Iran Braces for Reinstated U.S. Sanctions

Week of October 29, 2018 | Iran Unfiltered is a weekly digest tracking Iranian politics & society by the National Iranian American Council | Subscribe Here

  • Rouhani Stresses Iran will Withstand U.S. Pressure
  • Officials Reject Denmark Claims of Terrorist Plot, Call for Improving EU Ties
  • Quarrel Involving Senior Ayatollah Highlights Clerical Divisions
  • Israeli Prime Minister’s Oman Trip Viewed as Advancing Broader Anti-Iran Agenda
  • Parliament Approves Rouhani’s Ministerial Changes

As U.S. sanctions on Iran’s banking and oil sectors are set to be reinstated on November 5th, Iranian officials emphasize Iran can endure the pressure and will not change its regional policies. Officials have also strongly rejected accusations by Denmark regarding an alleged Iranian plot to assassinate an opposition figure associated with the al-Ahvaz separatist group. The charge has been characterized by the Iranian foreign ministry as aimed at reversing the improvement in Iran-EU ties and pushing Europe to join the Trump administration’s pressure campaign. A recent meeting between a senior Ayatollah and former reformist President Mohammad Khatami also spurred controversy inside Iran after the Ayatollah came under attack by prominent conservative official. Meanwhile, the recent trip by Israeli Prime Minister Benjamin Netanyahu to Oman—often used as a Western backchannel to Iran—was perceived by some Iranian analysts as aimed at breaking Oman away from Iran.

 

Officials Defiant as U.S. Sanctions Return

On October 31st, President Hassan Rouhani held a cabinet-level meeting where he discussed the return of U.S. sanctions and contended that the U.S. was backing down in its pressure campaign. He proclaimed: “I am certain that America will not be victorious in this new plot against Iran. As we are seeing, they are backing down step by step.” He went on: “First, they said ‘we will reduce Iranian oil [exports] to zero,’ then they said in November it won’t be possible to reduce to zero but it will be in several more months, and later they slowly began saying we can’t reduce to zero but we only want to just reduce Iranian oil exports.”

Rouhani touched on the hardships that the Iranian people are facing and said his administration will successfully overcome the difficulties. He stated: “Maybe in the past several months our people have endured hardships and the next months will also be difficult, but the government will use all its capabilities to ease problems and God willing, with the help of the people, producers, exporters, and all economic actors, we won’t allow this trajectory to continue.”

Rouhani also contended that U.S. pressure was transient and called on other countries to maintain commercial ties with Iran. He declared: “To Iran’s commercial partners, I say that this American pressure is temporary but our relations with you are permanent. The Americans yell for a few days but will eventually leave. They cannot decide for this region and great nations in this regard.”

Rouhani also struck a more provocative tone by comparing the reinstatement of sanctions to the 1979 hostage crisis at the U.S. embassy in Tehran. Rouhani noted that the anniversary of the hostage crisis coincided with the reimposition of U.S. sanctions. He opined: “13 Aban [November 4th, anniversary of U.S. embassy hostage taking] was rooted in struggling against capitulation and struggling for the Iranian people’s independence and against American aggression … they [U.S. leaders] hoped that within a few months the revolution would crumble and they could gloriously and with complete dominance return to Iran and consolidate their control here.”

Foreign Ministry Spokesperson Bahram Ghassemi stated in his weekly press conference that Iran’s regional policies have not changed in response to the Trump administration’s pressure policies. He proclaimed: “Iran without a doubt is the same country it was previously with all the same features. It is the same country it was before Trump’s presidency, without any changes to its regional policies.”

Ghassemi also said that President Trump was making a mistake in neglecting regional history and was harming his own legacy. He stated: “It seems that Trump doesn’t have enough awareness regarding the region’s situation, the history and characteristics of the people of the region, and the developments that have taken place in this part of the world in recent years.” He went on: “His prominent advisors unfortunately neglect the interests of the American people and based on wrong intelligence attained from terrorist groups, are keen on getting America in confrontations in the Middle East. This is resulting in the American peoples’ interests and Trump’s reputation being destroyed.”

 

Tehran Reacts to Denmark’s Accusation of an Assassination Plot

On October 30th, Denmark’s security and intelligence agency announced that a Norwegian citizen of Iranian background, who allegedly intended to carry out an assassination on Danish soil, had been arrested and would be held until November 8th before going to trial. According to Danish intelligence chief Finn Borch Andersen, an Iranian intelligence agency was behind the plot, which was aimed at assassinating the head of the “Arab Struggle Movement for the Liberation of Ahvaz” (ASMLA), a group that calls for the separation of Iranian Arabs from Iran. Denmark subsequently recalled its ambassador to Iran and called for sanctions against Iran that are not contrary to the nuclear deal.

Iranian media and officials reacted to the allegation with disbelief and framed it as part of efforts to scuttle Iran’s relations with Europe as U.S. sanctions return. Moderate-conservative Alef stated: “Despite the atmosphere being created by some Western governments, it’s unthinkable for such an action to be taken on the eve of the return of U.S. oil and banking sanctions and at a time when Europe is to provide Iran its economic incentive package to win Iran’s acquiescence to stay in the nuclear deal.”

Reformist Fararu connected the allegation to Iran’s earlier rebukes of Denmark and other European states after the August 22nd Ahvaz terrorist attack. It stated: “In late September, Iran announced that Denmark, Norway, and Britain were providing refugee to several members of the ‘al-Ahvaz’ terrorist organization. The Islamic Republic views al-Ahvaz as responsible for the terrorist attack on the military commemoration parade on August 22nd in Ahvaz, which led to the death of 24 people.” Fararu added: “The separatist and terrorist Al-Ahvaz group claimed responsibility for the terrorist attack on the military commemoration parade in Ahvaz on August 22nd.”

Alef compared the charges to a similar episode in July, when some European states accused Iran of planning to attack an Iranian opposition gathering in Paris. It stated: “This comes after Belgian police, several months ago and just before President Rouhani’s trip to Europe, stated that two Belgian citizens of Iranian background were arrested while possessing a home-made bomb and aimed to attack the MEK gathering in Paris. At the time, the Zionist regime [Israel] also announced that it had discovered the plot and notified European governments.”

Iranian outlets and officials viewed reports that Israel’s spy agency Mossad provided the intelligence that led to the arrest by Denmark as confirming a sinister agenda behind the accusation. Fararu stated: “[Europe’s commitment to the nuclear deal] has greatly upset Israeli Prime Minister Benjamin Netanyahu. He has expressed pride over influencing America to leave the deal, but despite his multiple trips to Europe, he has been unable to change the European position on the nuclear deal. Now at a very sensitive juncture, suddenly Iran is accused of a terrorist operation in Denmark. An accusation that comes just days before the implementation of American oil sanctions against Iran.” It added: “These [European] countries now must decide whether or not to continue their efforts against U.S. sanctions. This dilemma is to the benefit of Israel.”

Alef also stated regarding the potential impact of the Denmark accusation on European efforts to maintain the nuclear deal: “This development might cause them [Europe] to turn their backs on the commitments that they are supposed to implement before November 5th or for them to compel Iran into giving more concessions on their demands.”

On October 31st, Foreign Ministry spokesman Bahram Ghassemi stated that the Danish Ambassador to Iran, shortly before returning to Denmark due to being recalled, had a meeting with the head of the Iranian foreign ministry’s office for European affairs. Ghassemi said of the meeting: “In this meeting, our country’s protests were conveyed to the Danish ambassador in regards to the hasty political and media reactions by some Danish officials to the arrest of the Norwegian-Iranian citizen on charges of planning to assassinate an individual in Denmark.”

During their meeting, the Iranian representative told the Danish ambassador that the allegation advanced the agenda of forces opposed to improved European-Iranian relations. Ghassemi said of the meeting: “The head of the office for European affairs in this meeting stressed that Iran rejects the one-sided reports regarding an unsuccessful operation against an Iranian oppositionist in Denmark and accusations that the Islamic Republic was connected to this.” He went on: “[He stated that] Iran views this as a continuation of plots and conspiracies by known enemies of the good and improving relations between Iran and Europe in the current, special circumstances. The head of office for European affairs also stressed the necessity of these developments being managed in a wise and calculated way and warned of misconduct leading to consequences that are indecisive and controversial.”

Hesamodin Ashna, a senior advisor to President Rouhani, stated that the “Denmark situation is an effort to bring Europe on board with the United States [in sanctioning Iran].” He added: “With their initial efforts [to separate Europe and Iran] having failed, on Tuesday a new case was created to bring Europe on board with U.S. sanctions under the excuse of terrorism. The confession of Mossad and Pompeo’s early celebration reveal their role. Relieving Saudi Arabia of international pressure over the murder of Khashoggi was another aim of this conspiracy. This was done even though Iran’s hand is strong and so now Mossad has sold this burnt case cheaply.”

