This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with red strikethrough and textual matter added in the later version is indicated with blue.
U.S. sanctions have been used extensively by successive Administrations to try to achieve change in Iran's behavior. Sanctions had a substantial effect on Iran's economy and on some major strategic decisions, but little or no effect on Iran's regional malign activities. During 2012-2015, when the global community was relatively united in pressuring Iran, Iran's economy shrank by 9% per year, crude oil exports fell from about 2.5 million barrels per day (mbd) to about 1.1 mbd, and Iran was unable to repatriate more than $120 billion in reserves held in banks abroad. The 2015 multilateral nuclear accord (Joint Comprehensive Plan of Action, or JCPOA) provided Iran broad relief from the international and U.S. secondary sanctions as the U.S. Administration waived relevant sanctions, revoked relevant executive orders (E.O.s), and corresponding U.N. and EU sanctions were lifted. Remaining in place were a general ban on U.S. trade with Iran and sanctions imposed on Iran's support for regional governments and armed factions, its human rights abuses, its efforts to acquire missile and advanced conventional weapons capabilities, and the Islamic Revolutionary Guard Corps (IRGC).
Under U.N. Security Council Resolution 2231, nonbinding U.N. restrictions on Iran's development of nuclear-capable ballistic missiles and a binding ban on its importation or exportation of arms remain in place for several years. However, Iran has continued to support regional armed factions and to develop ballistic missiles despite the U.N. restrictions, and did so even when strict international economic sanctions were in place during 2010-2015.
JCPOA sanctions relief enabled Iran to increase its oil exports to nearly pre-sanctions levels, regain access to foreign exchange reserve funds and reintegrate into the international financial system, achieve about 7% yearly economic growth, attract foreign investments in key sectors, and buy new passenger aircraft. The sanctions relief contributed to Iranian President Hassan Rouhani's reelection in the May 19, 2017, vote. Yet, perceived economic grievances have sparked sporadic unrest since December 2017.
On May 8, 2018, President Trump announced that the United States would no longer participate in the JCPOA and that all U.S. secondary sanctions would be reimposed after a maximum "wind-down period" of 180 days (ending November 4, 2018). With that time period expired, all U.S. sanctions, including those on energy or banking transactions with Iran, went back into effect on November 5, 2018.
The reimposition of U.S. sanctions has begun to harm Iran's economy as major companies exit the Iranian economy rather than risk being penalized by the United States. Iran's oil exports are decreasing and difficulties paying Iran for oil with hard currency are evident. The value of Iran's currency has sharply declined and economic-based unrest has continued, although not to the point where the regime is threatened. But it remains uncertain how extensively Iran's economy will be damaged, because the European Union and other countries are trying to keep the economic benefits of the JCPOA flowing to Iran in order to persuade Iran to remain in the JCPOA. And, on November 5, 2018, the Administration granted exceptions to eight countries that the Administration asserts significantly reduced oil imports from Iran. Exceptions were provided to China and India even though the two countries combined continued to import over 1 million barrels per day of Iranian crude oil in October, thwarting the Administration's goal of reducing Iranian oil exports "as close to zero as possible."
See also CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by [author name scrubbed] and [author name scrubbed]; and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by [author name scrubbed].
U.S. sanctions—and U.S. attempts to achieve imposition of multilateral and international sanctions on Iran—have been a significant component of U.S. Iran policy since Iran's 1979 Islamic
U.S. Laws and Executive Orders................................................................................................ 80
Contacts
Author Information........................................................................................................................ 94
Acknowledgments ......................................................................................................................... 95
Congressional Research Service
Iran Sanctions
Overview and Objectives
Sanctions have been a significant component of U.S. Iran policy since Iran’s 1979 Islamic
Revolution that toppled the Shah of Iran, a U.S. ally. In the 1980s and 1990s, U.S. sanctions were
intended to try to compel Iran to cease supporting acts of terrorism and to limit Iran'’s strategic
power in the Middle East more generally. After the mid-2000s, U.S. and international sanctions
focused largely on ensuring that Iran'’s nuclear program is for purely civilian uses. During 2010-201520102015, the international community cooperated closely with a U.S.-led and U.N.-authorized
sanctions regime in pursuit of the goal of persuading Iran to agree to limits to its nuclear program.
Still, sanctions against Iran have multiple objectives and address multiple perceived threats from
Iran simultaneously.
This report analyzes U.S. and international sanctions against Iran. CRS has no way to
independently corroborate whether any individual or other entity might be in violation of U.S. or
international sanctions against Iran. The report tracks "implementation"“implementation” of the various U.S. laws
and Executive Orders as designations and imposition of sanctions. Some sanctions require the
blocking of U.S.-based property of sanctioned entities. CRS has not obtained information from
the executive branch indicating that such property has been blocked, and it is possible that
sanctioned entities do not have any U.S. assets that could be blocked.
