On February 3, 2017, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 25 additional individuals and entities on its list of Specially Designated Nationals and Blocked Persons (SDNs). These designations by themselves do not constitute a departure from past policy or practice, but they might foreshadow the possibility of such a departure.

OFAC stated in an accompanying press release that these individuals and entities were involved in procuring technology and materials to support Iran’s ballistic missile program, and laundering money and procuring goods for Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Lebanon’s Hezbollah. These SDN designations block the property within US jurisdiction of the listed individuals and entities and prohibit US persons from dealing with them or any entity owned 50% or more by them. These newly designated persons and entities now trigger potential “secondary sanctions” for any non-US persons that knowingly facilitate significant financial transactions or provide material support for them.

The individuals and entities are located in Iran, Lebanon, the UAE, China, and elsewhere, but their inclusion on the SDN List is not likely to have a significant impact on commerce or other activity involving Iran, and this action does not itself indicate any obvious change in US sanctions policy on Iran. However, an unnamed senior administration official noted that this is only an “initial” step in the US government’s effort to “pressure [Iranian officials] to change their behavior,” and the Trump Administration has been clear that it intends to take a more confrontational stance on Iran than the Obama Administration.

These most recent SDN designations by OFAC were implemented under the authority of Executive Orders 13382 (July 1, 2005) and 13224 (Sept. 23, 2001). These are longstanding authorities that authorize, respectively, sanctions against those involved in proliferation of weapons of mass destruction and ballistic missiles, and those involved in supporting terrorism.

These SDN designations, viewed in isolation, are consistent with longstanding US policy and sanctions authorities. One thing that is noteworthy, though not new, is that OFAC appears to have based some of these sanctions, in part, on transfers to Iran of dual-use and other goods via a China-based network of suppliers. This underscores the importance of conducting end-use and end-user due diligence, even when trading with third countries in items that are not subject to export control licensing requirements.

These sanctions designations themselves do not indicate any change in the Obama Administration’s stated policy of enforcing the sanctions authorities that remained in force after January 2016, when the JCPOA took effect, including those related to ballistic missiles, support for terrorist groups, regional destabilization, and human rights abuses. This most recent move by OFAC comes in the wake of another test by Iran of medium-range ballistic missiles (MRBMs) on January 29, 2017. OFAC had announced similar SDN designations under the Obama Administration in January and March of 2016, following similar MRBM launches.

These sanctions also do not necessarily represent an additional step towards challenging the JCPOA, which President Trump has suggested he plans to do in the future. OFAC’s press release states its position that these new sanctions are “fully consistent” with US commitments under the JCPOA, although Iranian officials have disagreed with that position, and generally consider any new designations to be inconsistent with the deal. Likewise, Iran has taken the position that its ballistic missile tests do not violate its own commitments under the JCPOA, and has pledged to continue them. Trump Administration officials have called Iran’s recent missile tests a “violation” of the deal, as have Israeli officials. UN Security Council Resolution 2231 (July 20, 2015), which endorsed and set the groundwork for the implementation of the JCPOA, “called upon [Iran] not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons” for eight years after the adoption of the JCPOA on October 18, 2015. That language does not provide a clear legal basis for the United States to move to terminate the JCPOA on the basis of Iran’s ballistic missile activity, even if such missiles were nuclear-capable, which is a matter of factual dispute between the United States and Iran.

The bigger stories to watch over the coming weeks and months are whether the Trump Administration, or Congress, take steps to expand the scope of US sanctions on Iran in new and material ways. Enforcing existing authorities in typical ways is not a departure from longstanding US policy; nor is it likely to present a real challenge to the JCPOA. But if the United States were to impose new and different sanctions on activity involving Iran, or if the Iranians were to take significant steps in the nuclear or missile arena, or even with respect to conventional weapons, we could see more dramatic deterioration of the US and Iranian understanding of the boundaries of the JCPOA.