Memo: H.R. 3425, State Sanctions Against Iranian Terrorism Act

On July 26, 2017, Rep. Ron DeSantis (R-FL-6) introduced H.R. 3425, “State Sanctions Against Iranian Terrorism Act,” a bill that effectively seeks to provide safe passage for U.S. state and local governments to enact additional divestment laws targeting investment in Iran.  By seeking to limit the ability of the federal government to preempt state or local laws contrary to U.S. policy at the federal level, this bill would pose a direct challenge to U.S. commitments under the Joint Comprehensive Plan of Action (JCPOA) – the nuclear accord between the United States, other major world powers, and Iran.  Due to its inconsistency with U.S. obligations under the JCPOA, U.S. legislators should refrain from sponsoring or otherwise providing their support for this legislation absent amendments that ensure that the bill will not cause the United States to act contrary to its express commitments under the nuclear deal.

U.S.’s JCPOA Commitments

Under ¶ 25 of the JCPOA’s Main Text, the United States is obligated to take steps ensuring that state or local laws do not interfere with full implementation of the sanctions lifting specified in the JCPOA.  Moreover, the United States is committed “actively encourage officials at the state or local level to take into account the changes in U.S. policy reflected in the lifting of sanctions under [the] JCPOA and to refrain from actions inconsistent with this change in policy.”  This provision was included as part of the JCPOA due to the fact that a wide range of state and local governments in the United States had enacted state divestment and/or selective procurement laws that sought to punish U.S. and foreign companies that engaged in certain transactions with Iran, including, but not limited to, in Iran’s energy sector.  Due to the U.S.’s lifting of sanctions on Iran’s energy sector as a result of the JCPOA, the Obama administration had taken steps to inform state and local governments about the changes in U.S. policy towards Iran and encouraged state and local governments to amend their own laws in accordance with this new policy. 

Section 202 of CISADA

Under Section 202 of the Comprehensive Iran Sanctions Accountability and Divestment Act of 2010 (“CISADA”), state or local governments in the United States are authorized to “adopt and enforce measures…to divest the assets of the State or local government from, or prohibit investment of the assets of the State or local government in, any person that the State or local government determines has an investment of $20 million or more in the energy sector on Iran or is a financial institution that extends $20 million or more in credit to another person if that person will use the credit for investment in Iran’s energy sector.  Furthermore, Section 202 of CISADA states that such “measure of a State or local government…is not preempted by any Federal law of regulation.”  This latter provision restricts the ability of the U.S. federal government to preempt (or nullify) state or local laws that are contrary to U.S. law or policy at the federal level.  This provision has proved especially problematic for purposes of the U.S.’s JCPOA implementation, as the United States has waived the application of sanctions on foreign companies investing in Iran’s energy sector yet state and local governments are able to maintain the application of similar laws. 

H.R. 3425

H.R. 3425 would pose ever more significant challenges to the ability of the United States to act in conformity with its express JCPOA obligations.  Specifically, H.R. 3425 would amend Section 202 of CISADA by authorizing state and local governments to adopt and enforce state divestment laws that target persons determined to have investments of $10 million or more in Iran’s energy or business sectors.  This amendment lowers the dollar amount of investments required to trigger the application of state divestment laws, while also extending the kinds of investments that can be targeted – i.e., encapsulating investments in Iran’s business sector as opposed to only its energy sector.  Moreover, H.R. 3425 encourages state and local governments to enter into “interstate compacts” to ensure a consistent approach to these divestment laws. 

To ensure that the U.S. federal government is unable to effectively preempt these state divestment laws and ensure that state and local governments act consistent with U.S. foreign policy interests, H.R. 3425 amends subsection (f) of Section 202 of CISADA by stating that any such divestment laws are “authorized and not preempted by any Federal law or regulation, or any policy, agreement, or exercise of waiver authority of the executive branch.”  This provision is intended to preempt any effort by the U.S. federal government to claim what is called “federal policy preemption” – i.e., that there has been an effective change in U.S. federal policy since the enactment of Section 202 of CISADA and, as a result, this new federal policy preempts the application of Section 202 of CISADA, thereby nullifying state divestment laws that are contrary to U.S. commitments under the JCPOA.  In doing so, H.R. 3425 would tie the U.S. federal government’s hands and prevent the Executive branch from taking steps to comply with ¶ 26 of the JCPOA’s Main Text, as indicated above.

