Iran Sanctions After the JCPOA: Terrorism, Human Rights, Conventional Weapons and Ballistic Missiles Sanctions
Under the Joint Plan of Action the United States, its P5+1 partners, and Iran agreed to in November 2013, the U.S. committed to lift all “nuclear-related” sanctions on a “step-by-step reciprocal basis” in return for concessions on Iran’s nuclear program should a final deal be reached. With the advent of the Joint Comprehensive Plan of Action (“JCPOA”), agreed to by the U.S., other major world powers, and Iran on July 14, 2015 and endorsed by the United Nations Security Council on July 20th, the U.S. promised to relieve all nuclear-related sanctions imposed on Iran once the IAEA verifies that Iran has taken certain key nuclear-related steps to constrain and roll-back its nuclear program.
Some have expressed concern that, in doing so, the U.S. has rendered itself impotent to tackle Iranian behavior that remains of concern, including Iran’s support for international terrorism and its human rights abuses. Nothing could be further from the truth. Even once all nuclear-related sanctions imposed on Iran have been lifted, Iran will remain one of the most sanctioned countries on earth. The U.S. will have significant sanctions in place to deter Iran from engaging in nefarious activities in the region and towards its own people. Moreover, significant sanctions authorities will likewise remain to allow the President to impose additional terrorism- or human rights-related sanctions on Iran should the President believe doing so lies in U.S. interests. As such, the fear that the U.S. will be incapable of addressing Iranian activities anathema to U.S. interests is misplaced and endangers a strong nuclear deal.
This memo seeks to detail sanctions that are exclusively focused on Iran’s support for international terrorism and its violation of Iranian human rights – all of which will remain in place after a nuclear deal. This is intended as an aid to policymakers when evaluating the scope of sanctions relief under the JCPOA and dissecting the claims of opponents who believe the U.S. has pursued a nuclear deal with Iran at the expense of ignoring Iran’s regional behavior. As evidenced in the analysis below, the JCPOA limits sanctions relief only to those related to Iran’s nuclear program and leaves intact a wide range of sanctions that target Iranian activities anathema to U.S. interests.
II. Non-Nuclear Sanctions
Below is a list of sanctions that will remain following implementation of the JCPOA and are thus left unaffected by the nuclear deal with Iran:
A. Sanctions on Iran’s Support for International Terrorism
The United States has long had a significant foreign-policy interest in ending Iran’s support for acts of international terrorism and, most especially, its support for groups like Hezbollah, Hamas, and Palestinian Islamic Jihad. Despite concerns that a nuclear deal will render the U.S. incapable of challenging Iran on these issues, the President will retain important legislative authorities to target and sanction individuals and entities in Iran that are responsible for supporting acts of international terrorism.
Sanctionable activities include committing or sponsoring acts of terrorism that threaten the security of the U.S. and its nationals; assisting or sponsoring elements in the Syrian regime of Bashar al-Assad; and supporting the activities of designated Foreign Terrorist Organizations (FTOs). Those involved in one or more of these activities and designated as such include the IRGC-Qods Force, Qasem Soleimani, the Iranian Ministry of Intelligence and Security (“MOIS”), the Law Enforcement Forces of the Islamic Republic, Bank Saderat, Mahan Air, the Lebanese Martyrs Foundation, and others. Sanctions include visa restrictions, asset freezes, and prohibitions on U.S. financial assistance to Iran.
Legislative authorities that are unrelated to the nuclear issue and will remain in place during the period of the JCPOA include:
i. CISADA Section 104(c)(2)(A)(ii)
Under the JCPOA, the President retains the power to sanction foreign financial institutions that facilitate Iran’s support for designated FTOs. (The Secretary of State can designate an organization an FTO under Section 219 of the Immigration and Naturalization Act, which mandates U.S. financial institutions to block any assets it controls or possesses. Hamas, Hezbollah, and Palestinian Islamic Jihad are all designated FTOs.) Foreign financial institutions determined to facilitate Iran’s support for FTOs are restricted in their ability to open or maintain correspondent or payable-through accounts at U.S. banks and are effectively denied access to the U.S. financial system.
ii. CISADA Sec. 104 (c)(2)(E)(ii)(II)
Under the JCPOA, the President retains the power to sanction foreign financial institutions that facilitate a “significant transaction or transactions or provide significant financial services for Iran’s Revolutionary Guard Corps [IRGC] or any of its agents or affiliates whose property or interests in property are blocked pursuant to [IEEPA]…” Foreign financial institutions determined to facilitate a transaction for an Iranian financial institution designated for its support of international terrorism (i.e., Bank Saderat) are restricted in their ability to open or maintain correspondent or payable-through accounts at U.S. banks and are thus effectively denied access to the U.S. financial system. As such, foreign banks returning to Iran will have to take extreme caution to ensure that they are not in any manner conducting or facilitating transactions with Bank Saderat or other Iranian banks so designated.
iii. Executive Order 13224
Executive Order 13224 authorizes the President to impose IEEPA-based sanctions on foreign persons involved in acts of terrorism that threaten U.S. national security. Persons who provide financial, material, or technological support to or on behalf of designated persons could also be subject to sanctions under Executive Order 13224.
