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October 24, 2017

Memo: The Iran Ballistic Missiles and International Sanctions Enforcement Act (H.R. 1698)

On October 25, 2017, the House of Representatives is set to vote on the Iran Ballistic Missiles and International Sanctions Enforcement Act (H.R. 1698). The bill amends the Iran Sanctions Act to mandate the President to impose sanctions on parties providing support to Iran’s ballistic missile and conventional weapons programs.

President Trump’s refusal to certify the Joint Comprehensive Plan of Action (JCPOA) has already begun to isolate the U.S. from its allies, weakening America’s hand on Iran policy and raising serious doubts that the U.S. will adhere to its obligations under the agreement. Congress must restore U.S. credibility and international unity by making it absolutely clear that America will uphold its commitments in spite of the President’s rhetoric and actions. The passage of new sanctions risks doing the opposite: sending a message to the world that the U.S. may indeed be hedging on its JCPOA commitments and that domestic politics trump international obligations.

If Congress and the Administration are serious about addressing Iran’s ballistic missile program and other issues of concern, there is a clear and obvious way: direct multilateral negotiations — the same kind that produced sustained and verifiable limits on Iran’s nuclear program for the first time in decades. The Administration’s recent actions significantly undermine any prospect of serious multilateral negotiations on remaining issues of concern with Iran, and Congressional sanctions will do further damage to prospects for a diplomatic solution. There has been no effort by this Administration to engage their Iranian counterparts, and claims of seeking to “bring Iran back to the table” in lieu of any serious attempt at dialogue ring hollow. Passage of sanctions within this diplomatic vacuum risks undermining the nuclear deal and damaging U.S. alliances. Instead of pursuing new sanctions, Congress should focus on restoring confidence that the U.S. will uphold its obligations under the JCPOA and remain committed to working with its international partners.

Sanctions and Reporting Requirements

The original bill had two main components:

(1) reporting requirements that mandate the President to detail Iran’s domestic and foreign supply chain in support of its ballistic missile program, as well as to submit tri-annual reports on Iran’s involvement in sanctionable activities related to its ballistic missile and conventional weapons programs; and

(2) amendments to the Iran Sanctions Act that mandate the imposition of sanctions on parties involved in or otherwise supporting Iran’s ballistic missile and conventional weapons programs.

Certain amendments inserted in committee include additional reporting requirements that would push the administration to re-impose sanctions on Iranian airlines in contravention of the JCPOA and revoke the licensed sale of aircraft to Iran. Moreover, these amendments mandate the President to impose sanctions on foreign States, such as Russia, that are engaged in the transfer of conventional military systems to Iran, such as the S-300 and S-400.

New Sanctions

The bill would amend § 5(b) of the Iran Sanctions Act by mandating the President to impose sanctions with respect to:

(1) an agency or instrumentality of the Iranian government that seeks to develop, procure, or acquire goods, services, or technology that materially contributes to efforts by the Iranian government with respect to ballistic missile-related goods, services, and technologies in violation of United Nations Security Council Resolution 2231 (UNSCR 2231);

(2) a foreign person or State if the foreign person or State knowingly provides material support to the Iranian government that materially contributes to Iranian government efforts with respect to ballistic missile-related goods, services, or technologies in violation of UNSCR 2231;

(3) a foreign person that the President determines knowingly engages in a significant transaction with, or provides significant financial services for, a foreign person or State described above with respect to proscribed ballistic missile-related activities;

(4) a foreign person or State if the President determines that the person or State knowingly imports, exports, or re-exports to, into, or from Iran, directly or indirectly, any significant arms or related materiel prohibited by UNSCR 2231; or

(5) persons that knowingly export or transfer, or permit or otherwise facilitate the transshipment or re-export of, goods, services, technology, or other items to Iran that materially contribute to Iran’s ability to (1) acquire or develop ballistic missiles or related launch technologies; or (2) acquire or develop destabilizing numbers and types of advanced conventional weapons.

Reporting Requirements

The bill requires the President to submit several reports to Congress that are aimed at pressuring the administration to designate additional Iranian entities for sanctions violations, including by:

  • Detailing the foreign and domestic supply chain in Iran that directly or indirectly significantly facilitates, supports, or otherwise aids Iran’s ballistic missile program, as well as an assessment of the Government of Iran’s ability to indigenously manufacture or otherwise produce the goods, services, or technology meant to support its ballistic missile program;

  • Mandating the President to submit a report to Congress that details:

    • Iran’s efforts to develop, procure, or acquire goods, services, or technology for which sanctions may be imposed under the Iran Sanctions Act;

    • Iran’s acquisition or attempted acquisition of significant arms and related materiel in violation of UNSCR 2231;

    • Iran’s export or attempted export of significant arms or related materiel in violation of UNSCR 2231; and

    • Any UN Security Council approval for the export to Iran of significant arms or related material pursuant to UNSCR 2231.

  • Requiring the President to submit a report to Congress upon receipt of credible information that Iran has conducted a test of a ballistic missile fails to comply with, violates, or is in defiance of UNSCR 2231, detailing:

    • Iranian persons responsible for ordering, controlling, or otherwise directing the missile test and determining whether such persons are subject to U.S. sanctions as of the date of the report; and

    • Available information on the ballistic missile or the generic class of ballistic missile or space rocket that was launched, in addition to technical information including the trajectory, duration, range, and altitude of the missile flight, launch location and impact point, and payloads.

Reporting requirements inserted in committee could pose additional complications for the implementation of the JCPOA. An amendment from Rep. Brad Sherman, now included as Section 5, requires the President to determine every 180 days whether the Government of Iran has used any commercial aircraft for military or other illicit activities:

  • Pursuant to the JCPOA, the U.S. is permitted to revoke licenses for the sale of aircraft to Iran only if the licensed aircraft are transferred to or otherwise used by parties identified on the SDN list or if the aircraft are used for purposes other than civil aviation. Hence, the reporting requirement is broader than what is covered by the JCPOA by examining Iran’s entire aviation sector rather than simply licensed aircraft;

  • By requiring the President to report on the extent to which Iran’s entire commercial aviation sector is involved in sanctionable conduct, the amendment seeks to establish a factual basis to support the ultimate designation of Iran Air – or, more broadly, Iran’s commercial aviation sector – regardless of how licensed aircraft have been used;

  • Any such re-imposition of sanctions, absent evidence that Iran has used or is using licensed aircraft for non-commercial purposes, would be a violation of U.S. commitments under the JCPOA and would render a fatal blow to the licensed sale of U.S. aircraft to Iran.

An amendment from Rep. Steve Chabot, now included as Section 4, also poses complications for Iran policy. Upon receipt of credible information that destabilizing numbers and types of conventional weapons have been sold or transferred to Iran, the President shall notify Congress of the sale or transfer and determine whether various sanctions laws are applicable to the sale:

  • This reporting requirement would include the sale of the S-300 missile defense system to Iran, which Russia has already provided and is not prohibited by any UN Security Council Resolution, in addition to the S-400 system that has not been sold;

  • As a result, the provision could push the administration to sanction Russia for providing conventional defensive weaponry to Iran, in addition to other states, despite the lack of clear prohibitions on such transfers;

  • Such a stance could complicate efforts to present a united front toward Iran and lead toward a fracturing of international unity in implementing existing sanctions on Iran.

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