Following the conclusion of the Joint Comprehensive Plan of Action – the nuclear accord between the United States, other major world powers, and Iran – a basic question has arisen as to how seriously OFAC would enforce surviving sanctions authorities targeting activities of Iran beyond the nuclear issue.  Yesterday, the Acting Under-Secretary for Terrorism and Financial Intelligence at the U.S. Treasury Department, Adam Szubin, answered some of those questions in ways designed to advertise OFAC’s enforcement approach moving forward.

Perhaps the most interesting aspect of Szubin’s remarks was its predominant focus on the activities of the Lebanese group, Hezbollah, an Iranian proxy, rather than on Iran itself.  As Szubin said, “the JCPOA in no way limits [the U.S.’s] ability to target Iran’s destabilizing activities, and we have made our posture on this point clear…to Iran…”  But Szubin immediately followed this by stating, “We will use all of the tools at our disposal as a government to target the full range of Hezbollah’s activity, including terrorism, criminal activity, and its destabilizing conduct in the region.”

This focus on the activities of Iranian proxies like Hezbollah rather than on Iran itself – such as the IRGC and the IRGC-Qods Force – is reflected in recent OFAC enforcement actions, too.  On July 21, 2015, a week after the nuclear deal was agreed to, OFAC designated “a set of key Hizballah leaders, military officials, and an associate in Lebanon, further exposing and targeting Hizballah’s active support to the regime of Syrian President Bashar al-Assad and Hizballah’s terrorist activities.”  These designations were undertaken pursuant to Executive Orders 13582 and 13224.  A month earlier, the U.S. Treasury Department targeted “a key Hizballah support network” under the authority of Executive Order 13224 on June 10, 2015, including designations imposed on three individuals and four companies.

Other alleged proxies of Iran have not been immune, either.  Despite the apparent break between Iran and the Palestinian group, Hamas, the U.S. State and Treasury Department, acting together, have targeted Hamas, designating “four key Hamas financial facilitators, and a company controlled by one of them” under Executive Order 13224 on September 10, 2015, and four other Hamas operatives earlier on September 8, 2015.

This enforcement strategy squares with news reports coming out Szubin’s recent trip to Israel.  According to Israeli observers, Szubin focused predominantly on how to combat the activities of Hezbollah and the transfer of arms and funds to the group by Iran.  This contradicted the presumption that Szubin would also discuss how to combat Iran’s non-nuclear activities itself, including the activities of the IRGC and the IRGC-Qods Force.

Whether this evidences OFAC’s reticence to target entities too close to the Iranians – so as not to interfere with implementation of the nuclear accord – is unclear.  But it is unmistakable from recent actions of the U.S. Department of the Treasury, as well as from Szubin’s keynote speech before the Washington Institute for Near East Policy this week, that OFAC’s enforcement strategy towards Iran looks to be geared towards Iran’s proxies more than elements of the Iranian government itself.