House Committee Hears Testimony on Illegal Transshipment of Military, Dual Use Items to Iran
On July 29, 2010, the House Committee on Oversight and Government Reform held a hearing to examine the implementation of U.S. sanctions against Iran.
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Among others, an official from the Government Accountability Office testified. The following are highlights of his testimony:
Iran is Obtaining U.S. Military, Dual-Use Goods via Transshipment
Iran is obtaining U.S. military and dual-use goods (civilian goods with potential military applications) that are illegally transshipped through intermediaries in third-party nations, including the United Arab Emirates, Malaysia, Singapore, Thailand, Australia, Canada, Colombia, Brazil, Austria, France, Germany Luxembourg, the Netherlands, and the United Kingdom.
A 2009 Justice Department report cited 30 cases that involved the use of intermediaries in these countries. More than half of the cases involved the use of intermediaries in the UAE for transshipment. About 20% involved the use of intermediaries in Malaysia and Singapore. U.S. goods involved in these cases included U.S. military aircraft components, laboratory equipment, specialty alloy pipes, night vision goggles, and sensitive technologies sent to Iranian missile and nuclear entities.
CISADA Gives President Authority to Add Licensing Requirement for Diversion Countries
The recently enacted Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) requires the President to designate a country as a Destination of Diversion Concern if certain criteria are met. The CISADA also requires the President to impose a licensing requirement upon certain U.S. exports to the designated country unless the President makes a number of determinations, including determining that it is appropriate to provide technical assistance to strengthen the country’s export control systems.
U.S. Not Sanctioning Firms under ISA for Investing in Iran's Energy Sector
At least 41 foreign firms had commercial activity in Iran’s energy sector between 2005 and 2009. Of these firms, seven had contracts with the U.S. government valued at close to $880 million. The Iran Sanctions Act of 1996 (ISA) provides for sanctions against persons (firms and individuals) who invest more than $20 million in Iran’s energy sector in any 12-month period. However, the U.S. has not sanctioned firms under the ISA for investing in Iran’s energy sector.
The CISADA also requires the President to investigate reports of certain sanctionable activity where credible evidence is received and make a determination in writing to Congress whether such activity has indeed occurred. The President would then be expected either to impose or waive sanctions.
(See ITT's Online Archives or 07/02/10 news, 10070208, for BP summary of the President signing the CISADA into law.)