The temporary general license issued by the U.S. Treasury Department on Monday allows the production, delivery and sale of Iranian crude oil, petrochemicals and petroleum products until August 21. According to some estimates, this license could bring Iran up to $3 billion in revenue over the two-month period.
According to the 14-point memorandum of understanding signed between the U.S. and Iran last week, Washington will begin lifting all types of sanctions based on a timeline to be established within a final agreement. This process will last 60 days and may be extended.
Complex legal and political process
Lifting the remaining sanctions will require executive action for some measures, congressional approval for others, and close coordination with the UN and other countries that impose their own sanctions. Companies that have been subject to restrictions for decades may also reduce the impact.
Juan Zarate, former Deputy National Security Advisor for combating terrorism under President George W. Bush, said: "There is a complex tangle of sanctions, including not only executive orders but also congressional sanctions."
Congress has passed half a dozen sanctions laws due to Iran's nuclear program and its support for groups the U.S. designates as terrorist organizations, including Hamas, Hezbollah and the Houthis in Yemen, and presidents have issued executive orders.
Companies remain cautious
Banks, oil companies and insurers will be exposed to sanctions violation risks related to Iran's connections with countries such as China, North Korea and Russia. They will also remain subject to separate sanctions from the UK, UN, EU and others.
Zarate said, "We've somewhat battered the markets with the risk of doing business with Iran, so you can't just flip a switch and say 'It's now fine to do business with Iran.'"
Brett Erickson of Obsidian Risk Advisors said that given these risks, companies may avoid working with Iran to steer clear of legal and reputational risk as long as the Iranian government remains in power.
Erickson said, "Until things become much more solidified and politically stable, we won't see large, multi-billion-dollar commitments. There is a very long way to go."
Jeremy Paner, a partner at the law firm Hughes Hubbard & Reed and a former U.S. sanctions official, stated that delisting the thousands of entities designated for sanctions would take at least a year for the Treasury's Office of Foreign Assets Control (OFAC).
President Donald Trump could revoke the executive orders issued on Iran, but some measures, including sanctions against Hamas and Hezbollah, are mandated by law and would need to be lifted or modified by Congress.
