Actions to Enforce the Iran Sanctions Act and Implement Contractor Certification Requirement Page: 3 of 11
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Since the fall of 2010, State has sanctioned 13 foreign firms under the ISA-2 for
investments in Iran's energy sector8 and 11 for supplying refined petroleum products.9 State
imposed various sanctions on each firm, listed 10 in EPLS making them ineligible to receive
U.S. government contracts, and was in the process of listing the remaining 3 firms in EPLS
at the time of this report. To enforce the ISA, State has increased its staff to review available
information on companies' activities in Iran's energy sector, including information indicating
whether affiliated parent companies should be held accountable, relying heavily on the
intelligence community and U.S. embassies to corroborate the information. The final
decision on whether to apply sanctions is made by the Secretary of State or a delegee after
the information and evidence of potentially sanctionable activity is vetted through State and
other agencies when applicable. In addition to sanctions, State officials told us that they
have been successful in persuading firms to end their business dealings with Iran, and that
the number of foreign firms involved in Iran's energy sector has declined. However, they
acknowledged that some firms are still operating in Iran's energy sector, and they are
continuing their efforts to enforce the ISA.
In September 2010, the administration revised the FAR, as required by CISADA, to include
a requirement for prospective contractors to certify that they or any firm owned or controlled
by them are not engaging in activities for which sanctions may be imposed under section 5
of the ISA.10 The certification was subsequently added to the governmentwide electronic
system for maintaining various certifications and representations that are required for
contractors to do business with the government. The FAR was also revised to include
remedies upon determination of false certification and procedures for obtaining waivers to
the certification requirement, which would be needed if it was in the national interest for an
agency to contract with a firm that has engaged in sanctionable activity. 11 However, none of
the 13 firms sanctioned by State under the ISA held government contracts or were
registered to respond to solicitations for contracts, or submitted an offer after the certification
requirement went into effect, so there is no evidence of false certifications or the need for
waivers.
Background
U.S. law restricts U.S. firms from investing in Iran's energy sector through a variety of
sanctions administered by the Department of the Treasury to discourage Iran from
supporting terrorism and developing nuclear weapons. 12 Section 5(a) of the ISA, as
8 See 75 Fed. Reg. 62916-02 (Oct. 13, 2010) (imposing sanctions on Naftiran Intertrade Company),
and 76 Fed. Reg. 18821-04 (Apr. 5, 2011) (imposing sanctions on Belarusneft).
9 See Public Notice 7585, 76 Fed. Reg. 56866 (Sept. 14, 2011) (imposing sanctions on Allvale
Maritime Inc., Associated Shipbroking, Petrochemical Commercial Company International, Petroleos
de Venezuela S.A., Royal Oyster Group, Soci'Et'E Anonyme Mon'Egasque D'Administration
Maritime Et A'Erienne, Speedy Ship, and Tanker Pacific Management (Singapore) Pte. Ltd.).
10 75 Fed. Reg. 60254 (Sept. 29, 2010).
11 76 Fed. Reg. 68027-28; FAR 25.703-2; and FAR 25.703-4.
12 International Emergency Economic Powers Act, Pub. L. No. 95-223, 91 Stat. 1625 (1977); National
Emergencies Act, Pub. L. No. 94-412, 90 Stat. 1255 (1976); and 3 U.S.C. 301 as implemented by
Executive Order 12957, 60 Fed. Reg. 14615 (Mar. 15, 1995) (prohibiting U.S. involvement with
petroleum development in Iran). Also, see Exec. Order No. 12959, 60 Fed. Reg. 24757 (May 6, 1995)
(banning specified exports and investment), and Exec. Order No. 13059, 62 Fed. Reg. 44531
(Aug. 19, 1997) (prohibiting virtually all trade and investment activities with Iran by U.S. persons,
wherever located).GAO-12-316R Iran Sanctions
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United States. Government Accountability Office. Actions to Enforce the Iran Sanctions Act and Implement Contractor Certification Requirement, text, January 24, 2012; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc295384/m1/3/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.