International Court of Justice allows Iran claim to proceed to the merits phase but upholds jurisdictional objection on sovereign immunity

On 13 February 2019, the International Court of Justice dismissed one of the United States’ jurisdictional objections to a claim by Iran, upheld another and deferred a final jurisdictional objection to the merits phase in the case concerning Certain Iranian Assets (Iran v United States). The substantive claim, brought by Iran against the United States, relates to legislative and executive acts by the latter permitting enforcement against Iranian assets.

Iran filed its application instituting proceedings on 14 June 2016 under the 1955 Treaty of Amity, Economic Relations, and Consular Rights between the United States of America and Iran (a “Party” or the “Parties“) (the “Treaty“), from which the United States has since indicated it will withdraw. This is one of two cases currently pending before the Court between Iran and the United States.

The Judgment on Preliminary Objections (the “Judgment“) is available on the Court’s website, and can be accessed here. Our previous post concerning Iran’s application instituting proceedings in the same case is available here.

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Second Wave of United States Sanctions Against Iran Re-Imposed

Following President Trump’s decision on 8 May, 2018 to withdraw the United States from the Joint Comprehensive Plan of Action (“JCPOA”), the US government announced that it would re-impose pre-JCPOA nuclear-related Iran sanctions (both primary and secondary) that were lifted under the JCPOA. As we reported previously, two “wind-down” periods—of 90 and 180 days respectively—commenced from the day of the announcement, during which non-US, non-Iranian companies were encouraged by the US government to withdraw from operations in Iran that would be affected by re-imposed sanctions. OFAC’s guidance discouraged non-US persons from engaging in new activity during the wind down periods, and stated that any such new activity may be a factor in connection with future enforcement action for actions taken after the wind-down period.

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