 

Official’s Attack on a Senior Ayatollah Spurs Clerical Backlash

Ayatollah Musa Shobeiri Zanjani, who holds the highest rank of Marja Taqlid in the Shia clerical hierarchy, was the subject of controversy for recently meeting former reformist President Mohammad Khatami and other prominent reformists. During the same trip to Tehran, Shobeiri Zanjani also met with Supreme Leader Ayatollah Khamenei, leading to speculation that he was attempting to reconcile Ayatollah Khamenei and senior reformist leaders—who have been long estranged.

However, the controversy over Ayatollah Shobeiri Zanjani’s meeting with Khatami negated any potential efforts to facilitate dialogue between excised reformists and Ayatollah Khamenei, highlighting the depth of Iran’s political divide.

Ayatollah Shobeiri Zanjani’s meeting was strongly criticized by Mohammad Yazdi, the conservative head of Iran’s powerful Assembly of Experts–an elected body constitutionally-mandated with monitoring and choosing the Supreme Leader. In a letter to Shobeiri Zanjani, Yazdi stated: “The release of pictures on social media which show his excellency [Shobeiri] next to some problematic individuals who have no respect for the Islamic Republic system and the supreme leader … has saddened and surprised many in the seminary.”

Yazdi went on to issue a stern warning to the senior Ayatollah: “I remember your position and the respect you held under the shadow of respect for the Islamic system, the Leader, and the dignity of Marjas. It is necessary for this respect and the dignity of Marjas to be respected and for arrangements to be made so that these types of issues don’t occur again.”

Yazdi’s letter triggered widespread outrage and backlash among politicians and religious centers.  Deputy Speaker of Parliament Ali Motahari said in response to the letter: “With your threatening sentence, have you respected the dignity of Marjas or not? Who said that a meeting between a Marja Taqlid and people with records of service to the revolution who—even if there might be some criticisms to be made against them—is against the dignity of marjas? Do you know the dignity of marjas better than they themselves do? Do people have to get permission for you to meet whoever they want?

Motahari added: “The position and respect of a Marja Taqlid [senior Ayatollah] is not necessarily derived from just respecting the Islamic system, but is more based on his positions towards this system, in supporting its correct actions and criticizing its incorrect actions and defending the rights of the people.”

The prominent “Assembly of Qom Seminary Scholars and Researchers” also sharply rebuked Yazdi. The organization stated in a letter: “Shia Marjas have been an independent institution who in times of crisis has been able to solve difficulties and help save Iran. This letter, putting aside the damage it does to the institution of Marjas and the Qom seminary, has hurt the link between Marjas and the [Islamic Republic] system and created a cleavage between these two institutions in the public arena.”

After Yazdi’s letter, Ayatollah Andalib Hamedani resigned from the Society of Seminary Teachers of Qom, another prominent clerical organization which Yazdi heads, citing his strong disapproval of Yazdi’s letter.

 

Netanyahu Trip to Oman Raises Concerns in Tehran

On October 26th, Israeli Prime Minister Benjamin Netanyahu travelled for an official visit to Oman, the first such visit to the Persian Gulf state by an Israeli leader since 1996. Amir Mousavi, a former senior advisor to a previous Iranian defense minister, discussed Netanyahu’s trip to Oman in an interview with the reformist Fararu.

Mousavi stated that Israeli ties with Persian Gulf Arab states are not a new phenomenon. He said: “We have to take into consideration that these days attacking Iran is far more prevalent than Israel, and anti-Iranian propaganda has to a large degree paid off.” He added: “About Israel’s relations with Arab countries, this is nothing new at all. The only change that has occurred is that these ties were previously secret and now are public. Nearly all the Persian Gulf countries have old relationships with the Zionist regime. At first it was commercial in most cases and gradually expanded and reached security and now political levels.”

Mousavi contended that Saudi Arabia likely had a role in getting Oman to accept a visit by Netanyahu: “The next point is that it is not at all unlikely that Saudi Arabia had a role in the meeting [Netanyahu in Oman]. Given the pressures it was under over the murder of Khashoggi, it is likely to have given economic concessions to Muscat to allow for Netanyahu’s trip to Oman. Especially given that Saudi Arabia has problems with Oman over their borders. It is possible it was ready to give concessions.”

Mousavi then stated that Israel wishes to distance Iran and Oman from each other. He declared: “Oman has strategic and security relations with Iran and from long ago has been a country that we have had close relations with. I think this meeting [Netanyahu in Oman] is aimed at confronting Iran after November 5th when U.S. sanctions are reimposed.” He added:  “They have tried for a long time to create a cleavage between Iran and Oman … Sultan Qaboos has good relations with Iran, but there are others who aren’t aligned with his thought and Saudi Arabia and the UAE want to bring them to the forefront. If this trajectory continues, it is possible that after Sultan Qaboos there will be changes in relations between Iran and Oman.”

In other domestic politics news, the Iranian parliament this week approved all four of Rouhani’s proposed replacements of his cabinet. The changes include: Farhad Dejpasand as the minister of economy, Mohammad Eslami as minister of transport and urban development, Mohammad Shariatmadari as minister of cooperative, labor, and social welfare, and Reza Rahmani as minister of industry, mine and trade.

 


 

 

Experts on the Reimposition of Sanctions on Iran in Violation of the Nuclear Deal

For Immediate Release: November 2, 2018
Contact:
 Brett Abrams | brett@unbendablemedia.com

WASHINGTON, DC — At midnight on Monday, President Trump’s snapback of nuclear-related sanctions on Iran will be finalized. While a portion of the sanctions previously waived under the Joint Comprehensive Plan of Action (JCPOA) came back into force on August 7, the November 5 tranche of Iran sanctions includes many of the most impactful sanctions to be levied on Iran, including those targeting Iran’s energy and financial sectors.

The decision by the United States to violate the Iran nuclear deal and reinstate sanctions has already caused economic pain for Iran’s population of 80 million. However, Iran has ruled out negotiations with the Trump administration for the foreseeable future.

Jamal Abdi, President of the National Iranian American Council, a leading voice for the Iranian-American community and expert on US-Iranian relations, issued the following statement reacting to the implementation of snapback sanctions against Iran:  

“These sanctions are a slap in the face to the Iranian people who have been squeezed between the repression of their government and the pressure of international sanctions for decades. Impoverishing ordinary Iranians will not hurt the regime or achieve any of America’s security interests, but it will set back the Iranian people’s aspirations for years to come.

“The Obama administration left a playbook for how to secure concessions from Iran through patient, multilateral diplomacy. Unfortunately, Trump and his team have ripped the diplomatic playbook to shreds, opting for policies that echo the drumbeat for war that led up to the 2003 invasion of Iraq.

“Trump, his war cabinet and regional cheerleaders in Benjamin Netanyahu and Mohammed bin Salman do not have the Iranian or American people’s best interests at heart. Instead, they are blowing up an agreement that supports U.S. interests and the aspirations of the Iranian people while planting the seeds for a disastrous war. The U.S. must reverse course before irreparable harm is done to the Iranian people, regional security and America’s international standing.”

In a memo to U.S. lawmakers, the National Iranian American Council warns that the snapback of sanctions on Iran has precipitated a crisis in slow motion, threatening a range of U.S. national interests and tying America closer to the destabilizing campaigns of Saudi Arabia. In the memo, NIAC warns that the blowback from sanctions reimposition will:

Increase the Risks of an Iranian Nuclear Weapon

  • Trump’s snapback of nuclear-related sanctions has eviscerated Iran’s benefit for complying with the JCPOA, increasing the risk of Iran halting its compliance with the accord and moving closer to a nuclear weapon.
  • The re-designation of the Atomic Energy Organization of Iran (AEOI) threatens to disrupt international work to reduce proliferation risks at the Arak heavy water reactor and deeply buried Fordow facility.

Raise the Risk of War

  • Trump’s advisors John Bolton and Mike Pompeo have pushed for war with Iran as an alternative to negotiations, as have Iran’s regional rivals who have increased sway with the Trump administration.
  • A spark for a military confrontation could come from several directions in the absence of diplomacy with Iran – whether over Iran’s nuclear program, regional tensions or a naval confrontation in the Persian Gulf.

Isolate the United States

  • The U.S. is in material breach of the UN Security Council-endorsed JCPOA, which all other parties to the accord – including our allies in Britain, France and the European Union (EU) – are seeking to keep alive.
  • JCPOA participants and Iran are seeking to establish independent payment channels, with ramifications that could undercut U.S. dominance of the global financial system and the power of U.S. secondary sanctions far into the future.

Raise Oil Prices

  • President Trump has repeatedly called on Saudi Arabia and Russia to pump more oil to offset Iranian oil that has been taken off the market, reducing spare capacity that could be key to respond to any emergency.
  • Iranian oil cannot be offset forever, and a crisis risks soaring oil prices and substantial harm for American consumers.

