22 U.S.C. § 8513a — Imposition of sanctions with respect to the financial sector of Iran
submitted 15 years ago by Pub. L. 112-81 to r/title-22-FOREIGN-RELATIONS-AND-INTERCOURSE · 2,013 words · no verdicts yet
Treasury named Iran's financial system, including its central bank, a money-laundering risk in 2011. The law designates Iran's financial sector a primary money-laundering concern and requires freezing its U.S.-linked assets. Foreign banks that knowingly do major business with Iran's central bank can lose U.S. account access.
(a) Findings: Congress found that on November 21, 2011, the Treasury Secretary identified Iran as a jurisdiction of primary money-laundering concern. Treasury's Financial Crimes Enforcement Network wrote that Iran's Central Bank helped sanctioned Iranian banks move billions of dollars in 2011 through schemes designed to hide the Central Bank's role and evade sanctions. The next day, a senior Treasury official said the entire Iranian banking sector — including its central bank — poses terrorist-financing, weapons-proliferation-financing, and money-laundering risks to the global financial system.
(b) Designation as primary money-laundering concern: Iran's financial sector, including its Central Bank, is formally designated a primary money-laundering concern under section 5318A of title 31, because of the dangers from Iran's pursuit of nuclear weapons, its support for international terrorism, and its efforts to deceive banks and dodge sanctions.
(c) Freezing assets of Iranian financial institutions: Under the emergency-powers law, the President must block and prohibit any transactions in Iranian financial institutions' property or assets that are in the United States, that reach the United States, or that come under a U.S. person's control.
(d) Sanctions on the Central Bank of Iran and other Iranian banks: Starting 60 days after December 31, 2011, the President must ban — or impose strict conditions on — a foreign bank opening or keeping a U.S. correspondent or payable-through account if it knowingly conducted a significant financial transaction with Iran's Central Bank or another sanctioned Iranian bank, and may also directly sanction Iran's Central Bank. This doesn't apply to sales of agricultural commodities, food, medicine*, or medical devices to Iran. Sanctions against a foreign central bank apply only to petroleum-related transactions with Iran happening on or after 180 days after December 31, 2011. Every two months, the Energy Information Administration must report to Congress on non-Iranian oil supply and prices; based on those reports, the President must decide every 180 days whether enough non-Iranian oil supply exists to let buyers significantly cut their Iran purchases, and sanctions on petroleum transactions apply only once the President makes that finding. An exception applies if the President determines and reports to Congress that a country has significantly cut its Iranian crude purchases, or has cut them to zero — as long as the transaction is only for goods-and-services trade with Iran and any money owed to Iran is credited to an account in that country. Starting in 2024, "significant financial transaction" also specifically includes any Chinese bank's purchase of Iranian oil, or any foreign bank's purchase of Iranian drones, drone parts, or related systems, regardless of size — and within 180 days of April 24, 2024, and yearly for five years after, the President must determine whether any such transactions happened and report that to relevant congressional committees. The President may waive these sanctions for up to 120 days at a time, renewable, after determining the waiver serves national security and reporting to Congress the justification, certifying the affected country faced exceptional circumstances preventing a bigger cut in Iran purchases, and describing any cooperation gained from the waiver.
(e) Multilateral diplomacy initiative: The President must lead a diplomatic effort urging countries that buy Iranian oil to limit how Iran spends that oil revenue — to everyday consumer goods only — and to block Iran from buying military or dual-use technology, including items on several international weapons-control lists, or anything else that could help Iran's weapons programs. The President must also reach out to oil-producing countries to boost non-Iranian oil supply and limit price effects from these sanctions. Every 180 days starting 180 days after December 31, 2011, the President must report to Congress on these diplomatic and outreach efforts and their results.
(f) Form of reports: Every report under this section is submitted unclassified, though it may include a classified annex.
(g) Implementation and penalties: The President may use all authorities under the related emergency-powers law to carry this out. Violating this section or its regulations brings the same penalties that apply to violations of that underlying law.
(h) Definitions: "Account," "correspondent account," and "payable-through account" mean what they mean under section 5318A of title 31. "Foreign financial institution" is defined the way the Treasury Secretary defines it under section 8513(i). "Reduce significantly," "significant reduction," and "significantly reduced" (for Iran oil purchases) include any move — in price or volume — toward completely stopping those purchases. "United States person" means a U.S. citizen, resident, or national, or an entity organized under U.S. or state* law.
(i) Termination: This section stops applying 30 days after the President sends Congress the certification described in section 8551(a) of this title.
