and procedures to allow their non-US subsidiaries to engage in transactions with Iran, and make available automated and globally integrated business support systems and platforms, including servers, to process information for Iran-related transactions.
On 27 June 2018, OFAC confirmed that General License H has been revoked, and replaced with a more limited license to enable activities entered into pursuant to the license to be wound down by 4 November 2018. The text of the new license can be found at § 560.537 of the ITSR.
The new license authorises, up to 4 November 2018, “all transactions and activities that are ordinarily incident and necessary to the wind down” of
• activities with Iran by non-US entities owned or controlled by US persons, and
• related support by the US owner/parent company,
that had previously been authorised under General License H
All goods, services, and payments related to transactions governed by General License H or the wind-down general license must be completed by 4 November 2018, after which US-owned/controlled foreign entities will be under the same restrictions in respect of conducting business with Iran as apply generally to their US parent.
These developments mean that affected companies:
• should not commence new business with Iran, and
• should take all steps necessary to complete transactions otherwise authorised by General License H or the new limited license, by 4 November 2018.
OFAC has also issued updated FAQs which were originally issued on 8 May 2018 regarding the US re-imposition of sanctions against Iran here. The FAQs indicate that any unauthorised activity after 4 November 2018 may be subject to OFAC enforcement, and in considering such potential enforcement, OFAC will take into account the efforts to wind down any Iran-related activities prior to 4 November.
