Export Compliance

Nuclear fallout? How the U.S. pulling out of Iran nuclear deal could impact export compliance.

President Trump has once again voiced his displeasure with the state of the Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful—more commonly known as the Iran nuclear deal—and has repeated his intentions to pull out of the deal if a more favorable agreement cannot be reached.

The potential impact of the Trump administration’s position highlights the importance of remaining vigilant in staying up-to-date with international affairs, maintaining the highest levels of export compliance, and making sure you stay up-to-date with the ever-changing landscape of compliance.

The increasing likelihood that the U.S. could reinstate sanctions that have been waived as part of the agreement has created uncertainty around Airbus’ deal with Iran Air. Because many of their components are manufactured in America, Airbus requires U.S. export licenses to do business with Iran. Under the JCPOA, they have the appropriate OFAC licenses, but, if the U.S. pulls out, those licenses may no longer be valid. In light of this, Iran’s deputy transport minister Asghar Fakhrieh Kashan has stated that “As long as uncertainties are not resolved, we will not provide down payments. Because of these negotiations, there can be delays in payments,”[1] strongly implying that changes to the Iran nuclear deal could put the multi-billion dollar contract in jeopardy.

The turbulent landscape of export compliance

The situation facing Airbus highlights how the international landscape, much like flying in seemingly smooth skies, can change in a heartbeat. Relationships between once friendly nations can turn sour overnight, new names get added to watch lists every day, regulations change frequently, and business deals that were legal yesterday may no longer be allowable today. Having an export compliance system in place to ensure your licenses and authorizations are still valid is an essential aspect of export compliance; as is being able to adapt to regulatory changes that impact your ability to do business with people and organizations in other countries.

Thankfully for Airbus, they have had ample time to adjust their business plans and prepare for potential changes to the enforcement of sanctions against Iran, but that won’t always be the case. Extra care needs to be taken when entering into agreements with entities that have recently been removed from lists, or in countries where restrictions have recently been lifted or eased.

Ensuring continuous export compliance is your oxygen mask and flotation device rolled into one

Relying on internal resources to keep up-to-date with the changes to the regulatory landscape can take up significant time and resources that may be better spent elsewhere. Many organizations cannot afford to employ an export compliance team dedicated with the daily work required to stay up-to-date. Working with a trusted compliance partner that has a dedicated team of specialists tasked with updating and maintaining the regulatory information they provide to their clients can go a long way to help ease the burden of continuous compliance. While, ultimately, remaining compliant is the obligation of the parties involved in a transaction, having a strong partner helping to support compliance can only serve to improve the ability to do so.


[1] Iran threatens Airbus deal as Trump threatens its nuclear deal. Business Day. https://www.businesslive.co.za/bd/companies/2018-01-17-iran-threatens-airbus-deal-as-trump-threatens-its-nuclear-deal/. Accessed January 31, 2018.