FDD Praises New Bipartisan Iran Sanctions Bill Introduced Today

FOR IMMEDIATE RELEASE

Washington — On the heels of the P5+1 talks with Iran in Kazakhstan, House Foreign Affairs Committee Chairman, Ed Royce (R-CA), and Ranking Member Eliot Engel (D-NY) introduced a bill aimed at strengthening sanctions against the Iranian regime, which includes measures that, if enforced, would move the Iran sanctions regime closer to a much-needed de facto commercial and financial embargo on Iran. 

These measures include steps to target Iran's critical euro-denominated foreign exchange reserves, curtail all commercial trade with Iran with the exception of humanitarian goods, and encourage the Obama administration to step up its designations of Iranian government officials for human rights abuses.

If implemented and enforced, these measures would require the Obama administration to add hundreds of Iranian entities owned or controlled by the government of Iran to a key sanctions list. To avoid sanctions, companies trying to do business with Iran would have to find a “pure private” Iranian entity that is not connected to Iran's Revolutionary Guard Corps or to the government of Iran. In strategic sectors of the Iranian economy that is all but impossible.  

Countries doing business with Iran would also have to significantly reduce their commercial trade with Iran to avoid sanctions. 

“As Iran continues to enhance its critical nuclear capability through the introduction of advanced centrifuges into its enrichment facilities, and improves its plutonium processing capabilities, the bill shines a spotlight on the problem that Iranian nuclear physics continues to beat Western economic pressure,” said FDD executive director Mark Dubowitz who heads FDD's Iran project.   

The legislation requires the Obama administration to report on breakout capacity, and other indices of Iran's nuclear development, and on Iran's macroeconomic viability, including on the efficacy of sanctions in bringing Iran closer to a severe balance of payments crisis.    

Dubowitz continued: “The bill recognizes the evolving countermeasures Iran has taken to shore up its access to euro-denominated foreign exchange reserves which can be used for illicit activities. Iranian banks and companies have billions of euros in overseas bank accounts and have begun to exchange euros for local currencies, finding a potential way around sanctions. This new bill provides an important opportunity to move quickly to deny them access to euro assets.”

“The bill also sends a message to the Iranian people that Iran’s human rights abusers are of deep concern to the U.S,” Dubowitz continued. “Those who engage in corrupt activities by diverting medicine or humanitarian goods that are meant for the people of Iran will not act with impunity. Congress will not stand idly by.”

Earlier this week, 36 Senators sent a letter to the European Union (EU) to close a loophole in US-EU sanctions against Iran by cutting off Iran’s ability to access foreign held euros through the European Central Bank's settlement platform, referred to as Target2. The senators describe how Iran uses euro conversion to pay for imports, skirting existing sanctions, and “freeing up funds to engage in illicit activities and further its goals to develop a nuclear weapon.”

“We strongly urge you to take all necessary measures to immediately cut off Iran’s ability to use its foreign-held euros by prohibiting direct or indirect access to Target2 services by or on behalf of accounts owned or controlled by the Government of Iran or its affiliates,” the Senators wrote. “Such an action would be consistent with the ECB’s guidelines – which explicitly prohibit access to Target2 for entities engaged in “money-laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems” – and would bring the EU into alignment with American policy vis-à-vis Iranian access to the dollar.”

The Shaheen-Kirk letter was signed by 36 Senators, including a majority of the Senate Foreign Relations and Banking Committees, which have oversight over US-EU relations and Iran sanctions, respectively.

For more information or to speak with FDD experts, please contact Madeleine Levey Lambert [email protected] or 202-403-2941.

###

The Foundation for Defense of Democracies is a Washington-based non-profit, non-partisan policy institute dedicated to promoting pluralism, defending democratic values, and fighting the ideologies that drive terrorism.