Posted on August 4, 2017
Archive : August 2017
Category : Herbert Smith Freehills

H.R. 3364 (the "Countering America's Adversaries Through Sanctions Act") overwhelmingly passed the House and Senate and has now been signed into law by the US President, albeit with two partly critical signing statements (here and here). The law represents significant development in sanctions against Iran, North Korea, and Russia.

The President's first signing statement expresses support for the bill – particularly its sanctions against Iran and North Korea, lauding "tough measures to punish and deter bad behavior by the rogue regimes in Tehran and Pyongyang."

However, the statement calls the (now signed) bill "seriously flawed" and notes that the President has repeatedly expressed his "concerns to Congress about the many ways [the bill] improperly encroaches on Executive power, disadvantages American companies, and hurts the interests of our European allies." Despite these criticisms, the bill has improved as a result of amendments in the House, according to the President, reflecting "feedback from our European allies – who have been steadfast partners on Russia sanctions – regarding the energy sanctions provided for in the legislation. The new language also ensures our agencies can delay sanctions on the intelligence and defense sectors, because those sanctions could negatively affect American companies and those of our allies."

The President's first statement indicates that the President signed the bill "for the sake of national unity," but expresses hope that cooperation between the US and Russia will make it "so that these sanctions will no longer be necessary."

The second signing statement is focused on constitutional and legal problems that the Trump Administration believes the bill will create. Specifically, the statement indicates that the Administration believes the legislation impinges on the President's foreign affairs powers in various respects, including by requiring Congressional review of certain actions to relax sanctions, pursuant to procedures that the Administration believes do not fully comport with Supreme Court precedent.

Together, the President's signing statements reflect concern about the relationship between the US and its allies. This may signal that the law's discretionary provisions will be implemented in ways sensitive to the concerns of US allies and – to the extent possible – intended to minimize unnecessary further disruptions in the US-Russia relationship.

Further details can be found on our previous e-Bulletins: June 14 e-Bulletin; June 16 e-Bulletin; July 27 e-Bulletin. Herbert Smith Freehills' New York office continues to monitor developments in this area.