Furthermore, H.R. 3425 would amend the sunset provision of CISADA so that Congress is granted an opportunity to disapprove any presidential certification made thereunder.  Under Section 401 of CISADA, CISADA sunsets on the date that is 30 days after the President certifies to Congress that (1) the Government of Iran has ceased providing support for acts of international terrorism and no longer satisfies the criteria for designation as a state sponsor of terrorism; and (2) the Government of Iran has ceased the pursuit, acquisition, and development of nuclear, biological, and chemical weapons and ballistic missiles and ballistic missile launch technologies.  H.R. 3425 would add a new subsection stating that Section 202 of CISADA shall not terminate pursuant to any such certification from the President if Congress enacts a joint resolution disapproving such certification.

NIAC Action Statement on President Trump Signing New Iran Sanctions Into Law

Contact: Jamal Abdi
Phone: (206) 369-2069

Washington, D.C. – Jamal Abdi, Executive Director of NIAC Action, issued the following statement in response to President Trump signing the ‘‘Countering America’s Adversaries Through Sanctions Act’’:

“Buried within the Russia and North Korea sanctions are dangerous and controversial Iran sanctions that will likely backfire against us. These Iran sanctions are a threat to the nuclear agreement and give Donald Trump new tools to significantly escalate tensions in the Middle East. Trump has made no secret of his intent to exit the Iran nuclear agreement, regardless of the immense costs to U.S. interests. Meanwhile, the White House is reportedly considering a regime-change strategy for Iran similar to what the U.S. did with Iraq.

“Steve Bannon and other administration hardliners have been tasked with formulating Trump’s reckless new strategy towards Iran and Congress just gave them new tools to do so.

“The alarm bells should be ringing but instead of restraining Trump’s reckless inclinations on Iran, Congress appears to be actively encouraging him.

“The Iran sanctions also risk pushing the U.S. into violation of the nuclear accord by obligating the Trump administration to redesignate entities scheduled for sanctions relief. Congress has now left it up to Donald Trump to navigate these pitfalls to ensure the continued successful implementation of the nuclear accord.

“We urge that lawmakers voice their concerns with Trump’s approach to Iran and demand that these sanctions be coupled with a strategy that include diplomacy, actively upholding the nuclear deal, and avoiding a war of choice.”


NIAC Action Statement on Senate Passage of Iran Sanctions

Contact: Jamal Abdi
Phone: (206) 369-2069

Washington, D.C. – Jamal Abdi, Executive Director of NIAC Action, issued the following statement in response to the passage of the ‘‘Countering America’s Adversaries Through Sanctions Act’’:

“This will be the first new Iran sanctions bill signed into law since before negotiations even began on the interim nuclear deal. There is likely to be significant blowback that undermines the nuclear accord and makes it easier for Trump to put the nail in the coffin of the deal. Those who voted for this are either rooting for that outcome or hoping it’s not the case.

“After three and a half decades of failed pressure policies, the U.S. finally found a successful way to impact Iranian policies through diplomacy. Congress is now following Trump’s lead by abandoning that successful approach and returning to the self-defeating pressure track. The result is predictable: more missile tests, more hostility from Iran, and more undermining of U.S. national security. This is what happens when politics trumps reason, experience and logic.”


Congress Must Restrain Trump’s Push to Unravel the JCPOA

There are numerous indications that the Trump administration is actively seeking to undermine the Iran nuclear deal and that the Administration could very likely decide not to recertify Iran’s compliance as mandated by the Iran Nuclear Agreement Review Act this fall.
If the Trump Administration makes good on these threats, or otherwise undermines or violates the JCPOA, they will succeed in ending far-reaching, verifiable restraints on Iran’s nuclear program and returning the U.S. and Iran to the brink of war. Now is not the time for Congress to provide legislation that could give Trump new authorities to violate the nuclear deal and set the stage for conflict.
Particularly in light of the Administration’s dangerous direction on the JCPOA, as well as the lack of diplomatic engagement between the U.S. and Iran that should be a prerequisite to any sanctions approach, NIAC Action opposes new Iran sanctions that are included as part of a larger sanctions package (the ‘‘Russia, Iran, and North Korea Sanctions Act’’) and will go to a vote this week. NIAC Action encourages lawmakers to speak publicly about the Trump Administration’s apparent eagerness to sabotage the nuclear deal, the danger of this approach in taking the U.S. and Iran to the brink of war, and the dangerous lack of diplomatic engagement by this Administration vis a vis Iran.
  • On July 17, 2017, the State Department certified that Iran was in compliance with the JCPOA despite President Trump’s opposition. According to inside accounts, President Trump “spent 55 minutes of the meeting telling them [his advisers] he did not want to [certify].”
  • According to Foreign Policy, Trump has tasked White House staffers with laying the groundwork to potentially withhold certification at the next 90 day review of the JCPOA this fall. Chief White House Strategist Steve Bannon and Advisor to the President Seb Gorka are reportedly among those staffers involved in making the case for decertification. 
  • The new initiative – a task force dedicated to searching for intelligence to justify a decision not to certify – harkens back to the push for war with Iraq in 2002, when Under Secretary of Defense for Policy Douglas Feith cherry picked intelligence to help make the case for overthrowing Saddam Hussein.
  • The Trump administration is considering downgrading the State Department’s Office of Iran Nuclear Implementation by merging it into the Bureau of Near East Affairs. Such a move would risk reducing the State Department’s ability to effectively monitor Iranian compliance.
  • At a White House press briefing on July 10, 2017, then Principal Deputy Press Secretary Sarah Huckabee Sanders stated that, while meeting with foreign leaders at the G-20 Summit, President Trump urged nations to come together and “to stop doing business with nations that sponsor terrorism, especially Iran.” This contradicts express U.S. obligations under the JCPOA not to deter others to normalize trade with Iran. See JCPOA ¶¶ 28-29.

