The woes for Iran continue: U.S. moves forward with Sanctions

On 15 June 2017, the U.S. Senate overwhelmingly voted to adopt new sanctions against Iran. The new sanctions are framed in the Countering Iran’s Destabilizing Activities Act of 2017 (S.722). Text of S.722 can be found here

The main theme of the Countering Iran’s Destabilizing Activities Act of 2017 (CIDAA) is to expand existing U.S. Iran sanctions on any non-U.S. parties:

  • that conduct business with any entity already blacklisted by the U.S. Government linked to Tehran’s ballistic missile program;
    • These sanctions could also apply to any non-U.S. party facilitating the advancement of Iran’s missile program. The bill comes on the heels of more recent OFAC sanctions imposed in February and May 2017 concerning Iran’s medium-range missile tests in January 2017. 
  • that supply arms to Iran;
  • Iranian human rights violators; 

Further, the CIDAA also requires the imposition of sanctions against Iran’s Islamic Revolutionary Guard Corps (IRGC) – regarding it’s involvement in terrorism and other activities already subject to U.S. sanctions.

Finally, the CIDAA also requires the Administration to provide:

  • a comprehensive strategy for deterring what the U.S. considers Iran’s destabilizing activities against the U.S. and it’s allies in the Middle East and North Africa
  • reports on sanctions coordination between the U.S. and the EU on U.S. citizens detained in Iran.

Key Measures of CIDAA
Text of CIDAA can be found here

Reporting Requirements concerning U.S. regional strategy for countering conventional and asymmetric Iranian threats in the Middle East and North Africa (Section 3 CIDAA)

CIDAA requires that the Secretaries of State, Defense, and the Treasury and the Director of National Intelligence to submit a strategy to Congress every two years for deterring conventional and “asymmetric” Iranian activities that threaten the United States and key allies in the Middle East and North Africa. The strategy must summarize:

  • U.S. objectives for countering Iran’s “destabilizing activities,”
  • review the capabilities, contributions, and short-falls of U.S. allies, 
  • assess Iran’s conventional, chemical, and biological weapons capabilities, 
  • a report to Congress every 180 days that identifies and accounts for discrepancies between sanctions imposed by the EU and sanctions imposed by the U.S., and
  • a report every 180 days detailing efforts to secure the release of U.S. citizens detained by Iran.

WMD and Missile related sanctions (Section 4 CIDAA)

CIDAA directs the POTUS to impose financial sanctions and a travel ban on individuals and entities:

  • who “knowingly engage in any activity that materially contributes to the activities of the Government of Iran with respect to its ballistic missile program, or any other program in Iran for…weapons of mass destruction.”
  • Although Executive Order 13382 already authorizes the imposition of sanctions against individuals and entities who materially contribute to the development of weapons of mass destruction (including missile delivery systems), CIDAA would mandate the imposition of sanctions against those who meet the criteria in the bill.

IRGC terrorism related sanctions (Section 5 CIDAA) 

CIDAA applies to existing terrorism sanctions under Executive Order 13224 to the IRGC (officials, agents and affiliates hereof). This section is to a large extent cosmetic, given EO 13224 already sanctions the IRGC – i.e. IRGC’s special forces unit – the Quds Force – as a supporter of terrorism. However, the CIDAA’s significance is in sub-section (3) – as it identifies the whole IRGC as a perfidious organization, responsible for implementing Iran’s international program of destabilizing activities, support for acts of international terrorism, and ballistic missile program. The text also echoes the Trump administration’s proposal to blacklist the IRGC as a Foreign Terrorist Organization (FTO). 

Human Rights related sanctions (Section 6 CIDAA)

Section 6 CIDAA directs the Secretary of State to:

  • identify individuals responsible for certain human rights abuses within Iran, including extrajudicial killings and
  • torture of human rights dissidents and activists.

The bill would authorize, but not require, POTUS to impose financial sanctions and a travel ban against those designated for human rights abuses. This provision would expand the range of sanctions available under US law against those responsible for human rights abuses in Iran.

Arms embargo related sanctions (Section 7 CIDAA)

CIDAA implements the current UN Security Council arms embargo by directing POTUS:

  • to impose sanctions on any person that knowingly contributes to the supply, sale or transfer of prohibited arms to Iran, including battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles, and missile systems.
  • POTUS must also sanction parties who knowingly provide technical training, advice, or financial resources related to the cited arms embargo. 

An overview of current U.S. Iran sanctions can be found here. 

Unsurprisingly, Iran has denounced the CIDAA as a violation of the JCPOA.

In a technical sense, this might not be the case, given that Iran’s missile program is not part of the JCPOA; and that the U.S. only committed itself not to impose secondary-sanctions on non-U.S. companies owned or controlled by U.S. persons which honor the JCPOA. Thus, such parties violating the JCPOA or non-U.S. foreign parties supplying weapons to Iran, can be sanctioned. 

However, from a symbolic perspective, it’s not the best signal to send to Iran. Firstly, the timing of the Senate’s vote on CIDAA can be considered misplaced given that Iran was a victim of international terrorism. In this context, whatever we think about Iran, it demonstrates that all countries face the threat of terrorism. Secondly, it again signals confusion by the Trump Administration – which despite the pledge of President Trump to rip-open the JCPOA – it has not done so. On the contrary, it has certified that Iran is complying with the JCPOA. This in turn reinforces the uncertainty to engage in business with Iran for private companies. 

To be continued. 

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