April 22, 2019: The White House announced that it will not re-issue the significant reduction exceptions (SREs) that previously allowed companies outside of the US (Italy, Greece, Turkey, China, India, Taiwan, S Korea, Japan) to procure oil from Iran without running afoul of US Iran sanctions. The current SRE is in effect until May 2, 2019. Proceeds of sales under the SREs must be held in an account in the SRE country. Their use is restricted to a trade between Iran and the SRE country or they can be used to procure humanitarian goods. Under the applicable Executive Order, US Iran sanctions would not apply to non-US persons in an SRE country, if such persons engaged in any significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran. The Trump Administration issued the SREs currently still in effect to those countries that were deemed to have demonstrated significant reductions in the purchase of Iranian crude oil during the six months preceding November 2018. The Trump Administration explained that it decided not to re-issue the SREs because it believes that oil revenues from the SREs have helped to finance Iran’s nuclear weapons and ballistic missile programs.
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