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Thursday, October 25, 2007

U.S. Imposing New Sanctions Against Iran

Flashback to 9/29/07- Kyl-Lieberman amendment on Iran passes with a vote of 76 to 22. Roll call here and the text of the amendment can be found here.

I am listing the sense of the senate portions of the amendment first and after discussing the new sanctions that will be announced today against Iran, I will also list the "findings" of the Senate, which will explain the need for these newer sanctions.

After listing the "findings" (A 1 THROUGH 15), the amendment lists their "sense of the senate".

(b) Sense of Senate.--It is the sense of the Senate--

(1) that the manner in which the United States transitions and structures its military presence in Iraq will have critical long-term consequences for the future of the Persian Gulf and the Middle East, in particular with regard to the capability of the Government of the Islamic Republic of Iran to pose a threat to the security of the region, the prospects for democracy for the people of the region, and the health of the global economy;

(2) that it is a vital national interest of the United States to prevent the Government of the Islamic Republic of Iran from turning Shi'a militia extremists in Iraq into a Hezbollah-like force that could serve its interests inside Iraq, including by overwhelming, subverting, or co-opting institutions of the legitimate Government of Iraq;

(3) that it should be the policy of the United States to combat, contain, and roll back the violent activities and destabilizing influence inside Iraq of the Government of the Islamic Republic of Iran, its foreign facilitators such as Lebanese Hezbollah, and its indigenous Iraqi proxies;

(4) to support the prudent and calibrated use of all instruments of United States national power in Iraq, including diplomatic, economic, intelligence, and military instruments, in support of the policy described in paragraph (3) with respect to the Government of the Islamic Republic of Iran and its proxies;

(5) that the United States should designate the Islamic Revolutionary Guards Corps as a foreign terrorist organization under section 219 of the Immigration and Nationality Act and place the Islamic Revolutionary Guards Corps on the list of Specially Designated Global Terrorists, as established under the International Emergency Economic Powers Act and initiated under Executive Order 13224; and

(6) that the Department of the Treasury should act with all possible expediency to complete the listing of those entities targeted under United Nations Security Council Resolutions 1737 and 1747 adopted unanimously on December 23, 2006 and March 24, 2007, respectively.

Today I see the blogosphere is abuzz this morning with reports from the NYT, Wapo and AP that the U.S. will be issuing a statement about new sanctions to be imposed by the U.S. against Iran.

Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson will be issuing the statement informing the public of what sanctions will be placed on Iran by the administration.

By singling out the Revolutionary Guard Corps for proliferating weapons of mass destruction, an the Quds Force as a supporter of terrorism, the U.S. will be able to block financial and other assets that the Guard controls making way for more unilateral sanctions which will hinder the Revolutionary Guard and anybody that does business with it.

Had Russia and China not weakened the two previous sets of UN sanctions, this might not have been necessary but as long as they are going to be the weak links in the UN and block any meaningful sanctions, then it is up to countries to unilaterally start imposing their own sanctions against Iran.

Wapo points out:

"This is a very powerful set of measures designed to send a message to Iran that there will be a cost to what they do. We decided on them because we have seen no change in Iranian behavior," said a senior administration official who spoke on the condition of anonymity because the measures have not yet been announced. "Our diplomacy needs to be stronger and more effective."

The move caps a year of growing U.S. pressure on Tehran, including billions of dollars in arms sales to Persian Gulf allies and Israel, interception of Iranian arms shipments in Iraq and Afghanistan, detention of Iranian agents in Iraq, and pressure on the United Nations and European allies to increase Iran's isolation. The dramatic U.S. steps underscore the escalating tensions between the United States and Iran.


The Quds Force, the foreign operations branch of the Revolutionary Guard Corps, will be designated separately as a supporter of terrorism under Executive Order 13224, which Bush signed two weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding, U.S. officials said. It authorizes the United States to identify individuals, businesses, charities and extremist groups engaged in terrorism.

