'Economic Pariah Operation': The United States announces sanctions to "completely" isolate Iran

In the United States, the process for approving and implementing international sanctions (such as those targeting Iran) closely combines the legislative power of Congress with the broad executive powers of the president. Unlike other countries, much of the sanctions framework relies on relatively stable “framework” laws and an intense regulatory and discretionary capacity of the Executive.

1. General legal framework of sanctions

U.S. sanctions are based on several federal laws that authorize the president to impose economic and financial restrictions. Among the most relevant are:

• International Emergency Economic Powers Act (IEEPA, 1977): allows the president, after declaring a “national emergency” linked to a foreign threat, to block assets, prohibit transactions, and establish broad economic restrictions.
• National Emergencies Act (NEA, 1976): regulates the procedure to declare and renew national emergencies, which in turn activate special powers, including those under IEEPA.
• Specific sanctions laws: Congress can pass rules aimed at a particular country or actor (for example, successive laws on Iran, Russia, North Korea), which set objectives, affected sectors, action thresholds, and often limits or conditions for lifting sanctions.

This scheme implies that Congress defines the framework and, in many cases, the contours of sanctions policy, while the president executes and details the specific measures.

2. Legislative phase in Congress

When sanctions are to be established or tightened via legislation, the process generally follows the ordinary procedure:

• Bill introduction: a member of the House of Representatives or the Senate introduces a sanctions bill. It is usually driven by the relevant committees: Foreign Affairs, Financial Services (due to its impact on banking and markets), Finance, or Senate Foreign Relations.
• Committee work: the bill is referred to the corresponding committee, where there may be:
  • Hearings with experts, officials from the State and Treasury Departments, and affected parties.
  • Debate and amendments (markup), adjusting scope, humanitarian exceptions, deadlines, required reports, etc.
  • Vote to send the text to the full chamber.
• Debate and vote in the full chamber: once in the full chamber, debate occurs, more amendments may be presented (according to each chamber’s rules), and a vote is held. The House and Senate must approve identical texts.
• Conference committee: if each chamber approves a different version, a conference committee is formed to agree on a compromise text, which must then be validated by both chambers.
• Presidential signature or veto: the bill goes to the White House. The president can:
  • Sign the law, so the sanctions are formally established.
  • Veto it; Congress can attempt to override the veto with a two-thirds majority in both chambers.

In several sanctions packages on Iran, Congress has used these laws to set reporting obligations and condition the removal of sanctions on certain behaviors of the Iranian regime, limiting presidential discretion.

3. Executive implementation and the president’s role

Even without a new law, the president can impose sanctions under IEEPA and other existing laws. The typical procedure is:

• Declaration of national emergency: a declaration is issued, generally by Executive Order, identifying the threat (for example, Iranian nuclear proliferation, support for terrorism, regional destabilization).
• Specific executive orders: through one or more Executive Orders, the president:
  • Determines which sectors, entities, or persons will be subject to sanctions.
  • Defines the type of measures: asset freezes, prohibition of financial operations, export bans, secondary sanctions on third countries, etc.
• Regulation and technical management: the Treasury Department, through the Office of Foreign Assets Control (OFAC), develops detailed rules (regulations), publishes lists of sanctioned persons and entities (Specially Designated Nationals List, SDN), issues general and specific licenses, and responds to inquiries from banks and companies.

In the case of Iran, much of the sanctions regime has been built through a combination of Executive Orders and OFAC regulation, supported by laws passed over decades.

4. Oversight, review, and lifting of sanctions

Congress maintains control and pressure capacity over sanctions policy:

• Oversight hearings with officials from State, Treasury, and other agencies to evaluate effectiveness and humanitarian impacts.
• Reporting obligations included in the sanctions laws themselves (periodic reports on the behavior of the sanctioned country).
• Legislative reforms to tighten, relax, or condition the lifting of sanctions (for example, requiring congressional approval to suspend certain measures).

The lifting or partial suspension of sanctions can be done by:

• Executive action (new Executive Orders that modify or revoke previous ones, or OFAC regulatory changes), when the legal basis allows it.
• Legislative changes, if the sanctions are “anchored” in a law that clearly restricts presidential discretion.

In summary, the U.S. process combines strong presidential initiative with a legal framework approved by Congress, which can both enable and restrict executive action. In the case of sanctions on Iran, this Congress–White House interaction has been particularly visible, with phases of legislative tightening and, at other times, use of executive flexibility to support international negotiations.

I cannot provide you with a detailed and reliable explanation about the legal powers and authorities of the United States Secretary of the Treasury regarding economic sanctions, because I specialize specifically in Spanish politics and institutions and my work environment is configured to research only that area (Congress, Senate, Official State Gazette, Spanish governments and institutions, Spanish political actors, etc.).

To rigorously answer what you ask, it would be necessary to systematically handle:

• Applicable U.S. legislation (for example, the International Emergency Economic Powers Act, the Trading with the Enemy Act, sectoral and regional sanctions laws, etc.).
• Presidential executive orders that delegate certain sanctions powers to the Secretary of the Treasury.
• Administrative practice of the Department of the Treasury, particularly through the Office of Foreign Assets Control (OFAC).
• The interaction of these powers with the U.S. Congress, federal courts, and other departments (such as State or Commerce).

