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Published on September 8th, 2015 | by Guest


Inside Cardin’s Anti-Deal Legislation

by Tyler Cullis 

In tandem with the announcement of his opposition to the Iran nuclear accord last week, Sen. Ben Cardin (D-MD) declared his intent to introduce new legislation aimed at forging a “functional, bipartisan approach to Iran” in the wake of the Joint Comprehensive Plan of Action (“JCPOA”) reached between the U.S., other major world powers, and Iran.

As Jim Lobe accurately notes in an excellent critique of the proposed bill, Cardin’s draft legislation—a version of which was obtained by LobeLog—is filled “with ‘poison pills’ designed to scuttle the accord” that “will almost certainly draw strong objections from the White House as well as its P5+1 partners and Iran.” This supplement to Jim Lobe’s piece provides further confirmation that the Cardin bill is nothing more than a bad-faith attempt to scuttle the Iran nuclear accord at the very moment of its inception.

Key features of the legislation—such as preventing the president from fully implementing the deal, unilaterally defining certain terms and conditions of the JCPOA outside of the negotiating room, and expediting new legislation imposing additional sanctions on Iran before a deliberative fact-finding process can resolve initial U.S. concerns—are carefully constructed to kill or, at the very least, undermine the JCPOA without being too obvious about its designs. As such, wavering Democrats, nervous about the negative repercussions of their vote in favor of the president’s negotiated resolution to the decades-old nuclear dispute with Iran, will almost certainly be tempted to lend their signatures to the Cardin bill—ignorant of its intent to act as a back-door solution to scuttle the nuclear accord with Iran.

Constraining the President

The most obvious deal-killer would be legislative provisions that bar the president from implementing U.S. commitments under the JCPOA. A soft version of this feature in the Cardin bill, Section 11, provides that the president cannot lift certain sanctions designations imposed on Iran’s banks for terrorism-related or ballistic missile-related reasons until the president certifies that such banks have ended their facilitation of transactions that aided Iran’s support for terrorism and ballistic-missile development.

The use of the word “terrorism” here is intended to misdirect readers away from the true purpose of this provision. Only one Iranian financial institution—Bank Saderat—was ever designated under the authority of Executive Order 13224, which provides for blocking sanctions on certain individuals and entities that commit, pose a risk of committing, or assist those committing or pose such a risk of committing acts of terrorism that threaten U.S. nationals or the United States itself. Bank Saderat was designated as such back in September 2006 for facilitating transactions on behalf of Hezbollah in Lebanon. Left unsaid in this draft bill, however, is that Bank Saderat will remain so designated under the terms of the JCPOA, as its designation was not nuclear-related and its name does not appear in the Attachments to Annex II as an entity or individual subject to de-listing from U.S. sanctions lists. Thus, this provision has zero effect on Iranian banks designated for terrorism-related purposes, as Bank Saderat will remain on U.S. sanctions lists.

However, this provision does affect the designations of major Iranian banks, such as Bank Sepah, Bank Melli and those Iranian banks determined to be owned and controlled by Bank Melli, Bank Tejarat, Post Bank of Iran, and others. These banks were all designated under the authority of Executive Order 13382, which sanctions entities and individuals involved in WMD proliferation, including the proliferation of ballistic missiles capable of delivering WMD. Because these major state-owned banks are involved in a host of transactions involving Iran’s major state actors, all were designated for conducting or facilitating transactions on behalf of groups involved in Iran’s nuclear and ballistic missile program.

Each of these banks will be de-listed from U.S. sanctions lists upon Implementation Day, as they are solely designated pursuant to Executive Order 13382. Insofar as Iran’s major incentive for undertaking these negotiations had to do with removing restrictions on its banking sector, the continuance of sanctions designations related to Iran’s major state-owned banks would have prevented a successful resolution to the nuclear dispute and will kill any deal should those designations not be rescinded. Moreover, as much as Cardin’s bill aims to state the contrary, the true predicate to the sanctions designations of these banks in the first instance was their facilitation of transactions in support of Iran’s nuclear program. Few sanctions experts, if any, believe that such designations would have been put into place had the concern solely been related to Iran’s development of advanced ballistic missiles.

