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August 3, 2016

Memo: Countering Iranian Threats Act of 2016

The Countering Iranian Threats Act of 2016 (S.3267) – a bill sponsored by the Senate Foreign Relations Committee Chairman Bob Corker (R-TN) – is the latest in a series of Congressional efforts that would violate the Iran nuclear accord and block any further diplomatic outreach to Iran in favor of a return to a posture of confrontation.  

The bill would prevent the United States from implementing its sanctions-related obligations under the Joint Comprehensive Plan of Action (“JCPOA”) and would thus threaten to fatally undermine the historic accord.  Under the JCPOA, the U.S. is committed to lifting all U.S. nuclear-related sanctions, as well as refrain from re-imposing the lifted sanctions or implementing policies intended to adversely affect the normalization of trade and economic relations with Iran.  However, S.3267 would require the President to re-impose sanctions on individuals and entities that were delisted from the Specially Designated Nationals and Blocked Persons List (“SDN List”) maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) pursuant to the JCPOA. It would also enact policies aimed at preventing Iran from engaging in certain activities permitted it under the JCPOA, including access to U.S. dollars from non-U.S. financial institutions.  

Furthermore, the bill would significantly constrain any President’s ability to utilize sanctions for their intended purpose – i.e., to incentivize a change in Iran’s behavior. S.3267 imposes arduous requirements for any suspension of the sanctions imposed under the bill and would prohibit the President from waiving sanctions or licensing transactions involving Iran as part of U.S. implementation of any international agreement with Iran.  While this provision would apply prospectively and would thus not directly impact U.S. obligations under the JCPOA, it would render impossible future efforts to forge a diplomatic compromise with Iran that secures vital U.S. national security and foreign policy interests.  It would also constitute a gross overreach by Congress into the Executive Branch’s ability to conduct U.S. foreign policy.    

Most critically, the bill would require the U.S. to view Iran as the U.S.’s principal threat in the Middle East by mandating the administration to develop a plan to counter Iran’s regional activities.  In an era in which non-state actors such as the Islamic State and al-Qaeda are terrorizing the region and threatening to turn their attentions towards the U.S. homeland, this bill would effectively ignore these developments in favor of the U.S. building a regional strategy solely devoted to countering Iran.  While the U.S. continues to have serious strategic differences with and concerns about Iran and its regional behavior, this bill’s single-minded focus on counteracting Iranian activities in the region is dismissive of the profound potential inherent in the U.S. and Iran cooperating to resolve the problems posed by state collapse – whether in Iraq, Syria, or Afghanistan.   

As such, deal-supporting legislators – as well as those who have since recognized the merits of the nuclear accord in constraining Iran’s nuclear program and reject efforts to undermine the deal – should oppose this bill and refrain from joining efforts to pass this deal-killing legislation.

Below, the substantive provisions of this bill are detailed:

The bill would require the administration to develop a 10-year strategy biennially aimed at countering Iran and its activities in the region.  This would include the development of plans to build a regional security architecture – inclusive of the Gulf Cooperation Council (GCC) states, Egypt, Jordan, Iraq, and Israel – whose primary purpose would be to counteract Iran.  In this manner, the bill would effectively define Iran as the principal threat to U.S. interests in the Middle East and mandate this (and successive administrations) to design security policies aimed at neutralizing this perceived threat.

The bill would also:

