May 24, 2024 | Policy Alerts

National Security Act of 2024 – Iran Sanctions Oversight Guide & Calendar

May 24, 2024 Policy Alerts

National Security Act of 2024 – Iran Sanctions Oversight Guide & Calendar

The National Security Act of 2024, signed into law on April 24, 2024, contains a range of sanctions against the Islamic Republic of Iran and Iran-backed proxies and regimes. These include targeting those engaged in the transportation of Iranian oil, supporting Tehran’s missile program, and engaging in human rights abuses, as well as enhanced sanctions targeting Hamas’s financial networks, among others.

Below is an oversight guide and calendar of these and other provisions targeting Tehran, its proxies, and its allies.

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Iran Oil Sanctions

The supplemental includes the text of the Stop Harboring Iranian Petroleum Act (SHIP Act), which passed the House on November 3, 2023, by a vote of 324-69. Under the new law, the President shall impose sanctions on foreign port owners and operators who knowingly dock vessels transporting Iranian oil. It also sanctions individuals who knowingly process, refine, deal in, or engage in ship-to-ship transfers of Iranian oil. The President could prohibit covered vessels from docking at any U.S. port for two years, freeze U.S. assets owned by sanctioned entities, and deny or revoke U.S. visas. Congress needs to closely monitor the implementation and enforcement of these new mandatory measures.

Key Oversight Dates

•  August 22, 2024—The first annual report from the Energy Information Agency on Iran’s export of petroleum and petroleum products is due (Sec. 4(a) of Division J). This report is required until the President certifies that the Government of Iran no longer repeatedly provides support for international terrorism and has ceased and verifiably dismantled its nuclear, biological, chemical, and ballistic missile weapons programs.

•  August 22, 2024—The Secretary of State must provide a strategy to and brief Congress on the role of the People’s Republic of China regarding sanctions evasion related to Iranian-origin petroleum products (Sec. 5(a) of Division J).

•  October 11, 2024—The administration must brief the appropriate congressional committees on the regulations to be issued on October 21, 2024 (Sec. 3(e)(3) of Division J).

•  October 21, 2024—SHIP Act sanctions take effect (Sec. 3(a) of Division J).

•  October 21, 2024—Regulations are to be issued to implement the SHIP Act sanctions (Sec. 3(e)(2) of Division J).

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China-Iran Transactions

The supplemental included the text of the Iran-China Energy Sanctions Act of 2023, which passed the House on April 15, 2024, by a vote of 383-11. The new law amends longstanding mandatory financial sanctions first introduced by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 to target Chinese financial institutions purchasing oil from Iran. Most significantly, the new law expands the definition of a “significant financial transaction” to include transactions of any size made between Chinese and Iranian financial institutions to purchase Iranian petroleum products and for other activities. As this amends current law and there is no effective date, these sanctions went into effect on April 24, 2024.

Key Oversight Dates

•  April 24, 2024—The sanctions took effect immediately.

•  October 21, 2024—The first annual determination on Chinese banks for sanctions violations is due (22 U.S.C. 8513a(d)(5), as amended). This is required through October 21, 2029.

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Missile Program Sanctions

The supplemental included the Fight and Combat Rampant Iranian Missile Exports Act (Fight CRIME Act), which passed the House on September 13, 2023, by a vote of 403-8. This new law targets Tehran’s missile capabilities and proliferation by mandating the enforcement of Annex B to UN Security Council Resolution 2231 (2015) – a resolution that restricts missile-related activities and transfers to and from Iran. The law mandates sanctions on anyone that provides Iran with items or technology covered by the Missile Technology Control Regime. These sanctions also extend to those supporting the general development of Iran’s missile program, such as by participating in joint missile or drone development with the Government of Iran or aligned entities or by otherwise trading in arms and materiel prohibited by UNSCR 2231. Most importantly, this law mandates sanctions against anyone who provides financial or technological support or engages in significant transactions with individuals sanctioned by this law—an area in which Congress should aggressively push the administration to act. As there is no effective date in the law, these sanctions went into effect on April 24, 2024.

Key Oversight Dates

•  April 24, 2024—The sanctions took effect immediately (Sec. 5(a) of Division K).

