New US Sanctions Against Iran

On Saturday, September 30, 2006, President Bush signed into law the Iranian Freedom Support Act. In addition to codifying existing sanctions against Iran, this act added significant new ones, targeting Iran’s efforts at nuclear proliferation, as well as the companies that assist them.

The act requires the President to impose these sanctions on any company or individual who knowingly provides goods, services or technologies to Iran which would aid them in acquiring, or developing, nuclear, chemical or biological weapons.

It is mandatory that the President impose sanctions on violating companies, but he does have the flexibility to choose among six separate sanctions. They are:

1. Withholding Ex-Im Bank financing and credit
2. Denial of export licenses
3. Prohibiting loans in excess of 10 million dollars to the sanctioned party
4. Prohibiting the sanctioned person form acting as a repository of government funds or from serving as a primary dealer of US debt instruments
5. Prohibiting the US government from procuring goods and services from the sanctioned person
6. Imposing any other sanctions under the International Emergency Economic Powers Act

Offending companies must be published in the Federal Register. No company has been listed yet, but it is likely that Russian and Chinese companies who have assisted Iran with nuclear facilities and missile technology will be among the first.