The Quds Force -- "Quds" is Arabic for Jerusalem -- is estimated to number up to 15,000 and runs Tehran's covert activities throughout the Middle East, including arms, aid and training for groups such as Hezbollah, Hamas and Islamic Jihad. U.S. officials say that it has provided the high-tech bombs capable of penetrating armored vehicles and the roadside explosives that are the No. 1 killer of U.S. forces in Iraq.

Although Iran's suspected weapons programs have been a longtime problem for the United States, the Quds Force's operations in Iraq have become a bigger immediate challenge. "The Quds Force controls the policy for Iraq," Gen. David H. Petraeus, the top U.S. commander in Iraq, said earlier this month. "There should be no confusion about that."

These sanctions will make it easier for our allies in Europe to impose their own sets of sanctions against Iran, bypassing the useless UN and China and Russia.

As Rice said:

"The international community's got to get a lot tougher if it's going to be resolved diplomatically."

The reasons for the actions can be found in that Kyl-Lieberman amendment that we showed part of above:

(a) Findings.--The Senate makes the following findings:

(1) General David Petraeus, commander of the Multi-National Force Iraq, stated in testimony before a joint session of the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives on September 10, 2007, that ``[i]t is increasingly apparent to both coalition and Iraqi leaders that Iran, through the use of the Iranian Republican Guard Corps Qods Force, seeks to turn the Shi'a militia extremists into a Hezbollah-like force to serve its interests and fight a proxy war against the Iraqi state and coalition forces in Iraq''.

(2) Ambassador Ryan Crocker, United States Ambassador to Iraq, stated in testimony before a joint session of the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives on September 10, 2007, that ``Iran plays a harmful role in Iraq. While claiming to support Iraq in its transition, Iran has actively undermined it by providing lethal capabilities to the enemies of the Iraqi state''.

(3) The most recent National Intelligence Estimate on Iraq, published in August 2007, states that ``Iran has been intensifying aspects of its lethal support for select groups of Iraqi Shia militants, particularly the JAM [Jaysh al-Mahdi], since at least the beginning of 2006. Explosively formed penetrator (EFP) attacks have risen dramatically''.

(4) The Report of the Independent Commission on the Security Forces of Iraq, released on September 6, 2007, states that ``[t]he Commission concludes that the evidence of Iran's increasing activism in the southeastern part of the country, including Basra and Diyala provinces, is compelling. ..... It is an accepted fact that most of the sophisticated weapons being used to `defeat' our armor protection comes across the border from Iran with relative impunity''.

(5) General (Ret.) James Jones, chairman of the Independent Commission on the Security Forces of Iraq, stated in testimony before the Committee on Armed Services of the Senate on September 6, 2007, that ``[w]e judge that the goings-on across the Iranian border in particular are of extreme severity and have the potential of at least delaying our efforts inside the country. Many of the arms and weapons that kill and maim our soldiers are coming from across the Iranian border''.

(6) General Petraeus said of Iranian support for extremist activity in Iraq on April 26, 2007, that ``[w]e know that it goes as high as [Brig. Gen. Qassem] Suleimani, who is the head of the Qods Force. ..... We believe that he works directly for the supreme leader of the country''.

(7) Mahmoud Ahmedinejad, the president of Iran, stated on August 28, 2007, with respect to the United States presence in Iraq, that ``[t]he political power of the occupiers is collapsing rapidly. Soon we will see a huge power vacuum in the region. Of course we are prepared to fill the gap''.

(8) Ambassador Crocker testified to Congress, with respect to President Ahmedinejad's statement, on September 11, 2007, that ``[t]he Iranian involvement in Iraq--its support for extremist militias, training, connections to Lebanese Hezbollah, provision of munitions that are used against our force as well as the Iraqis--are all, in my view, a pretty clear demonstration that Ahmedinejad means what he says, and is already trying to implement it to the best of his ability''.

