Should Intel Agencies Investigate Iran’s Use of Sanctions Relief & Cash Settlements for Terrorism? (H.R. 6774)

What is H.R. 6774?

(Updated November 2, 2018)

This bill — known as the Iran Payments Accountability Act of 2018 — would require the Directorate of National Intelligence (DNI) to seek information as to whether the Iranian government has improperly used money from sanctions relief and cash settlements to sponsor foreign terrorist organizations, facilitate illicit narcotics activities, conduct military operations in Syria, facilitate illicit narcotics operations, attack U.S. citizens, or attack members of the U.S. Armed Forces.

If the DNI found that U.S. aid funds were used to support any of the above activities, this bill would require the Secretary of State to demand the repayment of the U.S. funds in question through any means necessary, including through the imposition of new or increased sanctions.

Terrorist groups designated for the DNI’s reporting are the Iranian Islamic Revolutionary Guard Corps, Hamas, and Hezbollah.

Argument in favor

Iran has a history of funding terrorist groups and President Bashar al-Assad’s regime in Syria. The U.S. needs to ensure that Iran isn't using the sanctions relief and cash settlements it was given to fund terrorism around the world.

Argument opposed

Intelligence agencies shouldn't focus specifically on how Iran is spending its influx of cash. U.S. sanctions against terrorism remain active against Iran and are the most effective levers to pull if Iran is, indeed, funding terrorism or Assad’s regime.

Impact

Terrorist groups; Director of National Intelligence; Secretary of State; Syria; and Iran,

Cost of H.R. 6774

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Mike Bishop (R-MI) introduced this bill to require the the DNI to submit a report to Congress detailing Iran’s use of assets received from sanctions relief and cash settlements from the U.S. government:

“The Obama Administration delivered $1.7 billion dollars, along with billions of dollars in sanctions relief, to the Iranian regime – the world’s foremost state sponsor of terrorism. My constituents, and Americans across the nation, have every right to know how and where these dollars were used. Specifically, the American people have a right to know if these funds were used to foment terrorism, military activity, or other criminal acts. That’s why I introduced the Iran Payments Accountability Act to provide transparency and empower the State Department to secure repayment from Iran if these funds are traced to terrorist organizations or illicit activities.” 

Rep Ed Royce (R-CA), who sponsored a House bill to ban liquid asset (cash and gold) payments to Iran the previous Congress, has said that “forking over cash and gold to the world’s leading state sponsor of terror is incredibly dangerous.”

Testifying before the House Committee on Foreign Affairs Subcommittee on the Middle East and North Africa, Suzanne Maloney argued that Iran’s focus is domestic, not foreign:

“The public discussion of the [Iran nuclear deal] and its provisions regarding sanctions relief has tended to emphasize the availability of new resources for Tehran’s support for terrorist groups and other violent proxies as well as its assiduous efforts to extend its influence across the broader Middle East. However, it should be acknowledged that the most pressing needs facing the Iranian government are not those related to its regional posture, but rather to its domestic economy.”

Treasury Secretary Steven Mnuchin argues that Iran is misusing national resources — including the national treasury’s funds — to fund rights abuses:

“Iran not only exports terrorism and instability across the world, it routinely violates the rights of its own people.  The Iranian regime diverts national resources that should belong to the people to fund a massive and expensive censorship apparatus and suppress free speech. Those who speak out against the regime’s mismanagement and corruption are subject to abuse and mistreatment in Iran’s prisons.  America stands with the people of Iran, and Treasury is taking action to hold the Iranian regime accountable for ongoing human rights abuses, censorship, and other despicable acts it commits against its own citizens.”

Former Secretary of State John Kerry has acknowledged the likelihood that some of Iran’s sanctions relief money will go to terrorist groups:

“I think that some of it will end up in the hands of the IRGC (Iranian Revolutionary Guard Corps) or other entities, some of which are labeled terrorists. You know, to some degree, I'm not going to sit here and tell you that every component of that can be prevented… [But] right now, we are not seeing the early delivery of funds going to that kind of endeavor at this point in time. We have made it very clear that we use sanctions when we think they are appropriate in order to counter behavior that we believe has broken the law or has challenged the United Nations Security Council or threatened the United States, and we stand by our sanctions. We think they have been used judiciously and effectively and we are looking to move on now to put to test the willingness of Iran and other countries in the region to try to reduce tensions and move in a different direction.”

Kerry adds that the Iranian government has so many developmental priorities, “there is no way they can succeed in what they want to do if they are very busy funding a lot of terrorism.” He also adds that it’s clear that the Iranian government would be in trouble with both the U.S. and others if it was found to be funding terrorism, and expresses confidence that lifting sanctions will not increase threats in the Middle East:

“If we catch them funding terrorism, they are going to have a problem with the United States Congress and other people, obviously… We are confident that this will not result in an increase somehow in the threat to any partner or any friend in the region."

For its part, Iran denies that it sponsors terrorism, and has complained that the sanctions-relief funds it’s owed are coming too slowly.

This legislation has the support of 13 cosponsors, including 11 Republicans and two Democrats.

Of Note: Iran gives vital support to President Bashar al-Assad’s regime in Syria, which is fighting ISIS but also at war with Western-backed rebel groups such as the Free Syrian Army (FSA). Estimates currently suggest that Iran sends the Assad regime anywhere from $3.5-$20 billion a year.

After the signing of the nuclear deal in 2015, some have worried that Iran’s government will use its newly free-up funds to support its allies, some of whom are anti-democratic. However, U.S. intelligence officials have largely concluded that most of Iran’s nearly freed-up funds are going towards addressing domestic economic ills.

It’s also worth noting that America’s terrorism-related sanctions against Iran have remained in place. These sanctions bar certain identified individuals and entities from accessing the U.S. financial system, while others deny Iran wholesale access to the U.S. economy. Additionally, some specific Iranian banks and entities have remained sanctioned, and new ones can be added to the sanctions list if they violate U.S. sanctions. Moreover, since 9/11, the international banking system has adopted new standards and created intergovernmental groups, such as the Financial Action Task Force, to crack down on money laundering and terrorism financing.

In May 2018, theTreasury Department’s Office of Foreign Assets Control (OFAC) designated two Iranian entities for committing serious human rights abuses on behalf of the Iranian government. OFAC also designated an entity that had operated information or communications technology that facilitated monitoring or tracking that could assist or enable serious human rights abuses on behalf of the Iranian government. Finally, OFAC designated two individuals for engaging in censorship activities prohibiting, limiting, or penalizing the exercise of freedom of expression or assembly by Iranian citizens, and one citizen for acting for or on behalf of an entity engaged in censorship activities.

Media:

• Sponsoring Rep. Mike Bishop (R-MI) Press Release