In its final weeks in session before taking the summer recess, the US House of Representatives passed five measures aimed at blocking Iran from access to major economic deals. While the House actions will require parallel Senate laws, and then the signature of President Barack Obama, who has pledged to veto those measures, the growing Congressional opposition to closer economic ties to Iran is already having a serious dampening impact.
On July 7, bipartisan amendments were introduced in the House by Illinois Republican Peter Roskam and California Democrat Brad Sherman, which effectively blocked the planned $25 billion sale of Boeing commercial jets to Iran Air. The Boeing deal was by far the biggest economic deal reached with Iran by any Western corporation since the January 2016 formal lifting of United Nations sanctions on the Islamic Republic, under the Joint Comprehensive Plan of Action (JCPOA), otherwise known as the P5+1 deal.
The two amendments, to the Financial Services and General Government Appropriations Act, were passed by voice vote, indicating overwhelming bipartisan support for their inclusion. One amendment prohibited the Treasury Department’s Office of Foreign Assets Control (OFAC) from using any funds to process the Boeing and Airbus licenses to sell aircraft to Iran Air (this, despite the fact that Iran Air was removed from the Obama Administration’s sanctions list earlier this year). The second amendment blocked Iran from benefiting from any loans issued to Boeing for the Iran sales by the Export-Import Bank, by further prohibiting OFAC from spending any funds to process funding applications. With those two attached amendments, the bill passed the House by a clear majority of 239-185.
Boeing’s chief executive, Dennis Muilenburg, in a widely publicized statement issued from the Farnborough International Airshow in Britain, expressed deep frustration at the Congressional action, but vowed that if Boeing was blocked from the sales to Iran Air, no other company should be allowed to make any sales to the Iranian national airline.
Roskam and Sherman argued that the Boeing or Airbus sales to Iran Air would be used for “nefarious purposes,” including the shuttling of military supplies to Hezbollah, a group on the US government’s list of terrorist organizations. In June, Sherman had written to Secretary of State John Kerry, Secretary of the Treasury Jack Lew, and Secretary of Commerce Penny Pritzker, demanding a halt to the recently announced Boeing deal.
On July 13, the House of Representatives passed a bill barring the Obama Administration from proceeding with the announced purchase of $8.6 million worth of heavy water from Iran. Both Democrats and Republicans in the House strongly opposed the idea of the US “rewarding” Iran’s violations of the limits on heavy water production under the P5+1 deal, by purchasing the excess and, in effect, subsidizing Iran’s nuclear program.
The next day, July 14—the first anniversary of the signing of the P5+1 deal—the House passed two additional bills, both with direct bearing on the implementation of the JCPOA. By a largely partisan vote of 246-181, the House barred Iran from having access to the US financial system, including all international transactions in US dollars.
And by a similar vote of 246-179, the House passed the Iran Accountability Act of 2016 (H.R.5631). The bill was introduced on July 6 by Representative Kevin McCarthy, a California Republican who is the Majority Leader in the House of Representatives, the number two leadership post, behind the Speaker of the House.
The bill imposed new sanctions on Iran over the activities of the Iranian Revolutionary Guard Corps, including its support for terrorism and money laundering, its human rights abuses, and its ballistic missile program. The bill also included secondary sanctions against “financial institutions that engage in certain transactions on behalf of persons involved in human rights abuses or that export sensitive technology to Iran.” Also, both the Supreme Leader Ali Khamenei and President Hassan Rouhani were placed on the sanctions list. The vague language of the bill gives great latitude to the Treasury Department’s OFAC to expand the list of Iranian corporations and individuals barred from any economic activity. Mahan Air was explicitly named in the bill.
The House actions in the closing days before the summer recess have their parallels in the US Senate, where two Republicans, Mark Kirk of Illinois and Kelly Ayotte of New Hampshire, have introduced identical legislation to the recent bills passed on the House. Kirk issued statements, praising McCarthy, Roskam, and Sherman for their initiatives.
The big question begged by the House legislative assault on the P5+1 deal is: What comes next, following the November presidential elections?
Republican nominee Donald Trump has made vague statements that he will renegotiate all agreements that he sees as detrimental to US interests, both security and economic interests. One of Trump’s advisers on national security affairs, General Michael Flynn, the former head of the Defense Intelligence Agency, has sharply attacked the P5+1 deal, and repeatedly assails Iran as a hotbed of support for global terrorism, including Hezbollah.
The Democratic nominee, Hillary Clinton, has also been a sharp critic of Iran, although Republicans have criticized her for her ambiguity on whether or not she supported Iran’s limited right to enrich uranium, under the strict International Atomic Energy Agency (IAEA) inspection regime. Some of Clinton’s key campaign advisers and aides at the State Department, including husband-and-wife duo Robert Kagan and Victoria Nuland, are strong critics of Iran and have voiced skepticism over the P5+1 deal.
Some leading national security specialists in Washington are skeptical that Congressional opposition to the continuation of the P5+1 deal will be sufficient to kill the deal altogether. However, they point to the fact that hardliners in Iran are on the ascent, despite the recent Majlis and Council of Experts elections. The hardline bloc of Supreme Leader Khamenei, the top IRGC commanders, and the Principalist faction of clerics are all gaining support, based on the failure of the P5+1 deal to garner the anticipated economic benefits. Recent polls in Iran show growing support for former President Ahmadinejad and decreasing support for the current moderate/reformist government of President Rouhani. While it remains a strong probability that Rouhani will stand for re-election in 2017 and will win, the growing economic frustration can alter the balance of power at the top and give a boost to the IRGC and allies, who continue to maintain their vice-grip over the real economy.
Any gains by hardliners in Tehran will strengthen the hand of those in the US Congress who want to maintain a strong anti-Iran policy. And if Republican nominee Donald Trump wins in November, all bets are off.