In a January 14th Executive Order, President Trump expanded sanctions on Iran after a ballistic missile attack on two American military bases in Iraq. Executive Order 13902 expands secondary sanctions on Iran to capture “significant” or “material” support transactions between non-U.S. persons and Iran’s construction, mining, manufacturing, and textiles sectors. The Executive Order also expands secondary sanctions to non-U.S. financial institutions that facilitate transactions with sanctioned entities and sectors of Iran’s economy.
The January 10th SDN List designations from the Office of Foreign Asset Controls (OFAC) were made under a previous Executive Order covering Iran’s aluminum industry, not the most recent order expanding secondary sanctions. According to an OFAC official, more designations under Executive Order 13902 are to be expected soon. In a recently published Frequently Asked Question (FAQ), OFAC explained that there is a 90-day wind-down period for Executive Order 13902 to allow companies and persons an opportunity to wind-down transactions covered by the expanded sanctions.
Following the expansion of U.S. sanctions on Iran, European Union (EU) member states including the United Kingdom, Germany, and France triggered the dispute mechanism of the Joint Comprehensive Plan of Action (JCPOA), as the Iran Nuclear Deal is officially titled, in response to Iran’s apparent disregard for the terms of the agreement, such as enriching uranium and installing centrifuges beyond the allowed limit. While the EU member states are trying to save the JCPOA, triggering of the dispute mechanism might ultimately lead to the reimplementation of United Nations (UN) sanctions on Iran if Iran does not comply.
