The Decision to Terminate US Participation in the JCPOAįollowing through on both a campaign promise and recent statements, on May 8, 2018, the administration began the process of terminating US participation in the JCPOA.
The reversion to pre-JCPOA sanctions, while leaving the export authorizations in place, may impact banks’ willingness to process payments, requiring consideration of whether and how to continue conducting this business. The Iranian Transaction and Sanctions Regulations (ITSR) provision that implements the general license, 31 CFR 560.530(a)(3)(ii), has not been changed, and therefore medical device manufacturers may continue to take advantage of the general license. The May 2018 decision to reimpose pre-JCPOA sanctions has thus far had limited impact on the scope of medical devices that can be sent to Iran. OFAC’s action allowed US and non-US companies to export to Iran all medical devices properly classified as EAR99 products under the US Commerce Department’s Commerce Control List (CCL), except those identified on a modified list-the “List of Medical Devices Requiring Specific Authorization.” This action opened the door to exports to Iran of many more medical devices than had been previously authorized, without the need for a specific license from OFAC. The sanctions relief in the JCPOA did not initially address medical devices, but in a significant move in late 2016 and early 2017, the US Treasury Department’s Office of Foreign Assets Control (OFAC) effectively relaxed the restrictions on exporting medical devices to Iran. The general licenses and accompanying detailed guidance prior to the JCPOA identified many of the medical devices that could be exported to Iran, and the conditions for those exports. For humanitarian reasons, US and non-US companies were able to export a number of medical devices to Iran, and engage in the associated dealings necessary to conduct that business. United States sanctions against Iran prior to implementation of the Joint Comprehensive Plan of Action (JCPOA) in January 2016 included secondary sanctions that subjected foreign parties to potential liability for transactions involving Iran, but, thanks to fairly broad general licenses and related exclusions, the sanctions exempted a large number of medical devices from their purview.
After the decision to terminate US participation in the Joint Comprehensive Plan of Action, most EAR99 medical devices remain covered by general licenses for export or re-export to Iran, but medical device companies will need to identify financial institutions able to handle export-related transactions.