These warning signs have not gone unnoticed, as major editorials, former officials and political commentators have noted the drift toward unnecessary conflict with Iran:

  • New York Times, Avoiding War With Iran, Editorial Board–July 20, 2017
    “The last thing the United States needs is another war in the Middle East. Yet a drumbeat of provocative words, outright threats and actions — from President Trump and some of his top aides as well as Sunni Arab leaders and American activists — is raising tensions that could lead to armed conflict with Iran.”
  • New Yorker, Is The Nuclear Deal With Iran Slipping Away?, Robin Wright–July 19, 2017
    “At least three major U.S. allies have sent their ambassadors to Iran to Washington, to try to convince the new Administration to support the accord—and to explain Iran to Trump Administration staffers who were not involved in the diplomacy. Trump appears willing to chart a risky course, whatever the repercussions.”
  • Los Angeles Times, Stop playing games with the Iranian nuclear deal, Editorial Board–July 22, 2017
    “It’s time for Trump to stop playing games with U.S. support for the nuclear agreement. So long as Iran complies with the terms, the U.S. should live up to its obligations.”
  • USA Today, Iran nuclear deal is working–July 20, 2017
    “The agreement is working. With a few minor exceptions that have nothing to do with proliferation — each quickly corrected when discovered by inspectors — Tehran has abided by limits on stockpiles of low-enriched uranium, heavy water for nuclear plant operation and centrifuges for enriching uranium. Last year, for example, Iran poured concrete into the core of its only heavy-water plant capable of producing weapons-grade plutonium, ruining it.”
  • The New Republic, Nuclear Summer, Colin Kahl–July 14, 2017
    “But even if Trump doesn’t torpedo the Iran deal directly, he could wind up scuttling the agreement by pushing Iran into a corner. In the coming months, the president is likely to embrace a much more aggressive posture toward Tehran, including more sanctions, more military exercises in the region, interdicting more Iranian vessels, selling more arms to Israel and Arab states, and taking direct action against Iran’s militant proxies—moves that could serve to escalate tensions and increase the likelihood of a military confrontation.”  
  • Washington Post, The U.S. and Iran are heading toward crisis, Ishaan Tharoor–July 19, 2017
    “Iran remains the president’s No. 1 geopolitical bugbear. Trump, who seems determined to smash every pillar of former president Barack Obama’s legacy, repeatedly cast the deal as a capitulation to the Islamic Republic. The only memorable event in the short-lived tenure of ousted national security adviser Michael Flynn was his cryptic statement ‘officially putting Iran on notice.’ In Saudi Arabia, on his first foreign visit, Trump signed on to Riyadh’s vision for the Middle East — one that is shaped first and foremost by antipathy toward Tehran.” 
The Trump administration has now taken every step short of explicitly leaving the JCPOA to indicate its desire for it to fail. But the nuclear accord has produced tangible results that benefit U.S. security including:
  • Iran reduced its installed centrifuges by two-thirds.
  • The time it would take Iran to enrich sufficient uranium for a single nuclear weapon has increased from 2-3 months under the interim deal to a full year under the JCPOA.
  • Iran’s enrichment level is now capped at 3.67%, far below weapons grade.
  • Iran’s uranium stockpile was cut by 97%, a fraction of the amount needed for a single nuclear weapon with further enrichment.
  • The core of the Arak reactor was destroyed and Iran will redesign the facility so that it will not produce weapons grade plutonium.
  • Iran is voluntarily implementing the IAEA Additional Protocol and will later seek its ratification, ensuring expanded inspector access throughout Iran’s entire nuclear program, enhancing the IAEA’s ability to detect any potential Iranian cheating. 
Trump is setting the stage to eliminate all of these national security gains without a realistic plan for anything better. Without the JCPOA, Iran would once again move toward a nuclear weapon capability, and the U.S. and Iran would be moving quickly toward war – this time without the support of the international community.
We encourage lawmakers to take action to restrain the Trump Administration and speak out publicly about the dangerous direction of the Administration to dismantle the JCPOA before it is too late.