The sections below are grouped by function, in the chronological order in which these themes
have emerged.1
U.S. sanctions on Iran were first imposed during the U.S.-Iran hostage crisis of 1979-1981, in the
form of executive orders issued by President Jimmy Carter blocking nearly all Iranian assets held
in the United States. These included E.O. 12170 of November 14, 1979, blocking all Iranian
government property in the United States, and E.O 12205 (April 7, 1980) and E.O. 12211 (April
17, 1980) banning virtually all U.S. trade with Iran. The latter two Orders were issued just prior
to the failed April 24-25, 1980, U.S. effort to rescue the U.S. Embassy hostages held by Iran.
President Jimmy Carter also broke diplomatic relations with Iran on April 7, 1980. The trade-relatedtraderelated Orders (12205 and 12211) were revoked by Executive Order 12282 of January 19, 1981,
following the "“Algiers Accords"” that resolved the U.S.-Iran hostage crisis. Iranian assets still
frozen are analyzed below.
The Accords established a "“U.S.-Iran Claims Tribunal"” at the Hague that continues to arbitrate
cases resulting from the 1980 break in relations and freezing of some of Iran'’s assets. All of the
4,700 private U.S. claims against Iran were resolved in the first 20 years of the Tribunal, resulting
in $2.5 billion in awards to U.S. nationals and firms.
On November 13, 2012, the Administration published in the Federal Register (Volume 77, Number 219) “Policy
Guidance” explaining how it implements many of the sanctions, and in particular defining what products and chemicals
constitute “petroleum,” “petroleum products,” and “petrochemical products” that are used in the laws and executive
orders discussed below. See http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf.
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The major government-to-government cases involved Iranian claims for compensation for
hundreds of foreign military sales (FMS) cases that were halted in concert with the rift in U.S.-Iran relations when the Shah'’s government fell in 1979. In 1991, the George H. W. Bush
Administration paid $278 million from the Treasury Department Judgment Fund to settle FMS
cases involving weapons Iran had received but which were in the United States undergoing repair
and impounded when the Shah fell.
On January 17, 2016, the day after Implementation Day of the JCPOA, the United States
announced it had settled with Iran for FMS cases involving weaponry the Shah was paying for
(funds deposited into a DOD-managed "“Iran FMS Trust Fund"”) but that was not completed and
delivered to Iran when the Shah fell. The Trust Fund had a balance after 1990—the year $200
million was paid to Iran to settle some FMS cases—of about $400 million. Under the 2016
settlement, the United States sent Iran the $400 million balance in Trust Fund plus $1.3 billion in
accrued interest, paid from the Department of the Treasury's "’s “Judgment Fund."” In order not to
violate U.S. regulations barring direct U.S. dollar transfers to Iranian banks, the funds were
remitted to Iran in late January and early February 2016 in foreign hard currency from the central
banks of the Netherlands and of Switzerland. Some remaining claims involving the FMS program
with Iran remain under arbitration at the Tribunal.
Iranian assets in the United States are blocked under several provisions, including Executive
Order 13599 of February 2010. The United States did not commit to unblock any of these assets under the JCPOA. as a
consequence of the JCPOA.
About $1.9 billion in blocked Iranian assets are bonds belonging to Iran'’s Central
Bank, frozen in a Citibank account in New York belonging to Clearstream, a
Luxembourg-based securities firm, in 2008. The funds were blocked on the
grounds that Clearstream had improperly allowed those funds to access the U.S.
financial system. Another $1.67 billion in principal and interest payments on that
account were moved to Luxembourg and are not blocked.
About $50 million of Iran'’s assets frozen in the United States consists of Iranian
diplomatic property and accounts, including the former Iranian embassy in
Washington, DC, and 10 other properties in several states, along with related bank accounts.2
and related accounts.2
Among other frozen Iranian assets are real estate holdings of the Assa Company,
a UK-chartered entity, which allegedly was maintaining the interests of Iran's ’s
Bank Melli in a 36-story office building in New York City and several other
properties around the United States (in Texas, California, Virginia, Maryland, and
other parts of New York City). An Iranian foundation, the Alavi Foundation,
allegedly is an investor in the properties. The U.S. Attorney for the Southern
District of New York blocked these properties in 2009. The Department of the
Treasury report avoids valuing real estate holdings, but public sources assess
these blocked real estate assets at nearly $1 billion. In June 2017, litigation won
the U.S. government control over the New York City office building.
There are a total of about $46 billion in court awards that have been made to victims of Iranian
terrorism. These include the families of the 241 U.S. soldiers killed in the October 23, 1983,
2
http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf.
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bombing of the U.S. Marine barracks in Beirut. U.S. funds equivalent to the $400 million balance
in the DOD account (see above) have been used to pay a small portion of these judgments. The
Algiers Accords apparently precluded compensation for the 52 U.S. diplomats held hostage by
Iran from November 1979 until January 1981. The FY2016 Consolidated Appropriation (Section
404 of P.L. 114-113) set up a mechanism for paying damages to the U.S. embassy hostages and
other victims of state-sponsored terrorism using settlement payments paid by various banks for
concealing Iran-related transactions, and proceeds from other Iranian frozen assets.