Congress makes the following findings:
On November 21, 2011, the Secretary of the Treasury issued a finding under section 5318A of title 31 that identified Iran as a jurisdiction of primary money laundering concern.
In that finding, the Financial Crimes Enforcement Network of the Department of the Treasury wrote, “The Central Bank of Iran, which regulates Iranian banks, has assisted designated Iranian banks by transferring billions of dollars to these banks in 2011. In mid-2011, the CBI transferred several billion dollars to designated banks, including Saderat, Mellat, EDBI and Melli, through a variety of payment schemes. In making these transfers, the CBI attempted to evade sanctions by minimizing the direct involvement of large international banks with both CBI and designated Iranian banks.”.
On November 22, 2011, the Under Secretary of the Treasury for Terrorism and Financial Intelligence, David Cohen, wrote, “Treasury is calling out the entire Iranian banking sector, including the Central Bank of Iran, as posing terrorist financing, proliferation financing, and money laundering risks for the global financial system.”.
The financial sector of Iran, including the Central Bank of Iran, is designated as a primary money laundering concern for purposes of section 5318A of title 31 because of the threat to government and financial institutions resulting from the illicit activities of the Government of Iran, including its pursuit of nuclear weapons, support for international terrorism, and efforts to deceive responsible financial institutions and evade sanctions.
The President shall, pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), block and prohibit all transactions in all property and interests in property of an Iranian financial institution if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person.
Except as specifically provided in this subsection, beginning on the date that is 60 days after December 31, 2011, the President—
shall prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States of a correspondent account or a payable-through account by a foreign financial institution that the President determines has knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran or another Iranian financial institution designated by the Secretary of the Treasury for the imposition of sanctions pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.); and
may impose sanctions pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) with respect to the Central Bank of Iran.
The President may not impose sanctions under paragraph (1) with respect to any person for conducting or facilitating a transaction for the sale of agricultural commodities, food, medicine, or medical devices to Iran.
Except as provided in paragraph (4), sanctions imposed under paragraph (1)(A) shall apply with respect to a central bank of a foreign country, only insofar as it engages in a financial transaction for the sale or purchase of petroleum or petroleum products to or from Iran conducted or facilitated on or after that date that is 180 days after December 31, 2011.
Not later than October 25, 2012, and the last Thursday of every other month thereafter, the Administrator of the Energy Information Administration, in consultation with the Secretary of the Treasury, the Secretary of State*, and the Director of National Intelligence, shall submit to Congress a report on the availability and price of petroleum and petroleum products produced in countries other than Iran in the 2-month period preceding the submission of the report.
Not later than 90 days after December 31, 2011, and every 180 days thereafter, the President shall make a determination, based on the reports required by subparagraph (A), of whether the price and supply of petroleum and petroleum products produced in countries other than Iran is sufficient to permit purchasers of petroleum and petroleum products from Iran to reduce significantly in volume their purchases from Iran.
Except as provided in subparagraph (D), sanctions imposed under paragraph (1)(A) shall apply with respect to a financial transaction conducted or facilitated by a foreign financial institution on or after the date that is 180 days after December 31, 2011, for the purchase of petroleum or petroleum products from Iran if the President determines pursuant to subparagraph (B) that there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions.
Sanctions imposed pursuant to paragraph (1) shall not apply with respect to a financial transaction described in clause (ii) conducted or facilitated by a foreign financial institution if the President determines and reports to Congress, not later than 90 days after the date on which the President makes the determination required by subparagraph (B), and every 180 days thereafter, that the country with primary jurisdiction over the foreign financial institution—
has significantly reduced reduced 1 its volume of crude oil purchases from Iran during the period beginning on the date on which the President submitted the last report with respect to the country under this subparagraph; or
in the case of a country that has previously received an exception under this subparagraph, has, after receiving the exception, reduced its crude oil purchases from Iran to zero.
A financial transaction conducted or facilitated by a foreign financial institution is described in this clause if—
the financial transaction is only for trade in goods or services between the country with primary jurisdiction over the foreign financial institution and Iran; and
any funds owed to Iran as a result of such trade are credited to an account located in the country with primary jurisdiction over the foreign financial institution.
For the purpose of paragraph (1)(A), a “significant financial transaction” shall include, based on relevant facts and circumstances, any transaction—
by a Chinese financial institution (without regard to the size, number, frequency, or nature of the transaction) involving the purchase of petroleum or petroleum products from Iran; and
by a foreign financial institution (without regard to the size, number, frequency, or nature of the transaction) involving the purchase of Iranian unmanned aerial vehicles (UAVs), UAV parts, or related systems.