NIAC Action Statement on Senate Passage of Iran Sanctions Bill

Contact: Ryan Costello
Phone: (202) 386-6319

Washington, D.C. – Jamal Abdi, Executive Director for NIAC Action, issued the following statement in response to Senate passage of S. 722, the Countering Iran’s Destabilizing Activities Act of 2017:

“Giving Trump any new toys to wreak havoc in the Middle East is complete recklessness. We hope Members of Congress come to their senses and reconsider this ill-advised bill before it is too late.

It is the height of folly to expect Trump to show restraint with these new authorities when he is openly hostile to the nuclear deal and diplomacy in general. Numerous former administration officials, including Sec. Kerry, had cautioned against moving forward with this bill at this time. These warnings have gone unheeded in part due to the desire to pass new sanctions on Russia, which were inserted into the bill via amendment.

“The U.S. has now moved one step closer to a potential war with Iran. It is now the responsibility of those Senators – in particular those who asserted contrary to evidence that this bill is wholly consistent with the nuclear deal – to ensure that Donald Trump does not use these authorities to undermine the accord or spark conflict with Iran. If they fail to do so, they will end up bearing a large portion of the responsibility for an unnecessary geopolitical disaster.”


Vote Against Iran Sanctions Bill S. 722

NIAC Action urges Senators to vote against S. 722, the ‘Countering Iran’s Destabilizing Activities Act of 2017.’ Former Obama Administration officials have warned that the legislation would violate the JCPOA. Unfortunately, these concerns were not sufficiently addressed in the Manager’s Amendment. Passage of S. 722 would therefore risk terminating the JCPOA, providing President Trump with a mandate for an escalatory Iran policy, and empowering Iranian hardliners at the expense of moderates.
Defense Intelligence Agency: Iran is not ‘more aggressive’ post JCPOA and is aiding the fight against ISIS in Iraq
  • The Defense Intelligence Agency Chief, Lt. Gen. Vincent Stewart, declined to describe Iran’s role in the region as more aggressive since the nuclear deal in testimony before the Senate Armed Services Committee yesterday, cutting against the justification for the deeply flawed S. 722.
  • Lt. Gen. Stewart noted Iran’s positive contributions against ISIS in Iraq, stating Iraq’s reclamation of territory from ISIS is “due to substantial external support — most notably U.S.-led coalition airpower and support from Iran.” He also noted that Iran’s relief from the deal has primarily gone toward economic development.
World leaders and editorial boards warn against Trump’s Iran policy
  • The New York Times editorial board wrote, “Mr. Trump’s determination to forge an anti-Iran alliance with the Sunni Arab states and isolate Iran could drift into military confrontation. The nuclear agreement negotiated between Iran and the United States could unravel, causing a split with America’s European allies.”
  • The Elders – an independent group of global leaders including former UN Secretary General Kofi Annan – issued a statement following President Trump’s visit to Saudi Arabia warning that “inflammatory rhetoric towards Iran can aggravate sectarianism and fuel current and future wars,” urging all parties to exercise restraint.
  • Qatari Emir, Sheikh Tamim bin Hamad Al-Thani, in unexpected pushback to Trump’s visit, stated “There is no wisdom in harboring hostility toward Iran.”
  • Federica Mogherini, the EU’s top diplomat, contrasted Trump’s bellicose rhetoric on Iran by being the first world leader to congratulate President Rouhani and expressed the E.U.’s intention to increase bilateral engagement including on regional security.
Designating the IRGC a terror group would target ordinary Iranians due to mandatory conscription and risk confrontation
  • Section 5 of S. 722 would result in the entire IRGC being labeled a “Specially Designated Global Terrorist (SDGT).” 
  • Given Iran’s compulsory conscription, the average Iranian man has no choice over whether he is drafted into the group, raising concerns about the implications of designating the entire military service under a terror designation.
The Senate bill prioritizes confronting Iran across the region. However, few Americans view Iran as a top strategic priority.
  • According to a Politico poll this week, the American public does not view confronting Iran as an urgent priority for U.S. policy.  Just 12% of Democrats believe President Trump should prioritize building a coalition to challenge Iran, while only 36% of Republicans identify Iran as a top strategic priority for the United States.