Increase U.S. reliance on Saudi Arabia

  • At a time when Saudi Arabia appears to be an increasingly unsavory partner for the U.S. after the brutal murder of Jamal Khashoggi, the Trump administration has pigeonholed itself into an approach to the Middle East that relies on Saudi Arabia.
  • Overlooking Saudi Arabia’s crimes to pressure Iran bears eerie resemblance to America’s early backing of Saddam Hussein throughout the Iran-Iraq war. A more balanced approach to the region is needed.

Undercut Moderate Forces in Iran

  • Trump’s Iran sanctions are likely to crush the Iranian middle class and private sector, unleashing economic desperation in the country and limiting prospects for internal moderation.
  • Iran’s hardliners have been vindicated by Trump’s decision to violate the JCPOA and snap back sanctions, and will benefit from sanctions that crush forces for moderation while leaving them relatively unscathed.

Trigger a Humanitarian Crisis in Iran

  • Sanctions on Iran under the Obama administration triggered shortages of key life-saving medicines and contributed to the impoverishment of ordinary Iranians by depressing the economy and increasing the cost of basic goods. Similar effects are already being felt from Trump’s snapback.
  • The Trump administration has already targeted private Iranian financial institutions that facilitated humanitarian transactions, raising the risk of further humanitarian crises in the months ahead and more damage to American credibility.

# # #

The National Iranian American Council is a nonpartisan, nonprofit organization dedicated to strengthening the voice of Iranian Americans and promoting greater understanding between the American and Iranian people.

Sanctions Snapback: Trump Reverses Iranian Sanctions Relief

President Trump’s snapback of nuclear-related sanctions on Iran previously waived under the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, will be finalized at midnight on Monday, November 5. While a portion of the sanctions previously waived under the JCPOA came back into force on August 7, the November 5 tranche of Iran sanctions includes many of the most impactful sanctions to be levied on Iran, including those targeting:

  • Iran’s port operators and shipping and shipbuilding sectors;
  • Petroleum-related transactions with the National Iranian Oil Company, Naftiran Intertrade Company, and the National Iranian Tanker Company, including the purchase of petroleum, petroleum products, and petrochemical products from Iran;
  • Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions;
  • The provision of specialized financial messaging services to the Central Bank of Iran and certain Iranian financial institutions;
  • The provision of underwriting services, insurance, or reinsurance; and
  • Iran’s energy sector.

In addition, the Trump administration will re-impose sanctions that applied to persons removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”) and other U.S. sanctions lists pursuant to U.S. commitments under the JCPOA. This includes, for instance, the re-imposition of sanctions on most of Iran’s financial institutions, including the Central Bank of Iran.

Blowback from Snapback

The snapback of sanctions on Iran has precipitated a crisis in slow motion, threatening a range of U.S. national interests and tying America closer to the destabilizing campaigns of Saudi Arabia. The blowback from sanctions reimposition will:

Increase the Risks of an Iranian Nuclear Weapon

  • Trump’s snapback of nuclear-related sanctions has eviscerated Iran’s benefit for complying with the JCPOA, increasing the risk of Iran halting its compliance with the accord and moving closer to a nuclear weapon.
  • The re-designation of the Atomic Energy Organization of Iran (AEOI) threatens to disrupt international work to reduce proliferation risks at the Arak heavy water reactor and deeply buried Fordow facility.

Raise the Risk of War

  • Trump’s advisors John Bolton and Mike Pompeo have pushed for war with Iran as an alternative to negotiations, as have Iran’s regional rivals who have increased sway with the Trump administration.
  • A spark for a military confrontation could come from several directions in the absence of diplomacy with Iran – whether over Iran’s nuclear program, regional tensions or a naval confrontation in the Persian Gulf.

Isolate the United States

  • The U.S. is in material breach of the UN Security Council-endorsed JCPOA, which all other parties to the accord – including our allies in Britain, France and the European Union (EU) – are seeking to keep alive.
  • JCPOA participants and Iran are seeking to establish independent payment channels, with ramifications that could undercut U.S. dominance of the global financial system and the power of U.S. secondary sanctions far into the future.

Raise Oil Prices

  • President Trump has repeatedly called on Saudi Arabia and Russia to pump more oil to offset Iranian oil that has been taken off the market, reducing spare capacity that could be key to respond to any emergency.
  • Iranian oil cannot be offset forever, and a crisis risks soaring oil prices and substantial harm for American consumers.

Increase U.S. reliance on Saudi Arabia

  • At a time when Saudi Arabia appears to be an increasingly unsavory partner for the U.S. after the brutal murder of Jamal Khashoggi, the Trump administration has pigeonholed itself into an approach to the Middle East that relies on Saudi Arabia.
  • Overlooking Saudi Arabia’s crimes to pressure Iran bears eerie resemblance to America’s early backing of Saddam Hussein throughout the Iran-Iraq war. A more balanced approach to the region is needed.

Undercut Moderate Forces in Iran

  • Trump’s Iran sanctions are likely to crush the Iranian middle class and private sector, unleashing economic desperation in the country and limiting prospects for internal moderation.
  • Iran’s hardliners have been vindicated by Trump’s decision to violate the JCPOA and snap back sanctions, and will benefit from sanctions that crush forces for moderation while leaving them relatively unscathed.

Trigger a Humanitarian Crisis in Iran

  • Sanctions on Iran under the Obama administration triggered shortages of key life-saving medicines and contributed to the impoverishment of ordinary Iranians by depressing the economy and increasing the cost of basic goods. Similar effects are already being felt from Trump’s snapback.
  • The Trump administration has already targeted private Iranian financial institutions that facilitated humanitarian transactions, raising the risk of further humanitarian crises in the months ahead and more damage to American credibility.

Sanctions Bar Educational Platform from Servicing Iranians

A nonprofit online education platform, edX, cited a delay in obtaining a U.S. government license as the basis for a recent suspension of services that inadvertently affected Iranian Americans. After sending an open letter to the company, the National Iranian American Council (NIAC) has been working with edX to resolve complications arising from the suspension.

According to a response from edX, its specific license from the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) for Iran expired prior to being granted a renewal. U.S. sanctions targeting Iran prohibit U.S. companies, such as edX, from exporting services to Iran, including educational services to Iranian nationals located in Iran, which impacted the availability of some edX courses. In order to comply with U.S. sanctions absent a specific license for work involving Iran, across a learner base of over 17 million users, edX identified individuals who could be resident in Iran based on self-identified country residence and IP address and barred them from coursework.

This appears to have included at least some individuals who are not currently resident in Iran (but whose last activity on edX indicated an Iran IP address), including at least one U.S. citizen based outside Iran. However, NIAC has found no evidence of discriminatory intent by edX, and NIAC staff has been assured by edX that it is willing to work to resolve any remaining complications for individuals who should be legally permitted to access edX’s online coursework. If you or a friend believe that they have been erroneously barred from edX coursework, please do not hesitate to contact either NIAC staff (info@niacouncil.org) or edX Support (info@edx.org).

NIAC notes that the availability of coursework to Iranian nationals, regardless of their country of residence, ultimately serves U.S. interests by building bridges to and empowering the Iranian people. Unfortunately, by failing to issue broad enough general licenses to permit edX and similar educational platforms to make its coursework available to Iranians, OFAC has once again ensured that sanctions harm the Iranian people but not the regime. We encourage OFAC to issue necessary licenses for platforms like edX and to carve out broad exemptions to enable Iranian nationals the ability to access educational and communications tools.

EdX Response to NIAC

Trump’s Sanctions Will Hurt the Wrong People in Iran

In August 2013, a group of 466 Iranian dissidents, including dozens of political prisoners, wrote a letter to President Barack Obama chastising him for his Iran policy. The unprecedented sanctions Obama had mustered against Iran, they argued, were not only debilitating the Iranian economy but suffocating Iranian civil society and prospects for peaceful democratic change within the country.

“The Iranian people see themselves as victims to tensions between the U.S. and Iranian governments,” the letter proclaimed. “[They] have reached the conclusion that the sanctioning countries don’t care about their human rights and, to compel the Islamic Republic to accept their demands, they target the Iranian people.”

This week, Donald Trump reinstated the first set of those sanctions, which were removed as part of the July 2015 nuclear accord. According to the Congressional Research Service, these sanctions were the “most sweeping sanctions on Iran of virtually any country in the world,” cutting Iran out of most international trade and banking, and slashing its oil exports—the lifeblood of the Iranian economy.

The Obama sanctions plunged the Iranian economy into recession and doubled the rate of Iranian families in poverty. In January 2013, the Guardian wrote that “hundreds of thousands of Iranians with serious illnesses have been put at imminent risk by … sanctions, which have led to dire shortages of life-saving medicines such as chemotherapy drugs for cancer and bloodclotting agents for haemophiliacs.”

