Obama Administration Wins Delay on Sanctions from Senate Democrats

The Obama administration sent two top officials to Congress twice in the past week, to defend ongoing nuclear talks with Iran and to argue against two Iran-related bills gaining ground in the Senate.  The lobbying effort was partially successful, as Senate Democrats today announced plans to delay a vote on new sanctions until after a late March negotiating deadline.

In a January 21 hearing before the Senate Foreign Relations Committee, Under Secretary of the Treasury for Terrorism and Financial Intelligence David Cohen and Deputy Secretary of State Antony Blinken were repeatedly asked to justify their opposition to the prospective sanctions proposed by Senators Kirk and Menendez, which would take effect only if no final deal is reached or if Iran reneges on its terms.  Deputy Secretary Blinken argued that such sanctions would be perceived as a violation of the interim nuclear accord by Iran and by U.S. negotiating partners.  He warned that the sanctions “could provoke Iran to walk away from the negotiating table,” or that they could lead Iranian negotiators “to adopt more extreme positions,” and that other countries would be less willing to enforce existing sanctions or adopt new ones.  He called on Congress to “be patient for a few more months to fully test diplomacy.”

It seems this call was at least partially successful.  At a Senate Banking Committee hearing one week later, Senator Menendez called for postponing a floor vote on the new bill until after March 24, the deadline the administration has given for arriving at a “framework agreement” on the core elements of a final deal.  In a January 27 letter to President Obama, Senator Menendez and nine other Senate Democrats said that while they “remain deeply skeptical” about Iran’s intentions in the talks, they are willing to delay a vote, “in acknowledgement of […] concerns regarding congressional action on legislation.”

This decision may buy the administration some time, but it places additional pressure on the late March deadline.  Little detail emerged from the most recent round of multilateral talks, which concluded last week in Geneva, or from bilateral U.S.-Iran talks, held late last week in Zurich.  It does not appear that negotiators are much closer to reaching agreement – even a basic “framework agreement” – on the most controversial aspects of Iran’s program than they were last November, when talks were extended.

Senators also grilled Under Secretary Cohen on sanctions during the January 21 hearing.  He argued that sanctions had been “vigorously enforced,” including the period since the interim accord was struck in November 2013.  Since then, according to Under Secretary Cohen, “the United States has sanctioned nearly 100 individuals and entities that were helping Iran evade our sanctions, aiding Iranian nuclear and missile proliferation,” among other sanctionable activity.

Meanwhile, European Union sanctions continue to be challenged in court.  In the latest such example, the European General Court struck down sanctions against Bank Tejarat in a January 22 judgment.  On the same date, the Court struck down sanctions against a handful of companies associated with the Islamic Republic of Iran Shipping Lines (IRISL) that operate in Cyprus, Germany, and Malta.  The European Union now has two months to appeal these decisions or to reimpose sanctions under new grounds.  In most past challenges, the EU has chosen to do one or the other, thus limiting the effect of these cases.

Bank Tejarat, which is also on the U.S. blacklist, has helped other designated Iranian banks evade sanctions, and has facilitated the purchase of yellowcake uranium by Iran’s Atomic Energy Organization.  It has also facilitated payments on behalf of U.N.-sanctioned entities such as the Shahid Hemmat Industrial Group (SHIG) and the Ministry of Defense Armed Forces Logistics (MODAFL).