Former Obama Officials Agree S.722 Risks Undermining JCPOA

Former Obama administration officials involved in the JCPOA’s implementation have warned that S.722 violates one or more aspects of the nuclear deal. These former officials include: 
  • John Kerry, Secretary of State
  • Wendy Sherman, Under Secretary for Political Affairs 
  • Adam Szubin, Under Secretary for Terrorism and Financial Crimes 
  • Antony Blinken, Deputy National Security Advisor 
  • Avril Haines, Deputy National Security Advisor
  • Colin Kahl, Deputy Assistant to the President and National Security Advisor to the Vice President
  • Jeff Prescott, Special Assistant to the President and Senior Director for Iran, Iraq, Syria, and the Persian Gulf states on the National Security Council
  • Jon Finer, Staff and Director of Policy Planning for Secretary Kerry  
  • Philip Gordon, Special Assistant to the President and White House Coordinator for the Middle East, North Africa, and the Persian Gulf Region
  • Robert Malley, Senior Director of National Security Council
  • Richard Nephew, Principal Deputy Coordinator for Sanctions Policy, State Department   
According to the above officials, S.722 violates the JCPOA in the following ways:
Sec. 8 of the bill would block the President from lifting certain sanctions as required under the nuclear deal. Sanctioned individuals would be required to take additional steps beyond the nuclear deal related to ballistic missiles and terrorism. 
Sec. 4 mandates the President to impose sanctions on any individual engaging in activities that materially contribute or that pose a risk of materially contributing to Iran’s ballistic missile program. This could lead to reimposition of most sanctions. 
Sec. 5 would designate the Islamic Revolutionary Guard Corps (IRGC) – Iran’s main military force – a terrorist organization under the U.S. Specially Designated Global Terrorist program (SDGT). This dangerous move risks endangering U.S. troops, undermining the fight against ISIS, and leading to a confrontation that could result in a war with Iran.
Below you can find excerpts of statements warning of the dangers of S.722 as currently drafted:
On May 24, 2017, John Kerry explicitly warned “this is not the moment for a new Iran bill.”
Speaking on May 16, 2017 on a panel at the CATO Institute, Ambassador Wendy Sherman stated that she opposes S.722 categorically.
“I know that the Senators, particularly Cardin, worked really hard to try to ensure that it does not have unintended consequences. Nonetheless, I oppose this legislation. Categorically. And I do so because one, lawyers disagree about its impact on the JCPOA. It can be read in a number of different ways even as it stands, even with the care that was put on the bill. And my question is why take the risk? Because quite frankly, the bill doesn’t do anything. There is no real consequence to the bill. It’s just a way to say we’re tough. Because we can under our existing laws and executive orders designate virtually everybody who might be covered in this legislation. So why risk the JCPOA for a bill that does nothing, that is going to arguably undermine the JCPOA? It is just not worth it. So I oppose it.”
Writing in Foreign Policy, Antony Blinken, Avril Haines, Colin Kahl, Jeff Prescott, Jon Finer, Philip Gordon, and Robert Malley warn that S.722 will permit the Trump administration to leave sanctions unlifted unless new requirements are met and Iran will respond similarly.
“First, the bill adds new conditions that must be met before Washington can lift sanctions on certain Iranian parties in the future, including sanctions we are already committed to remove if Tehran continues to comply with the nuclear deal. According to the draft legislation, lifting sanctions on such Iranian entities would require a certification that they had not supported or facilitated ballistic missile or terrorist activity. This provision is unnecessary and could give Iran an excuse to undermine the deal.”
Richard Nephew warned in The Hill that the proposed legislation fails to signal to Tehran that the U.S. does not intend to undermine the JCPOA. He recommends:
“Modifications to the bills are necessary, particularly the Senate bill’s sweeping, mandatory sanctions on activities with Iran that ‘pose a risk’ of contributing to Iran’s missile program, its mandatory terrorism designation of the IRGC (which adds nothing to the sanctions already in place against the IRGC but which military analysts fear could pave the way for retaliation against U.S. forces in the region), and language that could prejudice the ability of the U.S. to terminate in time some sanctions designations covered by the deal.”
Adam Szubin wrote a letter to the Chairman and Ranking Member of the Senate Committee on Foreign Relations that the bill “would provoke a terrible reaction in Iran and with our allies, as it would be seen as contrary to at least the spirit of the Joint Comprehensive Plan of Action.” He recommends:
-Removing Section 8 from S.722
-Remove “or poses a risk of materially contributing” from Section 4.  
It is crucial that Congress take these warnings seriously in order to preserve the JCPOA and ensure Iran’s nuclear program is verifiably limited to peaceful purposes. 

S. 722 Violates the Iran Nuclear Deal & Endangers U.S. Troops

S. 722 – the Countering Iran’s Destabilizing Activities Act of 2017 – introduced by Sen. Bob Corker (R-TN), is the first new Iran sanctions bill that has a serious chance of passing into law since the implementation of the Iran nuclear deal, or Joint Comprehensive Plan of Action (JCPOA). While some in the Senate have cosponsored the bill under the false belief that is compliant with the Iran deal, key provisions would violate or disrupt the JCPOA and take provocative new steps opposed by multiple past Presidents that could endanger U.S. troops in the region and put the U.S. on course for war with Iran.

