Iran Sanctions Update: European Union Imposes Further Restrictive Measures Against Iran, With More to Follow

Iran Sanctions Update: European Union Imposes Further Restrictive Measures Against Iran, With More to Follow

Fulbright Briefing
Lista M. Cannon, David M. Harris and Nicola Kelly

In further developments since our briefing of 28 November 2011,[1] the Council of the European Union has decided that a further 143 entities and 37 individuals will be subject to restrictive measures concerning Iran. The decision follows the Foreign Affairs Council meeting in Brussels on 1 December 2011.

To give effect to the latest round of sanctions the Council has adopted EU Regulation No. 1245/2011, which provides that a total of 180 entities and individuals will be subject to a freeze on their assets and economic resources in the EU. The entities and individuals will also be subject to a travel ban on entering the EU by virtue of Council Decision 2011/783/CFSP, subject to limited exceptions. These restrictive measures are intended to target individuals directly involved in Iran's nuclear activities, individuals which are in violation of United Nations Security Council resolutions; entities and individuals owned, controlled or acting on behalf of the Islamic Republic of Iran Shipping Line; and members of, as well as entities controlled by, the Islamic Revolutionary Guard Corps.

In light of the latest International Atomic Energy Agency report, the Council has also decided that it should extend the scope of its restrictive measures against Iran. The Foreign Affairs Council meeting[2] concluded that that the Council would examine, in close coordination with international partners, additional measures including those aimed at having an adverse impact on the Iranian financial system, the transport sector, and the energy sector, together with further measures against the Iranian Revolutionary Guard Corps.

The Council has requested that the preparatory Council bodies[3] are to elaborate on the further restrictive measures for adoption by no later than the next Foreign Affairs Council meeting, which is understood to be scheduled for January 2012.

The decision to broaden the scope of the existing sanctions comes just weeks after a Ministerial Statement in which the UK government considered that existing UN and EU financial sanctions against Iran had demonstrated that targeting individual Iranian banks is insufficient.

Press reports indicate that the Council had failed to agree on whether to impose an oil embargo on Iran. It is thought that some EU countries were concerned that further restrictions would lead to an increase in oil prices. The French foreign minister, Alain Juppé, reportedly stated that Greece had raised concerns regarding the proposed oil embargo and that the EU would: "have to take account of them and work with the different partners so that the interruption of Iranian deliveries can be offset by higher production in other countries."

With the prospect of further sanctions in the new year, it remains to be seen how these prospective restrictions will affect companies and individuals with any connection to Iran in practice, particularly in relation to the energy sector. It is recommended that EU companies engaged in business in the region should monitor developments closely as the situation continues to change.

This article was prepared by Lista M. Cannon, Partner (lcannon@fulbright.com or +44 020 7832 3601), David M. Harris, Senior Associate (dharris@fulbright.com or +44 0 20 7832 3637) and Nicola Kelly, Associate (nkelly@fulbright.com or +44 0 20 7832 3630) of Fulbright & Jaworski International LLP in London. Lista, David and Nicola are lawyers in Fulbright's International Trade Practice Group. Lista Cannon is head of the firm's UK and EU Trade and Sanctions Practice in London. Stephen M. McNabb (smcnabb@fulbright.com or +1 202 662 4528) is Partner and Chair of Fulbright's International Trade Practice Group. Fulbright's International Trade Practice Group advises clients worldwide in matters concerning international trade laws and regulations; including economic sanctions regulations, export/import control regulations, anti-boycott regulations, and anti-corruption laws.

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[1] http://www.fulbright.com/index.cfm?fuseaction=publications.detail&pub_id=5228&site_id=494&detail=yes
[2] http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/126493.pdf
[3] Meaning working parties set up to carry out certain preparatory work or studies as may be defined by the Council.

 

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