January 30, 2012


Banking Committee to vote on the sanctions and human rights bill Thursday

WASHINGTON – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Richard Shelby (R-AL) announced the Committee will consider and vote on new Iran sanctions legislation Thursday.  The Iran Sanctions, Accountability and Human Rights Act will put further economic pressure on Iran’s leaders to abandon their illicit nuclear program and support for international terrorism.
“A nuclear-armed Iran would represent a grave threat to regional peace and international security,” said Chairman Johnson.  “Iran’s continuing defiance of its international legal obligations and refusal to come clean on its nuclear program underscore the need to further isolate Iran and its leaders.  I thank Ranking Member Shelby and his staff for helping to move this legislation forward in a bipartisan manner.”
“I am pleased to work with Chairman Johnson to advance legislation that sends a clear signal through strong measures that Iran must abandon its nuclear weapons program and its designs for the spread of international terror,” said Shelby.
The Senate Banking Committee has jurisdiction over sanctions legislation.  In 2010, the Committee passed comprehensive sanctions legislation which became law and provided the President with powerful new tools to counter the Iranian threat.  These new sanctions together with other international efforts have prompted many foreign firms to withdraw from Iran, and slowed Iran’s illicit nuclear program. 
However, it is now clear that the steps taken thus far by the international community have not been sufficient to force Iran to abandon its nuclear ambitions. Senators Johnson and Shelby teamed up months ago and started working on this additional bipartisan legislation. 
The Johnson-Shelby plan provides for a range of new measures for the President to employ to increase pressure on Iran to comply with its international obligations. The legislation will broaden the list of available sanctions, require intensified targeting of Iran’s Revolutionary Guard Corps, require firms traded on US stock exchanges to disclose Iran-related activity to the Securities and Exchange Commission, sanction energy and uranium mining joint ventures with Iran’s government outside of Iran, penalize US parent firms for certain Iran-related activities of their foreign subsidiaries, mandate sanctions for those who supply Iran with weapons and other technologies used to commit human rights abuses, and provide other similar measures designed to increase pressure on Iran’s government. 
Below is a summary of provisions included in the Iran Sanctions, Accountability and Human Rights Act.
Highlights of Johnson-Shelby Iran Sanctions, Accountability and Human Rights Act of 2012
Expanding Human Rights Sanctions: Imposes broad sanctions, including visa denial and freezing of assets, on persons and firms which supply Iran with technologies – including weapons, rubber bullets, tear gas and other riot control equipment, and jamming, monitoring and surveillance equipment – which the President determines are likely to be used by Iranian security forces to commit human rights abuses. Also requires: sanctions against individuals and firms found to have engaged in censorship; a strategy to promote Internet freedom in Iran; and expedited processing of Iran-related humanitarian, human rights and democratization aid.
US Policy Statement on Iran: Declares US policy to be to prevent Iran from acquiring or developing nuclear weapons, continuing its support for international terrorism, and engaging in other activities designed to destabilize its neighbors in the region.
Intensification of US Diplomatic Efforts on Iran: The bill includes a Sense of Congress urging:
·         Prompt expansion and vigorous implementation of bilateral and multilateral sanctions against Iran;
·         Intensification of US diplomatic efforts, including broadening the UN sanctions regime to include additional restrictions on:
o   Iran’s human rights violators,
o   Iranian supporters of proliferation and terrorism,
o   An Iranian shipping firm and an Iranian airline designated for sanction by the US for arms proliferation and terrorism support;
·         Expanded sanctions on Iran’s energy sector; and expansion of US diplomatic and economic efforts to help key allies reduce their dependence on Iranian crude oil supplies.
Requires detailed, periodic reporting to Congress on the success of such diplomatic efforts.
Extends US sanctions to Iranian Energy Joint Ventures: For the first time, extends US sanctions under the Iran Sanctions Act (ISA) to firms engaged in new energy-related joint ventures anywhere in the world in which Iran’s government is a substantial partner or investor, or by which Iran could otherwise receive critical advanced energy sector technology or know-how not previously available to its government.
