You’d be forgiven for missing it, but General License H authorizes a new set of activities for U.S. lawyers.

That’s right. Under General License H, recently issued as part of the Joint Comprehensive Plan of Action (“JCPOA”) between the U.S., other major world powers, and Iran, U.S. persons are authorized to engage in:

…activities related to the establishment or alteration of operating policies and procedures of a United States entity or a U.S.-owned or –controlled foreign entity, to the extent necessary to allow a U.S.-owned or –controlled foreign entity to engage in transactions [authorized by the general license]…

Previously, U.S.-owned or –controlled foreign entities were subject to the prohibitions of the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. Part 560, to the same extent as if they were U.S. persons. Moreover, 31 C.F.R. § 560.215 specially defined a U.S.-owned or –controlled foreign entity to include foreign entities in which a U.S. person: (1) holds a 50 percent or greater equity interest by vote or value in the entity; (2) holds a majority of seats on the board of directors of the entity; or (3) otherwise controls the actions, policies, or personnel decisions of the entity.  (For what it is worth, General License H defines a U.S.-owned or -controlled foreign entity in the same manner.)  Foreign subsidiaries of U.S. parent companies, as well as what would otherwise have been regarded as purely foreign entities, were often captured by this rule and thus subject to the prohibitions of the U.S. trade embargo with Iran.

The authorizations in General License H are intended to permit foreign subsidiaries of U.S. parent companies, as well as other foreign entities that meet the definition of a U.S.-owned or –controlled foreign entity for purposes of the ITSR, to engage in transactions or other dealings with Iran. Effectively, U.S. entities can now adopt or alter operating policies and procedures to allow their foreign subsidiaries to engage in transactions with Iran, provided that the U.S. parent company and any U.S. persons involved do not engage in or otherwise facilitate transactions or any other dealings that have a potential nexus to Iran and that would implicate the ITSR’s sanctions prohibitions.

What’s the new role that U.S. lawyers can play, then? As OFAC’s Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA) on Implementation Day explains, the authorizations in General License H for U.S. persons extend to “U.S. persons who may be hired as outside legal counsel or consultants to draft, alter, advise, or consult on such operating policies and procedures.” Further, General License H “authorizes U.S. persons, including employees and outside legal counsel and consultants, to provide training, advice, and counseling on the new or revised operating policies and procedures, provided that these services are not provided to facilitate transactions in violation of U.S. law.”

In other words, U.S. lawyers are authorized under General License H to provide legal or other consulting services to U.S. parent companies or U.S.-owned or –controlled foreign entities to draft, alter, advise, or consult on the entity’s operating policies and procedures, in order to permit a U.S.-owned or –controlled foreign entity to engage in transactions or other dealings with Iran, all the while ensuring that the U.S. parent company and any U.S. persons involved remain in full compliance with U.S. sanctions laws (i.e., with the ITSR’s sanctions prohibitions).

This is not insignificant. Previously, U.S. parent companies and U.S.-owned or –controlled foreign entities were prohibited from altering their operating policies and procedures to allow their foreign subsidiaries or they themselves to engage in transactions or other dealings with Iran that would otherwise be prohibited by the ITSR if engaged in by a U.S. person. That much was clear under the ITSR’s interpretation of a “prohibited facilitation” at 31 C.F.R. § 560.417(a)-(c). As such, U.S. lawyers were also prohibited from providing legal services to help U.S. parent companies and U.S.-owned or –controlled foreign entities alter their operating policies and procedures to permit a foreign affiliate to engage in Iran-related transactions, as the provision of such legal services would itself have constituted a prohibited facilitation under the relevant sanctions regulations.

Now, however, U.S. lawyers are able to provide such legal services – thanks to the new authorizations at General License H. Most likely, U.S.-owned or –controlled foreign entities with U.S. persons employed at the executive, board, or senior management level will be the first to pursue such legal services, as they will seek to alter their operating policies and procedures to ensure that U.S. persons are walled off from any potential Iran-related dealings. That will be a rather easily resolvable issue.

The big looming question will be whether U.S. companies take advantage of the new authorization to set up or utilize foreign subsidiaries to engage in Iran-related transactions, all the while walling off the U.S. parent company and all involved U.S. persons from transactions or any other dealings with a potential nexus to Iran. Situations like this will involve building operating policies and procedures from the ground-up to ensure full compliance with existing sanctions regulations.