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Deal provides Iran limited relief from sanctions
By Stephen M. McNabb, Stefan Reisinger and Gwen S. Green
On January 20, 2014, the Joint Plan of Action reached between Iran and the five permanent members of the UN Security Council (United States, United Kingdom, France, Russia, and China) plus Germany (the "P5+1") goes into effect for a six-month interim period that expires on July 19, 2014. The agreement, reached November 24, 2013, provides for the gradual easing of certain trade and economic sanctions against Iran in exchange for the curtailment of Iran's nuclear activities. The agreement is the first step in ongoing negotiations to dismantle Iran's nuclear enrichment program and nuclear stockpile. The Joint Plan of Action goes into effect as members of Congress push for additional US sanctions on Iran.
While not all of the details have been publicly disclosed, the P5+1 have agreed to provide Iran the following limited, temporary, targeted and reversible sanctions relief in exchange for Iran undertaking specific and verifiable steps to limit its nuclear enrichment program:
In exchange, Iran has agreed to: (i) dilute its stockpile of uranium enriched to 20% to no more than 5% or convert to a form not suitable for further enrichment; (ii) halt all uranium enrichment above 5% and dismantle the technical equipment that makes higher-level uranium enrichment possible; (iii) halt the construction of new centrifuges and enrichment facilities; and (iv) halt essential work on its heavy-water reactor under development at Arak. In addition, Iran is expected to provide daily access to inspectors from the International Atomic Energy Agency ("IAEA"), to monitor Iran's centrifuge assembly and storage facilities, uranium mills and the Arak reactor, as well as other nuclear facilities.
While the agreement provides for limited sanctions relief, the overwhelming majority of current U.S. economic sanctions on Iran will remain in place during the interim six-month period. If Iran should not fulfill its commitment under the agreement, the P5+1 warned it would revoke the limited sanction relief and impose more severe sanctions against Iran's key economic sectors. The US Congress is also presently considering two separate but similar bills (the Nuclear Iran Prevention Act [H.R. 850] and the Nuclear Weapons Free Iran Act of 2013) that, if passed, could also serve to derail the agreement.
Companies should continue to monitor these developments and adjust their compliance programs appropriately as events warrant.
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