On 27 October 2022, K2 Integrity and the Atlantic Council hosted a webinar on the current state of the demonstrations in Iran and the imposed sanctions’ impact on the Iranian regime. The panel included from K2 Integrity, Juan Zarate, global co-managing partner and chief strategy officer; Ladan Archin, associate managing director, Financial Crimes Compliance; and Leslie Kuester, senior director, Financial Crimes Compliance; and from the Atlantic Council, Gissou Nia, director of the Strategic Litigation Project. This article summarizes the key points and analysis from the event. To watch a recording of the full webinar, click here.
Current Situation in Iran
A historic and powerful popular movement—led by women in response to the murder of Mahsa Amini while in the custody of the Iranian Morality Police in mid-September—is currently unfolding in Iran. Mahsa Amini’s murder has led to national protests, not just regarding the repression of women, but also the overall repression of the populace by the Iranian government. These protests have become widespread, sustained, and of international import, and have led to further repression and human rights abuses by the regime. The United States, the UK, the EU, and other countries have imposed sanctions targeting Iranian institutions and officials, such as the Morality Police, for human rights violations.
The Morality Police is a unit of the Islamic Republic of Iran’s law enforcement tasked with enforcing Islamic laws, specifically the Islamic dress code in public. With the election of President Ebrahim Raisi, the Morality Police has increased its presence in big cities and ratcheted up the enforcement of laws, with some tragic events happening even before Mahsa Amini’s death. Rows of security forces have been dispatched in Tehran, plainclothes security forces (the Baisiji) have assaulted demonstrators, protesters have been shot at, including children as young as ten years old, and many protestors as young as teenagers have been imprisoned, resulting in mass violence across Iran. While we know there is horrific violence against young girls and women, including sexual assaults, rapes, and the assignment of girls to reeducation centers, the full scope of violence is unknown due to the lack of transparency. The reaction of the Islamic Republic’s authorities to peaceful protestors has hardened the resolve of the protestors, and increased the participation of various sectors of society, with the protests continuing in Iran and across the globe in support of the courageous woman-led Iranian movement.
Factors Behind the Global Response
These current protests are different from the protests that have been occurring in Iran since December 2017 focused on issues such as water shortages, low wages, and increases in gas prices. The current protests are open about the demand for social change, and the sense of outrage has manifested itself with women and girls courageously taking off their hijab in public, flaunting the regime’s repressive mandates.
The current protests are also quite unlike the 2009 Green Movement, the last time the world saw such widespread demonstrations sweep across Iran. During those protests, which called for election reform, the regime also arrested many of the protesters, but the reaction of the United States and other countries was quite different, as the protests occurred at the start of the negotiations for the Joint Comprehensive Plan of Action (JCPOA), the Iran nuclear deal, and the parties to the JCPOA were eager to move into nuclear deal negotiations.
This time, the reaction has been quite different. The negotiations over the nuclear deal with Raisi’s administration have stalled, and Iran has ramped up uranium enrichment and installed more centrifuges, causing the West to be less forgiving of the Iranian government’s human rights violations. Human rights sanctions started being put in place just days after Mahsa Amini’s death. After the Iranian government shut down the internet on 6 October in response to the protests, sanctions were then put in place against those who shut down the internet, the security forces, and Iranian leadership. In addition, the “Woman, Life, Freedom” movement has garnered widespread support not just from celebrities and politicians, but also athletes and athletic teams, musicians, and actors who hadn’t before participated in such causes.
The Role of Sanctions
Currently the sanctions against Iran are some of the strongest prohibitions that have ever existed in any sanctions program. The United States prohibits U.S. persons from engaging in any and all dealings with Iran, unless prior authorization is received. Non-U.S. persons also need to be mindful of knowingly engaging in any significant activity with certain Iranian persons and certain sectors in Iran to ensure that they do not also become subject to sanctions.
