Australia relaxes sanctions against Iran

Following Iran’s refusal to suspend its uranium enrichment program, Iran has been subject to close to a decade of economic sanctions from the UN, the US, the EU, Australia and other nations. In July 2015 Iran entered into an agreement with the US, the UK, France, China, Russia and Germany to scale down its nuclear program in return for a release from many of the sanctions to which it was subject. On 16 January 2016 the International Atomic Energy Association announced that Iran had met its commitments under the nuclear deal. Following UN Security Council Resolution 2231, the EU and the US, Australia has now suspended all nuclear related sanctions against Iran. Australian companies and individuals are now permitted to participate in commercial activities previously prohibited including shipping, banking, insurance and exporting and importing of commodities previously precluded, such as oil and gas. Some elements of Australia’s Iranian sanctions, including those relating to nuclear and military activities, remain in place. The changes to Australian sanctions against Iran took place following amendments to the Charter of the UN (Sanctions-Iran) Regulation 2008 (Commonwealth) and the Autonomous Sanctions Regulations 2011 (Commonwealth).

Australian sanctions still remain in place for certain designated Iranian persons and entities in respect of Iran military activities.

As a result of the easing of the sanctions Australian business will not be disadvantaged in pursuing trading and investment opportunities in Iran. Prior to the imposition of sanctions Australian exports to Iran were approximately AUD$1 billion but recently they had fallen to approximately AUD$360 million (excluding goods transhipped through other places). It is likely that lifting the sanctions will see exports from Australia to Iran increase significantly in both goods and services.

Australian entities are still required to seek approval for transactions worth AUD$20,000 or more to or from Iran pursuant to Australia’s anti-money laundering and counter-terrorism legislation.

Notwithstanding the lifting of Australian sanctions against Iran, Australia still needs to consider whether their intended dealings with Iran would contravene any sanctions imposed by any other country, including the US where some sanctions (including domestic sanctions) remain in place. This could have an impact with transfers of US dollars to Iranian entities with banks to unable to clear US dollars for Iranian business.

Post by Derek Luxford

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