Under this authority, the U.S. Department of the Treasury has designated Iran’s largest bank, Bank Saderat, for sanctions. Sharing the designation are Iran’s Ministry of Intelligence and Security (“MOIS”), the IRGC-Qods Force, Mahan Air, and the Lebanese Martyrs Foundation. These designations are left unaffected by the nuclear deal.
iv. Executive Order 12947
Under Executive Order 12947, the President can impose IEEPA-based sanctions on persons that have committed (or are at significant risk of committing) acts of violence that have the purpose or effect of disrupting the Middle East peace process. Persons who assist in, sponsor, or provide financial, material, or technological support for such acts of violence are also subject to sanctions under this Order. As of today, Hamas and Hezbollah have been designated as Specially Designated Terrorists (“SDTs”) under Executive Order 12947.
v. Executive Order 13582
Executive Order 13582 authorizes the President to impose IEEPA-based sanctions on persons that have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, large parts of the Syrian Government. Utilizing this authority, President Obama has designated Iran’s MOIS, the IRGC-Qods Force, Qasem Soleimani, and the Law Enforcement Forces of the Islamic Republic for sanctions. None of these designations will be removed as part of a nuclear deal.
vi. Arms Export Control Act (22 U.S.C. § 2780)
The Arms Export Control Act enacts a de facto arms embargo on countries that the President finds have supported acts of international terrorism. Iran is a designated state sponsor of terrorism under the statute. The U.S. Government is prohibited from engaging in transactions relating to the export of munitions, licensing the export of munitions, and providing credits, guarantees, or other financial assistance to Iran.
vii. Foreign Assistance Act of 1961 (22 U.S.C. § 2371)
The Foreign Assistance Act of 1961 bars the provision of U.S. financial assistance to countries that the President finds have repeatedly provided support for acts of international terrorism. Iran remains designated under this Act as a state sponsor of terrorism.
viii. Export Administration Act of 1979 (50 U.S.C. app. 2405(j))
The Export Administration Act of 1979 (statutorily expired but renewed by Executive Order) requires a validated license before goods or technology can be exported to a country that the President has determined has provided support for acts of international terrorism. Iran is a designated state sponsor of terrorism.
B. IRGC-Related Sanctions
i. CISADA Section 104(c)(2)(E)(i)
CISADA Section 104(c)(2)(E)(i) authorizes the Secretary of the Treasury to impose sanctions on foreign banks that “facilitate a significant transaction or transactions or provide significant financial services for Iran’s Revolutionary Guard Corps or any of its agents or affiliates whose property” is blocked. Foreign financial institutions determined to facilitate a transaction for the IRGC or any of its agents or affiliates are restricted in their ability to open or maintain correspondent or payable-through accounts at U.S. banks and are thus effectively denied access to the U.S. financial system. As such, foreign banks returning to Iran will have to take extreme caution to ensure that they are not in any manner conducting or facilitating transactions with the IRGC.
ii. Executive Order 13382
Executive Order 13382 authorizes the President to impose IEEPA-based sanctions on persons that he determines have engaged in activities or transactions that materially contribute to (or pose a risk of contributing to) the proliferation of WMD or their means of delivery (including missiles capable of delivering such weapons). This includes “any efforts to manufacture, acquire, possess, develop, transport, transfer or use such items, by any person or foreign country of proliferation concern…” The IRGC will remain designated under Executive Order 13382 as a result of its ballistic missile activities.
C. Human Rights-Related Sanctions
Under the JCPOA, the President retains significant legislative authorities to tackle Iran’s poor human rights record, including its censorship, surveillance, Internet monitoring, and other human rights abuses directed at its own people. These provisions authorize the President to impose targeted sanctions – such as visa restrictions and asset freezes – on Iranian individuals and entities that he determines are responsible for abuses taking place on or after the contested June 2009 election. Such measures conform to U.S. objectives, as they are more likely to directly impact the persons and entities being targeted without having broad effects on Iran’s civilian population.
i. CISADA Section 105
CISADA Section 105 targets individuals who are Iranian government officials or who are persons acting on behalf of the Iranian government and that are determined to be responsible for human rights abuses committed after the contested June 2009 presidential election. The President is granted full discretion to designate individuals and impose visa restrictions and block U.S.-based assets.
ii. TRA Title IV
Title IV of the TRA amends CISADA Section 105 to expand the class of persons in Iran that the President can target with sanctions. Sanctionable activities include the provision of goods and technologies used to repress and surveil Iran’s citizens. Persons who engage in censorship in Iran are also targeted with IEEPA-based sanctions and visa restrictions.
iii. Executive Order 13553
Executive Order 13553 authorizes the President to target persons and entities that assist or provide financial or material support to designated individuals or entities. Utilizing this authority, President Obama designated several top-level officials in Iran’s security apparatus, including IRGC Commander Mohammad Ali Jafari, Head of Intelligence Heydar Moslehi, and head of Iran’s Law Enforcement Forces Mostafa Mohammad Najjar. These individuals remain designated and under sanction at present.