S.722 would move the goalposts on the Iran deal by blocking the lifting of sanctions as required under the deal.

Sec. 8 of the bill would block the President from lifting certain sanctions as required under the nuclear deal unless sanctioned individuals take additional steps beyond the nuclear deal related to ballistic missiles and terrorism. This moves the goalposts on the nuclear deal and would be a violation of the JCPOA.

Former Obama administration officials who negotiated the Iran deal warn that S.722 violates the deal.

Seven former Obama administration officials – including Former Deputy Secretary of State Antony J. Blinken and former White House Deputy National Security Advisor Avril Haines – outlined their serious concerns that the legislation would risk “giving an impulsive president license to take steps that could undermine a deal that is working, isolate the United States, and put U.S. troops at risk.” Similarly, former Principal Deputy Coordinator for Sanctions Policy at the Department of State Richard Nephew has warned that “changes do need to be made to make the bill JCPOA compliant.”

S.722 gives the Trump administration new authorities to undermine the deal.

Sec. 4 mandates the President to impose sanctions on any individual engaging in activities that materially contribute or that pose a risk of materially contributing to Iran’s ballistic missile program. This language is overly broad and could be used by the Trump administration to reimpose sanctions on Iranian entities in a manner that violates the accord.

S.722 risks conflict by designating the IRGC a terrorist organization despite a decade of warnings from the Pentagon.

Sec. 5 would designate the Islamic Revolutionary Guard Corps (IRGC) – Iran’s main military force – a terrorist organization under the U.S. Specially Designated Global Terrorist program (SDGT). Multiple administrations – including under George W. Bush, Barack Obama, and even Donald Trump – have declined to take this unprecedented step and the Pentagon has warned since at least 2007 that it would endanger U.S. troops and expose them to similar counter-designations. This dangerous move risks endangering U.S. troops, undermining the fight against ISIS, and leading to a confrontation that could result in a war with Iran.

The sanctions would backfire by empowering Iranian hardliners.

Iran is in the midst of a Presidential election that has been a referendum on the Iran deal – with hardliners claiming diplomacy is a failed approach and moderates arguing that hardliners seek to deny civil rights and undermine international engagement. Escalating sanctions now will only serve to empower those hardliners that thrive under sanctions and the threat of war, like the IRGC, while undermining moderates that seek cooperation with the West and to rein in provocative hardline forces.

View this memo in PDF form.

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

On March 23, 2017, the Iran Ballistic Missiles and International Sanctions Enforcement Act (H.R. 1698) was introduced by Reps. Ed Royce (R-CA-39), Eliot Engel (D-NY-16), Kevin McCarthy (R-CA-23), and Steny Hoyer (D-MD-5). 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. 

In mandating President Trump utilize new sanctions authorities, the legislation risks incentivizing the Trump administration to engage in aggressive actions towards Iran that could undermine the Joint Comprehensive Plan of Action (JCPOA) – the nuclear accord between the United States, other major world powers, and Iran – all the while setting the stage for conflict between the two countries. Undoing the long-term restrictions on Iran’s nuclear program in service of an aggressive focus on Iran’s ballistic missile program would be in clear contradiction of U.S. interests.

Moreover, the timing of the legislation is inopportune. In less than two months, Iran will hold its presidential election. The imposition of new sanctions on Iran – even for activities not related to Iran’s nuclear program – risks distorting Iran’s domestic politics in favor of hardline candidates. This would broadly undermine U.S. interests by undermining moderate candidates open to engagement with the United States (as evidenced by the recent nuclear agreement) in favor of those who evidence implacable hostility towards Washington.

Sanctions and Reporting Requirements

The bill has 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.

New Sanctions

Specifically, 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; or (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.

The bill would also amend § 5(b) of the Iran Sanctions Act to mandate the imposition of sanctions on foreign persons or States 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.

Finally, the bill would amend § 5(b) of the Iran Sanctions Act by mandating the President to impose sanctions on 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 a report to Congress 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. Such report shall also include an identification of foreign persons that have directly or indirectly facilitated or supported the development of Iran’s ballistic missile program.  The report shall be submitted to Congress in unclassified form.

The bill also mandates the President to submit a tri-annual report to Congress that details (1) Iran’s efforts to develop, procure, or acquire goods, services, or technology for which sanctions may be imposed under the Iran Sanctions Act; (2) Iran’s acquisition or attempted acquisition of significant arms and related materiel in violation of UNSCR 2231; (3) Iran’s export or attempted export of significant arms or related materiel in violation of UNSCR 2231; and (4) any Security Council approval for the export to Iran of significant arms or related material pursuant to UNSCR 2231.

