With effect from 16 January 2016, the UN and the EU have lifted the comprehensive economic and financial restrictions against Iran. This gives Norwegian companies a golden opportunity to restore trade and cooperation with Iran. However, US companies are still subject to the embargo, as the US has only lifted the extra-territorial sanctions. In addition, several Iranian enterprises and persons are still on the sanction list. In a patchwork of rules, Norwegian companies must act with care.

Iran was relieved of a number of sanctions immediately after the International Atomic Energy Agency confirmed that the Iranian government has met its obligations under the so-called atomic agreement, or the Joint Comprehensive Plan of Action. The rules in the Norwegian Regulation on sanctions against Iran correspond to EU and UN rules, and were updated with effect from 16 January 2016.

Particularly affected businesses

Several of the sanctions affect businesses crucial to Iran’s economy. Now that trade with Iran is being restored, doing business with Iran’s energy sector is permitted, including export of Iranian oil and gas to the EU. Equipment supply to Iranian oil and gas production may also be restored and insurance services can be provided to Iranian enterprises. In addition, Iranian banks that are not sanction-listed may apply the money transfer system SWIFT.

Permitted business includes:
  • Import and export of Iranian petroleum product
  • Export of basic equipment to Iranian oil and gas industry
  • Investments in Iranian oil and gas industry
  • Export of goods and services related to the shipping industry
  • Ship design and construction
  • Flagging and classification of Iranian ships
  • Export of minerals and software
  • Money transfers to Iran
  • Insurance
  • Financing of legal trade with Iran

Many enterprises and persons are also removed from the sanction list, among them Iranian banks, financial institutions and petroleum and shipping companies.

Remaining sanctions and challenges

Although the economic and financial sanctions have been annulled, restrictions on trade and cooperation with Iran remain in certain areas. Also, the US trade embargo against Iran is still in effect. This gives a rather complex situation for the operators ready to enter the Iranian market. Some points should be noted in particular:

  • The US has only removed the extraterritorial sanctions. Enterprises and persons covered by the definition of a “US person” are thus subject to extensive restrictions on trade. For example, special restrictions apply to the use of US insurance companies and insurance schemes.
  • Money transfers in USD to Iran are restricted. Other transaction currencies should in principle be elected.
  • The Joint Comprehensive Plan of Action contains a “snapback” clause allowing the sanctions to be reintroduced if Iran materially breaches its obligations under the agreement.
  • The US, the UN and the EU keep their lists of particularly sanctioned companies and persons. This requires thorough investigations of Iranian contractual parties. Note that the US sanction list does not necessarily correspond to the sanction list of the EU/UN and that capital belonging to sanctioned enterprises will still be frozen.
  • There are still strict sanctions on the provision of services or goods applied in connection with violation of human rights, Iranian weapon industry or the atomic program.
  • The export of certain goods requires the prior approval of the Norwegian Ministry of Foreign Affairs.
  • The sanction reliefs set general rules for which activities to be permitted. This may be regulated more strictly through existing private law contracts.

In principle, anyone interested in trading with Iranian companies or persons are recommended to continue to act with care, make thorough investigations of contractual parties and assess whether existing agreements contain provisions against trade with Iran which is now permitted under Norwegian rules. Legal advice should also be sought for interpretation of the rules and contractual clauses regarding the sanctions. Any violation, contribution to violation or evasion of the regulations may lead to criminal liability.

Finally, it should be noted that Iran is a high-risk country in terms to bribery and corruption. Anti-corruption work should therefore be a priority if contracts are to be entered into with Iranian enterprises or persons.

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