If the US-Iran memorandum of understanding survives its 60-day negotiation window, your sanctions compliance program will face one of the most complex policy reversals in recent memory. This situation involves Executive Orders that can be reversed immediately, Congressional statutes that can't, UN Security Council resolutions requiring multilateral consensus, and a Financial Action Task Force blacklisting that won't change just because Washington does.
This checklist guides you through what you need to verify, update, and monitor as the sanctions landscape shifts.
Prerequisites
Before updating compliance, confirm these baseline conditions:
Your institution has current sanctions screening capabilities. You need functioning name screening against OFAC's Specially Designated Nationals (SDN) List and Consolidated Sanctions List, plus the ability to rapidly update screening parameters when lists change.
You can distinguish Executive Order sanctions from statutory sanctions. Not all Iran sanctions are created equal. Executive Order 12170 (which froze Iranian central bank assets in 1979) can be reversed by presidential action. The Iran Sanctions Act 1996, Iran Threat Reduction Act 2012, and Stop Harboring Iranian Petroleum Act 2024 require Congressional legislation to lift.
You understand the Iran Nuclear Agreement Review Act (INARA) constraints. During Congressional review of any Iran nuclear agreement, the president cannot waive, suspend, reduce, or provide relief from statutory sanctions. This creates a compliance window where some sanctions remain enforceable even if the administration signals intent to lift them.
Checklist Items
1. Map which Iran sanctions your institution relies on for screening decisions.
Create a table listing every Iran-related sanctions authority your compliance program references: Executive Orders, statutory sanctions, UN Security Council resolutions, and FATF designations. For each, note whether it requires presidential action, Congressional legislation, UN Security Council resolution, or FATF plenary decision to lift.
2. Identify frozen Iranian assets or blocked transactions in your portfolio.
Pull records of any Iranian central bank funds, petroleum-related payments, or transactions blocked under Iran sanctions authorities. Approximately US$2 billion in Iranian central bank reserves are held directly in the US, with substantial additional amounts in the EU and South Korea.
3. Verify whether oil and petroleum transaction licenses are actually issued.
The MOU commits the US to issue sanctions licenses authorizing trade in Iranian oil immediately upon signing. Monitor OFAC's website and Federal Register for General License issuance. Don't rely on press statements.
4. Confirm Iran's Black List status before clearing any financial transactions.
Iran remains one of three countries on the FATF Black List, alongside North Korea and Myanmar. This designation persists regardless of US sanctions policy. Between 2016-2020, FATF temporarily removed Iran from the blacklist in response to the Joint Comprehensive Plan of Action, but that required multilateral political consensus that may not materialize for the current MOU.
5. Update your name screening configuration for Iranian banks and entities.
As sanctions are lifted on a rolling schedule, Iranian banks and state entities will be removed from the SDN List. Configure your screening system to flag these removals for manual review rather than auto-clearing transactions.
6. Document which statutory sanctions remain in force during the transition.
The Iran Sanctions Act 1996, Iran Threat Reduction Act 2012, and SHIP Act 2024 cannot be lifted by Executive Order. Track Congressional action (or inaction) on these statutes. During INARA's Congressional review period, statutory sanctions remain fully enforceable.
7. Assess whether other jurisdictions' sanctions apply to your operations.
Australia, Canada, the UK, and the EU maintain autonomous sanctions on parts of the Iranian state, including the Islamic Revolutionary Guards Corps. Australia sanctions the IRGC under both the Autonomous Sanctions Act and as a state sponsor of terrorism under the Criminal Code. If your institution operates in these jurisdictions, US sanctions relief doesn't remove these obligations.
8. Establish enhanced due diligence protocols for newly permissible Iranian counterparties.
Even when sanctions are formally lifted, Iran's FATF blacklisting and the residual risk of sanctions snapback justify heightened scrutiny. Require beneficial owner identification, source of funds documentation, and transaction purpose verification for any Iranian customer or payment.
Common Mistakes
Assuming "sanctions lifted" means "safe to transact." Many US financial institutions will exercise extreme caution even after formal sanctions removal. FATF blacklisting, reputational risk, and the possibility of sanctions snapback under UN Security Council Resolution 2231's mechanism all justify conservative risk appetites.
Treating all Iran sanctions as reversible by Executive Order. Statutory sanctions require Congressional action. Relying on presidential statements about sanctions relief without verifying the legal mechanism creates compliance gaps.
Ignoring the 60-day MOU negotiation window. The immediate oil trade licenses are tied to MOU signing, but full sanctions termination depends on a final deal negotiated within 60 days. Your compliance program needs to handle a phased rollback, not a single switch-flip.
Clearing transactions based on press briefings rather than published licenses. Public statements about sanctions relief don't create legal authority to process blocked transactions. Wait for the actual OFAC General License or Federal Register notice.
Next Steps
Assign a sanctions analyst to monitor OFAC's Iran sanctions page daily during the 60-day negotiation period. Set up Federal Register alerts for "Iran" and "General License." Prepare a compliance memo template you can quickly customize each time a sanctions authority is modified, explaining to business units what changed and what transactions are now permissible.
If the final deal includes a phased sanctions removal schedule, you'll need to update your screening configuration and customer risk ratings multiple times. Build that expectation into your compliance calendar now, before the first Executive Order is signed.
