On December 1, the United States Congress voted overwhelmingly to extend the Iran Sanctions Act, which was set to expire on December 31, for 10 more years. Between the two chambers, there was only one vote cast against the extension. On December 15, without a signature from the President, the act became law. Prior to the vote by Congress, the White House had asserted that the extension of the Iran Sanctions Act was unnecessary. After the extension came into law, the White House reiterated this point and added that the passage of the act “is entirely consistent with our commitments in the Joint Comprehensive Plan of Action.”
The Iran Sanctions Act grants the President the authority to implement certain financial sanctions against Iran. The Act itself does not implement these sanctions – rather, most Iran sanctions are issued by Executive Orders under the authority of various statutes, including the Iran Sanctions Act. The White House had been arguing that it had sufficient authority to maintain the Iran sanctions under other statutes, such as the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 and the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA). Nevertheless, Congress passed the extension.
As a result of the passage of this extension, Iran has expressed some uneasiness. In fact, Iranian President Hassan Rouhani told his parliament that he considered the extension a violation of the Joint Comprehensive Plan of Action (JCPOA). It is unclear whether Iran plans to take any action that would undermine the JCPOA or if President Rouhani’s comments, made after the vote by Congress but before its passage into law, were intended to affect President Obama’s signing of the bill.
At this point the passage of the extension is more of a symbolic act, but it is some indication of how Congress views the JCPOA. In addition, given President-elect Trump’s comments regarding the deal, it may suggest that the JCPOA is on tenuous footing during the next Administration. Indeed, communications from the Foreign Affairs Committee of the House of Representatives indicated that the passage of the law would “provide clear authority to ‘snap-back’ many of the most powerful sanctions on Iran’s energy industry if the regime rushes toward a nuclear weapon.”
Businesses and individuals interested in pursuing opportunities in Iran must continue to review applicable sanctions, export controls rules, and regulations to determine whether any potential Iran related activities are permissible and should also consider the likelihood of a potential “snap back.”
