On March 1, House Foreign Affairs Committee Chairman Ed Royce (R-CA) and the committee’s ranking Democrat, Eliot Engel (D-NY), introduced bipartisan legislation targeting Iran’s Islamic Revolutionary Guard Corps (“IRGC”), a branch of Iran’s armed forces considered responsible for much of Iran’s international terrorism and domestic repression. The new bill, known as the Iranian Revolutionary Guard Corps Economic Exclusion Act (HR 5132), seeks to expand sanctions against the IRGC and push the administration to more robustly implement already existing sanctions.

The most important change under HR 5132 would be an amendment to Section 301 of the Iran Threat Reduction and Syrian Human Rights Act of 2012 (“ITRA”). As currently written, Section 301 of ITRA directs the president to identify and designate certain non-U.S. persons acting as officials, agents, or affiliates of the IRGC, but does not refer to entities owned or controlled by the IRGC. HR 5132 would clarify and strengthen Section 301 by requiring the president to target entities owned or controlled by the IRGC, and with regard to such entities, by authorizing the president to “identify foreign persons in which Iran’s Revolutionary Guard Corps has an ownership interest in such foreign person of less than 50 percent.” If passed, this change could lead to a significant number of new designations and could complicate compliance for companies seeking to avoid entities which might become subject to U.S. sanctions.

HR 5132 would also amend Section 301 of ITRA by requiring the president to investigate whether certain non-U.S. persons meet the criteria for designation under Section 301 of ITRA (namely non-U.S. persons identified as the Government of Iran under 31 CFR § 560.304 and non-U.S. persons engaged in certain enumerated “sensitive transactions”). ITRA currently instructs the president to give “priority to investigating” such non-U.S. persons, but HR 5132 instead states “the President shall investigate” such persons.

HR 5132 would also make several changes to the definition of “sensitive transaction.” For example, ITRA currently lists one type of sensitive transaction as “a financial transaction or series of transactions valued at more than $1,000,000 in the aggregate in any 12-month period involving a non-Iranian financial institution.” HR 5132 seeks to alter that definition by reducing the dollar threshold to $500,000 and by including both Iranian and non-Iranian financial institutions.

HR 5132 would further require the president to determine whether certain specifically enumerated entities meet the criteria for designation under Section 301 of ITRA. Those entities consist primarily of companies in the telecommunications sector (including the Telecommunication Company of Iran and the Mobile Telecommunication Company of Iran (MTCI)) and extractive industries. Furthermore, the president would be required to submit a report identifying entities owned 33 percent or greater by the IRGC.

The bill would also amend Section 302 of ITRA, which authorizes sanctions against non-U.S. persons that knowingly provide certain support or engage in certain transactions with the IRGC or other sanctioned persons. HR 5132 would broaden those sanctions by targeting non-U.S. persons that engage in significant transactions with Iranians designated as a Foreign Terrorist Organization (“FTO”) or support acts of international terrorism, as well as Iranians designated under a number of Executive Orders. This change could broaden the group of Iranian persons with which foreign persons are restricted from transacting under U.S. secondary sanctions. Furthermore, HR 5132 would specifically target the provision of financial services to restricted entities.

Additionally, HR 5132 would require the Executive Branch to submit a number of new reports, including on supply chains supporting the IRGC, and would amend certain sanctions waivers under ITRA to tie their use to Iran’s role in Syria. Finally, the bill would establish that it is U.S. policy to prevent Iran from joining the World Trade Organization (“WTO”) until Iran has ceased supporting international terrorism.

The bill’s prospects for passage are currently unclear. HR 5132 was introduced on a bipartisan basis by the Chairman and Ranking Member of the House Foreign Affairs Committee, suggesting it may have a chance to advance. However, it is particularly difficult to pass major legislation in an election year, and many Iran-related bills introduced this Congress have failed to gain traction, even with bipartisan support. Nonetheless, countering Iran and addressing perceived flaws in the Iran nuclear deal (the Joint Comprehensive Plan of Action) remain a top priority for the Trump Administration, and a major development on that front could be a catalyst for legislative action on Iran.