EXCLUSIVE: U.S. officials conclude (CONSTITUTIONAL LAW PROFESSOR OBAMA) Iran deal violates federal law

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Some senior U.S. officials involved in the implementation of the
Iran nuclear deal have privately concluded that a key sanctions
relief provision – a concession to Iran that will open the doors
to tens of billions of dollars in U.S.-backed commerce with the
Islamic regime – conflicts with existing federal statutes and
cannot be implemented without violating those laws, Fox News has
learned.

At issue is a passage tucked away in ancillary paperwork
attached to the Joint Comprehensive Plan of Action, or JCPOA, as
the Iran nuclear deal is formally known. Specifically, Section
5.1.2 of Annex II provides that in exchange for Iranian
compliance with the terms of the deal, the U.S. “shall…license
non-U.S. entities that are owned or controlled by a U.S. person
to engage in activities with Iran that are consistent with this
JCPOA.”

In short, this means that foreign subsidiaries of U.S. parent
companies will, under certain conditions, be allowed to do
business with Iran. The problem is that the Iran Threat
Reduction and Syria Human Rights Act (ITRA), signed into law by
President Obama in August 2012, was explicit in closing the so-
called “foreign sub” loophole.

Indeed, ITRA also stipulated, in Section 218, that when it comes
to doing business with Iran, foreign subsidiaries of U.S. parent
firms shall in all cases be treated exactly the same as U.S.
firms: namely, what is prohibited for U.S. parent firms has to
be prohibited for foreign subsidiaries, and what is allowed for
foreign subsidiaries has to be allowed for U.S. parent firms.

What’s more, ITRA contains language, in Section 605, requiring
that the terms spelled out in Section 218 shall remain in effect
until the president of the United States certifies two things to
Congress: first, that Iran has been removed from the State
Department’s list of nations that sponsor terrorism, and second,
that Iran has ceased the pursuit, acquisition, and development
of weapons of mass destruction.

Additional executive orders and statutes signed by President
Obama, such as the Iran Nuclear Agreement Review Act, have
reaffirmed that all prior federal statutes relating to sanctions
on Iran shall remain in full effect.

For example, the review act – sponsored by Sens. Bob Corker (R-
Tennessee) and Ben Cardin (D-Maryland), the chairman and ranking
member, respectively, of the Foreign Relations Committee, and
signed into law by President Obama in May – stated that “any
measure of statutory sanctions relief” afforded to Iran under
the terms of the nuclear deal may only be “taken consistent with
existing statutory requirements for such action.” The continued
presence of Iran on the State Department’s terror list means
that “existing statutory requirements” that were set forth in
ITRA, in 2012, have not been met for Iran to receive the
sanctions relief spelled out in the JCPOA.

As the Iran deal is an “executive agreement” and not a treaty –
and has moreover received no vote of ratification from the
Congress, explicit or symbolic – legal analysts inside and
outside of the Obama administration have concluded that the
JCPOA is vulnerable to challenge in the courts, where federal
case law had held that U.S. statutes trump executive agreements
in force of law.

Administration sources told Fox News it is the intention of
Secretary of State John Kerry, who negotiated the nuclear deal
with Iran’s foreign minister and five other world powers, that
the re-opening of the “foreign sub” loophole by the JCPOA is to
be construed as broadly as possible by lawyers for the State
Department, the Treasury Department and other agencies involved
in the deal’s implementation.

But the apparent conflict between the re-opening of the loophole
and existing U.S. law leaves the Obama administration with only
two options going forward. The first option is to violate ITRA,
and allow foreign subsidiaries to be treated differently than
U.S. parent firms. The second option is to treat both categories
the same, as ITRA mandated – but still violate the section of
ITRA that required Iran’s removal from the State Department
terror list as a pre-condition of any such licensing.

It would also renege on the many promises of senior U.S.
officials to keep the broad array of American sanctions on Iran
in place. Chris Backemeyer, who served as Iran director for the
National Security Council from 2012 to 2014 and is now the State
Department’s deputy coordinator for sanctions policy, told
POLITICO last month “there will be no real sanctions relief of
our primary embargo….We are still going to have sanctions on
Iran that prevent most Americans from…engaging in most
commercial activities.”

Likewise, in a speech at the Washington Institute for Near East
Policy last month, Adam Szubin, the acting under secretary of
Treasury for terrorism and financial crimes, described Iran as
“the world’s foremost sponsor of terrorism” and said existing
U.S. sanctions on the regime “will continue to be enforced….U.S.
investment in Iran will be prohibited across the board.”

Nominated to succeed his predecessor at Treasury, Szubin
appeared before the Senate Banking Committee for a confirmation
hearing the day after his speech to the Washington Institute. At
the hearing, Sen. Tom Cotton (R-Arkansas) asked the nominee
where the Obama administration finds the “legal underpinnings”
for using the JCPOA to re-open the “foreign sub” loophole.

Szubin said the foreign subsidiaries licensed to do business
with Iran will have to meet “some very difficult conditions,”
and he specifically cited ITRA, saying the 2012 law “contains
the licensing authority that Treasury would anticipate using…to
allow for certain categories of activity for those foreign
subsidiaries.”

Elsewhere, in documents obtained by Fox News, Szubin has
maintained that a different passage of ITRA, Section 601,
contains explicit reference to an earlier law – the
International Emergency Economic Powers Act, or IEEPA, on the
books since 1977 – and states that the president “may exercise
all authorities” embedded in IEEPA, which includes licensing
authority for the president.

However, Section 601 is also explicit on the point that the
president must use his authorities from IEEPA to “carry out” the
terms and provisions of ITRA itself, including Section 218 –
which mandated that, before this form of sanctions relief can be
granted, Iran must be removed from the State Department’s terror
list. Nothing in the Congressional Record indicates that, during
debate and passage of ITRA, members of Congress intended for the
chief executive to use Section 601 to overturn, rather than
“carry out,” the key provisions of his own law.

One administration lawyer contacted by Fox News said the re-
opening of the loophole reflects circular logic with no valid
legal foundation. “It would be Alice-in-Wonderland bootstrapping
to say that [Section] 601 gives the president the authority to
restore the foreign subsidiary loophole – the exact opposite of
what the statute ordered,” said the attorney, who requested
anonymity to discuss sensitive internal deliberations over
implementation of the Iran deal.

At the State Department on Thursday, spokesman John Kirby told
reporters Secretary Kerry is “confident” that the administration
“has the authority to follow through on” the commitment to re-
open the foreign subsidiary loophole.

“Under the International Emergency Economic Powers Act, the
president has broad authorities, which have been delegated to
the secretary of the Treasury, to license activities under our
various sanctions regimes, and the Iran sanctions program is no
different,” Kirby said.

Sen. Ted Cruz (R-Texas), the G.O.P. presidential candidate who
is a Harvard-trained lawyer and ardent critic of the Iran deal,
said the re-opening of the loophole fits a pattern of the Obama
administration enforcing federal laws selectively.

“It’s a problem that the president doesn’t have the ability wave
a magic wand and make go away,” Cruz told Fox News in an
interview. “Any U.S. company that follows through on this, that
allows their foreign-owned subsidiaries to do business with
Iran, will very likely face substantial civil liability,
litigation and potentially even criminal prosecution. The
obligation to follow federal law doesn’t go away simply because
we have a lawless president who refuses to acknowledge or follow
federal law.”

A spokesman for the Senate Banking Committee could not offer any
time frame as to when the committee will vote on Szubin’s
nomination.

http://www.foxnews.com/politics/2015/10/08/exclusive-us-
officials-conclude-iran-deal-violates-federal-law/