FPI Bulletin: Another Concession to Iran on Sanctions

June 23, 2015

On April 2, immediately after Iran and the P5+1 concluded a nuclear framework agreement, President Obama said that U.S. sanctions on Iran “for its support of terrorism, its human rights abuses, its ballistic missile program, will continue to be fully enforced” under a final deal. According to a recent Associated Press report, however, the Obama administration will instead drop most of these penalties in an audacious attempt to redefine the meaning of “nuclear-related” sanctions — and, as a consequence, free up billions of dollars that Tehran can use to build ballistic missiles, sponsor terrorist attacks, and oppress its people with impunity.

From the beginning, President Obama’s pledge to lift only nuclear-related sanctions has rested on a poor understanding of the sanctions regime that bipartisan majorities in Congress have imposed over the course of decades. Most importantly, the White House has ignored the reality that specific sanctions often target multiple types of illicit activity. In the words of a prescient letter that 344 members of the House sent to President Obama last year, “The concept of an exclusively defined ‘nuclear-related’ sanction on Iran does not exist in US law.” The letter proceeds to explain why:

Almost all sanctions related to Iran’s nuclear program are also related to Tehran’s advancing ballistic missile program, intensifying support for international terrorism, and other unconventional weapons programs. Similarly, many of these sanctions are aimed at preventing Iranian banks involved in proliferation, terrorism, money laundering and other activities from utilizing the US and global financial systems to advance these destructive policies.

Iran, the letter adds, must terminate all these activities to receive permanent sanctions relief. Asked about the letter at a press briefing, a senior administration official said the administration would pursue “consultation with Congress to determine what are effectively nuclear-related sanctions and what are not” — implicitly acknowledging the difficulty in distinguishing nuclear from non-nuclear sanctions.

Yet now, according to the AP, the administration has embarked on a unilateral effort to define for itself, without input from Congress, what constitutes a nuclear-related sanction. For example, say U.S. officials, “measures designed to stop Iran from acquiring ballistic missiles are nuclear-related because they were imposed to push Iran into the negotiations. Also, they say sanctions that may appear non-nuclear are often undergirded by previous actions conceived as efforts to stop Iran’s nuclear program.”

The Obama administration plans to employ definitions so favorable to Tehran because of its concern that any definition based on the actual text of the relevant laws would prevent it from sweetening a deal for the regime.

The nature of sanctions on the Iranian banking sector — above all, the Central Bank of Iran — illustrates why the administration is reversing its position. “Of the 24 Iranian banks currently under U.S. sanctions, only one — Bank Saderat, cited for terrorism links — is subject to clear non-nuclear sanctions,” notes the AP. “The rest are designated because of nuclear and ballistic missile related financing, while several are believed to be controlled by the Revolutionary Guard.”

James S. Robbins of the American Foreign Policy Council observes that Congress has made clear the responsibility of the entire Iranian financial sector for the regime’s illicit activities. As Robbins writes, the National Defense Authorization Act of 2012 designated Iran’s entire financial sector, including the Central Bank, as “a primary money laundering concern” stemming “from the illicit activities of the Government of Iran, including its pursuit of nuclear weapons, support for international terrorism, and efforts to deceive responsible financial institutions and evade sanctions.”

According to the AP, the administration plans to lift all sanctions on the Central Bank of Iran by redefining them as nuclear-related, thus sweeping the regime’s support for terrorism and other illicit activities under the rug. Such relief would have extraordinary value for the regime in light of the Central Bank’s pivotal role in the financial sector and the economy as a whole. Unfortunately, it will also ignore the intent of Congress. For Robbins, such favorable treatment amounts to a “get out of sanctions free card.”

Rather than deploy strained logic to redefine sanctions, the Obama administration should interpret them the same way Congress did when it approved them. A sanction passed to address multiple types of Iranian misbehavior should be lifted only if Tehran addresses all of its misbehavior. If President Obama believes that lifting sanctions related to terrorism, ballistic missiles and other illicit activities is in the national interest, he should explicitly make that case to Congress, not define the penalties away.

According to the terms of the Iran Nuclear Agreement Review Act of 2015, both the House and the Senate will have the opportunity to pass resolutions of approval or disapproval after any deal with Iran is finalized. Members should consider carefully whether any proposed agreement with Iran provides the regime with valuable concessions it has not earned.

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