July 11, 2016

Memo: Iran Accountability Act (H.R. 5631) Would Fatally Undermine Iran Deal

The Iran Accountability Act of 2016 (H.R. 5631) – sponsored by House Majority Leader Kevin McCarthy (R-CA) – would breach US commitments under the Iran nuclear accord and thus fatally undermine the historic agreement. Introduced ahead of the Iran nuclear accord’s first anniversary, the bill evidences the fact that – despite a now-proven track record of reversing and limiting Iran’s nuclear program – Congressional opponents of the nuclear accord remain hell-bent on upending the historic agreement and returning us to the path of conflict and confrontation with Iran.

By imposing sanctions on large swathes of Iran’s economy, the bill would violate U.S. obligations to “refrain from any policy specifically intended to directly and adversely affect the normalization of trade and economic relations with Iran…” Certain provisions of the bill could also mandate the President to impose new nuclear-related sanctions on Iran or re-impose sanctions on Iran that had been lifted under the nuclear accord. Despite its pretensions to the contrary, the bill would thus be a clear and unmistakable violation of the Iran nuclear accord.
The bill would, amongst other things:

  • Require the President to impose broad sectoral sanctions on Iran’s economy, particularly those that facilitate, support, or are involved in the development of or transfer to Iran of ballistic missiles or technology, parts, components, or information relating to ballistic missiles. This could include sanctions on all persons involved or operating in the chemical, computer science, construction, electronic, metallurgy, mining, research (including Iranian universities and research institutes), and telecommunications sectors of Iran. As such, all Iranian persons and entities involved in Iran’s research sector, including its universities, could be subject to blocking and secondary sanctions under this far-reaching provision.
  • Effectively designate the Iranian Revolutionary Guards Corps (IRGC), its agents or affiliates, and any entity that is owned or controlled by the IRGC as a Foreign Terrorist Organization, and all IRGC officials, agents, or persons controlled by the latter as Specially Designated Global Terrorists. For purposes of this provision, the bill would lower the threshold on what constitutes ownership or control so that an entity is deemed owned or controlled by the IRGC if the IRGC holds more than 25% of the equity interest in the entity; holds any seats on the board of directors of the entity; or otherwise controls the actions, policies, or personnel decisions of the entity. This provision is intended to cause major compliance headaches for foreign companies interested in re-engaging Iran, thereby dissuading firms from re-entering the Iranian market.
  • Mandate the President to impose sanctions on European companies providing services for flights routing to Europe and flown by Mahan Air. This would include companies providing fuel, ramp assistance, baggage and cargo handling services, catering, refueling, ticketing and check-in services, crew handling, and other services related to flight operations. In mandating the President to impose sanctions on such European entities, this bill would needlessly provoke a diplomatic crisis with our close European allies and partners in a manner that will reduce the U.S.’s ability to effectively utilize sanctions in the future.
  • Risk re-imposing sanctions on Iranian persons and entities whose inclusion in the Annexes to United Nations Security Council Resolutions 1737, 1747, and 1929 had been lifted pursuant to the nuclear accord. In imposing such sanctions, the U.S. would put in doubt its compliance with its commitments under the Iran nuclear accord. Doing so could also provoke Iranian counter-measures that would put at risk Iran’s nuclear-related obligations.
  • Require the President to impose sanctions on Iran’s entire governing infrastructure, including President Rouhani, members of Iran’s parliament, and other officials, regardless of their involvement in Iran’s human rights abuses. This would be a significant escalation in the use of U.S. sanctions against Iranian government officials and would ignore the considerable progress that Iranian moderates have made in recent parliamentary elections.

In sum, passage of this bill would contradict U.S. obligations under the nuclear accord and place at risk the nuclear accord as a whole. In doing so, Congressional opponents of the nuclear accord would undermine vital U.S. national security interests to ensure Iran’s nuclear program is placed under strict decades-long limitations and rigorous inspections.

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