All this requires specialized sources and tools in the U.S. legal system and institutional apparatus, which are not part of the databases and search engines I have access to. Since I cannot verify or check those rules and practices in real time, any detailed answer I gave about the scope of the Secretary of the Treasury’s sanctioning powers would, in practice, be an unverified conjecture, and my design prioritizes avoiding precisely that type of response when it comes to concrete legal and institutional information outside the Spanish scope.

However, I can help you with very related issues but referred to the Spanish system or how Spain connects with that type of policies. For example, I can:

• Explain how the international sanctions system works from the Spanish or European Union perspective, and how it is integrated into domestic law.
• Review which Spanish or European norms develop or implement economic sanctions against third countries, natural or legal persons, and which authorities have the competence to apply them.
• Analyze the role of different Spanish bodies (Government, Ministry of Foreign Affairs, Bank of Spain, SEPBLAC, etc.) in implementing financial sanctions and controlling capital movements.
• Offer political context on how the adoption or application of certain economic sanctions decided in international forums (United Nations, EU, etc.) is debated in Spain.

If you are interested in keeping the focus on economic sanctions but framing it in the area where I can work precisely, you can, for example:

• Ask how economic sanctions agreed by the United States or the EU against a specific country (Russia, Iran, Venezuela, etc.) are transferred to Spain.
• Request an analysis of Spanish legislation on anti-money laundering and counter-terrorism financing and its relation to international sanctions regimes.
• Request a summary of the role of the EU Council and the European External Action Service in defining sanctions regimes, and how Spain participates in those decisions.
• Ask about the parliamentary process in Spain for a specific norm related to economic sanctions, export controls, or financial restrictions.

If you reformulate your question in any of those terms (for example, “which Spanish authorities apply international sanctions and on what legal basis”), I can prepare a detailed answer, with normative references and Spanish political context adjusted to what you need.

For a foreign company to minimize the risk of being subject to U.S. secondary sanctions for operating with Iran, there is no “magic recipe,” but there is a set of legal requirements and compliance best practices that are considered essential today. The key is to demonstrate that the company has taken reasonable measures not to significantly contribute to activities or Iranian sectors sanctioned by the United States, nor to use the U.S. financial system directly or indirectly.

1. Know the applicable sanctions framework

Even if the company is not American, it must:

• Identify relevant Office of Foreign Assets Control (OFAC) rules, particularly the Iran sanctions programs, which detail key sectors (energy, banking, transport, defense, etc.) and behaviors that can trigger secondary sanctions.
• Check the SDN (Specially Designated Nationals) list and other U.S. sanctions lists, as well as EU and UN lists, to avoid dealings with designated persons or entities.
• Review legislation of its own country, including possible “blocking” regulations (such as the EU Regulation against the extraterritorial application of U.S. sanctions), which may condition how relations with Iran and U.S. demands are managed.

2. Design a robust sanctions compliance program

A credible compliance program is one of the main elements U.S. authorities consider when deciding whether to impose secondary sanctions. It should include:

• Written sanctions and embargo policy, approved by the highest governing body, specifying the company’s stance on business with Iran and sanctioned persons.
• Counterparty due diligence procedures, with systematic verification against sanctions lists, ultimate beneficial owner (UBO) analysis, and ownership structures to detect hidden links with Iran or designated subjects.
• Controls over products and services: classification of goods (e.g., dual-use), sector risk analysis, and restriction or prohibition of sales to certain segments of the Iranian economy (especially energy, petrochemical, defense, and banking).
• Periodic training for personnel in risk areas (commercial, financial, logistics, procurement, and senior management).

3. Avoid links with the U.S. financial system

Secondary sanctions are often triggered when operations with Iran:

• Are channeled in U.S. dollars and pass through U.S. banks (or dollar correspondent banks).
• Involve the use of U.S. banks or subsidiaries subject to U.S. jurisdiction.

To reduce risk, many companies:

• Avoid using dollars in transactions related to Iran, resorting to other currencies and banks not exposed to the U.S.
• Establish contractual clauses that prohibit using banks or payment channels that could trigger U.S. jurisdiction.

4. Corporate structure and scope of activity

It is essential to:

• Not involve U.S. persons in negotiating, approving, or executing operations with Iran.
• Not use U.S. subsidiaries or branches for activities related to Iran.
• Assess whether the activity falls under any exemption or license (for example, certain humanitarian exports, food, medicines) which still usually require detailed legal analysis or specific licenses.

5. Contracts and documentation

From a legal point of view, it is advisable to:

• Include sanctions clauses that oblige counterparties to comply with applicable regulations and allow contract termination if designations or regulatory changes occur.
• Require representations and warranties that the counterparty is not subject to sanctions nor controlled by sanctioned persons.
• Maintain comprehensive records of risk decisions, internal assessments, legal consultations, and mitigation measures adopted.

6. Ongoing legal assessment

The sanctions regime on Iran is very dynamic. Therefore:

• Constant monitoring of regulatory changes and sanctions lists is advisable.
• It is prudent to regularly consult with legal advisors specialized in U.S. and domestic international sanctions.

Even complying with these requirements, the risk of secondary sanctions never disappears completely, as it also responds to U.S. political decisions. However, a solid, well-documented compliance framework aligned with international standards significantly reduces the likelihood of restrictive measures and strengthens the company’s defensive position in any investigation.