Doing business with Iran

New Zealand updated its regulations for doing business with Iran in February 2016, in line with United Nations Security Council changes to sanctions.

Some countries also have unilateral sanctions in place against Iran, including the United States. On 8 May 2018, the United States announced it would withdraw from the JCPOA and reinstate unilateral sanctions against Iran(external link). By 4 November 2018, all of the sanctions the United States had in place before the JCPOA will have been re-imposed. Some of the United States’ sanctions may have extra-territorial effect, meaning they can apply to people and companies outside the United States. The United Nations Security Council resolution (2231 (2015)), which endorsed the JCPOA, remains in place despite the decision by the United States to withdraw from the deal. As such, New Zealand’s sanctions against Iran remain unchanged.

However, it is essential that you get independent legal advice if you are contemplating or doing business with Iran, including on the possible consequences of the re-imposition of US sanctions that may affect New Zealanders doing business with Iran. New Zealanders are also advised to consult their banks to ask about their policies on doing business with Iran

Changes to doing business with Iran

On 16 January 2016 the International Atomic Energy Agency (IAEA) reported to the United Nations Security Council that Iran had taken a series of measures called for by the historic nuclear agreement between Iran, the Five Permanent (P5) members of the United Nations Security Council, and Germany (known as the “Joint Comprehensive Plan of Action”).

New Zealand was pleased to play a role as UN Security Council president in adopting UNSC Resolution 2231(external link) which endorsed the comprehensive agreement. Resolution 2231 (2015) provides for the termination of the provisions of previous Security Council resolutions on the Iranian nuclear issue and specified the sanctions measures that still applied to Iran.

This historic development was welcomed(external link) by New Zealand and the Foreign Minister announced(external link) the domestic process for implementation was completed through the United Nations (Iran – Joint Comprehensive Plan of Action)(external link) Regulations 2016. These regulations removed the requirement to register with the Ministry of Foreign Affairs and Trade before doing business with Iran.

In the long term it is hoped that the lifting of sanctions will allow for a stronger trade and economic relationship between New Zealand and Iran.

New Zealand has had an Embassy in Tehran since 1975 making it New Zealand’s longest-standing mission in the Middle East. During the 1980s Iran was one of New Zealand’s top five export markets. In 2017 the value of New Zealand exports to Iran was NZ $120 million.

Remaining measures

Restrictions remain on the trade in nuclear-related material, equipment or technology, ballistic missile related technology specified in the following lists:

Dealing with the items specified in these lists is permitted with the prior approval of the Security Council and, in some cases, acceptance by the Secretary of Foreign Affairs and Trade of an appropriate end-user guarantee. Given that an application for approval from the Security Council will need to be made by the Member State on behalf of the importer/exporter, if you are considering importing or exporting any of the specified sensitive items, you should contact the Ministry of Foreign Affairs and Trade in the first instance at iranenquiries@mfat.govt.nz.

Find out more information about New Zealand’s remaining sanctions regulations on Iran.

Some further information on the practical arrangements in the Security Council for the implementation of resolution 2231, including the procurement channel for nuclear-related material, equipment or technology. is available on the Security Council’s dedicated webpage(external link).

Additional Requirements

New Zealanders doing business with Iran must still comply with the regulations regarding prohibited exports, including the export of weapons and of strategic goods (military and dual-use goods as listed in the New Zealand Strategic Goods List).

New Zealand’s regulations also still incorporates the asset freeze on individuals and entities designated on the 2231 List(external link).

Some countries, such as Australia, Canada, the European Union, the United States, and others, can impose restrictive measures unilaterally. These may be in addition to, or in the absence of, sanctions adopted by the UN Security Council. Such measures are often known as “autonomous” or “unilateral” sanctions. New Zealand businesses trading with countries subject to autonomous sanctions are advised to seek independent legal advice to ensure that their business does not contravene other sanctions regimes, including the remaining United States and European Union sanctions.

United States withdrawal from the JCPOA

On 8 May 2018 President Trump announced(external link) that the United States would withdraw from the JCPOA (Joint Comprehensive Plan of Action) - known as the “Iran nuclear deal” - over the next 90-180 days and reinstate autonomous sanctions against Iran. By 4 November 2018, all of the sanctions that the United States had in place before the JCPOA will have been reimposed and in effect.

The United States Treasury has released guidelines(external link) explaining how the United States will reinstate the sanctions it had previously eased as a result of the JCPOA.

New Zealanders doing business with Iran should note the potential impact of US sanctions, including the planned reinstatement by 6 August 2018 and 4 November 2018 of “secondary” sanctions that apply to non-US persons. These sanctions apply to a wide range of transactions.

Exporters of “humanitarian goods” to Iran such as dairy products, some beverages, meat, other food or medicine, should take particular note of the US policy toward these goods. The United States Treasury “Guidance on the Sale of Food, Agricultural Commodities, Medicine, and Medical Devices by Non-U.S. Persons to Iran” can be found its website(external link) (as at 3 August 2018). This guidance, issued in 2013, states that sales of “food, agricultural commodities, medicine, and medical devices” to Iran will “not trigger sanctions under U.S. law”.

Other factors for New Zealand exporters to consider

Iran will remain a challenging market in which to do business. An opaque regulatory environment, weak commercial law and IP protection, very high tariff levels and problems with corruption mean that New Zealand companies looking to do business in Iran will need to do their homework. Finding the right local partner will be critical.

New Zealanders are advised to consult their banks to confirm comfort levels with facilitating Iran-related trade prior to making any commitments.

Get legal advice

New Zealanders must fully comply with the sanctions regulations. Given the technical nature of the regulations, and the penalties for non-compliance, it’s essential you get independent legal advice if you are contemplating doing business with Iran. This guidance material does not constitute legal advice. MFAT is not responsible for any loss or damage caused to any person relying on this material.

Contact us

If you have questions about sanctions or the requirements imposed by the United Nations (Iran – Joint Comprehensive Plan of Action) Regulations 2016(external link) or doing business with Iran, email: iranenquiries@mfat.govt.nz. If you have general questions about doing business in Iran, call New Zealand Trade and Enterprise on 0800 555 888, or email exporthelp@nzte.govt.nz.