(9) General Petraeus stated on September 12, 2007, with respect to evidence of the complicity of Iran in the murder of members of the Armed Forces of the United States in Iraq, that ``[t]e evidence is very, very clear. We captured it when we captured Qais Khazali, the Lebanese Hezbollah deputy commander, and others, and it's in black and white. ..... We interrogated these individuals. We have on tape. ..... Qais Khazali himself. When asked, could you have done what you have done without Iranian support, he literally throws up his hands and laughs and says, of course not. ..... So they told us about the amounts of money that they have received. They told us about the training that they received. They told us about the ammunition and sophisticated weaponry and all of that that they received''.

(10) General Petraeus further stated on September 14, 2007, that ``[w]hat we have got is evidence. This is not intelligence. This is evidence, off computers that we captured, documents and so forth. ..... In one case, a 22-page document that lays out the planning, reconnaissance, rehearsal, conduct, and aftermath of the operation conducted that resulted in the death of five of our soldiers in Karbala back in January''.

(11) The Department of Defense report to Congress entitled ``Measuring Stability and Security in Iraq'' and released on September 18, 2007, consistent with section 9010 of Public Law 109-289, states that ``[t]here has been no decrease in Iranian training and funding of illegal Shi'a militias in Iraq that attack Iraqi and Coalition forces and civilians..... Tehran's support for these groups is one of the greatest impediments to progress on reconciliation''.

(12) The Department of Defense report further states, with respect to Iranian support for Shi'a extremist groups in Iraq, that ``[m]ost of the explosives and ammunition used by these groups are provided by the Iranian Islamic Revolutionary Guard Corps-Qods Force..... For the period of June through the end of August, [explosively formed penetrator] events are projected to rise by 39 percent over the period of March through May''.

(13) Since May 2007, Ambassador Crocker has held three rounds of talks in Baghdad on Iraq security with representatives of the Government of the Islamic Republic of Iran.

(14) Ambassador Crocker testified before Congress on September 10, 2007, with respect to these talks, stating that ``I laid out the concerns we had over Iranian activity that was damaging to Iraq's security, but found no readiness on Iranians' side at all to engage seriously on these issues. The impression I came with after a couple rounds is that the Iranians were interested simply in the appearance of discussions, of being seen to be at the table with the U.S. as an arbiter of Iraq's present and future, rather than actually doing serious business ..... Right now, I haven't seen any sign of earnest or seriousness on the Iranian side''.

(15) Ambassador Crocker testified before Congress on September 11, 2007, stating that ``[w]e have seen nothing on the ground that would suggest that the Iranians are altering what they're doing in support of extremist elements that are going after our forces as well as the Iraqis''.

Despite cries from the media over the last 18 months about the U.S. getting prepared to attack Iran militarily, which the media is still implying on a weekly basis, these sanctions are our best hope to squeeze Iran financially into complying with their international obligations and stopping their drive to acquire a nuclear weapon, with diplomacy, instead of any military action and to stop interfering in Iraq by providing training, fighters and weapons that are killing our troops.

Hat tip to Counterterrorism Blog, we see from the Treasury website we find other entities listed by the treasury department: (You can find the text of the Treasury statement, via PDF, here)

Proliferation Finance – Executive Order 13382 Designations

E.O. 13382, signed by the President on June 29, 2005, is an authority aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, and at isolating them from the U.S. financial and commercial systems. Designations under the Order prohibit all transactions between the designees and any U.S. person, and freeze any assets the designees may have under U.S. jurisdiction.

The Islamic Revolutionary Guard Corps (IRGC): Considered the military vanguard of Iran, the Islamic Revolutionary Guard Corps (IRGC), is composed of five branches (Ground Forces, Air Force, Navy, Basij militia, and Qods Force special operations) in addition to a counterintelligence directorate and representatives of the Supreme Leader. It runs prisons, and has numerous economic interests involving defense production, construction, and the oil industry. Several of the IRGC's leaders have been sanctioned under UN Security Council Resolution 1747.

The IRGC has been outspoken about its willingness to proliferate ballistic missiles capable of carrying WMD. The IRGC's ballistic missile inventory includes missiles, which could be modified to deliver WMD. The IRGC is one of the primary regime organizations tied to developing and testing the Shahab-3. The IRGC attempted, as recently as 2006, to procure sophisticated and costly equipment that could be used to support Iran's ballistic missile and nuclear programs.

