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Iran Deal: Michigan May Add Sanctions, Hit Chrysler

The states of Michigan, Kansas, and Missouri are considering new sanctions against the Iranian regime and companies doing business with it–whatever the fate of the Iran deal in Congress.

Michigan enacted state sanctions in 2012 that divest state pension funds from companies that do business with Iran, and that prevent such companies from receiving state contracts. Now, Chad Selweski reports, “if legislative leaders in Michigan have their way, Michigan will join Kansas and Mississippi in considering additional sanctions” in the wake of the Iran deal.

In late July, State Sen. Jack Brandenburg (R-Harrison Township), who called the Iran deal “the most stupid thing ever,” said he wants to boost sanctions against Iran “by crafting legislation that will disallow any business with economic ties to Iran from receiving economic development incentives from the state.”

Selweski explains such sanctions mean “a ban on Michigan grants, tax breaks and tax credits for any company with ties to Iran…and the incentives provided by the Michigan Economic Development Corporation, a quasi-government.”

One of the companies that might be most directly affected, Selweski notes, would be Fiat Chrysler Automobiles, which only stopped doing business in Iran in 2012 and might be eager to return. If it lost state incentives, it might consider building new plants outside its home state of Michigan. Critics point to that possibility as evidence that new state sanctions might do little to affect Iran, but could potentially hurt the local economy.

Still, state sanctions remain one of the few tools for pressuring Iran’s government after the Iran deal drops other restrictions.

Breitbart News first suggested that states could resist the Iran deal, despite a provision in the agreement that requires the U.S. government to urge the lifting of state and local sanctions. The idea was soon picked up by the Wall Street Journal. Secretary of State John Kerry then admitted before Congress that states had the constitutional authority to impose sanctions on Iran.On Sunday, GOP presidential candidate Ted Cruz, whose litigation in Medellin v. Texas in 2008 clarified states’ powers in this regard, endorsed the state sanctions strategy.

Thirty U.S. states have divested from Iran, and roughly a dozen have additional sanctions on Iran. In addition to Michigan, California and New York–both deep-blue, Democrat-dominated states–have indicated they are unlikely to ease Iran sanctions soon. California’s sanctions are directly tied to Iran’s support for terrorism, and New York maintains a blacklist of companies and individuals that cannot do business with the state, even though some of the same entities are relieved from international sanctions under the Iran deal reached last month.

 

 

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