Yet, Cardin’s bill purports to keep those designations intact. As Section 11 of the draft legislation states, in summary, all existing sanctions against Iranian banks engaged in ballistic missile proliferation “shall remain in effect until the date that is 90 days after the date on which the President” certifies to Congress that such banks are not supporting or otherwise facilitating such activities. This would put the president in the awkward position of having to assert, in order to implement the JCPOA, that certain Iranian banks are no longer conducting or facilitating transactions on behalf of Iranian entities engaged in the development of ballistic missiles

Indeed, this provision is solely meant to embarrass the president, as it is qualified at the end with a statement that nothing in the section is intended “to limit the authority of the President” under existing laws. In other words, the president has the discretion to both designate and de-designate certain Iranian entities and individuals that meet (or no longer meet) the designation criteria of Executive Order 13382, and this discretion would be left unaltered by passage of Section 11 of Cardin’s bill—despite its avowed pretensions to the contrary. This is the true kicker, as this end-qualifier turns Section 11 from being a deal-killer into a ripe opportunity for Iran hawks to lament the President’s failure to adhere to the intent, if not the meaning, of Section 11. Why a leading Senate Democrat would advocate for a provision intended to give opponents of the nuclear accord a brand-new basis to attack the president is unclear, but it’s nonetheless hardly surprising in Cardin’s down-is-up world.

Unilateral Interpretations

Congress’s unilateral interpretation of certain terms and conditions in the JCPOA— outside of the negotiating room and without the input of the U.S. administration—is intended to antagonize Iran and provoke reciprocal action by Iran’s parliament, which is set to debate the JCPOA in the coming days. Worse, in almost all respects Congress (deliberately) misreads the terms of the JCPOA and interprets them in ways that directly contradict their intended meaning. Even absent binding force on the president and his administration, these “Statements of Policy” threaten to cause real damage to the nuclear accord at the moment it prepares for takeoff.

For instance, Section 4(1) of Cardin’s bill rewrites the terms of the JCPOA so as to condition U.S. sanctions relief on Iran completing “all activities as set forth in paragraphs 2, 4, 5, and 6 of the Roadmap for Clarification of Past and Present Outstanding Issues regarding Iran’s Nuclear Program…” Under Annex I ¶ 66 of the JCPOA, Iran is indeed obliged to complete these said activities, but a plain reading of the JCPOA indicates that their completion does not condition the provision of sanctions relief to Iran, which is spelled out at Annex V ¶ 15 of the JCPOA. In this way, then, Cardin’s bill would establish a U.S. policy that is in direct contradiction to the plain text of an agreement that the U.S. administration just negotiated.

Similarly, Section 4(6) states that the JCPOA “binds Iran to abide by all of the provisions of the Additional Protocol…as of ‘Adoption Day’ as outlined in the JCPOA, regardless of whether the Iranian parliament approves the Additional Protocol.” But, as Annex I ¶ 64 of the JCPOA makes crystal clear, Iran will only provisionally apply the Additional Protocol to its Safeguards Agreement and only “subsequently seek ratification and entry into force” of the Additional Protocol at Year 8 of the nuclear accord. Here, too, there is a perverse irony, as the reason that Iran insisted on provisional application of the Additional Protocol had to do with the fact that the U.S. administration could promise nothing to Iran regarding congressional termination of legislative sanctions on Iran. As such, the JCPOA matched Iran’s ratification of the Additional Protocol to congressional termination of legislative sanctions at Year 8, in order to balance the leverage on each side. By considering the Additional Protocol to be in force in Iran prior to its ratification, Cardin’s bill aims at undermining Iran’s leverage and deconstructing the balance of equities so carefully negotiated in Vienna.

Section 4(5) of Cardin’s bill is the single instance in which the draft legislation correctly interprets a provision of the JCPOA. Here, Cardin’s bill restates the terms of ¶ 37 of the Main Text of the JCPOA and notes that the aim of this provision is to ensure that the snapback of sanctions will not have retroactive effect for contracts lawfully entered into with Iran or Iranian parties but will have effect for any future performance of such contracts following sanctions snap-back. Considering the bogeyman of the “grandfather clause” that gifted congressional offices during the Iran Nuclear Agreement Review Act of 2015 review period, we can be grateful for this, if for nothing else, in Cardin’s bill.

