Sec. 101. Findings
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Congress finds the following: The IRGC threatens the national security of the United States and United States allies. The IRGC is the key entity carrying out the efforts of the Government of Iran to sow chaos and instability throughout the Middle East, including threatening activities against the United States, Israel, and other allies and partners of the United States in the region. The IRGC provides direct sponsorship and support to numerous foreign terrorist organizations, including Hamas, Hezbollah, and Palestinian Islamic Jihad.
According to General Joseph Dunford, Chairman of the Joint Chiefs of Staff, the IRGC is responsible for the deaths of more than 500 members of the United States Armed Forces in Afghanistan and Iraq, including through the provision of explosive materials to Shia militias in Iraq. The IRGC is complicit in the ongoing slaughter of the people of Syria as it maintains support for, and seeks to preserve, the regime of Bashar al-Assad, which is responsible for hundreds of thousands of deaths and millions of displaced citizens of Syria.
The Government of Iran and the IRGC have been responsible for the repeated testing of illegal ballistic missiles capable of carrying a nuclear device, including observed tests in October and November 2015 and March 2016 that violated United Nations Security Council resolutions. The United States holds the IRGC responsible for severe and continuing human rights violations against the people of Iran, including unlawful arrests, torture, and harassment. The United States upholds sanctions against the IRGC for its proliferation-related activities and human rights abuses, and also against Iran’s Revolutionary Guard Corps-Qods Force for its support of terrorism.
The Office of Foreign Assets Control of the Department of the Treasury includes the IRGC on the list of specially designated nationals and blocked persons (in this section referred to as the SDN list ). Pursuant to section 561.405 of title 31, Code of Federal Regulations, entities owned by the IRGC, directly or indirectly, with 50 percent or greater interest are subject to sanctions and may be listed by the Office of Foreign Assets Control on the SDN list. Such entities’ property and interest in property are blocked regardless of whether such entities are included on the SDN List.
That regulation, commonly termed the 50 percent rule , is the standard used by the Office of Foreign Assets Control when determining ownership of entities by blocked or sanctioned persons. Under section 218 of the Iran Threat Reduction and Syria Human Rights Act of 2012 ( 22 U.S.C. 8725 ), the term own or control , with respect to an entity, means— holding more than 50 percent of the equity interest by vote or value in the entity; holding a majority of seats on the board of directors of the entity; or otherwise controlling the actions, policies, or personnel decisions of the entity.
The IRGC maintains a powerful and expansive presence throughout Iran’s financial, commercial, and oil and energy sectors, owning, controlling, operating, and influencing Iranian entities while producing revenues estimated in the billions of dollars. According to the Department of the Treasury, The IRGC has a growing presence in Iran’s financial and commercial sectors and extensive economic interests in the defense production, construction, and oil industries, controlling billions of dollars in corporate business. .
The IRGC has continuously engaged in sanctions evasion and deceptive business practices to conceal its ownership or control of Iranian entities, owning numerous Iranian entities that are not subject to sanctions because the IRGC has less than a 50-percent ownership interest, leaving such entities unsanctioned and open to business. As sanctions are lifted pursuant to the Joint Comprehensive Plan of Action and Iran becomes more open to international commerce, the international community must be aware of any and all entities that are owned, controlled, operated, or influenced by the IRGC or its agents or affiliates, including those entities that do not make the threshold to be covered by the 50 percent rule .
There is no prohibition in section 219 of the Immigration and Nationality Act ( 8 U.S.C. 1189 ) that prevents the Secretary of State from designating entities affiliated with the government of a foreign country as a foreign terrorist organization. The Financial Crimes Enforcement Network of the Department of the Treasury issued a notice of proposed rulemaking on August 4, 2014 (79 Fed. Reg. 45151; relating to customer due diligence requirements for financial institutions), proposing to amend chapter X of title 31, Code of Federal Regulations, to provide greater transparency to allow the identification of persons that own, control, and profit from entities to which banks and other financial institutions provide services.
The proposed rule, known also as the beneficial ownership requirement , would require financial institutions to identify and verify any individual who owns 25 percent or more of an entity that is a customer and an individual who controls such an entity. David Cohen, at the time Under Secretary of the Treasury for Terrorism and Financial Intelligence, stated on July 30, 2014, The beneficial ownership requirement is intended to provide us with an important new tool to track down the real people behind companies that abuse our financial system to secretly move and launder their illicit gains.
Along with meeting our international commitments, this rule would make our financial system more transparent by exposing the activities of illicit actors who will no longer be able to hide behind their anonymity. . On October 12, 2011, the Department of the Treasury imposed sanctions on Mahan Air for providing financial, material, and technological support to Iran’s Revolutionary Guards Corps-Qods Force. The Department of the Treasury noted that Mahan Air also provides transportation, funds transfers, and personal travel services to Iran’s Revolutionary Guards Corps-Qods Force.
The Department of the Treasury further noted that Mahan Air provides transportation services to Hezbollah, which was designated as a Specially Designated Global Terrorist under Executive Order 13224 ( 50 U.S.C. 1701 note; relating to blocking property and prohibiting transactions with persons who commit, threaten to commit, or support terrorism) in October 2001, and Mahan Air has transported personnel, weapons, and goods on behalf of Hezbollah. David Cohen, at the time Under Secretary of the Treasury for Terrorism and Financial Intelligence, stated on October 12, 2011, Mahan Air’s close coordination with [Iran's Revolutionary Guards Corps-Qods Force (IRGC–QF)]—secretly ferrying operatives, weapons and funds on its flights—reveals yet another facet of the IRGC’s extensive infiltration of Iran’s commercial sector to facilitate its support for terrorism.
Following the revelation about the IRGC–QF’s use of the international financial system to fund its murder-for-hire plot, today’s action highlights further the undeniable risks of doing business with Iran. .
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- 79 FR 45151
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