President Obama could treat Iran Central Bank sanctions as ‘non-binding’

On Saturday, President Barack Obama signed into law H.R. 1540, the National Defense Authorization Act of 2012. The bill included an amendment, which was authored by Sens. Robert Menendez (D-NJ) and Mark Kirk (R-IL) that would place crippling economic sanctions on financial institutions that do business with the Iran Central Bank. The amendment unanimously passed the U.S. Senate in December by a vote of 100-0.

Embedded in the president’s signing statement on the Defense Authorization Act, there was a portion devoted to the provisions on the Iran sanctions, which were under Section 1245 of the Defense Authorization Act:

"Sections 1235, 1242, and 1245 would interfere with my constitutional authority to conduct foreign relations by directing the Executive to take certain positions in negotiations or discussions with foreign governments. Like section 1244, should any application of these provisions conflict with my constitutional authorities, I will treat the provisions as non-binding."

If the president does view provisions of the Iran sanctions to be non-binding, it could cause some problems for him with the 100 senators who voted in favor of the Menendez-Kirk amendment

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Sen. Kirk sent me a statement in response to the president’s signing statement where he indicated that "with the Senate voting 100-0 to cripple the Central Bank of Iran, the President’s signing statement hinting he will ignore parts of this law risks overwhelming opposition in the Congress."

In addition, a senior Kirk aide noted that "Republicans and Democrats are committed to sanctions against the Central Bank of Iran. Is the President?"

When asked about the reference to the "non-binding" provisions, the White House Press Office referred me to additional background information that they sent around specifically highlighting the president’s view on the Iran-related provisions.

Particularly, the additional background emphasized that "the United States has already had sanctions on CBI and Iran’s oil industry for decades — so to make this legislation effective, the Obama Administration worked closely with Congress to shape the Iran provisions so that this new tool would increase the likelihood that other countries would stop doing business with CBI and Iran’s oil sector."

At the conclusion of the statement, the White House noted that "the measure signed into law today can be a significant escalation in the pressure on Iran, and President Obama has made clear that the United States is committed to increasing the pressure on Iran until it changes course."

While the White House background information does highlight its commitment to ratcheting up the pressure on Iran, it does not specifically respond to the aspect of the president’s signing statement where he would treat such provisions pertaining to Iran sanctions as "non-binding."

A full copy of the White House background on the Iran-related provisions is included below.

The National Defense Authorization Act for Fiscal Year 2012
Iran-Related Provisions

"There should be no doubt-the United States and the international community are determined to prevent Iran from acquiring nuclear weapons." -President Barack Obama

Today President Obama signed into law H.R. 1540, the "National Defense Authorization Act for Fiscal Year 2012". This bill includes funding for the defense of the United States and its interests abroad, crucial services for service members and their families and vital national security programs that must be renewed. The bill also includes provisions related to Iran, specifically sanctions on foreign financial institutions that do business with the Central Bank of Iran (CBI), including for oil transactions.

The United States has already had sanctions on CBI and Iran’s oil industry for decades — so to make this legislation effective, the Obama Administration worked closely with Congress to shape the Iran provisions so that this new tool would increase the likelihood that other countries would stop doing business with CBI and Iran’s oil sector. This is important because the most effective approach is one that involves multilateral participation and is timed and phased to avoid negative repercussions to international oil markets and instead focus pressure on Iran. The provisions signed into law today have that needed flexibility, and we are now working with partners to be in a position to most effectively implement it.

For three years, President Obama has led an unprecedented effort to prevent Iran from acquiring nuclear weapons. Through a two-track policy — one track increasing the pressure on Iran to induce it live up to its responsibilities in the international community and the other track offering a very credible option for engagement, provided Iran accepts its responsibilities to the international community – the United States has built a strong international coalition against Iran’s nuclear weapons aspirations. As a result, Iran now faces the toughest sanctions regime in the world and is more isolated diplomatically, both regionally and globally.

The measure signed into law today can be a significant escalation in the pressure on Iran, and President Obama has made clear that the United States is committed to increasing the pressure on Iran until it changes course.