Chair: Amb. K.C. Singh
Discussants: Prof. Chintamani Mahapatra, Dr. G. Balachandran and Shebonti Ray Dadwal

The paper examined the role of the US Congress vis-à-vis the Iran nuclear issue during the time period of the Obama administration. The paper began with an overview of the Executive-Congressional measures targeting Iran during the Clinton and the Bush administrations. The author noted that there have been 10 statutes/public laws and 26 Executive Orders (EO) targeting Iran since 1979.

A ‘State of Emergency’ was declared by Clinton in March 1995, which has been renewed every year since, most recently on March 12, 2014. The Clinton administration passed the Iran and Libya Sanctions Act (ILSA) in 1996, which became the Iran Sanctions Act (ISA) in 2006 when Libya was removed from its purview. The ILSA/ISA was a prime example of ‘secondary sanctions’ targeting companies from other countries for their involvement in Iran’s petro-chemical sector.

Despite Clinton passing ILSA however, it was the Obama administration which used ILSA/ISA provisions for the first time in September 2010 to sanctions a Swiss-based company. An important reason for US administrations not using such authorities was their reluctance to target energy companies belonging to allies like Japan and Europe. Prior to Obama, no authorities existed that targeted crucial financial institutions like the Central Bank of Iran or to curtail Iran’s oil revenues.

The Obama administration’s initial policy approach towards Iran has been characterised as ‘engagement’ or ’persuasion’ given that it included the threat of further sanctions if Iran did not respond to its ‘overtures’. Critics instead termed it ‘free-pass engagement’ as according to them the Iranian response was not encouraging. While following the policy of ‘engagement’, the Obama administration put its weight behind UNSC efforts to pressure Iran. Critics however termed the UNSC measures as being ‘too weak’.

There was broad bi-partisan support for Obama’s initial policy framework of ‘engagement’ in the US Congress. Pressure began to build up for a change in policy in the aftermath of the June 2009 electoral violence, the disclosure on the Fordow enrichment facility in September 2009, the failure of the October 2009 offer from the Vienna Group (US, Russia, France, IAEA) and concerns generated by the quarterly reports of the IAEA DG to the Board of Governors detailing the increase in Iran’s enrichment material and infrastructure.

The paper then went on to give pertinent aspects relating to key sanctions legislations and EO’s passed by the Obama administration. These included the Comprehensive Iran Sanctions and Divestment Act (CISADA), signed into law by Obama on July 1, 2010. US officials have credited CISADA for major energy traders stopping the sale of refined petroleum products to Iran. Section 1245 of the National Defence Authorisation Act 2012 (NDAA, signed into law on December 31, 2011) mandated sanctions on foreign central banks if they ‘engage in a financial transaction for the sale or purchase of petroleum or petroleum products to or from Iran’. Exemptions were to be provided if these countries ‘significantly reduced’ their crude oil purchases from Iran. 20 countries got such exemptions by June 2012. By November 2013, when the Joint Plan of Action (JPOA) was signed, only six countries were importing Iranian oil. These were China, India, South Korea, Japan, Taiwan, and Turkey.

Among the significant provisions of the Iran Threat Reduction and Syria Human Rights Act (ITRSHRA), which entered into force on February 6, 2013, was Section 504 expanding sanctions under Section 1245 of NDAA 2012. It led to the creation of ‘escrow’ accounts in countries importing Iranian oil and severely curtailed Iran’s foreign exchange earnings. The Iran Freedom and Counter-proliferation Act (IFCA) of 2012 targeted Iran’s shipping and ship building sectors as well apart from its energy sector.

The Obama administration passed 9 EO’s as well as used authorities present in Iran-related EO’s passed by previous administrations (numbering 17 from 1979 to 1997) as well as functional EO’s relating to terrorism (2001) and WMD proliferation (2005) to target Iran. More than 500 entities and individuals have been designated under the terms of these Executive-Congressional authorities.

The paper went on to note that the response to the JPOA has clearly been on partisan lines in the US Congress. The paper noted the pending Iran-related legislation as well as Obama administration’s response to these measures while continuing to bring new sanctions designations based on extant sanctions provisions. The paper closed by briefly pointing to the impact on India as a result of US sanctions, including designations under the INA on three chemical companies and two individuals during 2004-2006 (which were subsequently not renewed), the pressure brought on US EXIM Bank by members of the US Congress in late 2008 to stop its provision of loan guarantees to Reliance which resulted in the company stopping the sale of refined petroleum products to Iran as well as the impact of legislations like Section 1245 of NDAA 2012 which led to India reducing its crude oil imports from Iran.

Discussants’ View

Professor Chintamani Mahapatra congratulated the author and appreciated the commendable effort made to distil various aspects relating to US Executive-Congressional actions on the Iran nuclear issue. He suggested that the content relating to pertinent legislations could be presented in a more reader-friendly manner. He advised the author to examine the linkages between the laws passed and the politics driving the process, specifically the impact of lobby groups in shaping US Congressional actions as well as administration policies. Further, the impact of the sanctions on the Iranians could be explored, as well as the tensions between the US and its allies in the framing and passing of the laws, some aspects of which were covered by the author. He pointed out that the US Congress was not a unitary actor, and that a huge range of factors was at play in how it works, including lobby groups, various committees among other pertinent issues.

Dr. G. Balachandran suggested that a list of acronyms could be incorporated as well as a table indicating the significant sanctions provisions and their use to help improve readability. He also suggested that the author could explore issues such as the extent to which the threat of veto by Obama against new sanctions legislations in the post-JPOA period would be effective given that there has been near unanimity in the US Congress in passing strict legislations against Iran, as has been delineated by the author. Further issues that could be explored were the possible policy options for the US and EU if diplomacy failed and possible contours of an agreement between Iran and the P5+1.

Shebonti Dadwal suggested that more analytical heft could be added to the paper on aspects relating to the efficacy of sanctions, the possible linkages between issues like US shale gas revolution and Iran-related Congressional actions, the impact on Iran was well as domestic Iranian reactions to US sanctions measures and whether and how the sanctions have varied across administrations.

The Chair urged the author to situate the paper in the broader regional context, critically look at the debate and divergence if any between the legislative and executive arms of the US government as well as the dynamics between the Republicans and the Democrats affecting Congressional actions. Discussions from the floor related to the impact of regional dynamics like the advance of the ISIS in Iraq and its effect on the Iran nuclear negotiations, the linkages between the US sanctions and their impact on the trans-Atlantic alliance, and the role of lobby groups in shaping US Congressional actions as well as US foreign policy as it pertained to the region.

Report prepared by Aniruddh Mohan, Research Intern, Nuclear and Arms Control Centre, IDSA