Throughout negotiations with Iran, the position of the United States has consistently been that it would only lift “nuclear-related” sanctions as part of a final agreement. Given the complexity of the U.S. sanctions regime and numerous overlapping reasons for which sanctions have been placed on Iran, distinguishing between those measures which are and are not “nuclear-related” will pose a significant challenge to the deal’s implementation.
An in-depth look at The Joint Comprehensive Plan of Action (JCPOA) underscores that concern. While the deal claims to lift only “nuclear” sanctions, the list of specific entities that the deal delists includes individuals and companies that were sanctioned for reasons that cannot be clearly categorized as “nuclear-related.”
Having written previously on the dangers of leniency when lifting sanctions, the Bipartisan Policy Center (BPC) has maintained that there is a need for scrutiny when examining which bans the deal lifts. Iran, designated by the U.S. State Department as a “state sponsor of terrorism,” is unlikely to change its past behavior, and will likely continue to fund and fuel instability and conflict in the Middle East. Some of the economic recovery and direct cash injection that sanctions relief will bring to Iran could be channeled into pursuits that harm U.S. interests. Therefore, it is important for U.S. policymakers to ensure that only the appropriate sanctions are lifted, leaving non-nuclear sanctions in place.
Out of more than 800 entities listed for sanctions relief under JCPOA, a BPC analysis finds a total of at least 81 agencies, companies and persons that were sanctioned for reasons that are either explicitly non-nuclear or could be contested as non-nuclear. These include entities that have been involved in developing ballistic missile systems, weapons smuggling, supporting terrorism and violating human rights. Under a strict interpretation of what constitutes “nuclear-related” sanctions, these entities should not be subject to sanctions relief.
Of these 81 entities, 64 (or 79 percent), are government officials, agencies or subsidiaries of the Iranian government, while 17 (or 21 percent), are private entities. Of the private entities: three are banks, five are weapons traders, six deal with missile creation, one is an oil company, and two have had connections with the Iranian Revolutionary Guard Corps.
Energy-Related Sanctions Relief
Many of the lifted sanctions apply to sanctions evaders who did business with Iran’s energy sector. These include foreign fronts for Iranian government interests, international shipping companies, oil magnates and others who knowingly violated bans on the trade of Iranian petrochemicals, vessels or assets that financially strengthened an uncooperative Iranian regime. Though some of these companies, like Petroleos de Venezuela, were sanctioned specifically because their dealings with the Iranian energy sector allowed Iran to divert more funds to their nuclear program, sanctions on Iran’s energy sector were put in place with a dual rationale: curbing Iran’s nuclear program and its sponsorship of terrorism worldwide.
The Iran Sanctions Act of 1996, which placed sanctions on Iran’s energy sector, declared “it is the policy of the United States to deny Iran the ability to support acts of international terrorism and to fund the development and acquisition of weapons of mass destruction and the means to deliver them by limiting the development of Iran’s ability to explore for, extract, refine, or transport by pipeline petroleum resources of Iran.” While profits from Iran’s energy sector were used to finance Iran’s nuclear activities, the U.S. State and Treasury Departments have also determined that energy profits were used to fund Iran’s state sponsorship of terror, and have sanctioned entities accordingly.
Hybrid Sanctions Relief
One area of contention in sanctions relief is whether or not sanctions targeting Iran’s ballistic missile development fall into the category of nuclear-related sanctions. The list of delisted entities contained in the JCPOA seems to indicate that Iran and the P5+1 have agreed to waive sanctions targeted at ballistic missile development: of the 87 entities to be de-listed, a significant 57 (66 percent) were sanctioned because they created, researched, financed or shipped ballistic missiles for the Iranian government.
Even if Iran and the P5+1 agree to categorize ballistic missile sanctions as nuclear, an additional 30 delisted entities violated sanctions that are explicitly non-nuclear and that, under the terms of the final deal, should not be subject to sanctions relief.
One example is Iran Electronics Industries (IEI), a subsidiary of the Ministry of Defense Armed Forces Logistics. In 2008, IEI was added to the Specially Designated National list by the Treasury Department’s Office of Foreign Assets Control under Executive Order 13382 for aiding Iran’s proliferation of WMDs and their delivery systems. Most other entities targeted only for proliferation were delisted, so if this were the only sanction on IEI, it seems logical that it would be lifted.
However, IEI was also sanctioned in 2013 under the Iran Threat Reduction and Syria Human Rights Act for producing and providing the Government of Iran with services related to jamming, monitoring, and eavesdropping – sanctions which have no relation to Iran’s nuclear program and should remain in place under the provisions of the JCPOA.
Another example is SAD Import/Export Company, a delisted private corporation. In 2012, SAD shipped Iranian weapons to embattled Syrian President Bashar al-Assad’s Syrian Armed Forces in their brutal fight against Syria’s civilian population. Subsequently, in December of the same year, the U.S. Department of the Treasury sanctioned the company for aiding the Syrian government in its human rights abuses.
IEI and SAD are only two examples of entities that have been sanctioned for reasons other than contributing to Iran’s nuclear program, complicating the process of providing sanctions relief. Under the JCPOA, nuclear-related sanctions are to be lifted, but it is necessary to clarify whether or not non-nuclear sanctions will remain in place on entities delisted in the JCPOA or if sanctions will be removed wholesale.
View the full list of controversial entities delisted under the Iran deal.