• April 25, 2024

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U.S. Moves to Sanction Iran for Ballistic Missile Tests

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On March 8 and 9, Iran test-launched short- and medium-range ballistic missiles – the Qiam and the Ghadr-1. These launches have provoked a renewed push for U.S. and multilateral sanctions targeting Iran, as the United Nations Security Council (“UNSC”), the European Union (“EU”), and the U.S. consider what additional steps, if any, can be taken to constrain Iran’s development of its ballistic missile program.

Yesterday, the UNSC met to discuss Iran’s ballistic missile launches but ended in acrimony between the world powers, as the U.S. and Russia publicly expressed mutual recriminations. According to U.S. Ambassador to the United Nations, Samantha Power, Russia “seems to be lawyering its way to look for reasons not to act,” “quibbling…about this and that.” Meanwhile, Russia’s Ambassador to the United Nations, Vitaly Churkin, expressed Russia’s view that Iran’s ballistic missile tests did not violate UNSCR 2231, which was adopted in July and effectively superseded previous Iran-related resolutions this past January, and thus did not warrant punitive action from the UNSC. Russia’s argument is that the precise language of UNSCR 2231 (“calls upon”) regarding Iran’s ballistic missiles is merely hortatory, not mandatory (“decides”). (Outside legal observers agree with this interpretation.)

Yesterday, the EU likewise met to discuss Iran’s recent tests as well. Last week, France had discussed the possibility of imposing additional sanctions on Tehran for the ballistic missile launches. But following the meeting, the EU’s foreign policy chief, Federica Mogherini, stated: “When it comes to EU sanctions, the issue was not raised and no member state asked for or submitted proposals in this respect.” No action was taken, and individual EU foreign ministers resorted to criticizing Iran’s escalation of the issue.

The U.S. will also consider a response. Already, the U.S. is pushing the issue at the UNSC. However, there should be no reasonable basis for the U.S. to believe that the UNSC could issue more than a statement condemning Iran’s ballistic missile launches. With Europe also deciding to take no action as it pursues a broader trade and political relationship with Tehran in the post-JCPOA era, that leaves the U.S. alone in responding to Iran’s ballistic missile tests.

What will that response be? Last week, the Washington Post reported that a bipartisan coalition of Senators was forming to tackle threats emanating from Iran’s ballistic missile program. Some suggest that Congress will look to “sectoral sanctions” targeting those sectors of Iran’s economy that are involved in the production of ballistic missiles. Such a provision would likely be part of a broader bill in which the Iran Sanctions Act (“ISA”), set to expire later this year, is renewed. Nonetheless, Congress has been slow to act in the post-deal period, partly as a result of the exhaustion that transpired last summer when the nuclear accord was being fought over.

More likely, the U.S. administration will take unilateral action under existing authorities – most prominently Executive Order 13382 – to sanction Iranian persons and companies involved in Iran’s development of ballistic missiles. On January 16th, OFAC took similar action to designate Iranian and non-Iranian persons and firms. Nonetheless, due to the significant measures that OFAC has already taken to tackle Iran’s development of ballistic missiles – including designations of the Aerospace Industries Organization (“AIO”), the Defense Industries Organization (“DIO”), the Shahid Hemmat Industrial Group (“SHIG”), the Shahid Bakeri Industrial Group (“SBIG”), the Iranian Revolutionary Guards Corps (“IRGC”), the Ministry of Defense and Armed Forces Logistics (“MODAFL”), the Naval Defense Missile Industry Group, the IRGC Air Force, and the IRGC Missile Command – there is not much room for the United States to impose further biting sanctions that may lead to Iran curtailing its ballistic missile program. As such, while a new round of sanctions designations is likely, the targets of such designations are likely to be low-level figures that do not impact Tehran’s strategic calculations in any meaningful manner.

In other words, sanctions may not be the answer to this problem.

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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