The human costs of the sanctions were not only overlooked by many in Washington, but outright defended in some quarters. Congressman Brad Sherman declared at the time: “Critics also argued that these measures will hurt the Iranian people. Quite frankly, we need to do just that.”

Trump may have a similar mindset in re-imposing the sanctions, despite complete Iranian compliance with the nuclear deal that triggered their removal. Despite his expressed desire for talks with Iran, the rhetoric and actions coming from the president and his administration do not reflect an endgame focused on diplomatic compromise.

Rather, they betray an objective to weaken and destabilize Iran. To this end, Trump has embraced the aggressively anti-Iran positions of Israeli, Saudi, and Emirati leaders, who for years have pushed U.S. presidents to bomb Iran. For them, a failed state in Iran is a sufficient objective.

Trump’s “maximum pressure” campaign has been marked by all-out economic warfare, including a stated aim of forcing Iran out of the oil market. Trump and his hawkish officials National Security Advisor John Bolton and Secretary of State Mike Pompeo have also actively tried to sow the flames of unrest in Iran. At a time when economic hardship and political grievances have brought thousands of Iranians to the streets, Pompeo and Bolton have flattered fringe and extremist Iranian opposition groups. According to U.S. officials speaking with Reuters, the Trump administration has “launched an offensive of speeches and online communications meant to foment unrest and help pressure Iran.” The administration has also reportedly teamed up with Israel to form a “joint working group” focused on “internal efforts to encourage protests within Iran.”

The reality is that Trump’s pressure campaign weakens those within Iran who seek more conciliatory foreign relations and a more open political and social domestic landscape. It also empowers Tehran’s most reactionary forces.

The repressive powers in the Islamic Republic are far more threatened by Iran’s integration into the global economy than by a tit-for-tat dispute with the United States. They worry that the lifting of sanctions will undermine the monopolies established by the well connected few who are aligned with the Revolutionary Guards and other government entities. Indeed, after the nuclear deal, the Supreme Leader issued edicts against a broader opening to the United States and hardliners repeatedly warned of “foreign infiltration” in order to obstruct President Hassan Rouhani’s outreach to the West.

The real threats to repressive rule in Iran are a growing middle class, an organized civil society movement, and leaders who have the political capital to push for change against entrenched elements in the system. These trends make a democratic Iran inevitable. But outsiders, often led by the United States, have taken actions to arrest these developments. They have propped up Iran’s repressive rulers with threats of war and invasion, and bailed them out by slapping sanctions and travel bans to isolate Iranians and keep them weak.

Trump’s punishing use of sanctions will wither away Iranian civil society by impoverishing Iran’s middle class. The sanctions will serve to increase control of the Iranian economy by unaccountable and repressive forces. If U.S. policymakers wish to increase room for political dissent and civil society in Iran, they should remove obstacles to improving the standard of living and wellbeing of the Iranian people. Surrounded by advisors who have for years argued for orchestrating a civil war in Iran, Donald Trump unfortunately appears headed in a perilous direction.

Piece originally published in Lobe Log.

Risks Rise As US Reimposes Sanctions on Iran

Several undesirable consequences are becoming more likely.

This week, a set of Iran sanctions previously lifted under the Iran nuclear deal will snap back into effect as part of President Trump’s complete violation of the accord. Thus far, Iran has avoided rash action, instead seeking to secure concessions from Europe, Russia, and China that could reduce the sanctions’ impact. The cautious response may have lulled the Trump administration into thinking its approach is working, but several potential consequences loom on the horizon.

Renewed proliferation: Before the nuclear deal was signed in 2015, Iran’s heavy-water reactor at Arak was close to going online; it could have produced weapons-grade plutonium for several nuclear weapons per year. Moreover, the deeply buried Fordow facility was already being used to enrich uranium. However, under the nuclear accord Iran destroyed the core of the Arak reactor and agreed to redesign it with international partners so that it would not produce significant amounts of weapons-grade plutonium. Similarly, international partners in collaboration with the Atomic Energy Organization of Iran, or AEOI, are working to turn Fordow into a research-and-development facility, ensuring that Iran experiments with zinc or other benign materials instead of uranium at the site.

Read More at Defense One

Experts Weigh in on Iran ‘Snapback’ Sanctions Going Into Effect Today

WASHINGTON, D.C. — Tonight, sanctions that were lifted under the Iran nuclear deal will begin to go into effect. This includes extraterritorial sanctions on the purchase of U.S. dollar banknotes by Iran; Iran’s trade in gold or precious metals; Significant transactions in the Iranian rial; Iran’s civil aviation sector; and Iran’s automotive sector. The decision to violate the Iran nuclear deal and reinstate sanctions has already had a big impact as major European companies that entered the Iranian market – like Peugeot and Total – have already begun pulling out in anticipation of the “snapback.”

Jamal Abdi, President of the National Iranian American Council, issued the following statement on the reimposition of Iran sanctions:

“Today, the United States again violated a successful nuclear nonproliferation agreement endorsed by the UN Security Council that it helped negotiate, doing grievous harm to American leadership abroad and our ability to resolve challenges diplomatically rather than militarily. This weakens the Transatlantic alliance and pushes Iran further into the hands of Russia and China, undermining the security of the United States and its allies.

“These sanctions will threaten Iran’s compliance with the nuclear accord, while also undercutting hopes for Iranian moderation, harming the Iranian middle class and empowering Iranian hardliners and extremists. This is not an erratic tweet, but a collective punishment of 80 million people who are being plunged into economic misery and denied basic necessities such as life-saving medicine and safe civilian aircraft.

“Making matters worse, the Trump administration does not have a viable diplomatic plan to secure additional concessions from Iran. Instead, the administration appears to be joining with Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammad bin-Salman in pushing to destabilize Iran and create another failed state in the region.

“Make no mistake, with Trump listening to warmongers like John Bolton and Mike Pompeo, this puts the United States on the path to yet another costly and dangerous Middle East conflict.”

On November 4, the remaining sanctions that were lifted under the accord will be reinstated into full effect, including those targeting Iran’s energy sector; Purchases of petroleum and related products; Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions; and Persons removed from the Specially Designated Nationals (SDN) list, including most Iranian financial institutions.

# # # #

Memo: Consequences of Sanctions Snapback on Iran

Not satisfied with withdrawing from the Iran nuclear accord, or Joint Comprehensive Plan of Action (“JCPOA”), the Trump administration intends to start sanctioning foreign parties that seek to comply with the terms of the international agreement. As outlined by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the Trump administration will begin re-imposing those sanctions lifted pursuant to the JCPOA on August 7, 2018 and continuing up until November 4, 2018, at which time all formerly lifted sanctions will be re-imposed on Iran.

Because such U.S. sanctions primarily target foreign parties transacting or otherwise dealing with Iran, the Trump administration will be actively undermining efforts by the international community to act consistent with the JCPOA and ensure its survivability. This includes, most dramatically, undermining efforts by foreign countries and entities to take those measures identified in the JCPOA to reduce or eliminate the risk of nuclear proliferation in Iran. This move is a dangerous gambit that pits the U.S. in opposition to the rest of the world—including the U.S.’s closest partners and allies—and risks re-invigorating nuclear proliferation efforts in Iran.

Considering the dramatic consequences for U.S. national security and foreign policy interests, the Trump administration should not be given free reign to plunge the United States into a confrontation with its closest allies and partners — such as those in Europe — and risk a new war in the Middle East. Congress should assert its own constitutional prerogatives and ensure that the Trump administration acts consistent with long-standing U.S. policy objectives, including those related to nuclear non-proliferation. This could include, for instance, legislative measures to restrain the Trump administration from abrogating the JCPOA or sanctioning foreign parties seeking to comply with the terms of the nuclear accord. At the very least, Congress should hold hearings to adjudicate the potential negative consequences of the Trump administration’s decision to withdraw from the JCPOA and undo the global consensus in favor of the diplomatic agreement aimed at restraining Iran’s nuclear program.

Re-Imposition of U.S. Sanctions Lifted Under the JCPOA

Beginning August 7, 2018, the Trump administration will take steps to re-impose those U.S. sanctions lifted pursuant to the JCPOA. In its initial phase, this will include the immediate re-imposition of sanctions on:

  • The purchase or acquisition of U.S. dollar banknotes by the Government of Iran;
  • Iran’s trade in gold or precious metals;
  • The direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
  • Significant transactions related to the purchase or sale of Iranian rials or the maintenance of significant funds or accounts outside the territory of Iran denominated in the rial;
  • The purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
  • Iran’s automotive sector.

