More than 500 British, French and German parliamentarians have signed a letter addressed to their US counterparts urging them to persuade President Trump to uphold US commitment to the JCPOA (see previous blog here on President Trump’s JCPOA speech, 12 January 2018). The letter acknowledges the concerns surrounding Iran’s ‘other non-nuclear’ activities (namely, its ballistic missiles programme and role in Syria), but states that “these issues must be treated separately… and not within the context of the JCPOA”. Furthermore, “if the deal breaks down, it [would be] well-nigh impossible to assemble another grand coalition built around sanctions against Iran. We must preserve what took us a decade to achieve and has proven to be effective.”
At a meeting in Luxembourg on Monday, EU Foreign Ministers did not agree new sanctions against Iran over its ballistic missile programme and role in Syria, which had been considered to try to ensure that the US continues its commitment to the JCPOA.
The EU failed to agree new measures on Syria over its alleged chemical weapons attacks. Last week the EU issued a press release condemning the “repeated use of chemical weapons by the Syrian regime”, stating that it had sanctioned a number of Syrian high-level officials and scientists in July 2017 and March 2018 for “their role in the development and use of chemical weapons”, and that it was “always ready to consider imposing further measures as appropriate”.
In March 2017, we reported that Chinese telecoms company ZTE (Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd) had agreed to a combined civil and criminal penalty and forfeiture of $1.19bn after shipping telecommunications equipment to Iran and North Korea in violation of US sanctions, making false statements, and obstructing justice including through preventing disclosure to and misleading the US Government. In addition to those monetary penalties, ZTE also agreed a 7-year suspended denial of export privileges, which could be activated if any aspect of the agreement was not complied with.
Yesterday (16 April 2018), the US Department of Commerce announced that it had activated ZTE’s 7-year denial of export privileges order on the basis that the company had made false statements to the Department during settlement negotiations in 2016, and during the probationary period in 2017. Those statements had only been reported to the US Government after the Department had requested certain information from ZTE.
The EU has extended until 13 April 2019 its Iran human rights sanctions (30 listings also updated), see Council Decision (CFSP) 2018/568 and Council Implementing Regulation (EU) 2018/565. Those measures currently impose travel bans and asset freezes against 82 individuals and 1 entity (‘Cyber Police’), as well as a ban on exports to Iran of equipment which might be used for internal repression and of equipment for monitoring telecommunications. EU press release here, and UK OFSI Notice here.
On the subject of the JCPOA, US Treasury Secretary Steven Mnuchin stated yesterday that the US might impose “very strong” sanctions on Iran in the event that the “disastrous flaws” of the nuclear agreement (as referred to by President Trump) are not addressed before the 12 May deadline. He said that the US administration were considering both a fresh round of sanctions, as well as the return of previous sanctions that had been waived as part of the JCPOA.
Advocate General Tanchev (the Bulgarian AG in the EU Court of Justice) has given his opinion in the National Iranian Tanker Company’s (NITC) re-listing appeal, Case C-600/16 P (see previous blog here on the General Court judgment under appeal). Link to Opinion here, which does not bind the Court of Justice; the Court will give judgment in the next few months. Maya Lester QC (inter alia) acts for the NITC.
The NITC had argued that its right to an effective remedy (and other principles of EU law) was breached because it had been re-listed on the EU’s Iran sanctions having had its original listing annulled, without there being any change of fact; the only change was that the EU Council had said NITC should be re-listed because the form of support it was said to be providing to the Iranian Government as a tanker company was “logistical” rather than (as before) “financial”.
The Opinion contains an interesting analysis of the right to an effective remedy under the EU Charter and ECHR. The AG’s view is that that principle curtails the EU’s discretion to adopt measures that re-list after an error identified in an EU judgment, and that damages wouldn’t provide a remedy in those circumstances because there wouldn’t be a sufficiently serious breach of EU law. However, in his view, NITC’s right to an effective remedy had not been breached on the facts because logistical support was different from providing financial support to the Government of Iran, so the Council was not re-litigating the same point. He also said that there was no evidence that the Council had held back arguments at the time of first listing for use in re-listing (so-called “warehousing”) – this raises interesting issues about the circumstances in which there could be such evidence available to the applicant and the consequences.
Following a government audit, the Bahraini government has stated that it has discovered documents which reveal a $7 billion scheme, orchestrated by the Persian-Gulf bank ‘Future Bank’ (closed in 2015), which ultimately assisted Iran in the evasion of international sanctions between 2004 and 2015. The documents are alleged to reveal how the bank had routinely altered financial documents (including a practice known as ‘wire-stripping’) to mask illicit transactions between Iran and a number of foreign partners.
The US has charged 9 Iranians with conducting a massive cybertheft campaign on behalf of Iran’s Islamic Revolutionary Guard Corps, and imposed sanctions on them, a related company, and one other. In the Department of Justice’s press release, Deputy Attorney General Rod Rosenstein accused the 9 people of stealing “more than 31 terabytes of documents and data from more than 140 American universities, 30 American companies, 5 American government agencies, and also more than 176 universities in 21 foreign countries. He added that in many cases they acted “at the behest of the Iranian government”.
As a result of the sanctions, the assets of the Mabna Institute, the 9 Iranians connected to it, and Behzad Mesri, who is the subject of a US indictment announced in November 2017 for cybertheft, are frozen and US people are generally prohibited from doing business with them. The US Treasury’s press release is here, and the details of the sanctions are here.
The US Department of Justice (Southern District of New York) has announced that Iranian national Ali Sadr Hashemi Nejad has been charged with allegedly participating in a scheme to evade US sanctions against Iran; specifically, “a scheme in which more than $115 million in payments for a Venezuelan housing complex were illegally funnelled through the US financial system for the benefit of Iranian individuals and entities”.
Geoffrey Berman, US Attorney for the Southern District of New York, stated that Mr Nejad had “created a network of front companies and foreign bank accounts [(in Switzerland, Turkey and the British Virgin Islands)] to mask Iranian business dealings in Venezuela and evade US sanctions”.
In light of the charges, the Malta Financial Services Authority (MFSA) has issued an order to remove Mr Nejad, with immediate effect, from the position of director (along with any other executive roles) of the Pilatus Bank Limited. His voting rights as a shareholder of the bank have also been suspended. MFSA Notices here and here.
On 28 March 2018, Mr. Nejad pleaded not guilty to the charges before US Magistrate Judge Barbara Moses in Manhattan.