Posts Tagged ‘CISADA’


Chavez to Obama: no more talking, we’re still selling

June 10, 2011

The Islamic “Republic” of Iran can be thought of as a thin layer of scum atop a giant pond of oil. But Iran cannot refine itself out of a brown paper bag. Consequently, it must rely on imports to fuel their freight trucks, military equipment, and cars.

The U.S. enacted CISADA last year to penalize entities that continue selling gasoline to Iran.  Enforcement of CISADA has been weak enough over the past year to prompt the U.S. Senate to delay the confirmation of David Cohen, Pres. Obama’s flawed nominee for undersecretary of sanctions and terrorist financing at the Treasury Department.

The threat of delayed confirmation may be all it took to get acting undersecretary Cohen off his duff and start identifying the gas vending vassals of Iran.  The Treasury Department announced that Petroleos de Venezuela sells to Iran, and eliminated preferences to it that the U.S. normally offers to oil exporters.

That hasn’t sat well with Venezuelan bullyboy Hugo Chavez.  In retaliation he is severing diplomatic relations with the U.S.  From the Examiner on Jun. 6:

Venezuela officially “froze” relations with the United States on Sunday according to a top diplomat from Hugo Chavez’s government. Venezuela is striking back after Washington levied sanctions against them for doing business with Iran – commerce the U.S. fears is financing Tehran’s nuclear program.

Venezuelan foreign minister Nicolas Maduroalso also indicated that reestablishing communications with the U.S. was “impossible”.

The U.S. imposed sanctions on Petroleos de Venezuela (PDVSA) last month because the state oil company delivered $50 million worth of refined petroleum products to Iran between December and March.

The sanctions bar PDVSA from any U.S. government contracts, taxpayer-subsidized import-export financing and export licenses for sensitive technology. Venezuelan companies can still sell oil to U.S. private corporations.

The U.S. also imposed penalties on Venezuela’s Military Industries Co. for violating the Iran, North Korea and Syria Nonproliferation Act which bans buying and selling of sensitive technology related to nuclear, chemical and/or biological weapons and ballistic missile systems.

Chavez has persisted to defend the Iranians, claiming their nuclear program is meant for peaceful applications such as generating electricity.

Advertisement Venezuela is one of America’s main suppliers of petroleum and the U.S. is the South American country’s chief oil buyer.

Energy Minister Rafael Ramirez hinted that Venezuela might reduce its dependence on sales to the U.S. by exporting more oil to China and other countries.

Though tensions between the two countries reached a zenith under Bush, Chavez hoped the relationship would change when Obama took office. Yet the U.S. and Venezuela have been without ambassadors in each other’s capitals since July 2010.


GOP doubts effectivness of Iran sanctions

May 31, 2011

Republicans are delaying the confirmation of Treasury flunky David Cohen until the Obama administration proves it’s serious about enforcing sanctions against Iran.

Somehow this article snuck by me.  We’ve been following the David Cohen Treasury nomination pretty closely, and observed that at least one prominent Senate Democrat expressed reservations about Cohen’s confirmation, but did not realize that seven GOP lawmakers also moved to hold up the confirmation until Treasury gives more enforcement oomph to CISADA, which among other things sanctions gasoline sales to Iran.

Certainly, the White House is giving private assurances to Cohen that it’s all just “politics” about Iran that’ll blow over in due course, and that Cohen shouldn’t take it personally.  However, one suspects that if Pres. Obama had selected a tougher operative with stronger credentials on Iran or on sanctions enforcement in general, this hold-up would have never taken place.

From Foreign Policy’s The Cable earlier this month:

Seven Republican senators are demanding that the Obama administration take tougher measures to punish banks still doing business in Iran, and they are threatening to stall the nomination of a top Treasury Department official unless they get their way.

The dispute between the White House and Congress revolves around implementation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, the wide-ranging law signed into law last year. The Treasury Department issued a draft rule last week that lays out how it intends to implement a key provision of the law, which deals with Iran’s banking partners in countries around the world. And that rule raised the ire of seven GOP senators, who expected Treasury to enforce the law much more stringently.

The key provision, section 104(e), directs the administration to punish any international financial institutions still doing business with Iran by cutting them off from the U.S. financial system.

“We were extremely unhappy with the draft rule to implement section 104(e) of CISADA publish by the Treasury Department last week,” wrote Sens. Jon Kyl (R-AZ), Mark Kirk (R-IL), Roger Wicker (R-MS), David Vitter (R-LA), Jerry Moran (R-KS), Mike Crapo (R-ID), and Mike Johanns (R-NE), in a previously unreported letter sent Tuesday, and obtained by The Cable.