•  July 23, 2024—Two reports/strategies mandated by the Fight CRIME Act are due. The first is an annual strategy on how to maintain multilateral prohibitions on Iran’s missile program (Sec. 4(a) of Division K). It is required through July 23, 2026. The second is a recurring report identifying all Iranians that have attacked U.S. citizens using unmanned aerial systems (Sec. 6(a) of Division K). It is also due every 180 days after the initial report is submitted until April 24, 2028.

•  August 12, 2024—The administration must brief the appropriate congressional committees on the regulations to be issued on August 22, 2024 (Sec. (5)(f)(2) of Division K).

•  August 22, 2024—Regulations are to be issued to implement the Fight CRIME Act sanctions (Sec. 5(f)(1) of Division K).

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Sanctions Against the Supreme Leader and Other Iranian Officials

The supplemental included the Mahsa Amini Human Rights and Security Accountability Act (MAHSA Act), which passed the House on September 12, 2023, by a vote of 410-3. This provision mandates the imposition and/or continuation of existing sanctions on specific Government of Iran officials – including the Supreme Leader, President, and other state officials overseen by their offices – if they continue to violate U.S. sanctions regarding human rights abuses, corruption, support for terrorism, and other malign conduct. It also includes a congressional sanctions nomination authority for the chairmen and ranking members of the House Committees on Foreign Affairs and Financial Services as well as the Senate Committees on Foreign Relations and Banking, Housing, and Urban Affairs. In response to such a request, the President must determine if the individual meets the designation criteria and report back to Congress within 60 days on whether sanctions were imposed or are intended to be imposed.

Key Oversight Dates

•  July 23, 2024—On this date and annually thereafter, the administration must determine whether the Supreme Leader and Iran’s national command authority meet the designation criteria under one or more of the sanctions programs and authorities listed in the law (Sec. 2(c)(1)(A)(B) of Division L). Alongside this annual determination, the President shall impose applicable sanctions for any foreign person determined to meet the criteria.

•  July 23, 2024—On this date and annually thereafter, the administration must also report to Congress the list of all foreign persons that meet the designation criteria (Sec. 2(c)(1)(C of Division L). The report further details which, if any, of the sanctions authorized have or will be imposed within 30 days of the report’s submission and similarly if any sanctions designations have been waived and under what specific authorities.

•  August 22, 2024—This date marks the end of the thirty-day window by which individuals who meet the designation criteria are designated unless waivers are issued. This deadline recurs annually.

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Sanctions Against Hamas and Related Organizations

The supplemental included the Hamas and Other Palestinian Terrorist Groups International Financing Prevention Act (the Hamas bill), which passed the House on November 1, 2023, by a vote of 363-46. The new law mandates sanctions on foreign individuals and entities that support acts of terrorism, including through financial, material, or technological support. Sanctions will also have to be imposed on those who engage in a significant transaction with senior members of Hamas, Palestinian Islamic Jihad (PIJ), the Al-Aqsa Martyrs Brigade, the Lion’s Den, or their affiliates. Most significantly, mandatory sanctions will be imposed on foreign states that support those organizations. This includes suspending U.S. assistance, directing U.S. representatives at international financial institutions to oppose assistance, and blocking the export of weapons and other dual-use components for a year. The President could waive sanctions for national security interests or if they would prevent the U.S. from meeting the terms of a status of forces agreement.

Key Oversight Dates

•  June 23, 2024—The administration must issue revised regulations for implementing the sanctions against individuals and entities providing material or other support to Hamas, PIJ, Al-Aqsa Martyrs Brigade, the Lion’s Den, and possibly others (Sec. 3(e)(2) of Division M). Similarly, the administration must also issue regulations for implementing sanctions against foreign governments that provide material or financial support to those organizations (Sec. 4(f)(2) of Division M).

•  July 23, 2024—The first report on activities to disrupt global fundraising, financing, and money laundering activities of Hamas, PIJ, al-Aqsa Martyrs Brigade, the Lion’s Den, or any affiliate or successor is due (Sec. 5(a) of Division M). It is also due every 180 days after the initial report is submitted until April 24, 2031.

•  October 21, 2024—The mandatory sanctions against individuals and entities providing material support to Hamas, PIJ, Al-Aqsa Martyrs Brigade, the Lion’s Den, and possibly others go into effect (Sec. 3(a) of Division M). Similarly, the mandatory sanctions against foreign governments that provide those organizations with material support also go into effect (Sec. 4(a) of Division M).