Not later than 180 days after April 24, 2024, and every year thereafter for 5 years, the President shall—
determine whether any—
Chinese financial institution has engaged in a significant financial transaction as described in paragraph (1)(A)(i); and
financial institution has engaged in a significant financial transaction as described in paragraph (1)(A)(ii); and
transmit the determination under clause (i) to the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives and to the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate.
The President may waive the imposition of sanctions under paragraph (1) for a period of not more than 120 days, and may renew that waiver for additional periods of not more than 120 days, if the President—
determines that such a waiver is in the national security interest of the United States; and
submits to Congress a report—
providing a justification for the waiver;
certifying that the country with primary jurisdiction over the foreign financial institution otherwise subject to the sanctions faced exceptional circumstances that prevented the country from being able to reduce significantly its purchases of petroleum and petroleum products from Iran; and
that includes any concrete cooperation the President has received or expects to receive as a result of the waiver.
The President shall—
carry out an initiative of multilateral diplomacy to persuade countries purchasing oil from Iran—
to limit the use by Iran of revenue from purchases of oil to purchases of non-luxury consumers goods from the country purchasing the oil; and
to prohibit purchases by Iran of—
military or dual-use technology, including items—
in the Annex to the Missile Technology Control Regime Guidelines;
in the Annex on Chemicals to the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction, done at Paris January 13, 1993, and entered into force April 29, 1997 (commonly known as the “Chemical Weapons Convention”);
in Part 1 or 2 of the Nuclear Suppliers Group Guidelines; or
on a control list of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies; or
any other item that could contribute to Iran’s conventional, nuclear, chemical, or biological weapons program; and
conduct outreach to petroleum-producing countries to encourage those countries to increase their output of crude oil to ensure there is a sufficient supply of crude oil from countries other than Iran and to minimize any impact on the price of oil resulting from the imposition of sanctions under this section.
Not later than 180 days after December 31, 2011, and every 180 days thereafter, the President shall submit to Congress a report on the efforts of the President to carry out the initiative described in paragraph (1)(A) and conduct the outreach described in paragraph (1)(B) and the results of those efforts.
Each report submitted under this section shall be submitted in unclassified form, but may contain a classified annex.
The President may exercise all authorities provided under sections 203 and 205 of the International Emergency Economic Powers Act (50 U.S.C. 1702 and 1704) to carry out this section.
The penalties provided for in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) shall apply to a person that violates, attempts to violate, conspires to violate, or causes a violation of this section or regulations prescribed under this section to the same extent that such penalties apply to a person that commits an unlawful act described in section 206(a) of that Act.
In this section:
The terms “account”, “correspondent account”, and “payable-through account” have the meanings given those terms in section 5318A of title 31.
The term “foreign financial institution” has the meaning of that term as determined by the Secretary of the Treasury pursuant to section 8513(i) of this title.
The terms “reduce significantly”, “significant reduction”, and “significantly reduced”, with respect to purchases from Iran of petroleum and petroleum products, include a reduction in such purchases in terms of price or volume toward a complete cessation of such purchases.
The term “United States person” means—
a natural person who is a citizen or resident of the United States or a national of the United States (as defined in section 1101(a) of title 8); and
an entity that is organized under the laws of the United States or a jurisdiction within the United States.
The provisions of this section shall terminate on the date that is 30 days after the date on which the President submits to Congress the certification described in section 8551(a) of this title.
Source credit: (Pub. L. 112–81, div. A, title XII, § 1245, Dec. 31, 2011, 125 Stat. 1647; Pub. L. 112–158, title V, §§ 503(a)(1), (b)(1), 504(a), Aug. 10, 2012, 126 Stat. 1260, 1261; Pub. L. 112–239, div. A, title XII, § 1250, Jan. 2, 2013, 126 Stat. 2016; Pub. L. 118–50, div. S, § 2, Apr. 24, 2024, 138 Stat. 1003.)
- 2011Enacted · Pub. L. 112-81 · 125 Stat. 1647
- 2012Amended · Pub. L. 112-158 · 126 Stat. 1260, 1261
- 2013Amended · Pub. L. 112-239 · 126 Stat. 2016
- 2024Amended · Pub. L. 118-50 · 138 Stat. 1003
A history note hasn’t been published yet. The record shows enactment by Pub. L. 112-81 on 2011-12-31.
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