iv. Executive Order 13606
Executive Order 13606 authorizes the President to target computer and network disruption, monitoring, and tracking by government authorities in Iran and Syria. Sanctionable activities include the operation and provision of technologies that facilitate computer and network disruption, monitoring, or tracking and that could be used to commit serious human rights abuses against Iranian citizens. When issuing the order, the President designated such entities as the IRGC, Iran’s MOIS, and the Law Enforcement Forces of the Islamic Republic. These entities will remain under sanction post-nuclear deal.
v. Section 2 & 3 of Executive Order 13628
Section 2 of Executive Order 13628 authorizes the President to impose IEEPA-based sanctions on any person determined to have knowingly transferred or facilitated the transfer of goods or technologies to Iran that are likely to be used by the Government of Iran to commit serious human rights abuses against the Iranian people. Moreover, Section 2 of this Order authorizes the President the impose IEEPA-based sanctions on any person that knowingly provided services relating to hardware, software, or specialized information or professional consulting, engineering, or support services that are likely to be used to commit serious human rights abuses in Iran.
Section 3 of Executive Order 13268 targets the activities of persons that engaged in censorship or other activities in Iran on or after the June 2009 elections that limited freedom of expression and prohibited access to print or broadcast media. Designated persons are subject to IEEPA-based sanctions.
As a word of caution, this list is non-exhaustive. The U.S. has several non-Iran-specific statutes in place as well dealing with Iran’s human rights abuses, including the Foreign Assistance Act of 1961, which would provide opportunity for further sanctions. Moreover, the President has the discretion to impose additional IEEPA-based sanctions on Iran for its human rights violations – especially in light of the fact that he has successively found Iran’s serious human rights abuses to constitute a threat to the national security and foreign policy of the United States.
D. Sanctions on Conventional Weapons, Ballistic Missiles, and Money Laundering
The U.S. has a range of other sanctions that target various Iranian activities that are anathema to the United States, including Iran’s development of advanced conventional weapons and ballistic missile capabilities. Despite long-term changes to the sanctions imposed by the United Nations Security Council as to some of these issues, the U.S. will retain its own sanctions on Iran’s arms and ballistic missile activities.
i. Executive Order 13382
Executive Order 13382 authorizes the President to impose IEEPA-based sanctions on persons that he determines have engaged in activities or transactions that materially contribute to (or pose a risk of contributing to) the proliferation of WMD or their means of delivery (including missiles capable of delivering such weapons). This includes “any efforts to manufacture, acquire, possess, develop, transport, transfer or use such items, by any person or foreign country of proliferation concern…” While the United States will be de-listing certain Iranian individuals and entities that were designated under Executive Order 13382 for their contributions to Iran’s nuclear program, the U.S. will keep in place those designations that were related to the development of ballistic missiles capable of delivering nuclear weapons. Most prominently, the IRGC will remain designated under Executive Order 13382 for its contributions to Iran’s ballistic missile work. Dozens of other Iranian entities and individuals will also remain designated and subject to IEEPA-based sanctions.
ii. INKSA Section 3
Section 3 of INKSA authorizes the President to sanction foreign person that transfer to or acquire from Iran certain goods, services, or technologies related to missile proliferation. Sanctions include denial of procurement contracts with the U.S. government and a prohibition on transactions relating to the import of goods or services into the United States, amongst others.
iii. ISA Section 5(b)
Section 5(b) of the Iran Sanctions Act authorizes the Secretary of State to impose sanctions on persons determined to have exported or transferred to Iran goods, services, or technologies that would contribute to Iran’s ability to acquire or develop WMD or “destabilizing numbers and types of advanced conventional weapons.” Persons so sanctioned are subject to the ISA-based menu of sanctions.
iv. IIANA Sections 1604-1605
Section 1604 and 1605 of IIANA authorizes the President to impose sanctions on any person or foreign government that transfers or retransfers goods or technologies to Iran that would permit Iran to acquire “destabilizing numbers and types of advanced conventional weapons.” For persons so determined to be involved in the transfer of such goods to Iran, the President can prohibit the U.S. Government from entering into any procurement contracts and can prohibit the provision of U.S. export licenses. For foreign governments involved in the same activities, the President can suspend foreign aid and weapons development and production agreements with the foreign country for a period of one year.
v. Section 311 of the PATRIOT Act
Pursuant to Section 311 of the USA PATRIOT Act, the Secretary of the Treasury found Iran to be a jurisdiction of primary money laundering concern. This means that U.S. banks that maintain correspondent accounts for foreign banks that have relationships with Iran must engage in enhanced due diligence to ensure that Iranian financial institutions do not have backdoor entrance to the U.S. financial system. This is a significant financial sanction that has been rarely used but will be maintained following the nuclear deal.
Considering the breadth of the sanctions that will survive a nuclear deal, Iran will remain one of the most sanctioned jurisdictions in the world. As such, the U.S. will be well-prepared to deal with Iranian activities of concern – including with regard to international terrorism; ballistic missile development; and human rights violations. Trading nuclear-related sanctions for strong and enduring constraints on Iran’s nuclear program has – in no shape or form – diminished the U.S.’s toolkit for confronting these other areas of concern with Iran.