There is a remarkable amount of complexity in answering this simple question.
The 14-point MOU published in the media provides for multiple sanctions-related concessions by the US:
- 6. The United States of America undertakes, with regional partners, to develop a definitive mutually agreed plan with at least USD 300 Billion, for the reconstruction and economic development of the Islamic Republic of Iran. The mechanism for the implementation of this plan will be finalized as part of final Deal within 60 days. All required licenses, waivers and permissions needed for the relevant financial transactions will be granted by the United States of America.
- 7. The United States of America undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including the United Nations Security Council resolutions, IAEA Board of Governors resolutions, and all unilateral U.S. sanctions, primary and secondary, in an agreed upon schedule as part of the final deal. The Islamic Republic of Iran and the United States of America acknowledge the critical importance of the sanctions termination issue above mentioned and express their intentions to immediately address these issues in the negotiations in order to achieve mutual agreement on them.
- 9. Pending the final Deal, the Islamic Republic of Iran and the United States of America agree to maintain the status quo; the Islamic Republic of Iran will maintain the current status quo of its nuclear program, and the United States of America will not impose any new sanctions, and will not deploy any additional forces in the region.
- 10. The United States of America undertakes that immediately upon the signing of this MoU, and until the termination of sanctions, the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services including banking transactions, insurances, transportation, etc.
- 11. The United States of America undertakes to make fully available for use, the frozen or restricted funds and assets of the Islamic Republic of Iran upon the implementation of this MoU. The United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds during the negotiations. Such funds, whether retained in the original account or transferred, shall be made fully usable for payment to any ultimate beneficiary designated by the Central Bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorizations accordingly.
The Trump administration is briefing the press that sanctions will be lifted if Iran ‘behaves’. This is wrong in at least two respects:
- The US has committed to issuing sanctions licences authorising the trade in Iranian oil and petroleum immediately upon the signing of the MOU;
- The release of frozen Iranian central bank assets is tied to the conclusion of the final deal rather than Iran’s subsequent implementation thereof.
The rest of the sanctions are to be lifted ‘in an agreed upon schedule as part of the final deal’. It remains to be seen whether this schedule will merely set out a timeline for the progressive easing of sanctions or will stipulate conditions that Iran will have to meet.
Unilateral US Sanctions
The US government can lift some US sanctions against Iran. Most of those sanctions are imposed by Executive Orders signed by consecutive US presidents using the powers vested in them by International Emergency Economic Powers Act 1977 (IEEPA). These sanctions can be reversed by the sitting president.
Crucially, this includes Executive Order 12170, signed by Jimmy Carter in 1979 to freeze Iranian central bank assets.
There are however multiple statutes enacted by Congress that oblige the US president to impose certain kinds of sanctions against Iran. They include the Iran Sanctions Act 1996; Iran Threat Reduction Act 2012; and the Stop Harboring Iranian Petroleum Act (SHIP Act) 2024. Removing these sanctions will require legislation.
A separate statute, the Iran Nuclear Agreement Review Act (INARA), requires Congress to review any agreement reached in relation to Iran’s nuclear program. During the Congressional review, the president ‘may not waive, suspend, reduce, provide relief from, or otherwise limit the application of statutory sanctions with respect to Iran under any provision of law or refrain from applying any such sanctions pursuant to [the] agreement.’
Harvard Law School’s Jack Goldsmith argues this provision precludes Trump from providing any immediate sanctions waivers to Iran. It is not immediately obvious from Goldsmith’s analysis whether his conclusion only extends to Congressionally mandated sanctions (as I would assume based on INARA’s wording) or all US sanctions against Iran.
In any event, as Goldsmith makes clear, there is little that anyone can do to compel Trump to comply with INARA.
But there are real limits to the US government’s power to effectively reverse all sanctions against Iran. The US business community, including the financial sector, are unlikely to embrace commercial opportunities in Iran — and will exercise extreme caution in engaging with Iran’s currently sanctioned banks.
Notably, Iran is one of the three countries on the Financial Action Task Force’s money laundering and terror finance ‘blacklist‘, alongside North Korea and Myanmar. This will remain a source of great concern to many in the US financial community.
Between 2016-2020, the FATF temporarily removed Iran from the blacklist in response to the previous nuclear deal, the Trump-maligned Joint Comprehensive Plan of Action (JCPOA). That decision was plainly political, but at least the JCPOA was a joint effort between the US, other permanent members of the UN Security Council, and the EU. It is less likely, although not inconceivable, that the FATF will again bend over backwards to facilitate the new US-Iran agreement.
The position will mirror the situation the EU found itself in after the block lifted its Iran sanctions under the JCPOA: the formal removal of sanctions did little to incentivise anyone in the EU to engage with Iran.
The crucial difference is that Iran will still get over billions back in its central bank reserves (approximately $US2 billion is held directly in the US), and oil traders around the world will again deal in Iranian oil and petroleum with no fear of US sanctions.
UN Sanctions
The position as relates to UN sanctions against Iran is also complex.
The UN Security Council has put in place an extensive sanctions regime against Iran. These sanctions were conditionally lifted under Resolution 2231 (2015), post-JCPOA, and re-instated under the ‘snapback’ mechanism in 2025. Iran, China and Russia claim — spuriously — that these sanctions were never validly re-imposed.
The US cannot unilaterally undo UN sanctions against Iran. However, the Trump administration is counting on UN Security Council support for its peace deal. Indeed, Paragraph 14 of the MOU states as follows: ‘The final Deal will be endorsed by a binding UNSC resolution.’
It therefore appears that the US will present other UN Security Council members with the choice between signing away all sanctions on Iran and derailing Trump’s peace deal, with the almost inevitable result that they will opt for the former.
Other Sanctions
Other jurisdictions may well maintain their own unilateral sanctions regimes against Iran.
For example, substantial amounts in frozen Iranian central bank assets are held in the EU and South Korea.
Furthermore, many countries — including Australia, Canada and the UK, as well as the EU — have sanctioned certain parts of the Iranian state, including the Islamic Revolutionary Guards Corps. In Australia, the IRGC is sanctions twice: both under the Autonomous Sanctions Act and as a state sponsor of terrorism under the federal Criminal Code.
It is very difficult to see these sanctions being lifted, and this will further dampen anyone’s appetite to engage with Iran.
So, there is really no on/off switch that the Trump administration can flick to make all sanctions against Iran go away, but if the MOU survives the next 60 days, we will see a gradual demise of what once was a ‘maximum pressure’ campaign.
Economic Crime Law 