323. The JPOA stipulates that U.S. sanctions on Iran’s petrochemical exports, as well as sanctions on associated services, will be suspended for six months. What does the suspension entail and which petrochemicals are covered?
For the JPOA Period, the USG is suspending certain sanctions on purchases by non-U.S. persons not otherwise subject to the ITSR of petrochemical products exported from Iran as well as associated services that are required to facilitate such transactions. As part of this relief, such transactions exclusively for the export of Iran’s petrochemicals may involve Iranian depository institutions* listed solely pursuant to E.O. 13599 and certain other specified Iranian entities on the SDN List (see Question #324 for a list of these petrochemical companies). Non-U.S. persons not otherwise subject to the ITSR may undertake these specific activities only during the six-month sanctions relief period without exposure to U.S. sanctions, subject to certain conditions explained in the Guidance Relating to the Provision of Certain Temporary Sanctions Relief. The relief provided in the JPOA with respect to Iran’s exports of petrochemical products will expire on July 20, 2014, and any transactions, payments, deliveries, or associated services provided in connection with such exports that occur after July 20, 2014, could expose the relevant parties to potential U.S. sanctions.
Petrochemical products from Iran are defined in E.O. 13622 to include any aromatic, olefin, and synthesis gas, and any of their derivatives, including ethylene, propylene, butadiene, benzene, toluene, xylene, ammonia, methanol, and urea. Examples of such products include: butene, ethylhexanol, acetic acid, acrylonitrile butadiene styrene, alachlor, ammonium nitrate, ammonium sulfate, anhydrous ammonia, argon, butachlor, C2+, C3+, C4 cut, chlorinated paraffin, chlorine, chloracetyl chloride, citric acid, diammonium phosphate, diethanolamine, ethylene glycol, diethylene glycol, dioctyl phthalate, dodecycle benzene, ethane, ethoxylates, ethylbenzene, ethylene dichloride, ethylene glycol, ethylene oxide, heavy alkyl benzene, high density polyethylene, hydrochloric acid, isoprene, linear alkyl benzene, linear low density polyethylene, low density polyethylene, melamine, methyl tertiary butyl ether, methylene diphenyl diisocyanate, mid density polyethylene, monoethanolamine, monoethylene glycol, nitric acid, nitrogen, orthoxylene, paraxylene, pentene, perchlorine, phosphoric acid, phthalic anhydride, polybutadiene, polyethylene terephthalate, polypropylene, polystyrene, polyvinyl chloride, propylene, purified terephthalic acid, pyrolysis gasoline, raffinate, soda ash, sodium bicarbonate, sodium carbonate, sodium chloride, sodium hydroxide, sodium hypochlorite, styrene, tyrene acrylonite copolymer, sulfur, sulfuric acid, styrene butadiene, toluene diisocyanate, triethanolamine, triethylene glycol, and vinyl chloride monomer.**
This list, however, is not exhaustive. The term "petrochemical products" does not include finished products derived from these substances, such as pipes, plastic bags, tires, and solvents; it also does not include bitumen, condensates, and other substances considered "petroleum products" under E.O. 13622.***
All other sanctions on transactions with respect to Iran's petrochemical industry, including the provision of certain goods and services described in E.O. 13590, remain in place. [01-20-14]
* For purposes of these FAQs, as defined in section 14(g) of Executive Order 13645, the term "Iranian depository institution" means any entity (including foreign branches), wherever located, organized under the laws of Iran or any jurisdiction within Iran, or owned or controlled by the Government of Iran, or in Iran, or owned or controlled by any of the foregoing, that is engaged primarily in the business of banking (for example, banks, savings banks, savings associations, credit unions, trust companies, and bank holding companies).
** See the Department of State’s November 13, 2012, publication in the Federal Register providing an illustrative list of petrochemical products [77 FR 67726, November 13, 2012].
*** E.O. 13622 defines "petroleum products" to include unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical feedstocks, special naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still gas, and miscellaneous products obtained from the processing of: crude oil (including lease condensate), natural gas, and other hydrocarbon compounds. The term does not include natural gas, liquefied natural gas, biofuels, methanol, and other non-petroleum fuels.
1) FAQ Superseded by the entry into force of the JCPOA. The FAQ appears to not otherwise be significant for interpretation of secondary sanctions provisions. The FAQ is, as of 7/2021, housed on OFAC's "Joint Plan of Action (JPOA) Archive and Joint Comprehensive Plan of Action (JCPOA) Archive".
2) The list provided is useful for interpretation of current definition of "Petrochemical products" in the IFSR and for secondary sanctions purposes generally (561.330). The definition at 561.330 is structured as an open list: "The term petrochemical products includes any aromatic, olefin, and synthesis gas, and any of their derivatives, including ethylene, propylene, butadiene, benzene, toluene, xylene, ammonia, methanol, and urea." See also Department of State: State Department Sanctions Information and Guidance (Public Notice 8086) (2012).
3) See also Notes Common to 516.318 and 561.319 and 561.330.