Finally, the bill requires the President to submit a report to Congress upon receipt of credible information that Iran has conducted a test of a ballistic missile, detailing whether such test fails to comply with, violates, or is in defiance of UNSCR 2231.  Such report shall also identify 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.  The report shall also contain notice as to the steps that the President is taking to respond to the ballistic missile test.  This report shall also be submitted in unclassified form.

Former Official Highlights Risks of Iran Sanctions Bill S. 722

Colin Kahl, former Deputy Assistant to the President and National Security Advisor to the Vice President under the Obama administration, highlighted his concerns with Iran sanctions bill S. 722 (the ‘Countering Iran’s Destabilizing Activities Act of 2017’) in a panel discussion at the Center for Strategic and International Studies this morning.

Additionally, later in the afternoon, Kahl joined with six other former Obama administration officials – Antony J. Blinken, Avril Haines, Jeff Prescott, Jon Finer, Philip Gordon and Robert Malley – to warn against the bill in an article published on Foreign Policy. The officials cautioned that “[a]ny marginal benefit of this legislation is outweighed by the risk of giving an impulsive president license to take steps that could undermine a deal that is working, isolate the United States, and put U.S. troops at risk.”

At the panel discussion at CSIS, Kahl noted: 

  • The language in section 4 is “overly broad” and risks complicating JCPOA implementation and dividing the P5+1 coalition;
  • Section 5 “effectively designates the IRGC a terrorist organization,” which would be “gratuitous” and could risk putting U.S. troops in harm’s way;
  • Section 8 would complicate sanctions lifting on Transition Day, conveying that the U.S. is ”unilaterally renegotiating the terms of the agreement.”
Critically, Kahl warns that the bill risks loosening the restraints on the Trump administration to avoid activities that would explicitly undermine the deal, as the administration would be able to point to consensus in Congress to justify its activities:
Section 4 – ballistic missile sanctions:
“The problem there is how overly broad the sectors or the contributions to the ballistic missile program that could be sanctionable are, and there’s a real risk that it could be so overly broad it could complicate the execution of say, the procurement channel that’s part of the JCPOA, or it could run sideways from European interests in a way that splits the P5+1 coalition.”
“As staff and Members of Congress tweak the legislation, they should make sure that any steps they take on the ballistic missile front aren’t so overly broad that it unintentionally runs sideways from basically our commitments under the deal or consensus that underlies the implementation of the deal.”
Section 5 – IRGC designation:
The concern there is that it effectively designates the IRGC as a terrorist organization, and the problem with that is not that the IRGC are good folks and we shouldn’t be mean to them. We can already designate and sanction any member of the IRGC and the IRGC as an organization under existing authorities, so the bill actually does nothing beyond being a symbolic gesture to basically rub it in the nose of the IRGC, so it’s gratuitous.” 
“And, I understand politics and the need to show that you’re tough on Iran, but in this case the symbolism could have the inadvertent effect of triggering a response by the IRGC, and if that response by the IRGC is something that actually puts our troops, our men and women, in harm’s way – it strikes me that’s a price that’s not worth paying for a symbolic or political thing that won’t make any difference to our ability to actually do what we can already do against the IRGC. In areas like this, I get the politics but politics should not be the reason to do it.”
Section 8 – Transition Day:
“Section 8 of the bill, which I think in some ways is the most problematic as it relates to the JCPOA…the problem there is it puts a new condition on us lifting sanctions on Transition Day.”
The problem with the bill is it adds a new condition – it says you can’t lift those sanctions unless the administration at the time can certify that actors are not engaged in objectionable behavior in non-nuclear areas, which is again completely unnecessary because if they’re engaged in non-nuclear malicious activities – cyber, terrorism, human rights violations – we can designate them under other authorities…So it doesn’t get us anything, but what it does do is it conveys that we are unilaterally renegotiating the terms of the agreement and that we are looking for a way, a loophole to not lift nuclear related sanctions by recasting them as non-nuclear sanctions. And I worry that Iran will say, ‘Well, screw us, then screw you – here are all our conditions for us living up to’ – and they’ll start unilaterally renegotiating the deal.”
“I agree with Mike that the deal is imperfect, that there are problems with when it sunsets and how long it is and what the constraints are and there are things that are outside the four corners of the deal – but you don’t solve that problem by putting unilateral conditions and unilaterally renegotiating the terms that were negotiated in the deal. You solve that by actually sitting with our European allies…plus the Chinese and the Russians – and the Iranians – and trying to figure out ways to smooth out or clarify the ambiguities and make some corrections.
“So I am very worried about this…In the Obama administration, you could almost be assured that they would use the national security waivers if they thought that implementing things that Congress did would run sideways from the implementation of the deal. The Trump administration is not going to use those waivers, and in fact they may see this as a bipartisan permission slip to be even more assertive, because in a world where the Trump administration owns the failure of the deal, then they may be restrained in pushing past the boundaries of the deal. In a world where they think they have permission from the Congress on both sides of the aisle to dial up enforcement and other activities against Iran to 11, then suddenly they can say look it’s not us, there’s a bipartisan consensus…I say this to my Democratic friends, you will own this too, if you sign up to this and things go sideways.”

