Iran Sanctions - Foreign Press Centers

4. if the entity is a financial institution, a prohibition on its service as a primary
dealer in U.S. government bonds; and/or a prohibition on its serving as a
repository for U.S. government funds (each counts as one sanction);
5. prohibition on U.S. government procurement from the entity;
6. prohibitions in transactions in foreign exchange by the entity;
7. prohibition on any credit or payments between the entity and any U.S. financial
institution;
8. prohibition of the sanctioned entity from acquiring, holding, using, or trading any
U.S.-based property which the sanctioned entity has a (financial) interest in; and
9. restriction on imports from the sanctioned entity, in accordance with the
International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701).
Mandatory ISA Sanction Imposed by CISADA: Prohibition on Contracts
With the U.S. Government
Iran Sanctions
CISADA (§102(b)) added a provision to further compel foreign companies to comply. It requires
companies, as a condition of obtaining a U.S. government contract, to certify to the relevant U.S.
government agency, that the firm—and any companies it owns or controls—are not violating
ISA. A contract may be terminated—and further penalties imposed—if it is determined that the
company’s certification of compliance was false. CISADA required a revision of the Federal
Acquisition Regulation (within 90 days of CISADA enactment on July 1, 2010) to reflect this
requirement. This requirement has been imposed in regulations, as per an interim rule issued on
September 29, 2010. (H.R. 6296, introduced September 29, 2010, in the 111 th Congress, would
have authorized state and local governments to ban such contracts.)
This sanction does not apply to any firm sanctioned under Executive Order 13590 (see above).
Waivers, Exemptions, and Termination Authority
The President has had the authority under ISA to waive sanctions if he certifies that doing so is
important to the U.S. national interest (§9(c)). CISADA (§102(c)), changed the 9(c) ISA waiver
standard to “necessary” to the national interest. Under the original version of ISA, there was also
waiver authority (§4(c)) if the parent country of the violating firm joined a sanctions regime
against Iran, but this waiver provision was changed by the Iran Freedom Support Act (P.L. 109-
293) to allow for a waiver determination based on U.S. vital national security interests. The
Section 4(c) waiver was altered by CISADA to provide for a six month (extendable) waiver if
doing so is vital to the national interest and if the parent country of the violating entity is “closely
cooperating” with U.S. efforts against Iran’s WMD and advanced conventional weapons program.
The criteria of “closely cooperating” are defined in the conference report, with primary focus on
implementing all U.N. sanctions against Iran. However, it is not clear why an Administration
would use a Section 4 waiver rather than a Section 9 waiver, although it could be argued that
using a Section 4 waiver would support U.S. diplomacy with the parent country of the offending
entity.
ISA (§5(f)) also contains several exceptions such that the President is not required to impose
sanctions that prevent procurement of defense articles and services under existing contracts, in
cases where a firm is the sole source supplier of a particular defense article or service. The
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