•  October 21, 2024—The End Financing for Hamas and State Sponsors of Terrorism Act, also passed as part of the supplemental, requires a report containing an analysis of the major sources of financing to Hamas; a description of U.S. and multilateral efforts to disrupt illicit financial flows involving Hamas; an evaluation of U.S. efforts to undermine the ability of Hamas to finance armed hostilities against Israel; and the implementation plan for a multilateral strategy to disrupt Hamas financing (Secs. 2 and 3 of Division Q).

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Human Shields Sanctions

The supplemental included the Strengthening Tools to Counter the Use of Human Shields Act, which passed the House on April 16, 2024, by a vote of 419-4. This legislation reinstated sanctions through December 31, 2030, against individuals who use civilians as human shields for protection during attacks, including Hamas. These sanctions expired on Dec. 31, 2023. The bill would add members of PIJ to the mandatory sanctions list and include a critical nomination authority for Congress. It includes a reporting requirement on multilateral efforts to combat the use of human shields. It also includes a congressional sanctions nomination authority for the chairmen and ranking members of the House Committees on Foreign Affairs and the Judiciary as well as the Senate Committees on Foreign Relations and the Judiciary. In response to such a request, the President must determine if the individual meets the designation criteria and report back to Congress within 60 days whether sanctions were imposed or are intended to be imposed.

Key Oversight Dates

•  April 24, 2024—The reauthorization and expansion of the sanctions to include PIJ and the inclusion of congressional nominating authority took place on the date of enactment (Sec. 3(a) of Division O).

•  August 22, 2024—The report is due on combating the use of human shields by terrorist organizations such as Hamas, Hezbollah, PIJ, and any other organization as determined by the Secretary of Defense. (Sec. 4(a) of Division O).

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Report on Bank Accounts and Assets of Iran’s Leadership

The supplemental included the Holding Iranian Leaders Accountable Act of 2023, which passed the House on April 16, 2024, by a vote of 419-4. This is the culmination of a longstanding effort to mandate public reporting on the total accumulated wealth of Iranian officials such as Supreme Leader Ayatollah Ali Khamenei, top members of the Islamic Revolutionary Guard Corps, and senior leadership in Hamas and Hezbollah. It would also require U.S. financial institutions to close any accounts affiliated with those individuals. The provisions of this division expire no later than April 24, 2029.

Key Oversight Dates

•  May 24, 2024—The Secretary of the Treasury is required to report to Congress and provide an accompanying briefing on various Iranian assets and licenses (Sec. 3(d) of Division R).

•  October 21, 2024—The administration’s report on the disposition of assets and total net worth of senior Iranian officials is due (Sec. 3(a) of Division R). It is due annually until October 21, 2026.

•  January 19, 2025—The Treasury Department must require financial institutions to close accounts associated with the senior Iranian officials described in the bill (Sec. 4(a) of Division R).

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Iranian Drones

The supplemental included the No Technology for Terror Act, which passed the House on April 16, 2024, by a vote of 406-19. The new law codifies and expands the foreign direct product rule regulating foreign-produced, low-technology items used in Iranian drones if they contain U.S. content.

Key Oversight Date

•  July 23, 2024—The codification of the rule takes effect (Sec. 2(a) of Division N). The authority provided under this section shall terminate on July 23, 2031.

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Captagon Trafficking Sanctions

The supplemental included the Illicit Captagon Trafficking Suppression Act of 2023, which passed the House on April 17, 2024, by a vote of 410-13. The new law imposes mandatory sanctions on foreign individuals and entities involved in the illicit production or trade of Captagon, a synthetic amphetamine-type stimulant. The designation criteria are very broad and track with opioid trafficking sanctions regulations, which Congress should appropriately leverage.

Key Oversight Dates

•  April 24, 2024—The sanctions took effect immediately on the date of enactment (Sec. 4(a) of Division P).

•  August 12, 2024—The administration must brief the appropriate congressional committees on the regulations to be issued on August 22 (Sec. (4)(f)(2) of Division P).

•  August 22, 2024—Regulations are to be issued to implement the Captagon sanctions legislation (Sec. (4)(f)(1) of Division P).

•  October 21, 2024—A determination regarding whether certain individuals associated with the Syrian regime have engaged in sanctionable conduct and an accompanying report to Congress on that determination is due (Sec. 5(a) of Division P).

Issues:

Iran Sanctions and Illicit Finance