By November 4, 2018, the United States will re-impose all remaining sanctions targeting Iran that had been lifted pursuant to U.S. commitments under the JCPOA. This will include the re-imposition of sanctions on:

  • Iran’s port operators and shipping and shipbuilding sectors;
  • Petroleum-related transactions with the National Iranian Oil Company, Naftiran Intertrade Company, and the National Iranian Tanker Company, including the purchase of petroleum, petroleum products, and petrochemical products from Iran;
  • Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions;
  • The provision of specialized financial messaging services to the Central Bank of Iran and certain Iranian financial institutions;
  • The provision of underwriting services, insurance, or reinsurance; and
  • Iran’s energy sector.

In addition, the Trump administration intends to re-impose those sanctions that applied to persons removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”) and other U.S. sanctions lists pursuant to U.S. commitments under the JCPOA. This includes, for instance, the re-imposition of sanctions on most of Iran’s financial institutions, including the Central Bank of Iran.

Undermining International Compliance with a Successful Nonproliferation Agreement

The re-imposition of U.S. sanctions will pose immense difficulties for other major world powers’ compliance with the terms of the JCPOA.  Failure by the remaining JCPOA participants to fulfill the terms of the nuclear accord will prompt Iran to abandon some or all of the JCPOA’s limitations on its nuclear program, thus risking renewed proliferation efforts in Iran and threatening a new war in the Middle East.   

Pursuant to the JCPOA, major world powers — including Europe, Russia, and China — agreed to take steps to ensure effectiveness relating to the lifting of national and international sanctions. These commitments were geared towards ensuring that Iran received practical economic benefit from its agreement to maintain long-term restrictions on its own nuclear program. The JCPOA obligated all parties to take adequate measures “to ensure . . . effectiveness with respect to the lifting of sanctions under th[e] JCPOA” and committed JCPOA participants to “agree on steps to ensure Iran’s access in areas of trade, technology, finance, and energy.” The JCPOA was envisioned as an effective quid pro quo, whereby Iran agreed to long-term limitations on its nuclear program in return for practical economic benefits — including the lifting of nuclear-related sanctions — from major world powers.  

The re-imposition of U.S. sanctions, however, will risk the compliance of remaining JCPOA participants, as Europe and other JCPOA parties will have grave difficulties ensuring “effectiveness” with respect to the lifting of sanctions under the JCPOA. For instance, while the European Union and its respective states intend to continue the lifting of national and Union-wide sanctions targeting Iran–consistent with the JCPOA–European companies and persons will nonetheless remain subject to U.S. secondary sanctions targeting their own transactions or dealings with Iran.

The most notable consequences in this respect will be oil and banking transactions. To the extent that Iran is unable to export its oil and repatriate its oil revenues, the JCPOA will become a moot agreement, as Iran is highly unlikely to continue its adherence to limitations on its nuclear program while deriving no practical economic benefit from the nuclear accord. Re-imposed U.S. sanctions expressly target foreign banks — including foreign central banks — and foreign parties engaged in transactions related to the import of Iranian-origin oil. The Trump administration has sent conflicting signals as to whether it will grant exemptions to foreign countries importing Iranian-origin oil — including China, Europe, India, Japan, and South Korea. Similarly, to the extent that Iran’s financial institutions are isolated from the global financial system and unable to reconnect to foreign banks to process trade-related and other transactions, the Iran nuclear deal will not survive. Re-imposed U.S. sanctions will re-designate most Iranian financial institutions for sanctions and render foreign bank dealings with such Iranian financial institutions as sanctionable, thus expressly targeting foreign countries’ compliance with the nuclear accord.

Sanctioning Beneficial Work at Arak and Fordow

Pursuant to the JCPOA, Iran agreed to convert its enrichment facility at Fordow into a research center absent of proliferation risk. To do so, however, Iran required international collaboration, including in the form of scientific joint partnerships in agreed areas of research. In addition, the JCPOA required Iran — as part of an international partnership — to redesign and rebuild a modernized heavy-water reactor in Arak that would drastically reduce its potential output of plutonium.

However, these measures aimed at reducing the risk of nuclear proliferation in Iran are under serious threat, as re-imposed U.S. sanctions render sanctionable conduct by foreign parties with respect to Iran’s nuclear program. For instance, the Trump administration has stated that it will re-impose those sanctions that applied to persons removed from OFAC’s SDN List pursuant to the JCPOA. This appears to include the re-designation of the Atomic Energy Organization of Iran (“AEOI”) — the body responsible for Iran’s nuclear program — pursuant to Executive Order 13382. By designating the AEOI pursuant to E.O. 13382, entities that provide or attempt to provide financial, material, technological, or other support for, or goods or services in support of, the AEOI would be exposed to U.S. sanctions and risk designation under E.O. 13382 themselves. Foreign parties participating in an international partnership with the AEOI — consistent with the JCPOA — to convert the Arak nuclear reactor into a reactor absent of proliferation risk would thus be engaged in sanctionable conduct, as such parties would be prima facie engaged in the provision of material support to the AEOI  — thus meeting the criteria for designation under E.O. 13382.  

In addition, the U.S.’s re-designation of the AEOI pursuant to E.O. 13382 will render foreign financial institutions that facilitate significant transactions for or on behalf of the AEOI — including transactions consistent with the terms of the JCPOA — exposed to U.S. sanctions under § 104(c)(2)(E) of the Comprehensive Iran Sanctions Accountability and Divestment Act (“CISADA”) and § 1247 of the Iran Freedom and Counter-proliferation Act (“IFCA”). Such financial institutions would risk being cut off from the U.S. financial system and would thus be unlikely to facilitate transactions involving the AEOI, even if such transactions are consistent with the JCPOA and reduce the risk of proliferation in Iran.  

In the Trump administration’s zeal to kill the Iran nuclear deal, the administration will perhaps fatally undermine efforts to ensure the conversion of Iran’s nuclear facilities into facilities absent of proliferation risk, thus gravely undermining U.S. and regional security.

The Need for Congressional Intervention

The Trump administration’s withdrawal from the JCPOA and its re-imposition of U.S. sanctions targeting Iran risks splitting the United States irrevocably from its historical allies and partners, including those in Europe; threatens to undermine the future use of economic sanctions to secure national security and foreign policy objectives; and encourages the reinvigoration of nuclear proliferation risks in Iran. Such consequences implicate critical U.S. national security and foreign policy interests and warrant increased oversight over the administration’s actions.

Congress should be involved in any decision implicating U.S. national security and foreign policy interests. In this case, Congress should assert its own prerogatives in the realm of foreign policy and resume U.S. compliance with the JCPOA, including, but not limited to, the continued lifting of U.S. sanctions as obligated under the nuclear accord. Absent such a dramatic measure, however, Congress should seek to restrain the President from re-imposing those U.S. sanctions lifted under the JCPOA and should at least limit the damage re-imposed U.S. sanctions could cause to the transatlantic alliance between the United States and Europe. If the U.S.’s historical allies and partners in Europe believe that their own national security interests demand their continued compliance with the JCPOA, then the Trump administration should be restricted from imposing sanctions on European companies engaged in commercial trade with Iran that is permissible under European law.

Shockingly, Congress — which held numerous hearings on the U.S.’s assent to the JCPOA — has proven unwilling to conduct significant oversight regarding the potential consequences inherent in the Trump administration’s withdrawal from the JCPOA and its re-imposition of U.S. sanctions targeting Iran. In failing to assess the risks and dangers associated with the Trump administration’s actions, Congress has rendered itself incapacitated on an issue of critical import to U.S. national security. Following midterm elections, Congress should reassert its prerogatives in the field of national security and ensure that the Trump administration is not able to undermine long-standing U.S. foreign policy objectives — including the objective of nuclear non-proliferation — through its rash decision to withdraw from the Iran nuclear accord and re-impose those U.S. sanctions lifted under the JCPOA.


¹ Other U.S. sanctions may be applicable to transactions involving the AEOI and incident to the fulfillment of the terms of the JCPOA, including, for instance, menu-based sanctions on foreign parties that sell, supply, or transfer to Iran graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes, if the material is sold, supplied, or transferred for use in connection with Iran’s nuclear program. Section 1245(a)(1)(C) of IFCA does not distinguish between those transactions aimed at converting Iran’s nuclear facilities into facilities absent of nuclear proliferation risk and is thus likely to counteract international efforts to reduce the risk of nuclear proliferation in Iran.  

Pompeo and Trump Plan to Exploit and Silence Iranian Americans

FOR IMMEDIATE RELEASE
Contact: Jamal Abdi
Phone: 202-386-6408
Email: jabdi@niacouncil.org

Washington, D.C. – Jamal Abdi, the Vice President for Policy of the National Iranian American Council, issued the following statement in response to Secretary of State Mike Pompeo’s announcement that he will address Iranian Americans in Simi Valley later this month:

“The quest for human rights and democracy in Iran can only be owned by the Iranian people. It cannot be owned by the U.S., Israel, or Saudi Arabia. It cannot be decided by Iran’s government or even Iranian exiles.

