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United States views on international law (based on the document “Digest of U.S. Practice in International Law”): On March 29, 2011, the State Department announced sanctions on Belarusneft, a state-owned Belarusian energy company, under the Iran Sanctions Act (“ISA”) of 1996, as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act (“CISADA”) of 2010, for its involvement in the Iranian petroleum sector. 76 Fed. Reg. 18,821 (Apr. 5, 2011). see this world legal encyclopedia in relation with the year 2010 at 646-53 for a discussion of the energy-related sanctions provisions under ISA as amended by CISADA. A State Department media note, available at (internet link) state.gov/r/pa/prs/ps/2011/03/159309.htm, explained the basis for the sanctions on Belarusneft and the impact of CISADA more broadly:
In a thorough review, the Department confirmed that Belarusneft entered into a $500 million contract with the NaftIran Intertrade Company in 2007 for the development of the Jofeir oilfield in Iran. The ISA requires that sanctions be imposed on companies that make certain investments over $20 million.
Since President Barack Obama signed CISADA into law on July 1, 2010, Iran's ability to attract new investment to develop its oil and natural gas resources, and to produce or import refined petroleum products, has been severely limited. The State Department's direct engagement with companies and governments to enforce CISADA is raising the pressure on the Government of Iran. In the past year, many foreign companies have abandoned their energy-related projects in Iran or have stopped shipping refined petroleum to Iran. This is an appropriate response to Iran's longstanding use of its oil and gas sector to facilitate its proliferation activities and thereby its noncompliance with its nuclear obligations.
On May 23, 2011, President Obama signed Executive Order 13574, “Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Sanctions Act of 1996, as Amended.” 76 Fed. Reg. 30,505 (May 25, 2011). When the U.S. government determines that a person has engaged in sanctionable activity under the energy sector provisions in ISA, as amended by CISADA, three or more out of nine possible sanctions must be imposed. Executive Order 13574 directs relevant agencies to carry out these sanctions. Section 1(a) of E.O. 13574 is set forth below.
Developments
(a) When the President, or the Secretary of State pursuant to authority delegated by the President and in accordance with the terms of such delegation, which includes consultation with the Secretary of the Treasury, has determined that sanctions shall be imposed on a person pursuant to section 5 of ISA and has selected the sanctions set forth in section 6 of ISA to impose on that person, the Secretary of the Treasury, in consultation with the Secretary of State, shall take the following actions with respect to the sanctions imposed and maintained by the President or by the Secretary of State pursuant to and in accordance with the terms of such delegation:
(i) with respect to section 6(a)(3) of ISA, prohibit any United States financial institution from making loans or providing credits to the ISA-sanctioned person consistent with section 6(a)(3) of ISA;
(ii) with respect to section 6(a)(6) of ISA, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the ISA-sanctioned person has any interest;
(iii) with respect to section 6(a)(7) of ISA, prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the ISA-sanctioned person;
(iv) with respect to section 6(a)(8) of ISA, block all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any United States person, including any overseas branch, of the ISA-sanctioned person, and provide that such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in; or (v) with respect to section 6(a)(9) of ISA, restrict or prohibit imports of goods, technology, or services, directly or indirectly, into the United States from the ISA-sanctioned person.
Details
Effective May 24, 2011, the State Department imposed sanctions pursuant to ISA, as amended by CISADA, on six additional entities (Associated Shipbroking, Petrochemical Commercial Company International, Petróleos de Venezuela S.A., Royal Oyster Group, Speedy Ship, and Tanker Pacific Management (Singapore) Pte. Ltd.) for their activities in support of Iran's energy sector. 76 Fed. Reg. 56,866 (Sept. 14, 2011). In a clarification of the May 24th announcement, sanctions were imposed on two additional entities (Allvale Maritime Inc. and Société Anonyme Monégasque D'Administration Maritime Et Aérienne) effective August 26, 2011. Id. OFAC subsequently implemented the sanctions imposed by the State Department in accordance with E.O. 13574. 76 Fed. Reg. 70,544 (Nov. 14, 2011). In a special briefing on these ISA sanctions, available at (internet link) state.gov/r/pa/prs/ps/2011/05/164170.htm, senior U.S. government officials explained the reasoning behind the sanctions.
Security Council Resolution 1929 recognizes a connection between Iran's energy revenues and its nuclear and missile programs. The revenues it acquires through its energy sales do contribute to its proliferation program, so that was recognized internationally as a tie-in. And so … this is one basis for going after the energy sector. Also, some of the equipment and technology you can acquire for the energy sector's dual use can have applications to certain military programs in Iran, so that's one reason we've gone after that particular sector in Iran. the U.S. evidence, and this comes from reports, from countries that have embassies in Tehran and other anecdotal evidence, suggest that these measures that we have adopted have not adversely impacted the citizens of Iran and that the economic difficulties that exist in Iran, and they are substantial, are primarily the result of the mismanagement of the economy by the Iranian Government.
More about the Issue
In addition to imposing sanctions under CISADA, the U.S. engaged in a diplomatic effort to convince other countries to increase the pressure on Iran to comply with its nonproliferation obligations by turning to alternate sources for supply of petroleum products. On December 5, 2011, Special Advisor for Nonproliferation and Arms Control Robert J. Einhorn traveled to South Korea as part of this effort, and remarked:
…[W]e began a diplomatic campaign to encourage purchasers of Iranian petrochemicals around the world, to encourage them to find alternative sources of petrochemicals, to discontinue their import of petrochemicals from Iran and to find alternative sources of petrochemical supply.
United States views on international law (based on the document “Digest of U.S. Practice in International Law”): And now we're asking the U.S. partners all over the world to take additional steps and naturally we are coming to Korea to see what the Republic of Korea can do to sharpen the choice for the leaders of Iran.
Remarks, available at (internet link) state.gov/t/isn/rls/rm/178407.htm.
In relation to the international law practice and Energy-related Sanctions in this world legal Encyclopedia, please see the following section:
Sanctions, Export Controls, International Restrictions
About this subject:
Imposition, Implementation, and Modification of Sanctions and Certain Other Restrictions
Under this topic, in the Encyclopedia, find out information on:
- Iran
- U.S. sanctions and other controls
- Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
. Note: there is detailed information and resources, in relation with these topics during the year 2011, covered by the entry, in this law Encyclopedia, about Energy-related sanctions
Resources
See Also
- Sanctions
- Export Controls
- International Restrictions
- Imposition Of Sanctions
- Implementation Of Sanctions
- Modification Of Sanctions
- Iran
- United States