The Diplomat in Spain

The sanctions may affect any company even if it has no relationship with the United States.

The Diplomat. 07/08/2018

The Spanish government yesterday expressed «concern» over the decision of the United States to reactivate a set of sanctions against Iran, following Washington’s decision to withdraw from the nuclear agreement. In a statement, the Executive defends this agreement for «its contribution to non-proliferation and regional and international security» and considers that the «constructive and sincere collaboration of the Iranian authorities is key to the resolution of the different regional conflicts and the peace in the region».

US President, Donald Trump, announced last May his country was abandoning the Joint Comprehensive Action Plan (PAIC), signed in 2015 by the Group 5+1 and Iran.

This decision of Washington had as a consequence, among many others, the introduction of the so-called ‘secondary sanctions’, that is, those that affect those who do not have a North American nationality or any link with the United States. For example, secondary sanctions can affect a Spanish businessman who has his factories in Spain and invests in Iran or trades with a certain company in this country.

While the United States continues to apply the PAIC, the secondary sanctions are fundamentally focused on two important aspects: it is not allowed to use the North American financial system in transactions with Iran and it is not possible to export to Iran products or technologies that incorporate North American components that exceed the 10% of its value.

But this situation has worsened substantially since yesterday, 90 days after May 8, since the sanctions related to the acquisition of dollars by the Government of Iran will be reintroduced; the trade of gold or precious metals with Iran; or the supply or acquisition directly or indirectly by Iran of graphite, raw or semi-finished metals, such as aluminum and steel, coal and software to integrate industrial processes.

The US sanctions will also affect from today on the significant transactions related to the purchase or sale of Iranian rials, or the maintenance of funds or important accounts outside the territory of Iran denominated in Iranian rial; as well as the purchase, subscription or facilitation of the issuance of Iranian sovereign debt and the Iranian automotive sector.

The third round of US sanctions will arrive on November 4, 180 days after Trump’s signing, with sanctions on transactions with port operators, shipping companies and naval builders in Iran; to transactions related to oil and made with the main Iranian oil companies, including the purchase of oil, petroleum products and petrochemical products from Iran; as well as those made by foreign financial institutions with the Central Bank of Iran and other financial institutions of that country specifically designated.

Washington will also pursue the provision of specialized financial messaging services to the Central Bank of Iran and other specifically designated Iranian financial institutions; the provision of insurance and reinsurance services and will apply sanctions as of that date to the Iranian energy sector.

To this must be added that, no later than November 5, 2018, sanctions will be reintroduced to certain individuals and legal entities included in the List of Specially Designated Nationals and Blocked Persons (SDN List), which could imply the imposition of sanctions.

These sanctions, which may affect any company even if it has no relationship with the United States, must be taken into account by any Spanish company when it comes to operating with Iran due to its potential consequences.

This situation not only worries the European Union, but also many third countries that have commercial or investor relations with Iran and that are now «seriously worried about the panorama that is drawn,» according to a report by Lupicinio Abogados.