Ministry of Defense and Armed Forces Logistics (MODAFL): The Ministry of Defense and Armed Forces Logistics (MODAFL) controls the Defense Industries Organization, an Iranian entity identified in the Annex to UN Security Council Resolution 1737 and designated by the United States under E.O. 13382 on March 30, 2007. MODAFL also was sanctioned, pursuant to the Arms Export Control Act and the Export Administration Act, in November 2000 for its involvement in missile technology proliferation activities.

MODAFL has ultimate authority over Iran's Aerospace Industries Organization (AIO), which was designated under E.O. 13382 on June 28, 2005. The AIO is the Iranian organization responsible for ballistic missile research, development and production activities and organizations, including the Shahid Hemmat Industries Group (SHIG) and the Shahid Bakeri Industries Group (SBIG), which were both listed under UN Security Council Resolution 1737 and designated under E.O. 13382. The head of MODAFL has publicly indicated Iran's willingness to continue to work on ballistic missiles. Defense Minister Brigadier General Mostafa Mohammad Najjar said that one of MODAFL's major projects is the manufacturing of Shahab-3 missiles and that it will not be halted. MODAFL representatives have acted as facilitators for Iranian assistance to an E.O. 13382- designated entity and, over the past two years, have brokered a number of transactions involving materials and technologies with ballistic missile applications.

Bank Melli, its branches, and subsidiaries: Bank Melli is Iran's largest bank. Bank Melli provides banking services to entities involved in Iran's nuclear and ballistic missile programs, including entities listed by the U.N. for their involvement in those programs. This includes handling transactions in recent months for Bank Sepah, Defense Industries Organization, and Shahid Hemmat Industrial Group. Following the designation of Bank Sepah under UNSCR 1747, Bank Melli took precautions not to identify Sepah in transactions. Through its role as a financial conduit, Bank Melli has facilitated numerous purchases of sensitive materials for Iran's nuclear and missile programs. In doing so, Bank Melli has provided a range of financial services on behalf of Iran's nuclear and missile industries, including opening letters of credit and maintaining accounts.

Bank Melli also provides banking services to the IRGC and the Qods Force. Entities owned or controlled by the IRGC or the Qods Force use Bank Melli for a variety of financial services. From 2002 to 2006, Bank Melli was used to send at least $100 million to the Qods Force. When handling financial transactions on behalf of the IRGC, Bank Melli has employed deceptive banking practices to obscure its involvement from the international banking system. For example, Bank Melli has requested that its name be removed from financial transactions.

Bank Mellat, its branches, and subsidiaries: Bank Mellat provides banking services in support of Iran's nuclear entities, namely the Atomic Energy Organization of Iran (AEOI) and Novin Energy Company. Both AEOI and Novin Energy have been designated by the United States under E.O. 13382 and by the UN Security Council under UNSCRs 1737 and 1747. Bank Mellat services and maintains AEOI accounts, mainly through AEOI's financial conduit, Novin Energy. Bank Mellat has facilitated the movement of millions of dollars for Iran's nuclear program since at least 2003. Transfers from Bank Mellat to Iranian nuclear-related companies have occurred as recently as this year.

IRGC-owned or -controlled companies: Treasury is designating the companies listed below under E.O. 13382 on the basis of their relationship to the IRGC. These entities are owned or controlled by the IRGC and its leaders. The IRGC has significant political and economic power in Iran, with ties to companies controlling billions of dollars in business and construction and a growing presence in Iran's financial and commercial sectors. Through its companies, the IRGC is involved in a diverse array of activities, including petroleum production and major construction projects across the country. In 2006, Khatam al-Anbiya secured deals worth at least $7 billion in the oil, gas, and transportation sectors, among others.

