OFAC Holds Off on Sanctioning European Firms with Previous Iran Ties
The Office of Foreign Assets Control has not proposed any sanctions on European businesses that did business with Iran’s Islamic Revolutionary Guard Corps (IRGC), because despite past evidence of dealings, those companies have “moved away” from those activities, Acting OFAC Director John Smith told lawmakers during a Feb. 11 full House Foreign Affairs Committee hearing. “I have not seen evidence of European actors continuing to deal with the IRGC,” Smith said. Rep. Brad Sherman, D-Calif., pressed Smith for nearly two minutes about the amount of IRGC-related sanctions, and expressed skepticism about OFAC’s efforts to find entities that do business with sanctions designees. “The Treasury Department has announced that IRGC is a huge economic monolith,” he said. “You’ve only designated seven [entities], and there are a lot more firms, [but you] can’t find a single East Asian, South Asian or European business that’s doing business with them,” Sherman said as his time expired. In written testimony (here) for the hearing, Smith said secondary (non-nuclear-related) sanctions continue to be leveled against foreign entities who transact with the IRGC.
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The hearing focused on the Joint Comprehensive Plan of Action, a rollback by the U.S., United Kingdom, France, Germany, Russia and China of several nuclear-related sanctions on Iran that was implemented in Jan. 20. While OFAC removed more than 400 entities from its Specially Designated National list, it placed roughly half of them on a new OFAC list—the E.O. 13599 list—to indicate they remain blocked persons under U.S. law, said Smith. “While secondary sanctions no longer apply to most transactions involving individuals and entities on the E.O. 13599 list, U.S. persons continue to have an obligation to block property in which such persons have an interest and are prohibited generally from dealing with them,” Smith’s testimony said. OFAC is still aware of the national security threat Iran presents, and won’t back down from sanctions when necessary, Smith said. “[W]e are clear-eyed about the fact that Iran remains a State Sponsor of Terrorism and continues to engage in other destabilizing activities,” his testimony said. “We believe it is crucial to continue to implement and enforce the sanctions that remain.”