On March 23, 2017, Sens. Bob Corker (R-TN) and Robert Menendez (D-NJ) introduced a new Iran sanctions bill — the ‘Countering Iran’s Destabilizing Activities Act of 2017‘ (S.722). The bill would, amongst other items, impose a mandatory sanctions regime related to persons that engage in activities that materially contribute to, or pose a risk of materially contributing to, the activities of the Government of Iran with respect to its ballistic missile program, as well as establish new designation programs related to Iran’s human rights abuses and the supply of certain conventional armaments to Iran. Currently, the bill is attracting (limited) bipartisan support and will likely prove the major vehicle for imposing new sanctions on Iran for its non-nuclear activities.
Perhaps most controversial, however, is the bill’s mandate that the President impose the “sanctions applicable with respect to a foreign person pursuant to Executive Order 13224” “with respect to the IRGC and foreign persons that are officials, agents, or affiliates of the IRGC.” There is broad confusion in Congress as to what this provision requires.
Here’s the background: Executive Order 13224 was promulgated following the September 11 attacks and serves as the foundational order for the Global Terrorism Sanctions Regulations, 31 C.F.R. Part 594. Persons designated pursuant to the Order are generally known as Specially Designated Global Terrorist (or “SDGTs”). U.S. persons are generally prohibited from engaging in most transactions with SDGTs, and the property and interests in property of SDGTs is to be blocked should such property be or come within the United States or the possession or control of a U.S. person, wherever located. These sanctions mirror those found in other Executive Orders promulgated pursuant to the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1701 et seq.
Section 5 of the Senate bill would mandate the President to impose blocking sanctions on the IRGC and its officials, agents, or affiliates. This would be of little consequence, as the IRGC is currently subject to three separate U.S. sanctions programs, all of which impose blocking sanctions on the IRGC and its designated officials, agents, or affiliates. In short, the practical effect of this provision is negligible.
Some Congressional offices have nevertheless expressed interest as to the extra-legal repercussions of this particular provision. Common wisdom prevailing on Capitol Hill, for instance, is that the Senate bill is a clever way to avoid designating the IRGC a terrorist group, all the while otherwise seeming to do so. Recall that a couple of months ago, the Trump administration was considering designating the IRGC a Foreign Terrorist Organization (FTO) – only to receive strong pushback from the U.S. defense establishment, which was concerned about possible retaliation against U.S. troops based in Iraq. In the view of Congressional offices, the Senate bill mandates the President to impose the same sanctions as would be imposed on an SDGT, but avoids the technical designation of the IRGC as a terrorist group.
I think this view is wrong, however. First, as an initial matter, I think § 5 of the Senate bill constitutes the effective designation of the IRGC as a terrorist group, as evidenced by that section’s very title. If the concern is how Iran views the proposed legislation, then I have strong doubts Iran will be so generous as to share Congress’ legalistic reading of this particular provision. The precise point of § 5 is to impose sanctions on the IRGC for its terrorist-related activities.
But even more important, I think, is that § 5 of the Senate bill is likely to lead to the actual designation of the IRGC as a terrorist group. Why? Because the bill mandates the President to impose blocking sanctions on the IRGC, as those sanctions are outlined in EO 13224. In implementing this provision, I see three possible scenarios (in order of increasing odds): (1) the President sits on his hands and does nothing, as the IRGC is already subject to blocking sanctions, making the imposition of sanctions superfluous; (2) the President promulgates a new Executive Order specific to this provision under which he imposes blocking sanctions on the IRGC; or (3) the President designates the IRGC as an SDGT pursuant to EO 13224, thereby imposing the sanctions identified in EO 13224 on the IRGC.
In my view, the most likely option is (3). Congress is mandating the President to impose terrorism-related sanctions on the IRGC, as those sanctions are identified in EO 13224. There is a ready-made solution for the President to do so: by designating the IRGC an SDGT pursuant to EO 13224. I am not sure why the President (or those he designates to implement this provision) would avoid this step, most particularly in light of the earlier inclination of this administration to designate the IRGC a terrorist group.
In other words, § 5 of the Senate bill amounts to an effective designation of the IRGC as a terrorist group and will likely lead to the actual designation of the IRGC as an SDGT. Is that a bad idea? I don’t know. But I do think it is important for Senators to have a proper understanding of the legal and extra-legal implications of this proposed Iran sanctions bill.