The letter was addressed to David Cohen, the acting undersecretary for terrorism and financial intelligence at the Treasury Department. Cohen took over for Stuart Levey, the previous sanctions chief at Treasury, who moved on to the Council on Foreign Relations last month after more than 4 years on the job.

The senators are threatening to hold up Cohen’s nomination if their demands regarding enforcement of the sanctions provisions aren’t met. Cohen had his confirmation hearing before the Senate Banking Committee on Tuesday and, afterwards, Kirk sent Treasury a list of follow-up questions he says must be answered before he’ll allow Cohen’s nomination to move forward.

“The acting undersecretary’s response to our letter and questions for the record will weigh heavily in any confirmation decision,” Kirk told The Cable.

Kirk also identified 44 international financial institutions servicing Iranian banks and 18 U.S. institutions that are working with those who do business inside Iran. He got this list from a 2010 report entitled “Iran’s Dirty Banking”, which sourced the information to the Banker’s Almanac…


Recap of sanctions against Iran

May 31, 2011

Attorney Barbara Linney has provided readers with a good summary of sanctions laws against Iran that have expanded over the past year.  From Lexology on Apr. 28:

U.S. Developments. On July 1, 2010, long sought amendments to the Iran Sanctions Act (“ISA”) became law. As amended by the Comprehensive Iran Sanctions Accountability & Divestment Act (“CISADA”), the ISA targets persons determined to have invested $20 million or more in Iran’s ability to develop or obtain petroleum resources. CISADA expanded the definition of petroleum resources to include petroleum, refined petroleum products, oil or liquefied natural gas, natural gas resources, oil or liquefied natural gas tankers, and products used to construct or maintain pipelines used to transport oil or liquefied natural gas. Also targeted are persons contributing to Iran’s conventional and nuclear weapons proliferation activities, persons supplying refined petroleum products to Iran, and those who supply goods, services, and technology that could facilitate or contribute to Iran’s ability to produce or import refined petroleum products (subject to certain materiality and value thresholds). Provision of ships or shipping services to deliver refined petroleum products to Iran is a sanctionable service. CISADA also imposed or required adoption of other measures designed to tighten the blockade of Iran, including increased penalties for violations of U.N. Security Council resolutions.

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Menendez suggests Cohen weakness

May 13, 2011

In a follow-up to this post about the confirmation hearings David Cohen, the nominee to be the Treasury Department’s undersecretary for terrorism and financial intelligence, Sen. Bob Menendez (D-N.J.) wants some reassurance that Cohen is committed fully to enforcing CISADA, a U.S. sanctions law against Iran.

When questioned about why more hadn’t been done to enforce the law, Cohen’s answer could be translated “we’re working on it.”  Froom Haaretz on May 5:

U.S. Treasury nears decision on expanding Iran sanctions

The law, aimed at curbing Iran’s nuclear program, effectively requires banks to choose between dealing with the U.S.-led financial system or to continue doing business with Iran.
By Reuters

The United States Treasury is close to a decision whether to blacklist more banks that appear to be defying sanctions against Iran, including an institution in Turkey, a senior Treasury official said on Tuesday.

David Cohen, nominated to be Treasury’s undersecretary for terrorism and financial crimes, told a U.S. Senate confirmation hearing that he will vigorously enforce the Comprehensive Iran Sanctions, Accountability and Disinvestment Act (CISADA)
The law, aimed at curbing Iran’s nuclear program, effectively requires banks to choose between dealing with the U.S.-led financial system or to continue doing business with Iran.

Members of the Senate Banking Committee questioned Cohen on why Treasury had not sanctioned any banks under CISADA, which was passed in July 2010 to enforce tougher UN sanctions against Iran.

“We are pursuing the leverage” against banks dealing with Iran, Cohen said. “Our first option is to get them to stop. Our second best option is to apply sanctions. Without getting into the details of any particular investigation, we are getting close to a decision point on several institutions,” Cohen did not name any of the banks, but said that one institution in Turkey was effectively violating the sanctions.

“We are committed to enforcing the law,” Cohen added. “Generically, we have a financial institution (in Turkey) that is not responsive to our overtures and it is engaged in activity that is sanctionable under CISADA. We will pursue that very vigorously.”

Senator Robert Menendez, a Democrat from New Jersey, said he was concerned that Treasury had not adequately enforced the CISADA law.

“I am seriously concerned that as one of the prime movers of that legislation, that a sanctions regime that ultimately goes largely unenforced or to low-level players, sends the message of a toothless tiger,” Menendez said.

He added that he wanted a sense that Cohen, who is now serving as acting undersecretary, would pursue sanctions under CISADA before he would support Cohen’s nomination.