Countries globally are standing together in opposition to the actions by the Morality Police, Iranian law enforcement forces, and those prohibiting free communication. Recent sanctions in response to Iranian protests include:
- United States
- Asset freeze sanctions targeting the Morality Police and its leaders as well as those implicated with the shutdown of the internet
- Publication of OFAC General License D-2, which expands categories of communication technology that are available in Iran
- European Union
- Asset freeze and travel ban sanctions targeting the Morality Police, its leadership, and Iranian law enforcement forces
- United Kingdom
- Asset freeze and travel ban sanctions targeting individuals as well as the Morality Police
- Asset freeze sanctions including targeting former Foreign Minister Javad Zarif
There are also targeted authorities that allow for identification, designation, and asset freeze sanctions going back to 2010, including:
- UK: Iran (Sanctions) (Human Rights) (EU Exit) Regulations (2019)
- EU: Restrictive Measures in Relation to Serious Human Rights Violations in Iran (2011)
- U.S.: Executive Order 13553, Blocking Property of Certain Persons with Respect to Serious Human Rights Abuses by the Government of Iran and Taking Certain Other Actions (2010)
- Canada: Special Economic Measures (Iran) Regulations (2010)
These are joined by global human rights programs that include the Global Magnitsky Sanctions Program (2017) in the United States, the EU’s Global Human Rights Sanctions Regime (2020), the Global Human Rights Sanctions Regulations (2020) in the UK, and Global Human Rights Commission in Australia (2021). Human rights sanctions with regard to Iran are not new; policy makers have relied upon them for quite some time to counter difficult transnational issues by imposing serious economic consequences.
The sanctions are a way to show the Iranian people that the West cares about human rights and not just the Iran nuclear deal. Broadly, the Iranian people don’t expect any kind of military or other support from the rest of the world; they do want some kind of acknowledgement of what is happening. They don’t want the western countries and powers to sign an agreement with a government that they haven’t duly elected.
Sanctions and asset recovery are dual pillars in response to this human rights crisis. We are seeing targeted human rights sanctions, such as travel bans, on the individuals that are the most responsible for these violations. Additionally, individuals who are sanctioned for their role in the nuclear program or ballistic missiles programs are also now being designated with these human rights sanctions.
There are identified assets in the United States, UK, Canada, and EU belonging to these sanctioned individuals and their children. We anticipate seeing not only a freezing but also a seizing of these assets, which would then be repurposed for the rehabilitation of victims and survivors. This is something being seen in the Ukraine/Russia context where yachts and other assets are being seized, and some jurisdictions are adopting laws to repurpose these assets for Ukraine’s reconstruction. Using sanctions to transfer assets from perpetrators to victims is much more of an accountability tool than just a behavior modification tool. For chronic human rights violators, especially where only a portion of their traceable assets can be seized, it’s an appropriate response, and it does a lot for victim communities.
Around the same time the first asset freeze sanctions were implemented in response to recent protests in Iran, the U.S. government came out with an expanded authorization regarding communication in Iran. OFAC issued General License D-2, which removes the prior condition of only allowing “personal” communication and adds new categories of communication technology for the Iranian people. The United States has been very forward leaning with regards to communications and supporting social media, cloud computing, and the use of virtual private networks (VPNs). In addition, the Atlantic Council and others are working to ensure that global media outlets are interviewing protesters to get their voices heard, despite the internet disruptions. Sharing more information and support can raise the prioritization level for government officials, UN member states, and other decision makers.
How Human Rights Sanctions in Iran Fit into Global Magnitsky Sanctions
While there are longstanding sanctions authorities designed to target abuses in Iran specifically, governments are now using sanctions to combat human rights challenges in any jurisdiction. Sanctions historically targeted conduct such as narcotics trafficking, terrorism, or weapons proliferation, among others. With the advent of sanctions programs like the U.S. Global Magnitsky Sanctions program and other sanctions programs dedicated to human rights as referenced above, policy makers are now using sanctions to target corruption and human rights in all jurisdictions. When large-scale human rights abuses occur anywhere in the world, we would anticipate sanctions continuing to be a preferred tool to help address those challenges.
This movement can end differently than those in the past if the global community continues to shine a light on what’s happening inside Iran, and targeted human rights sanctions continue to impact those actually perpetuating the crimes against the Iranian people. There should also be a reorienting of foreign policy to support Iranian people, and not the government, by the international community. Countries should not simply orient a foreign policy around the current government but rather recognize that the Islamic Republic of Iran may not always be in power. Whatever change happens in Iran will come from within Iran, led by the brave women and men in the streets calling for change.