“What President Trump and Secretary Pompeo want is to exploit Iranian Americans and co-opt the Iranian people to provide legitimacy for the Trump Administration’s Iraq War redux for Iran. Just as the Bush Administration cultivated a few Iraqi exiles and talked about human rights to provide legitimacy for a disastrous invasion of Iraq, the Trump Administration appears intent on using Iranian exiles to advance dangerous policies that will leave the Iranian people as its primary victims.

“If Sec. Pompeo really wants the Iranian-American community to embrace the Trump agenda, he must start with a sincere apology and rescind Trump’s ban that is dividing Iranian Americans from their friends and loved ones in Iran. He should apologize for the Administration’s move to banish the most prominent Iranian-American national security official from policymaking decisions due to her heritage. Moreover, he should apologize for the decision to strip the Iranian people of their hope for relief from sanctions and greater connections with the outside world, instead ensuring they will be crushed between U.S. sanctions and resurgent hardline forces in Iran’s government that have benefited from Trump’s withdrawal from the nuclear accord.

“It should be abundantly clear that Secretary Pompeo, who called for bombing Iran instead of negotiations, is no friend of the Iranian people. Similarly, Trump – whose national security advisor and lawyer have elevated the voices of an undemocratic, human rights abusing cult, the MEK, to become the next leadership of Iran – does not have the Iranian people’s best interests at heart. The Trump Administration’s close coordination with Benjamin Netanyahu and Mohammad Bin Salman, who are motivated by their own political gain and regional power dynamics rather than any love for democracy or the Iranian people, should dispel any notion this campaign is about helping ordinary Iranians.

“As Americans, we have a vital role to play in ensuring our democratically elected government does not start wars on false pretenses or destroy lives in our names. As Iranian Americans, our voices are particularly vital when it comes to the U.S. government’s efforts regarding our ancestral homeland. We will not be exploited or silenced at this critical moment in history.”

###

NIAC Pushes for Broader Sanctions Exemptions for Humanitarian Relief

Washington, DC – In response to Iran’s deadly 2017 earthquake in Kermanshah province, hundreds of thousands of U.S. citizens donated to humanitarian relief efforts to rebuild devastated areas. Humanitarian relief efforts have long been exempt from U.S. sanctions law, though in practice there continue to be sanctions-related hurdles both in how American citizens contribute to relief efforts and how humanitarian NGO’s are able to finance relief work on the ground. On numerous occasions, NIAC has raised concerns regarding these complications and pushed the administration to ensure that U.S. sanctions were not standing in the way of urgent relief. In November, Sen. Bernie Sanders (I-VT) and four other Senators led a letter urging the administration to broaden its sanctions exemptions to facilitate relief.

On March 22, the Department of Treasury solicited feedback on the effectiveness of its current licensing procedures for humanitarian aid to Iran and Sudan. Given the importance of this issue to both the people of Iran and the Iranian-American community, NIAC submitted comments recommending opportunities for improvements, including by encouraging the Treasury Department to authorize a direct banking channel between the U.S. and Iran to finance relief work. This is of critical importance, as we have heard directly from humanitarian organizations regarding the continued difficulty of finding banks willing to transact with them given the perceived risk of running afoul of U.S. sanctions.

We will continue to work to advance our recommendations and ensure that U.S. sanctions do not inadvertently impede humanitarian relief to the people of Iran. You can see the text of NIAC’s comment below:

ATTN: Request for Comments (TSRA)
Office of Foreign Assets Control
United States Department of the Treasury
Freedman’s Bank Building
1500 Pennsylvania Avenue NW
Washington, D.C. 20220

Re: NIAC’s Comments Regarding OFAC’s TSRA Licensing Procedures

Dear Sir or Madam:

            On March 22, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced that it was “soliciting comments on the effectiveness of OFAC’s licensing procedures for the exportation of agricultural commodities, medicine, and medical devices to Sudan and Iran.”[1]  OFAC is required to solicit such comments as part of its biennial report to Congress on the operation of the licensing procedures pursuant to § 906 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) and will consider any such comments during the development of its report to Congress.  

By means of this instant submission, the National Iranian American Council (“NIAC”), the largest grassroots organization in the United States representing the interests of Iranian Americans, submits its comments regarding the effectiveness of OFAC’s licensing procedures for the export of agricultural commodities, medicine, and medical devices to Iran for the time period between October 1, 2014 to September 30, 2016. NIAC submits such comments with the sole intent of encouraging the robust facilitation of humanitarian trade between the United States and Iran in order to benefit the Iranian people, as is the purpose of the underlying TSRA legislation.

  1. Factual Background

            The Trade Sanctions Reform and Export Enhancement Act (“TSRA”), 22 U.S.C. § 7201 et seq., terminates any unilateral agricultural sanction or unilateral medical sanction in effect as of October 28, 2000 against a foreign country or foreign entity and prohibits the President from imposing any such unilateral agricultural sanction or unilateral medical sanction unless a proposed sanction is enacted into law by a joint resolution of the Congress.[2]  However, this provision does not direct the termination of, or prohibit the imposition of, any unilateral agricultural sanction or unilateral medical sanction that prohibits, restricts, or conditions the provision or use of any agricultural commodity, medicine, or medical device that is controlled on the United States Munitions List (“USML”), controlled on any control list established by the Export Administration Act of 1979 (“EAA”) or any successor statute, or used to facilitate the development or production of chemical or biological weapons or weapons of mass destruction.[3]

            Moreover, TSRA provides that the export of agricultural commodities, medicine, or medical devices to Cuba or to any U.S.-designated state sponsor of terrorism shall only be made pursuant to one (1) year licenses issued by the U.S. government for contracts entered into during the one (1) year period of the license and shipped within the twelve (12) month period beginning on the date of the signing of the contract.[4]  OFAC applies the licensing procedures required by this latter provision to all exports and re-exports of agricultural commodities, medicine, and medical devices to U.S.-designated state sponsors of terrorism – including Iran and Sudan – that are within the current scope of OFAC’s licensing jurisdiction.[5]

            Iran remains a U.S.-designated state sponsor of terrorism; and, as such, TSRA’s licensing procedures are applicable to the export of agricultural commodities, medicine, or medical devices to Iran.  These licensing procedures are codified in the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. Part 560.  Section 560.530 of the ITSR promulgates a general license and specific licensing procedure for the sale, export, and re-export to Iran of agricultural commodities, medicine, and medical devices, while § 560.532 of the ITSR identifies authorized means of making payment for and financing any such licensed sales, exports, or re-exports of agricultural commodities, medicine, and medical devices to Iran. 

  1. NIAC’s Comments Regarding OFAC’s TSRA Licensing Procedures

            The most significant impediment to U.S. person engagement in humanitarian trade with Iran remains the lack of a financial channel to remit payment for humanitarian goods.  Despite licensing the making of payments and financing for sales, exports, and re-exports of agricultural commodities, medicine, and medical devices to Iran, OFAC’s licensing procedures have failed to provide U.S. persons with reliable options for receiving payment for the provision of permissible humanitarian items to Iran.  Unable to reliably receive payment for their provision of humanitarian goods to Iran or receive financing to permit the sale of such humanitarian items to Iran, a substantial number of U.S. persons that otherwise would have made use of OFAC’s licensing procedures for humanitarian trade with Iran have elected not to pursue such trade.  This undermines U.S. foreign policy interests vis-à-vis Iran, as well as the purposes underlying TSRA’s legislation, by enacting a de facto embargo on the sale, export, or re-export of agricultural commodities, medicine, and medical devices to Iran. 

            Pursuant to 31 C.F.R. § 560.532(a), OFAC provides general license authorization for the following payments terms for sales authorized under § 560.530(a)

(1)       Payment of cash in advance;

(2)       Sales on open account, provided that the account receivable may not be transferred to the person extending the credit;

(3)       Financing by third-country financial institutions that are not U.S. persons, entities owned or controlled by U.S. persons and established or maintained outside the United States, Iranian financial institutions, or the Government of Iran.  Such financing may be confirmed or advised by U.S. financial institutions and by financial institutions that are entities owned or controlled by U.S. persons and established or maintained outside the United States; or

(4)       Letter of credit issued by an Iranian financial institution whose property and interests in property are blocked solely pursuant to 31 C.F.R. Part 560. Such letter of credit must be initially advised, confirmed, or otherwise dealt in by a third-country financial institution that is not a U.S. person, an entity owned or controlled by a U.S. person and established or maintained outside the U.S., an Iranian financial institution, or the Government of Iran before it is advised, confirmed, or dealt in by a U.S. financial institution or a financial institution that is an entity owned or controlled by a U.S. person and established or maintained outside the United States. 

Section 560.532(c)(2) further states that “[n]othing in this section authorizes payment terms or trade financing involving debits or credits to Iranian accounts, as defined in § 560.320.” 

