On September 24, the American-Iranian Council held a publicly announced and off-the-record breakfast roundtable in Washington, D.C. on the Iran sanctions. The event, hosted by the prominent law firm, Steptoe & Johnson, LLP, featured Ms. Andrea Gacki, the Acting Deputy Director of the Office of Foreign Assets Control (OFAC) at the U.S. Department of Treasury, as the main speaker. To date, Ms. Gacki is the highest-ranking OFAC official in the Obama Administration to appear at a publicly announced and open event. The session offered an opportunity to produce substantive knowledge about one of the most topical issues in international relations.
The roundtable brought together some 50 individuals involved in various aspects of the Iran sanctions debate representing the U.S. Government, energy companies, banks, insurance companies, law firms, as well as a number of policy experts from think tanks and universities.
The event featured a substantive discussion of the ways in which last July's signing of the Joint Comprehensive Plan of Action (JCPOA) between the P5+1 powers and Iran is likely to affect U.S. sanctions on the country. It also addressed how opportunities for people-to-people and academic exchange might be affected by the nuclear agreement and the ways in which sanctions relief will be implemented.
The event was moderated by Mr. Alidad Mafinezam, Policy Advisor at American Iranian Council
- Andrea Gacki, Acting Deputy Director, Office of Foreign Assets Control, U.S. Department of Treasury
- Professor Hooshang Amirahmadi, Founder and President, American-Iranian Council
- Senator Bennett Johnston (Ret.), Chairman, American-Iranian Council
- Edward Krauland, Chair of Sanctions Practice, Steptoe & Johnson
- Jack Hayes, Steptoe and Johnson
- Glenn Schweitzer, Director for Eurasia Programs, National Academy of Sciences
The following key topics were discussed by the presenters and the participants.
1. The American Iranian Council has been active for two decades in promoting the view that the common interests of the United States and Iran far outweigh their differences. During this time, it has hosted eminent American statesmen and women, who have shared their vision of a more constructive and mutually beneficial relationship between the two countries: then‑State Secretary Madeleine Albright, as well as then‑Senators Chuck Hagel, John Kerry, and Joe Biden have all spoken at past AIC events. AIC is the only organization of its kind that is currently holding an OFAC license to operate in Iran.
2. The Joint Comprehensive Plan of Action (JCPOA) is a unique occurrence in the history of the bilateral relationship between the United States and Iran, as well as in the US Government's long‑standing use of economic sanctions. For the first time, a multilateral, detailed, binding and transparent legal framework exists that links US sanctions policy vis-a-vis a target country (Iran) to a defined set of deliverable behaviors (Iran's unwinding of a nuclear program), where unmet obligations are addressed through a dispute resolution process that permits lawful derogation from the JCPOA. This framework has raised expectations on both sides of the bilateral relationship, and places a premium on active monitoring and management of the obligations each side has assumed. This framework underscores what the US government has said for many years: sanctions are not an end in themselves, but a tool to achieve a larger policy objective.
3. OFAC has been and remains the central agency behind the imposition and monitoring of Iran sanctions. Throughout the decades, especially in the past five years, sanctions have increased, as Congress has become directly involved in imposing them. The sanctions relief provided by the JCPOA is focused on nuclear-related secondary sanctions— i.e. third country actors who do business with Iran, especially its banks and oil and gas sector. These are outlined in the annexes in pages 2 and 5 of the agreement. It is likely that sanctions relief will begin to be implemented in the late winter or spring of 2016. However, the nuclear-related secondary sanctions will be “suspended,” not lifted, subject to verification by the IAEA that Iran has indeed implemented its JCPOA commitments.
Also, OFAC will provide the private sector with information on how to navigate the sanctions. U.S. persons and banks will still be prevented from conducting business with Iran. Trade in food, medicines, and carpets will be allowed by obtaining a general license, and the export of civilian aircraft and spare parts will be permitted but it also needs a license. Similarly, subsidiaries of U.S. firms may engage Iran only after approval and licensing from OFAC. It is thus prudent to consult with OFAC before making a decision to ensure the parties obtain the relevant licences, even in the areas such as academic and knowledge exchange and humanitarian activities.
4. Innovation and flexibility are essential to managing the sanctions relief being afforded to Iran; a slavish return to the pre-secondary sanctions era will not serve the broader policy interest of the United States and global community. The US government's decision to link Iran's military denuclearization to effective sanctions relief means we must allow constructive engagement to keep Iran's obligations unambiguously binding and committed. Therefore, (1) secondary sanctions relief should not be impeded by counterproductive application of the "anti-facilitation" provision to US persons under the ITSR; (2) humanitarian, academic, and people-to-people engagement that was expanded in the run-up to the JCPOA must be continually enhanced; and (3) dialogue between the governments of Iran and the United States must be maintained to ensure that the objectives of the JCPOA are secured, and ideally leveraged to achieve a new constructive bilateral relationship.
5. Given the fact that the majority of U.S. bilateral sanctions on Iran are not affected by the JCPOA, it is probable that European and Asian firms will be ahead of U.S. firms in signing major contracts in various sectors of Iran's economy. From a U.S. perspective, the focus on secondary sanctions relief, while maintaining most of its own sanctions in place, will place European and Asian firms in oil and gas, banking, telecommunications, auto, high technology and other sectors at a distinct advantage vis-a-vis their U.S. competitors.
6. While academic exchange and humanitarian goods and services are nominally exempt from sanctions, organizations and persons interested in pursuing such engagement opportunities with Iran are advised to contact OFAC and may need to apply for a specific license for particular exchange and humanitarian activities. The U.S. embargo on Iran has been largely left intact by the JCPOA and this affects the extent and nature of engagement between the U.S. and Iran in commercial and non‑commercial areas.
7. Despite the fact that over the past four years a series of sanctions laws have been passed against Iran in Congress, the president maintains the right to waive specific sanctions on humanitarian or economic grounds, provided that it can be shown that such actions are in U.S. interests. The fact that civilian aircraft, carpets, and the activities of foreign subsidiaries of U.S. firms have been exempted from the sanctions shows that there are significant modifications that can be made to the sanctions regime through executive action. However, this depends on whether the political will and satisfactory reasoning can be marshalled.
8. There is a need for more educational programming and public knowledge on what is allowed in terms of trade and engagement with Iran by American organizations and persons. The Treasury and State Departments are committed to meeting the information needs of such entities. OFAC will be publishing a detailed guide on what is and is not allowed regarding Iran.
9. The American Iranian Council, in collaboration with Steptoe & Johnson, has established an Iran Forum that will hold regular meetings at the latter's offices in Washington, D.C. with the aim of exploring the complexities of the Iran sanctions debate and opportunities that might exist for promoting U.S.-Iran cultural and/or economic relations.