Penalty! Nike refuses to supply Iranian football team on eve of World Cup

US-based Nike has refused to continue to supply the Iranian national football team with footwear for the World Cup, citing US sanctions. The global football tournament kicks off in Russia today.

‘US sanctions mean that, as a US company, Nike cannot supply shoes to players in the Iranian national team at this time,’ the company said in a statement.

The decision follows the ‘snap back’ of US sanctions against Iran after the US exited the Joint Comprehensive Plan of Action (‘JCPOA’) with Iran in May. Under the JCPOA, Iran agreed to scale back its nuclear capacity in exchange for sanctions relief. The other JCPOA signatories – France, Germany, Russia, China, the UK and the EU – remain committed to the deal. The manager of the Iranian team, Carlos Queiroz, one-time deputy to Sir Alex Ferguson at Manchester United, has approached football’s governing body FIFA for help.

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has issued varying ‘winding-down periods’ after which US sanctions against Iran will be re-imposed. Some sanctions, such as those on the purchase of US dollar banknotes by Iran, will be re-imposed after 6 August. All of the US sanctions waived under the JCPOA will be ‘in full effect’ after 4 November 2018. From 5 November, OFAC will revoke General License H, which authorises foreign subsidiaries of US companies to engage in transactions with Iran in certain circumstances. Sanctions will also be re-imposed on persons removed from the List of Specially Designated Nationals and Blocked Persons (‘SDN List’) on 16 January 2016.

The rest of the Iranian team’s kit is provided by Adidas, the German sportswear manufacturer. The White House national security adviser John Bolton has told reporters that US sanctions on European companies that maintain business dealings with Iran were ‘possible’. The EU and the E3 – France, Germany and the UK – have petitioned Treasury Secretary Steven Mnuchin and State Secretary Mike Pompeo in a joint letter for exemptions from US sanctions for EU companies, in particular requesting that the US: ‘

• grant exemptions from US sanctions for EU companies that initiated or concluded their contracts after JCPOA Implementation Day (16 January 2016).
• give public confirmation of areas of business that are exempt from US secondary sanctions, such as pharmaceuticals, healthcare; and grant exemptions to allow for economic relationships in key sectors, in particular in the fields of energy, automotive, civil aviation and infrastructure.
• grant exemptions to maintain banking channels and financing channels with Iran. This notably includes maintaining links with the Central Bank of Iran as well as with the other Iranian banks that are not sanctioned by the European Union and the preservation of financial messaging services (SWIFT) to these banks.
• grant extended and adapted winding-down periods according to the necessary time to properly wind down affected projects for companies that may eventually choose to withdraw from Iran.
• prolong General License H (foreign subsidiaries of US companies to be able to continue business).
• reaffirm the exemption for Embassy bank accounts.’

The joint letter can be found here:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/714262/Joint_E3_letter_on_JCPoA.pdf