            OFAC’s licensing procedures prohibit direct interaction between U.S. and Iranian financial institutions, as evidenced above.  Indeed, OFAC itself has stated that “it is contrary to U.S. foreign policy to allow U.S. financial institutions to maintain active correspondent relationships with Iranian banks.”  As a result, any financing for or receipt of payment from the licensed export of agricultural commodities, medicine, and medical devices to Iran must involve a third-country financial institution prior to the involvement of a U.S. financial institution, and U.S. person engagement in humanitarian trade involving Iran is contingent on the willingness of third-country financial institutions to issue letters of credit or otherwise process transactions involving the export or re-export of agricultural commodities, medicine, or medical devices from the United States or by a U.S. person, wherever located, to Iran.

            Unfortunately, OFAC has ample precedent at this time demonstrating that third-country financial institutions are generally unwilling to aid U.S. persons seeking to engage in humanitarian trade with Iran authorized pursuant to 31 C.F.R. § 560.530(a).  As a result, U.S. persons have not taken advantage of the permitted trade openings to the extent that would otherwise be possible if there were a reliable, authorized financial channel to remit funds from Iran to the United States.  OFAC has been presented with numerous options to resolve this ongoing problem, including, but not limited to, a direct financial channel between the United States and Iran for licensed dealings between the two countries.  For reasons that remain unclear, OFAC has chosen not to pursue these solutions and has persisted with an authorization that fails to produce the desired outcome.

            It is NIAC’s hope that OFAC will revisit its licensing procedures, including, most especially, its authorization for making payments and financing for the export and re-export of agricultural commodities, medicines, and medical devices to Iran, and will broaden the scope of current license authorizations to ensure that U.S. persons are able to timely and reliably receive payment and financing for humanitarian trade with Iran.

            III.      Conclusion

            NIAC submits this comment pursuant to OFAC’s March 22, 2018 Request for Comment and hopes that the agency will consider this feedback concerning its TSRA licensing procedures.  It is our considered view that while the agency has made important progress expanding the scope of license authorizations relating to the sale, export, and re-export of agricultural commodities, medicine, and medical devices to Iran – including by broadening the scope of medical devices that are generally authorized for export or re-export to Iran – OFAC should ensure that these license authorizations can be fully utilized by ensuring reliable options exist for making payments for and financing the export of such humanitarian items.  For the reasons explained above, NIAC believes that OFAC’s license authorizations have been under-utilized as a result of the lack of a reliable financial channel to facilitate payments for humanitarian items, and only new solutions – including, for example, a direct financial channel between the United States and Iran – can ease this ongoing problem for U.S. exporters and re-exporters.

[1]Effectiveness of Licensing Procedures for Exportation of Agricultural Commodities, Medicine, and Medical Devices to Sudan and Iran; Comment Request, U.S. Dep’t of Treasury, 83 Fed. Reg.12513, March 22, 2018, available athttps://www.gpo.gov/fdsys/pkg/FR-2018-03-22/pdf/2018-05638.pdf.

[2]See 22 U.S.C. § 7201 et seq.

[3]Resource Center: Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) Program, U.S. Dep’t of Treasury, January 13, 2017, https://www.treasury.gov/resource-center/sanctions/programs/pages/tsra_info.aspx. See also22 U.S.C. § 7203.

[4]22 U.S.C. § 7205.

[5]Resource Center: Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) Program, U.S. Dep’t of Treasury, January 13, 2017, https://www.treasury.gov/resource-center/sanctions/programs/pages/tsra_info.aspx.

 

FDD Scholar: War with Iran ‘Is On’

“The war is on”, declared Michael Ledeen, a “Freedom Scholar” with the anti-Iran deal Foundation for Defense of Democracies, at an event to discuss Iran policy following President Trump’s appointment of John Bolton and nomination of Mike Pompeo. “We’re in the war now. So all these people who keep on saying, ‘well if we sign, or if we don’t re-sign, or if we renew or we don’t renew (the Iran nuclear deal) then war,’ that’s all crazy. The war — we are in the war.”

Speaking on a panel at the Hudson Institute last week, Ledeen asserted his belief that the Iranian people had asked the U.S. for help in toppling the regime. His assertion was challenged by an Iranian American supporter of NIAC in the audience who asked Ledeen why he felt Iranians would want the United States’ help. “All they have to do is look at the neighboring countries and see that every country the United States has tried to change the leadership there, it has created a stateless country,” she said. “It’s like asking me to go to a doctor who all of his patients have died in the hospital, and asking ‘could you please operate on me?’ Why would they want the United States to aid them for any sort of help in the regime change?”

Ledeen’s response was to insult and bully rather than to engage in serious debate. Ledeen stated, “the question from this woman right here is not a question, but a provocation. So I am sorry that you’ve wasted your time coming here today to voice the line of your friends in Tehran…The reason why the Iranian people look to us for help, support, guidance in carrying out a revolution against the regime is because they hate the regime.” Ledeen then rudely told her to “sit there quietly” as the moderator moved on to the next question. The tense exchange showed both the stakes of the Iran debate in the months ahead – that Trump’s supporters think “war is on” with Iran – and that so-called “freedom scholars” will go out of their way to stifle debate on the road to confrontation.

Hawkishness and dismissiveness of alternative views was not limited to Ledeen. Richard Goldberg, another FDD adviser who served as a staffer for the hawkish former Senator Mark Kirk (R-IL), predicted that Trump would kill the deal. Goldberg indicated that with negotiations between Trump and the Europeans stalled and Bolton and Pompeo poised to enter the administration, “we have set the stage now for the likely exit of the U.S. from the nuclear deal and the potential for re-imposition of sanctions – at least on the Central Bank on May 12th, and perhaps much more.” Goldberg went on to argue that the reimposition of such sanctions, which he helped to initially pass as a staffer in Congress, would help topple the Iranian regime but avoid harming the Iranian people.

I asked Goldberg how the re-imposition of sanctions on Iran could be designed to be in favor of the Iranian people and avoid causing mass devastation. “With respect to our sanctions policy, the Iranian people are our greatest asset and we do not target the Iranian people, we do not target them, we have no quarrel with them,” Goldberg said. “And so our policy, when it targets the Central Bank of Iran (CBI), when it targets government banks, when it targets the Supreme Leader’s empire, this is about the lifeblood that keeps the Islamic Republic in business of oppressing its people.”

Goldberg’s answer might sound persuasive, yet the reality is that ordinary Iranians themselves are intricately connected to the Iranian economy and banking system – not just the regime. There is absolutely no way a country’s entire banking system can be sanctioned without its people suffering the consequences of the sanctions. We saw this at the height of nuclear sanctions, where the Iranian people suffered from mass unemployment and sanctions while the Islamic Revolutionary Guard Corps (IRGC) expanded its business empire.

Michael Pregent, a fellow with the Hudson Institute, stated that president Trump “has his Iran team in place,” with John Bolton in as National Security Advisor and Mike Pompeo hoping to be confirmed as Secretary of State. If Pompeo and Bolton share the Hudson panelists’ proclivities, it appears that war could be very difficult to avoid.

“Peace is not the opposite of war,” Ledeen ominously concluded. “Peace is the result of war. Peace happens when a war is fought and one side beats the other.”

Think Again: Iran’s Missile Program

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In spite of Iran’s verified implementation of the Joint Comprehensive Plan of Action (JCPOA), which has rolled back Iran’s nuclear program and subjected it to far-reaching inspections, Iran’s periodic testing of ballistic missiles has provoked substantial angst in Washington. Under UN Security Council Resolution 2231, the resolution endorsing the JCPOA, Iran is “called upon not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons” including tests for a period that will last up to eight years. While that language does not impose a binding legal obligation on Iran, both the U.S. and other parties have criticized Iran’s missile testing as “inconsistent” with UNSC Resolution 2231, though not a formal violation.

Since President Trump entered office, his administration has rolled out eight rounds of new sanctions designations and signed new sanctions legislation into law targeting Iran’s missile program. Moreover, the President in January threatened to terminate the JCPOA unless Congress passes legislation stating “that long-range missile and nuclear weapons programs are inseparable, and that Iran’s development and testing of missiles should be subject to severe sanctions.”

Despite this flurry of activity, there have been subtle shifts in Iran’s missile program that could reduce the program’s threat. In particular, Iran’s articulation of a range limit to its missiles and a shift toward short-range solid fueled missiles signals an interest in conventional, regional deterrence, not long-range nuclear missiles.

Iran is Focusing on Short-Range Missiles Aimed at Conventional Deterrence

The commander of the Islamic Revolutionary Guard Corps (IRGC), Gen. Mohammad Ali Jafari, asserted that Iran’s missile program is limited to a 2,000 kilometer radius around Iran under a policy endorsed by Iranian Supreme Leader Ali Khamenei. Similar statements have been issued in the past, though Jafari’s statement appears to be a firming up of prior policy and a signal to the U.S. and others regarding the relative limits of Iran’s missile ambitions.

