Washington, DC – Senior State and Treasury Department officials convened last week to discuss the implementation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, but failed to offer concrete guidance to a large audience of legal professionals trying to navigate the complex legislation. The event, co-sponsored by the Washington Foreign Law Society and the American Society of International Law, left numerous questions unanswered regarding how citizens should comply with the sanctions act.
Robert Cekuta, State Department Deputy Assistant Secretary for Energy, Sanctions and Commodities, called the sanctions “an additional tool to bring about policy changes on the part of the Iranian government.” Sean Thornton, Treasury Department Chief Counsel of the Office of Foreign Assets Control (OFAC), added that sanctions are meant “to increase our leverage to make diplomacy more effective.”
But while Cekuta lauded the sanctions’ effectiveness and ability to target certain industries, including shipping, energy, and fine petroleum products, both officials stressed that if foreign financial institutions choose to conduct any business in Iran, they could lose access to business within the United States. This ambiguity has created further legal complications for Iranians and Iranian Americans that were not addressed by the panel.
Several questions regarding the lack of clear guidelines surrounding CISADA arose, including frequent questions about the applicability of OFAC guidelines and regulations issued prior to CISADA’s enactment. Thornton warned against following these existing rules, but said that OFAC is not likely to offer guidance in the near future because it evaluates cases on an individual basis and generally tries to discourage all transactions regarding Iran.
Critics have warned that such an approach creates unintended consequences that are harmful to ordinary Iranians. For instance, in the immediate aftermath of CISADA’s passage, Iranian students seeking to study abroad found that Test of English as a Foreign Language (TOEFL) exams, which are required to apply to American colleges, were suspended because the bank processing exam fees ended all Iran-based transactions.
Iranian Americans and Iranian students in the US have found it increasingly difficult to send and receive family remittances due sanctions ambiguities as well. Remittances to Iran are legal, but no clear guidelines for these transactions exist. NIAC has requested clarification and new guidelines from OFAC that specifically address remittances.
When panel moderator and Arnold & Porter partner John Bellinger pressed Thornton and Cekuta for definitive answers on whether existing sanctions regulations could be relied on to navigate CISDA, there was no clear answer. An unnamed official in the audience from the State Department’s Office of the Legal Adviser responded, “The bottom line is…that it would not be prudent to rely upon the federal register notice.”