Iran Deal May Provide Billions in IRGC-Connected Sanctions Relief Prior To Congressional Review

On day one of a new Iran nuclear deal, the United States would reportedly repeal three executive orders that imposed sanctions on major sectors of Iran’s economy connected to the Islamic Revolutionary Guard Corps (IRGC). Washington would also release $7 billion of frozen funds tied to IRGC financing, all before submitting the agreement to Congress for review. President Joe Biden recently reaffirmed that the IRGC is a foreign terrorist organization; it is responsible for plots to assassinate former U.S. officials and kidnap Iranian-American dissidents.

Expert Analysis

“The administration is poised to lift major terrorism sanctions in violation of Secretary of State Antony Blinken’s commitment to Congress. And, in a legal sleight of hand, the administration appears ready to greenlight foreign companies to do business with Iranian entities that do business with the IRGC. The Guard will use front companies and cutouts to ensure that billions of international dollars flow into its coffers.” – Mark Dubowitz, FDD Chief Executive

“Congress should object to any sanctions relief that benefits the IRGC while Iran continues to plot terrorist attacks against the United States and our allies. Providing sanctions relief prior to any congressional review diminishes the legitimacy of the coming deal, making it easier for Congress or a future administration to reimpose sanctions.” – Richard Goldberg, FDD Senior Advisor

Upfront Sanctions Relief for IRGC-Connected Sectors

The Iran Nuclear Agreement Review Act (INARA) prohibits the president from providing statutory sanctions relief to Iran prior to congressional review of any nuclear agreement with Tehran.

However, there are three executive orders currently in effect that imposed economic sanctions on the Islamic Republic and are not codified in statute: Executive Order 13846, which imposed sanctions on Iran’s petrochemical and automotive sectors; Executive Order 13871, which imposed sanctions on Iran’s iron, steel, aluminum, and copper sectors; and Executive Order 13902, which imposed sanctions on Iran’s construction, mining, manufacturing, and textiles sectors, and under which Iran’s financial sector, along with 17 Iranian banks, is subject to secondary sanctions. While not confirmed, these may be the three executive orders repealed on day one of the new deal.

The sectors in line for relief generate 20 to 25 percent of the Islamic Republic’s GDP and 62 to 73 percent of its non-oil exports. Rescinding these executive orders may provide Iran with sanctions-free access to least $30 billion in annual export revenue, or more than $13.5 billion over the reported 165-day interim deal period — with that number growing after sanctions are lifted.

Brazen Circumvention of INARA

$7 billion held in foreign accounts belonging to the National Iranian Oil Company (NIOC) and/or the Central Bank of Iran (CBI) will reportedly be unfrozen prior to congressional review pursuant to INARA.

Both NIOC and the CBI are subject to terrorism sanctions for their financing of the IRGC’s Quds Force, the Guard’s expeditionary arm. Since release of these funds would likely require a statutory national security waiver, it is possible the release will occur prior to day one of a new deal. Since this release is clearly tied to the nuclear deal negotiations, issuing a waiver before submitting the deal to Congress would be an even more brazen circumvention of INARA.

Notably, the deal’s third step would reportedly greenlight billions of dollars in oil sales benefitting top IRGC financiers, while its final step would see terrorism sanctions relieved for the CBI, NIOC, the National Development Fund, and many other Iranian banks and companies even if they do not halt the illicit conduct that prompted the sanctions in the first place.

Related FDD Analysis

• “Biden, Congress Should Defend Terrorism Sanctions Imposed on Iran,” by Richard Goldberg, Saeed Ghasseminejad, Behnam Ben Taleblu, Matthew Zweig, and Mark Dubowitz
• “How Congress Can Keep Biden From Caving to Iran’s Demands,” by Matthew Zweig
• “Nuclear Deal with Iran Would Gut IRGC Sanctions,” FDD Flash Brief
• “Iran Targets Salman Rushdie,” FDD Flash Brief