Codifies and Expands US Sanctions on Suppliers to Iran’s Energy and Petrochemical Sectors: Codifies the President’s decision to extend US sanctions to Iran’s petrochemical sector, adopting the standards, monetary thresholds ($250,000 per transaction, or multiple transactions aggregating to $1 million in a 12-month period) and specific petrochemicals list contained in the November 21, 2011 Executive Order 13590.  Extends US sanctions to all suppliers who knowingly provide goods, services and technologies valued at $1 million or more, or $5 million annually, to a person or firm involved in Iran’s energy sector, including petroleum resource projects and domestic production of refined petroleum products (primarily gasoline) in Iran.
Applies mandatory US sanctions to Iranian Uranium Mining Joint Ventures: Requires at least 3 ISA sanctions to be imposed on firms who knowingly engage in joint ventures with Iran’s government, Iranian firms, or persons acting for or on behalf of Iran’s government in the mining, production or transportation of uranium anywhere in the world. Exempts from sanctions persons who agree to withdraw from such projects within 6 months after the effective date of the bill.
Expands the Current ISA Menu of Sanctions to Senior Corporate Officers of Sanctioned Firms: Expands the current menu of sanctions available to the President under the ISA to authorize exclusion from the United States of principal corporate officers (or other senior officers performing a similar function) or major shareholders in a sanctioned firm, and provides for applicable ISA sanctions to be applied to the CEO or other senior officers of a sanctioned firm, which could include a freeze of their US assets.
Accelerates and Expands Efforts to Target Iran’s Revolutionary Guard Corps (IRGC):
  • Requires the President to identify and designate for sanctions known officials, affiliates and agents of the IRGC within 90 days, and periodically thereafter; establishes priorities for investigations of IRGC entities. Requires exclusion of such persons from the US, and their designation for sanctions (related to WMD) under the International Emergency Economic Powers Act (IEEPA), including freezing their assets and otherwise isolating them financially. Requires reports to Congress on progress in sanctions designations.
  • Makes foreign persons and firms who are agents and affiliates of the IRGC, and anyone who materially assists them, or engages in any significant transaction with them – including through barter transactions – subject to at least 3 ISA sanctions. Also applies similar sanctions against any persons or firms who engage in significant transactions with UN-sanctioned persons, those acting for them or on their behalf. Provides for additional sanctions under IEEPA which the President deems appropriate. Requires the President to report on designations and waivers, as applicable.
  • Extends US procurement ban to foreign persons who interact with the IRGC, requiring certification by all prospective government contractors that neither they nor any of their subsidiaries have engaged in significant economic transactions with designated IRGC officials, agents or affiliates.
Mandatory Sanctions on Shippers of WMD/Terror Materials:  Requires the blocking of assets of, and other sanctions on shippers, insurers, and reinsurers who knowingly provide ships or insure vessels used in the shipment of materials contributing to Iran’s WMD program or its terrorism-related activities.  Also applies to parent firms if they knew or should have known of the shipments, and to subsidiaries of violators if they knowingly participated in the activity.
Liability of US firms for Activities of their Foreign Subsidiaries: Requires the imposition of civil penalties of up to twice the amount of the transaction on US parent companies for the activities of their foreign subsidiaries which, if undertaken in the US or by a US person, would violate US sanctions law. This includes activities under the current US trade embargo with Iran, and would apply regardless of whether the subsidiary had been established to circumvent US sanctions, as under CISADA.
Mandatory Disclosure of Iran-related Activity to the Securities and Exchange Commission: Requires all firms whose stock is traded on US stock exchanges to disclose whether they or their affiliates have engaged in activities which may be subject to sanction under US law (related to Iran’s energy sector; conducting or facilitating certain banking violations supporting WMD activities/terrorism, money laundering, and the IRGC; transferring weapons and certain other technologies to Iran; transferring sensitive communications jamming or monitoring technology; interacting with person or firms who have been designated for WMD/terrorism sanctions, or engaging in transactions with entities representing the government of Iran).  Provides for detailed public disclosure of any such information by the SEC, and conveyance of that information by the SEC to Congress and the President. Requires that the President initiate an investigation into whether such disclosed activities are sanctionable, and that the decision on sanctionability be made within 6 months.
Exclusion of Iranian Students Who Intend to Work in Iran’s Energy Sector or Nuclear Program: Requires that the Secretary of State deny visas to Iranian university and graduate students seeking to come to the US to study in energy-related fields, if the Secretary determines they intend to return to Iran to work in its energy sector or nuclear program.