New Sanctions?

The Cardin bill purports to expedite new legislation sanctioning Iran should the president report to Congress that “the Government of Iran has directed or conducted an act of international terrorism against the United States or that the Government of Iran has substantially increased its operational or financial support for a terrorist organization that threatens the interests or allies of the Untied States…” Furthermore, such legislation would not just authorize the president to impose sanctions on certain Iranian parties engaged in such activities, but would require the president to do so. Expediting new sanctions legislation as a replacement for a deliberative lawmaking process, all the while withdrawing from the president discretionary powers to impose or not to impose sanctions, is a bitter recipe for disaster.

As Jim Lobe aptly describes, this provision would “minimize the time and opportunity for Congress to seriously consider [its] options and their implications” and “could also invite forces in the region that are hostile to Iran to commit terrorist acts in ways that Iran or any Iranian-supported group could credibly be blamed in the knowledge that Congress could act before a serious and full investigation could be carried out.”

Most troubling about this provision, emblematic as it is of the concerns that opponents of the nuclear deal are expressing, is the lack of appreciation for the president’s current authority to target Iran’s activities in support of international terrorism. As I have written elsewhere in a detailed memo regarding the president’s surviving sanctions authority post-JCPOA, Iran will remain one of the most sanctioned jurisdictions in the world. This includes sanctions targeting Iran’s support for international terrorism and U.S.-designated terrorist groups.

For instance, the U.S. maintains three sanctions designation programs—under Executive Orders 12947, 13224, and 13582—that target Iran’s support for international terrorism, U.S.-designated terrorist groups, and the regime of Syrian President Bashar al-Assad. Under these sanctions programs, Bank Saderat, Iran’s Ministry of Intelligence and Security, the IRGC-Qods Force, Qasem Soleimani, and the Law Enforcement Forces of the Islamic Republic, among others, are designated for sanctions. Furthermore, these sanctions programs allow for future designations as well, as is evident by the example set a month ago when the U.S. Department of the Treasury sanctioned additional members of Lebanese Hezbollah under the authorities of Executive Orders 13224 and 13582.

Moreover, thanks to the continued application of Section 104(c) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), U.S. sanctions targeting foreign banks conducting or facilitating transactions on behalf of Iran’s Revolutionary Guards Corps and its agents or affiliates, that work with Iranian banks designated under Executive Order 13224 (i.e., Bank Saderat), or that assist the Iranian government in its support for U.S.-designated terrorist groups (e.g., Hezbollah, Palestine Islamic Jihad, and Hamas), remain in effect during the period of the JCPOA. These powerful secondary sanctions warrant extreme caution on the part of foreign banks renewing their correspondent relations with Iranian financial institutions.

In short, there is something amiss when members of Congress are keen on firing the gun before learning what’s in the chamber. Although the JCPOA provides Iran with significant sanctions relief, it was carefully constructed to leave intact sanctions related to other Iranian activities of concern to the United States. Instead of seeking to authorize new sanctions on Iran, Congress should develop an elementary understanding of what sanctions survive the nuclear deal and how they can address members’ concerns about giving Iran free rein in the region.

In short, Cardin’s proposed legislation is being offered to frustrate the purpose of the JCPOA, which was to relax the ever-growing tensions between the U.S. and Iran.   Several provisions of the bill are “poison pills” aimed at either thwarting implementation of the JCPOA or inviting Iranian responses that threaten to undercut the deal. We are thus entering a most dangerous time, in which the votes of hedging Democratic Senators for a disapproval resolution may come at the cost of this new Cardin legislation. In the weeks ahead, it will be vital to remember that the Iran nuclear accord will long be vulnerable to the attacks of those who have spent their millions this summer seeking to defeat the JCPOA from its inception.

Tyler Cullis is the legal fellow at the National Iranian American Council.  He specializes in the practice of U.S. economic sanctions.

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One Response to Inside Cardin’s Anti-Deal Legislation

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  1. avatar Phil Johnson says:

    … just when we hoi poloi thought it was OK to get back into the international waters…

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