Memo: S. 722 Would Designate IRGC a Terror Group

The ‘‘Countering Iran’s Destabilizing Activities Act of 2017’’ (S. 722) would mandate that the President designate the Islamic Revolutionary Guard Corps (IRGC) a terrorist organization. 
According to Section 5 of the bill, “Imposition of Terrorism-Related Sanctions with Respect to the IRGC,” the IRGC would be sanctioned pursuant to Executive Order 13224 – the foundational order to the U.S. Specially Designated Global Terrorist (SDGT) Sanctions Program. The designation itself would be implemented by the Executive Branch pursuant to passage of the bill. Congress views itself as being limited in its ability to designate parties pursuant to Orders granting sanctions authority to the Executive Branch alone, hence the legislation refers only to sanctioning the IRGC under the EO 13224 authority, leaving to the Executive the task of actually designating the IRGC an SDGT.
How does the bill designate the IRGC a terror group if it avoids a ‘Foreign Terrorist Organization’ (FTO) designation?
Designating the IRGC a SDGT is still a terrorist designation, and carries the same risks as an FTO designation. Other groups designated an SDGT include the Islamic State and al-Qaeda.
Groups who opposed the Joint Comprehensive Plan of Action have argued for designating the IRGC a SDGT for years, including AIPAC and the Foundation for Defense of Democracies. AIPAC’s advocacy for this issue dates back to at least 2007. Yet it remains a dangerous idea opposed by military and intelligence officials, as reporting last month indicated.
Could the sanctions of EO 13224 be implemented without designating the IRGC?
There is no example of an entity being designated pursuant to EO 13224 and not being labeled an SDGT, and there is no reason to believe any Administration – in particular the Trump administration – would construct a mechanism to circumvent the SDGT designation in its implementation of this legislation.
Consequences for U.S. Troops
In 2007, the Pentagon opposed the designation of the IRGC as an SDGT. The Joint Chiefs of Staff expressed concern that the designation of a foreign military could be reciprocated against the U.S. military, in particular Special Forces officers. Ultimately, the IRGC-Qods Force was designated per EO 13224 in 2007, a compromise reached to avoid a more dangerous designation of the full IRGC, which is now once again on the table today.
As former Deputy Secretary of State Antony Blinken argued in the New York Times last month:
The Bush and Obama administrations named Iran a state sponsor of terrorism and put sanctions on individual Revolutionary Guard commanders and two dozen Iranian firms to which the guard corps is connected. But they stopped short of designating the guards corps itself a terrorist organization because the potential blowback outweighed the benefits.
A direct challenge to the Revolutionary Guards Corps would likely cause its commanders to press for Iran’s withdrawal from the nuclear deal. It would undermine the re-election prospects of the accord’s main advocate, President Hassan Rouhani, who seeks to moderate Iran’s international behavior. It could also prompt the guards corps to unleash Shiite militias against United States forces in Iraq — just when our shared, if uncoordinated, objective of defeating the Islamic State there is within reach — or to go after American ships in the Gulf or shut down the Straits of Hormuz, through which 25 percent of the world’s oil flows.

Does the SDGT designation add new sanctions to the IRGC?

The IRGC is already one of the most sanctioned entities in the world—a fact that the 2015 nuclear deal did little to change. Any sanctions pursuant to EO 13224 and a SDGT designation would be duplicative of existing authorities, leaving only negative consequences from the unprecedented step of a terror label.

The Office of Foreign Assets Control also administers and enforces tough secondary sanctions on the IRGC, punishing foreign banks and firms implicated in transactions involving the IRGC or its designated affiliates with exclusion from the U.S. market. Those restrictions go beyond those that a terrorist designation would produce.

Background on the Specially Designated Terrorist Group designation
EO 13224 was promulgated in Sept. 2001 following the Sept. 11 terror attacks. EO 13224 imposes blocking sanctions on persons that the President determines engages in a range of activities, foremost of which is having committed or posing a risk of committing acts of terrorism that threaten the security of US nationals or US national security, foreign policy, or economy.
The Global Terrorism Sanctions Regulations, 31 C.F.R. Part 594, were thereafter promulgated to implement the EO.
Persons designated pursuant to EO 13224/GTSR are known as Specially Designated Global Terrorists.

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