  • Khatam al-Anbya Construction Headquarters
  • Oriental Oil Kish
  • Ghorb Nooh
  • Sahel Consultant Engineering
  • Ghorb-e Karbala
  • Sepasad Engineering Co
  • Omran Sahel
  • Hara Company
  • Gharargahe Sazandegi Ghaem

IRGC Individuals: Treasury is designating the individuals below under E.O 13382 on the basis of their relationship to the IRGC. One of the five is listed on the Annex of UNSCR 1737 and the other four are listed on the Annex of UNSCR 1747 as key IRGC individuals.

  • General Hosein Salimi, Commander of the Air Force, IRGC
  • Brigadier General Morteza Rezaie, Deputy Commander of the IRGC
  • Vice Admiral Ali Akhbar Ahmadian, Chief of the IRGC Joint Staff
  • Brigadier Gen. Mohammad Hejazi, Commander of Bassij resistance force
  • Brigadier General Qasem Soleimani, Commander of the Qods Force

Other Individuals involved in Iran's ballistic missile programs: E.O. 13382 derivative proliferation designation by Treasury of each of the individuals listed below for their relationship to the Aerospace Industries Organization, an entity previously designated under E.O. 13382. Each individual is listed on the Annex of UNSCR 1737 for being involved in Iran's ballistic missile program.

  • Ahmad Vahid Dastjerdi, Head of the Aerospace Industry Organization (AIO)
  • Reza-Gholi Esmaeli, Head of Trade & International Affairs Dept., AIO
  • Bahmanyar Morteza Bahmanyar, Head of Finance & Budget Department, AIO

Support for Terrorism -- Executive Order 13224 Designations

E.O. 13224 is an authority aimed at freezing the assets of terrorists and their supporters, and at isolating them from the U.S. financial and commercial systems. Designations under the E.O. prohibit all transactions between the designees and any U.S. person, and freeze any assets the designees may have under U.S. jurisdiction.

IRGC-Qods Force (IRGC-QF): The Qods Force, a branch of Iran's Revolutionary Guard Corps (IRGC), provides material support to the Taliban, Lebanese Hizballah, Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC).

The Qods Force is the Iranian regime's primary instrument for providing lethal support to the Taliban. The Qods Force provides weapons and financial support to the Taliban to support anti-U.S. and anti-Coalition activity in Afghanistan. Since at least 2006, Iran has arranged frequent shipments of small arms and associated ammunition, rocket propelled grenades, mortar rounds, 107mm rockets, plastic explosives, and probably man-portable defense systems to the Taliban. This support contravenes Chapter VII UN Security Council obligations. UN Security Council resolution 1267 established sanctions against the Taliban and UN Security Council resolutions 1333 and 1735 imposed arms embargoes against the Taliban. Through Qods Force material support to the Taliban, we believe Iran is seeking to inflict casualties on U.S. and NATO forces.

The Qods Force has had a long history of supporting Hizballah's military, paramilitary, and terrorist activities, providing it with guidance, funding, weapons, intelligence, and logistical support. The Qods Force operates training camps for Hizballah in Lebanon's Bekaa Valley and has reportedly trained more than 3,000 Hizballah fighters at IRGC training facilities in Iran. The Qods Force provides roughly $100 to $200 million in funding a year to Hizballah and has assisted Hizballah in rearming in violation of UN Security Council Resolution 1701.

In addition, the Qods Force provides lethal support in the form of weapons, training, funding, and guidance to select groups of Iraqi Shi'a militants who target and kill Coalition and Iraqi forces and innocent Iraqi civilians.

Bank Saderat, its branches, and subsidiaries: Bank Saderat, which has approximately 3200 branch offices, has been used by the Government of Iran to channel funds to terrorist organizations, including Hizballah and EU-designated terrorist groups Hamas, PFLP-GC, and Palestinian Islamic Jihad. For example, from 2001 to 2006, Bank Saderat transferred $50 million from the Central Bank of Iran through its subsidiary in London to its branch in Beirut for the benefit of Hizballah fronts in Lebanon that support acts of violence. Hizballah has used Bank Saderat to send money to other terrorist organizations, including millions of dollars on occasion, to support the activities of Hamas. As of early 2005, Hamas had substantial assets deposited in Bank Saderat, and, in the past year, Bank Saderat has transferred several million dollars to Hamas.

