On February 3, 2017, the Trump Administration imposed new sanctions against Iran. As discussed below, these new sanctions, which apply to 25 entities and are intended to be consistent with U.S. obligations under the Joint Comprehensive Plan of Action (JCPOA) that was signed with Iran in 2015, may be the first of several actions that the United States takes to deter Iran from supporting terrorism and developing its ballistic missile program.
The new sanctions were issued largely in response to a ballistic missile test that was conducted by Iran on January 29, 2017. On that date, Iran launched a new Khorramshahr medium-range ballistic missile that reportedly flew a distance of about 600 miles, but which had its re-entry vehicle explode before the flight was completed. Subsequently, on February 1, 2017, National Security Advisor Michael Flynn issued a public announcement from the White House, in which he condemned the ballistic missile test and other provocative actions taken by Iran and stated that “[a]s of today, we are officially putting Iran on notice.”
While the statement of “officially putting Iran on notice” seemed somewhat vague at the time, things became more clear when the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions against 25 entities on February 3, 2017. In a press release accompanying the announcement, OFAC stated that the entities were being sanctioned for being involved in procuring technology and/or materials to support Iran’s ballistic missile program, as well as for acting for or on behalf of, or providing support to, Iran’s Islamic Revolutionary Guard Corps–Qods Force (IRGC–QF).
Specifically, the new sanctions result in 13 individuals and 12 companies being added to the List of Specially Designated Nationals and Blocked Persons (SDN List). The 13 individuals include: Yahya Al-Hajj; Abdollah Asgharzadeh; Tenny Dariam; Hassan Dehghan Ebrahimi; Muhammad Abd-al-Amir Farhat; Mohammad Magham; Kambiz Rostamian; Ali Sharifi; Qin Xianhua; Richard Yue; Mostafa Zahedi; Ghodrat Zargari; and Carol Zhou. The 12 companies include: Cosailing Business Trading Company Limited; East Star Company; Ervin Danesh Aryan Company; Maher Trading and Construction Company; Mirage for Engineering and Trading; Mirage for Waste Management and Environmental Services SARL; MKS International Co. Ltd.; Ningbo New Century Import and Export Company, Ltd.; Ofog Sabze Darya Company; Reem Pharmaceutical, LLC; Royal Pearl General T.R.D.; and Zist Tajhiz Pooyesh Company. These individuals and companies are located or have operations in one or more of the following countries: Iran, Lebanon, China, and United Arab Emirates. For additional information about these individuals and companies, including their known locations and aliases under which they operate, please see: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170203.aspx.
As a result of the new sanctions, all property and interests in property of the entities referenced above are blocked if they are subject to U.S. jurisdiction. In addition, as is the case with all entities on the SDN List, U.S. Persons are generally prohibited from engaging in transactions with these sanctioned entities, unless authorization to do so is provided by OFAC in the form of a general license or a specific license.
In the press release that was issued by OFAC in connection with the announcement about the new sanctions, John Smith, the Acting Director of OFAC, was quoted as saying that: “Iran’s continued support for terrorism and development of its ballistic missile program poses a threat to the region, to our partners worldwide, and to the United States.” In addition, he further noted that “[t]oday’s action is part of Treasury’s ongoing efforts to counter Iranian malign activity abroad that is outside the scope of the JCPOA.”
The latter statement by Mr. Smith is important, because it reflects the fact that the Trump Administration believes that the new sanctions are fully consistent with U.S. obligations under the JCPOA, which is commonly referred to as the Iran Nuclear Deal. In addition, it suggests that the Trump Administration is inclined to adhere to the JCPOA, at least for the foreseeable future. While U.S. primary sanctions against Iran currently remain in place under the JCPOA, the Trump Administration’s willingness to abide by the terms of the JCPOA is significant with respect to the lifting of various U.S. secondary sanctions against Iran pursuant to the Implementation Day requirements set forth in the JCPOA, which benefit certain non-U.S. entities wishing to engage in certain kinds of transactions with certain Iranian entities subject to certain conditions. However, U.S. and non-U.S. entities alike should keep in mind that President Trump has repeatedly said that he does not feel that the JCPOA is in the best interests of the United States, and that he may take action at some point in the future to withdraw from the JCPOA or to enact its “snapback” provisions. Furthermore, given that the Trump Administration has recently stated that the new sanctions are just initial steps in response to provocative behavior by Iran, U.S. and non-U.S. companies also need to continue to monitor actions taken by OFAC and other U.S. Government agencies with respect to Iran on a regular basis.
For additional information, please contact Geoffrey Goodale at firstname.lastname@example.org or (202) 261-6644.
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