  • Effectively designate the Islamic Revolutionary Guards Corps (IRGC) as a Specially Designated Global Terrorist (SDGT) and Foreign Terrorist Organization (FTO) by imposing all of the sanctions applicable to such designations.  Sanctions would also be applied to IRGC officials, agents, and affiliates. (Section 201)
  • Require the President to impose blocking sanctions on persons that engage in activities related to the sale of arms to Iran currently prohibited by United Nations Security Council Resolution 2231.  Such persons would also be subject to U.S. civil and criminal penalties. (Section 202)
  • Require the President to impose blocking sanctions on persons that contribute to Iran’s ballistic missile program.  This includes successor entities to such persons, as well as those who exercise ownership or control over the persons.  The bill would also subject designated parties to U.S. civil and criminal penalties.  To ensure that the President was faithfully implementing this provision, the bill would require the President to submit a report every 6 months detailing all persons that have engaged in activities supportive of Iran’s ballistic missile program, as well as those sectors of Iran’s economy that are facilitating, supporting, or otherwise involved in the development of Iran’s ballistic missile program. (Section 203)
  • Require the President to impose blocking sanctions on persons that engage in significant activities undermining cyber-security on behalf of the Iranian government.  This provision also requires the President to submit a report to Congress on Iran’s cyber-activities, including a detailed strategy for counteracting such Iranian activities. (Section 208)
  • Mandate the President to maintain sanctions imposed under EO 13224 (relating to support for international terrorism) and EO 13382 (relating to support for WMD and WMD delivery systems, including ballistic missiles) until such time as the President certifies that the designated person has not provided support for such activities during the preceding 12-month period.  By requiring the designated person to relent from such malign activities for a 12-month period preceding the potential rescission of their designation, this provision would (1) undermine the President’s ability to trade the lifting of sanctions for a change in behavior in ways detrimental to U.S. security interests; and (2) prohibit the President from entering into a diplomatic settlement with Iran under which Iran would refrain from activities anathema to U.S. security interests (such as its support for terrorism) in return for the lifting of sanctions related to terrorism, as the President would be unable to make the required certification in such an instance. (Section 204)
  • Mandate the President to maintain sanctions on Iranian persons related to human rights abuses until such time as the President certifies that the designated person has refrained from such abuses during the preceding 12-month period. (Section 205)
  • Mandate the President to maintain sanctions on persons that are designated for having undermined cyber-security on behalf of the Iranian government until such time as the President certifies that the designated person has refrained from such activities for the preceding 12-month period. (Section 207)
  • Authorize the President to impose blocking sanctions on persons identified to:
    • Have committed or pose a significant risk of committing an act of violence that threatens the peace or stability of, or undermines the efforts to promote economic reconstruction and political reform in, the GCC countries, Iraq, Jordan, Lebanon, or Yemen; or undermines the peace process in Syria;
    • Have been responsible for or complicit in the commission of human rights abuses in Syria or in the GCC countries, Iraq, Jordan, Lebanon, or Yemen;
      Have committed or facilitated human rights abuses or other acts of violence in Iran on behalf of the Government of Iran;
    • Have been responsible for extrajudicial killings, torture, or other violations of human rights against persons in Iran who seek to (a) expose the illegal activities of the Iranian government or (b) promote human rights and freedoms in Iran;
    • Have been an official of the Government of Iran responsible for or complicit in acts of significant corruption in Iran, including expropriation of assets for personal gain, etc. (Section 206)
  • Authorize the President to impose blocking sanctions on Iranian government officials responsible for or complicit in acts of significant corruption in Iran, including the expropriation of assets for personal gain, etc. (Section 211)
  • Prohibit the President from authorizing offshore dollar clearing entities to conduct transactions with an Iranian bank in U.S. dollars.  The bill would also mandate the President to submit to Congress all documents – including Executive actions, guidance, regulations, FAQ documents, written communications, etc. – provided to offshore dollar clearing entities relating to the conduct of transactions with Iranian banks in U.S. dollars.  This provision would remain in effect until Iran’s designation as a state sponsor of terrorism is rescinded.  Moreover, the bill would require the Secretary of State to describe all efforts being undertaken by the U.S. government to prevent all U.S. dollar-related transactions involving Iran or the Government of Iran, including by reporting to Congress the names of all financial institutions engaged in the provision of U.S. dollars to Iran. (Section 209 & 302)
     
  • Renew the Iran Sanctions Act for a 10-year period ending December 31, 2026. (Section 212)
  • Require the Secretary of the Treasury to establish and maintain an IRGC Watch List, including the names of all entities in which the IRGC or a designated IRGC agent or affiliate has an ownership interest of less than 25% or in which the IRGC does not have an ownership interest but the IRGC or a designated IRGC agent or affiliate does maintain a presence on its board of directors or otherwise has influence over its actions, policies, or personnel decisions.  The IRGC Watch List will be sent to Congress on an annual basis. (Section 307)

    Require the President to submit a report to Congress every 6 months detailing the U.S. citizens that are detained in Iran or by groups supported by Iran, including the steps that the U.S. government is taking to secure their release. (Section 308)

  • Limit the President’s waiver authorities on a case-by-case basis, so that the President would be unable to broadly waive the applicability of the sanctions imposed under the bill.  Moreover, the bill would prohibit the President from using his waiver authorities under the bill to implement the terms of an international agreement with Iran unless that agreement is approved through enactment of a joint resolution or has received the advice and consent of the Senate via the Treaty Clause of the U.S. Constitution.  (Section 402)
  • Limit the President’s licensing authorities under the International Emergency Economic Powers Act (IEEPA) to implement the terms of an international agreement with Iran unless that agreement is approved through enactment of a joint resolution or has received the advice and consent of the Senate via the Treaty Clause of the U.S. Constitution.  This provision would derail efforts to engage Iran in a diplomatic process to resolve outstanding concerns and would have prevented the U.S. from adhering to its commitments under the nuclear accord. (Section 402)
  • Require the President to respond to Congress within 120 days regarding why a certain individual or entity has not been sanctioned under the bill’s authorities. (Section 403)
  • Mandate the President to initiate investigations into potentially sanctionable activities should the President receive credible information that persons have engaged in conduct deemed to be sanctionable under this bill.  Following no more than 180 days after the commencement of the investigation, the President shall determine whether sanctions should be imposed on the subject persons. (Section 404) 
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