On Saturday, President Bush signed into law the Iranian Freedom Support Act. The legislation codified existing sanctions against Iran and added significant sanctions against Iran. The new sanctions target Iran’s nascent efforts at nuclear proliferation and punish companies, including those outside Iran, that assist Iran’s nuclear and conventional weapons programs.

The new sanction must be imposed by the President on any company or individual that, after enactment of the new law, provides goods, services, or technologies to Iran knowing that this would contribute materially to Iran’s ability to acquire or to develop nuclear, chemical and biological weapons or destabilizing numbers of advanced conventional weapons. Although imposition of the sanction is mandatory, the President has the option to choose among six separate sanctions set forth in the new act. The six available sanctions are the following:

• Withhold Ex-Im Bank financing and credit facilities from any transaction involving the sanctioned person;
• Deny export licenses for export of goods, services or technologies to the sanctioned person;
• Prohibit loans to the sanctioned person by U.S. financial services in excess of $10 million in twelve months;
• Prohibit the sanctioned person from acting as a repository of government funds or from serving as a primary dealer of U.S. debt instruments;
• Prohibit the U.S. government from procuring goods and services from the sanctioned person; and
• Impose any other sanctions available under the International Emergency Economic Powers Act, which includes blocking any property of the sanctioned person in the United States.

A list of persons subject to these sanctions must be published in the Federal Register. No list has yet been published but it is likely that the first entities on the list will be companies in Russia that have assisted in Iran with nuclear facilities or have sold it weapons and companies in China that have sold missile technology to Iran.

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