Iran Sanctions: U.S. Agencies Continue to Implement Processes for Identifying Potentially Sanctionable Entities

What GAO Found

The Departments of State (State) and the Treasury (Treasury) have continued to implement their pre-January 2016 process for identifying entities that are potentially sanctionable under two executive orders for engaging in certain activities related to Iran’s space launch and missile programs. This process involves reviewing evidence to identify targets for missile-related sanctions, ensuring that State and Treasury have adequate evidence to impose those sanctions, and imposing and publicizing the sanctions. According to the agencies, since January 2016 they have designated 33 entities and 25 individuals for Iran missile-related sanctions pursuant to one of the executive orders.  

Similarly, State has continued its process for identifying and sanctioning entities that are potentially sanctionable under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA) for certain activities related to Iran’s space launch and missile programs. While the INKSNA process is similar to the executive order process, INKSNA also requires State to provide congressional committees with reports every 6 months that identify foreign persons for whom there is credible information indicating that they have transferred to, or acquired from, Iran, North Korea, or Syria certain items, including missile-related items. INKNSA does not allow State to impose INKSNA sanctions on entities until State has identified them in such a report. State informed GAO that it had provided reports in June 2016 and March 2017 that refer to or consider post-January 2016 information.  However, those reports cover calendar years 2013 and 2014, respectively, and State has yet to provide reports covering the post-January 2016 period.

GAO previously determined that State does not have a process that would allow it to comply with INKSNA’s 6-month deadlines, but State has not implemented GAO’s recommendations for correcting this deficiency. According to State officials, the June 2016 INKSNA report—which addressed calendar year 2013—included 11 individuals and entities sanctioned for their support to Iran’s ballistic missiles program. According to a March 2017 State press release, the 2017 INKSNA report—which addressed calendar year 2014—also included 11 individuals and entities sanctioned for their support to Iran’s ballistic missiles program.

Why GAO Did This Study

Multilateral talks with Iran culminated in a 2015 agreement through which Iran committed to limits on its nuclear program in exchange for relief from U.S. and international nuclear-related sanctions. On the agreement’s Implementation Day, January 16, 2016, the International Atomic Energy Agency verified that Iran had implemented certain commitments under the agreement, and the United States, the European Union, and the United Nations lifted nuclear-related sanctions on Iran as specified in the agreement. U.S. sanctions targeting Iran’s ballistic missile programs, such as those under EOs 12938 and 13382 and INKSNA, remain. State and Treasury implement EO sanctions while State implements INKSNA sanctions. In 2015, GAO reported on State’s and Treasury’s processes for imposing these sanctions.

GAO examined (1) the extent to which State and Treasury have continued to implement, since January 2016, the executive branch process for identifying (a) entities that are potentially sanctionable under the provisions of EOs 12938 and 13382 for engaging in activities with Iranian sectors connected to space launch vehicles and missiles capable of delivering nuclear weapons, and (b) entities sanctioned since January 2016 under these EOs for such activities; and (2) the extent to which State has continued to implement, since January 2016, the executive branch process for identifying (a) entities that are potentially sanctionable under the provisions of INKSNA for engaging in activities with Iranian sectors connected to space launch vehicles and missiles capable of delivering nuclear weapons, and (b) entities sanctioned since January 2016 under the provisions of INKSNA for such activities.