Moreover, Iran’s testing since the conclusion of the JCPOA appears consistent with this limit. According to an analysis from the Center for Nonproliferation Studies and Nuclear Threat Initiative, Iran has shifted from seeking longer range systems toward short-range missiles primarily suited for conventional deterrence. According to the study:

“the JCPOA has helped redirect Iran’s priorities for its missile program away from developing an ICBM (whose only purpose would be as a nuclear delivery system), to developing solid-fueled versions of its short-range missiles. While such missiles could also be nuclear-capable, they do not extend Iran’s range or payload capabilities meaningfully, and appear intended to serve a conventional purpose.”

While a 2,000 kilometer range limit would include Israel and Saudi Arabia, in addition to numerous U.S. bases in the region, Iran’s focus on conventional solid-fueled missiles suggests they are indeed aimed at regional deterrence – as opposed to long-range missile development that could threaten Europe or the U.S. mainland. Such a shift also meshes with Iran’s signing of the JCPOA, which ensures Iran’s missile program cannot be fitted with nuclear warheads. This is a positive that could be built upon through deft diplomacy, or undermined via diplomatic sabotage.

Pressure Is Unlikely to Change, and May Even Reinforce, Iran’s Missile Calculus

Director of National Intelligence Daniel Coats stated in the annual Worldwide Threats Report this week that Iran “has the largest inventory of ballistic missiles in the Middle East.” Yet, Iran’s competitors are not without missile inventories that match or exceed Iran’s capabilities. Saudi Arabia reportedly maintains dozens of missiles capable of striking Iran, with a maximum range of 2,650 kilometers. Israel is believed to possess both a sizable nuclear arsenal and ballistic missiles capable of traveling up to 6,500 kilometers. Moreover, Iran lacks a modern air force due to a continuing arms embargo and is outspent militarily by Saudi Arabia at a 5:1 rate.

While Iran may prove willing to negotiate over the range of its missiles or confidence building measures with other states if the JCPOA is adhered to, Iran views its missile program as a regional deterrent that is central to its national defense doctrine. Sanctions have not altered that calculus and major arms buildups among Iran’s neighbors have likely strengthened it.

Much of this doctrine stems from Iran’s experience in the Iran-Iraq war, when Iran was almost completely isolated within the region and globally as the world turned a blind eye and even aided Saddam Hussein’s chemical attacks on Iran. Moreover, while Hussein was able to target missiles at Iranian cities from within Iraq, Iran had no similar deterrence or response capability. Iranian Foreign Minister Javad Zarif has stated that Iran needs its missile program “to prevent another Saddam Hussein around the corner attacking us with chemical weapons because the international community has failed miserably in protecting the Iranian people.” The development of a conventional deterrent and response capability is one that has broad support within Iran across political divides. Unless the U.S. and international community engages on the fundamental issues at the heart of Iran’s missile calculus, no amount of sanctions or regional arms sales will succeed in altering it.

Iran’s Missile Testing Has Remained Sporadic

There were only a handful of confirmed reports of Iranian missile launches in 2017. These include:

  • Iran test-fired a medium-range ballistic missile January 29;
  • Iran test-fired a pair of short-range ballistic missiles in early March;
  • Iran launched eight missiles at ISIS (a U.S. enemy) on June 18 in response to a terror attack in Tehran;

While President Trump took to Twitter to allege another Iranian missile launch September 23, this report was actually based on old video of the January test. Further, while Iran test-fired a Simorgh satellite rocket July 27 amid passage of Congressional sanctions targeting Iran’s missile program, that rocket is not designed to be capable of reentering the atmosphere and thus has limited military applications.

It is noteworthy that the July 27 launch appears to be the last undertaken by Iran – a testing pause of more than six months that has extended into 2018. In roughly the same period, the U.S. Navy has reported a significant lapse in dangerous run-ins with the IRGC in the Persian Gulf. While these trends should be monitored, it appears possible that Iran is attempting to avoid giving the U.S. a pretext to sabotage the JCPOA and turn Europe against Iran.

Iran launched roughly five missile tests per year from 2006 to 2012 before nuclear negotiations involving the U.S. gained traction in 2013, according to Michael Elleman of the International Institute for Strategic Studies. Iran largely abstained from missile tests while the negotiations that led to the JCPOA were underway. Since then, the frequency of Iran’s missile tests has been largely consistent with past practices, and – barring major changes – there remains little reason to expect Iran to dramatically ramp up or seek to field a missile capable of reaching beyond the region.

To put Iran’s missile testing in perspective, the CNS-NTI report notes that North Korea tested 14 missiles capable of traveling more than 3,000 kilometers between the signing of the JCPOA and August of 2017, a feat that has not been replicated by Iran.

Transfers to Yemen?

U.S. Ambassador to the United Nations Nikki Haley has taken the lead for the administration in alleging that Iran transferred missiles to Houthi rebels in Yemen, which were in turn launched against Saudi Arabia. Iran has vociferously denied the claim while indicating that Houthi missile stocks were left over from prior Yemeni governments. While Russia has dismissed the Trump administration’s allegations as inconclusive, a confidential UN report has indicated that Iran “failed to block ballistic missile supplies from being used by Houthi rebels.”

Saudi Arabia’s intervention in Yemen – with substantial military assistance from the U.S – has been heavily focused on rolling back Iran’s alleged influence there. Yet, at least at the outset of the conflict, ties between Iran and the Houthis were tenuous at best, with Houthi rebels ignoring Iran’s warnings against taking the capital Sanaa in 2014. If Iran-Houthi ties have now progressed to the point where Iranian support has enabled the Houthis to nearly strike key targets in Riyadh, it should be a clear signal to policymakers that U.S. backing of Saudi Arabia’s intervention is having the opposite of its intended effect and is endangering Saudi and regional security.

What is needed is what the Trump administration has avoided since it came into office: serious, multilateral diplomacy aimed at ending the conflict in Yemen and ameliorating all the actors’ security concerns. Absent this, the negative trend line of the war in Yemen is likely to continue, with disastrous results for the Yemeni people and regional security.

Trump is Escalating Missile Sanctions without a Serious Diplomatic Plan

Thus far, the Trump administration has continued to designate entities and individuals with ties to Iran’s missile program, while also signing new legislation into law targeting the program. Calls to subject Iran’s program to “severe sanctions” would be largely redundant, as the program is already heavily sanctioned. The administration and Congress’ actions since January 2018 include:

  • February 2, 2017 – The Treasury Department imposes sanctions on 25 individuals and entities following Iran’s January launch;
  • May 17, 2017 – The Treasury Department sanctions seven individuals and entities, including a Chinese network, for supporting Iran’s missile program;
  • July 18, 2017 – The Department of State designates two entities for supporting Iran’s missile program while the Treasury Department designates sixteen entities and individuals for supporting the IRGC;
  • July 28, 2017 – The Treasury Department imposes sanctions on six Iranian entities supporting Iran’s missile program in response to its launch of the Simorgh space rocket;
  • August 2, 2017 – The administration signs the Countering America’s Adversaries Through Sanctions Act (CAATSA) into law, which mandates the imposition of additional sanctions in response to Iran’s missile program;
  • August 14, 2017 – The Treasury Department imposes sanctions on eleven entities and individuals, including one entity for supporting Iran’s missile program;
  • October 13, 2017 – The Treasury Department designates the IRGC as a Specially Designated Global Terrorist (SDGT), while also designating four entities including for ties to Iran’s missile program;
  • October 25, 2017 – The House of Representatives passes H.R. 1698, the Iran Ballistic Missiles and International Sanctions Enforcement Act.
  • January 4, 2017 – The Treasury Department sanctioned “five Iran-based entities subordinate to a key element of Iran’s ballistic missile program.”
  • January 12, 2017 – In addition to sanctioning Iranian persons and entities under human rights sanctions, the Treasury Department designated persons and an entity for ties to entities sanctioned for supporting Iran’s missile program.  

In the absence of serious, direct diplomatic engagement between the U.S. and Iran, there is little possibility of changing Iran’s security calculus and no possibility of trading in sanctions for concessions on Iran’s missile activity or other concerning behavior – ensuring that the status quo remains the same or worsens, but never sustainably improves.

Moreover, while it is fair to be concerned about the potential uses of Iran’s missile program or other Iranian activity that runs counter to U.S. interests, it is important to ensure that economic pressure is calibrated and proportional. Continuing to ramp up sanctions designations and legislation at such a pace risks undermining sanctions relief obligated under the JCPOA and could harden domestic political pressure within Iran to begin hedging on JCPOA-compliance and take a more aggressive stance towards the U.S. across the region.

Instead of replacing nuclear escalation with missile escalation, the Trump administration and Congress should protect the gains of the nuclear accord and seek to build on them through serious diplomatic engagement. Failure to do so will risk the unraveling of the nuclear accord and the U.S. once again facing the threats of a nuclear-armed Iran or war.