• April 27, 2024

The Only Comprehensive Resource on U.S. Economic Sanctions

Can’t Stop Won’t Stop: Congress on Iran Sanctions

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You can’t help but be curious as to how far a little bit of sanctions knowledge would go for some reporters covering the Congressional beat.

On Tuesday, Bloomberg View reported on Iran sanctions legislation that is pending the possible vote in Congress on the nuclear deal reached between the U.S., other major world powers, and Iran last month. According to BV, several bills are in the works – one in the House drafted by Rep. Ed Royce, the Chair of the House Foreign Affairs Committee, and a few in the Senate with Senators Mark Kirk (R-IL), Bob Menendez (D-NJ), Marco Rubio (R-FL), and Lindsey Graham (R-SC) as sponsors.

Few details are available regarding the content of these bills, but perhaps most interestingly, BV reports, “many of the bills will target the Iran Revolutionary Guard Corps [IRGC], which is responsible for Iran’s foreign violence and controls key sectors of the Iranian economy such as energy, mining, shipping, and automobiles.”

Insofar as these bills take direct aim at the IRGC, however, they are fairly superfluous. The reason is: the IRGC is currently tagged under five separate U.S. sanctions programs, including one program that corresponds to Section 104(c) of the Comprehensive Iran Sanctions Accountability and Divestment Act (“CISADA”). The “IRGC” program tag signifies that foreign banks that conduct or facilitate significant transactions on behalf of the IRGC or any of its agents or affiliates is threatened with lost access to their U.S. correspondent and payable-through accounts. In other words, the IRGC is, at this point, collecting designations under existing U.S. sanctions programs, so additional sanctions will do little to challenge or undermine their current activities.

Any reporter knowledgeable of U.S. sanctions would offer this point as a rejoinder to Congressional aides touting upcoming sanctions legislation such as this. The point of doing so would be two-fold: (1) to challenge the usefulness of additional sanctions on the IRGC when they are currently under so many U.S. sanctions; and (2) to gauge whether the pending legislation does indeed take direct aim at the IRGC.   This latter point is important in consideration of the fact that there are indications in the BV report that (at least some of) the upcoming sanctions bills will broadly target Iran’s economy and that the IRGC might well be used as the pretext to re-impose those sanctions to be lifted as part of the nuclear deal. For instance, while Rep. Ed Royce did not release the sanctions bill he was alleged to be working on this past winter, the BV report states that it was, in large part, “similar to legislation put forth by Senators Mark Kirk and Robert Menendez, a Republican and a Democrat, during the nuclear negotiations.” That Senate bill – S.269 – took broad aim at Iran’s economy, imposing what amounted to a de facto trade embargo with the Islamic Republic.

In the months ahead, new Iran sanctions bills will likely flood the floor of the Senate and House, as Republicans seek to turn the nuclear deal into a presidential election issue. Reporters should be armed with some basic facts of Iran sanctions – especially as regards those sanctions that will survive the nuclear deal – in order to get to the heart of what certain Members are offering. Anything less will only misdirect readers – many of whom would be forgiven, for instance, for thinking that the IRGC is given free rein under this nuclear deal to continue their troubling activities.

Tyler Cullis

Mr. Cullis is an Associate Attorney at Ferrari & Associates, P.C. where he is engaged in the practice of U.S. economic sanctions, including trade compliance, regulatory licensing matters, and federal investigations and prosecutions. Mr. Cullis has extensive experience counseling clients on matters falling under the purview of the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). He has provided counsel to U.S. and foreign parties on complex cross-border transactions and compliance with U.S. economic sanctions; conducted corporate internal investigations and developed sanctions compliance policies; and submitted license applications and voluntary self-disclosures to OFAC. Mr. Cullis has advised global financial institutions, multi-national corporations, U.S. and foreign exporters and insurers, as well as private individuals regarding U.S. sanctions matters, including matters involving Russia, Iran, and Cuba.

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