Effect of Today's Actions

As a result of our actions today, all transactions involving any of the designees and any U.S. person will be prohibited and any assets the designees may have under U.S. jurisdiction will be frozen. Noting the UN Security Council's grave concern over Iran's nuclear and ballistic missile program activities, the United States also encourages all jurisdictions to take similar actions to ensure full and effective implementation of UN Security Council Resolutions 1737 and 1747.

Today's designations also notify the international private sector of the dangers of doing business with three of Iran's largest banks, as well as the many IRGC- affiliated companies that pervade several basic Iranian industries.

Text of the Treasury Department statement:

Involving Illicit Iranian Activity

The Financial Crimes Enforcement Network is issuing this advisory to U.S. financial institutions so that they may guard against threats of illicit Iranian activity related to money laundering, terrorist financing and weapons of mass destruction proliferation financing. The Financial Action Task Force (FATF)1 has recently determined that Iran’s lack of a comprehensive anti-money laundering and combating the financing of terrorism (AML/CFT) regime represents a significant vulnerability within the international financial system.

These deficiencies, among others, have caused Iran to be identified in a statement of concern dated October 11, 2007. As noted in the statement, “FATF members are advising their financial institutions to take the risk arising from deficiencies in Iran’s AML/CFT regime into account for enhanced due diligence.”

Iran is currently the only country for which FATF has publicly identified such a significant AML/CFT vulnerability. FATF called upon Iran “to address on an urgent basis its AML/CFT deficiencies, including those identified in the 2006 International Monetary Fund Article IV Consultation Report for Iran”


In addition to the recent FATF action citing Iran’s AML/CFT deficiencies, FATF has released guidance on implementing the activity-based financial prohibitions called for under United Nations Security Council Resolution (UNSCR) 1737 of December 23, 2006 and UNSCR 1747 of March 24, 2007 with respect to Iran’s ongoing nuclear program. UNSCR 1737 in particular requires all member states “to prevent the provision to Iran of any technical assistance or training, financial assistance, investment, brokering or other services, and the transfer of financial resources or services, related to the supply, sale, transfer, manufacture or use of the prohibited items, materials, equipment, goods and technology” associated with Iran’s proliferation sensitive nuclear activities.

The FATF has advised jurisdictions to consider all customers and transactions associated with Iran as a primary risk determinant for the purposes of applying risk-based identification and enhanced scrutiny with respect to high-risk customers and transactions that may be related to activity prohibited by UNSCR 1737.

In light of the recent UNSCRs and the pronouncement of FATF’s concerns with Iran and weapons proliferation financing, financial institutions should be particularly aware that there may be an increased effort by Iranian entities to circumvent international sanctions and related financial

1 The FATF is a 34 member inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing.

2 Article IV of the IMF Articles of Agreement represents a general obligation on all IMF members to undergo regular surveillance of their economic and financial policies.

community scrutiny through the use of deceptive practices involving shell companies and other intermediaries or requests that identifying information be removed from transactions. Such efforts may originate in Iran or Iranian free trade zones subject to separate regulatory and supervisory controls, including Kish Island. Such efforts may also originate wholly outside of Iran at the request of Iranian-controlled entities.

Financial institutions also are reminded of the existing U.S. sanctions that are administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) with respect to the Government of Iran, including but not limited to Iranian Government-owned banks, as well as other sanctions imposed on Iranian entities that have been linked to terrorist activity and the proliferation of weapons of mass destruction. Information about these sanctions is available on OFAC’s website at

These will be the harshest set of sanctions yet and we can only hope our allies will follow suit with their own harsh sanctions.

No one wants Iran to have nuclear weapons and equally, no one wants to see military action have to be used, so it is in everyones interest to force Tehran to comply using sanctions that are not weakened by Russia and China, via the UN, and squeezing them until they give up their nuclear weapon ambitions and to quit interfering in Iraq.