U.S. Senators Kirsten Gillibrand (D-NY) and Mark Kirk (R-IL), and U.S. Representatives Ted Deutch (D-FL) and Dan Burton (R-IN) today introduced the Iran Transparency and Accountability Act designed to strengthen U.S. unilateral sanctions against Iran. Although the text of the bill is not yet on Thomas, the bill is described by a press release from Senator Gillibrand.

The bill has two major provisions. First, the bill would require publicly-traded companies to report to the SEC any dealings that the companies have with Iran including, presumably, dealings that are licensed and permissible under existing rules and legislation such as trade in agricultural and informational products. Further, the bill would require the SEC to post these dealings on its website.

The second part of the bill would deal with an unresolved issue from the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”). Part of CISADA, which this blog reported on here, required the Office of Foreign Assets Control (“OFAC”) to promulgate regulations requiring U.S. financial institutions with foreign bank correspondent accounts to undertake one or more of four activities designed to determine whether the foreign banks are providing services to Iran in aid of its proliferation goals. These include audits and “due diligence” on the foreign banks. No time limit was imposed by CISADA within which OFAC had to adopt these regulations, and there is no indication that has taken any steps at this point to adopt the required regulations. The proposed legislation would require audit rules to be promulgated within 90 days of enactment of the proposed law.

Needless to say, rules requiring U.S. banks to perform audits on its foreign correspondent banks to determine if they are dealing with Iranian banks will be costly and burdensome and could threaten U.S. trade with our allies and trading partners. Moreover, requiring these rules to be rushed through OFAC in 90 days or less is likely to lead to poorly thought-out rules which would exacerbate this negative impact on U.S. trade with countries other than Iran.

Permalink


Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)