In April 2016, the U.S. Supreme Court determined the Central Bank assets, discussed above ,
could be used to pay the terrorism judgments, and the proceeds from the sale of the frozen real
estate assets mentioned above will likely be distributed to victims of Iranian terrorism as well.3 3
On the other hand, in March 2018, the U.S. Supreme Court ruled that U.S. victims of an Iran-sponsoredIransponsored terrorist attack could not seize a collection of Persian antiquities on loan to a
University of Chicago museum to satisfy a court judgment against Iran. For further information, see CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by [author name scrubbed] and CRS Legal Sidebar LSB10104, It Belongs in a Museum: Sovereign Immunity Shields Iranian Antiquities Even When It Does Not Protect Iran, by [author name scrubbed].
Other past financial disputes include the mistaken U.S. shoot-down on July 3, 1988, of an Iranian
Airbus passenger jet (Iran Air flight 655), for which the United States paid Iran $61.8 million in
compensation ($300,000 per wage-earning victim, $150,000 per non-wage earner) for the 248
Iranians killed. The United States did not compensate Iran for the airplane itself, although
officials involved in the negotiations told CRS in November 2012 that the United States later
arranged to provide a substitute used aircraft to Iran.
Executive Order 13599, issued February 5, 2012, directs the blocking of U.S.-based assets of
entities determined to be "“owned or controlled by the Iranian government."” The order was issued
to implement Section 1245 of the FY2012 National Defense Authorization Act (P.L. 112-81) that
imposed secondary U.S. sanctions on Iran'’s Central Bank. The Order requires that any U.S.-based
assets of the Central Bank of Iran, or of any Iranian government-controlled entity, be blocked by
U.S. banks. The order goes beyond the regulations issued pursuant to the 1995 imposition of the
U.S. trade ban with Iran, in which U.S. banks are required to refuse such transactions but to return
funds to Iran. Even before the issuance of the Order, and in order to implement the ban on U.S.
trade with Iran (see below) successive Administrations had designated many entities as "“owned or
controlled by the Government of Iran."
”
Numerous designations have been made under Executive Order 13599, including the June 4,
2013, naming of 38 entities (mostly oil, petrochemical, and investment companies) that are
components of an Iranian entity called the "“Execution of Imam Khomeini'’s Order"” (EIKO).4 4
“U.S. Court Reverses Record Forfeiture Order over Iran Assets.” Associated Press. July 21, 2016.
http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication; and Department of Treasury announcement
of June 4, 2013.
3
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EIKO was characterized by the Department of the Treasury as an Iranian leadership entity that
controls "“massive off-the-books investments."
”
Implementation of the U.S. JCPOA Withdrawal.Withdrawal. To implement the JCPOA, many 13599-designated13599designated entities specified in the JCPOA (Attachment 3) were "delisted"“delisted” from U.S. secondary
sanctions (no longer considered "“Specially Designated Nationals,"” SDNs). The delisted entities
are presented in the tables at the end of the report. However, U.S. persons (or foreign entities
owned or controlled by a U.S. person) continued to be prohibited from conducting transactions
with these entities under Iran Transactions Regulations. The Treasury Department announced on
May 8, 2018, in concert with the U.S. withdrawal from the JCPOA, that the 13599-designatedalmost all of the 13599designated entities that were delisted as SDNs will be relisted as SDNs on November 5, 2018.5 5
On November 5, 2018, the Treasury Department published an updated list of SDNs in concert
with redesignating "delisted"“delisted” SDNs that were previously added to the designees blocked "solely “solely
pursuant to E.O 13599."6
Most of the hostage crisis-related sanctions were lifted upon resolution of the crisis in 1981. The
United States began imposing sanctions against Iran again in the mid-1980s for its support for
regional groups committing acts of terrorism. The Secretary of State designated Iran a "state “state
sponsor of terrorism"” on January 23, 1984, following the October 23, 1983, bombing of the U.S.
Marine barracks in Lebanon by elements that later established Lebanese Hezbollah. This
designation triggers substantial sanctions on any nation so designated.
None of the laws or Executive Orders in this section were waived or revoked to implement the
JCPOA. No entities discussed in this section were "delisted" from sanctions under the JCPOA.
The U.S. naming of Iran as a "“state sponsor of terrorism"”—commonly referred to as Iran's ’s
inclusion on the U.S. "“terrorism list"”—triggers several sanctions. The designation is made under
the authority of Section 6(j) of the Export Administration Act of 1979 (P.L. 96-72, as amended),
sanctioning countries determined to have provided repeated support for acts of international
terrorism. The sanctions triggered by Iran'’s state sponsor of terrorism designation are as follows:
The terrorism list designation, and other U.S. sanctions laws barring assistance to Iran, do not bar
U.S. disaster aid. The United States donated $125,000, through relief agencies, to help victims of
two earthquakes in Iran (February and May 1997); $350,000 worth of aid to the victims of a June
22, 2002, earthquake; and $5.7 million in assistance for victims of the December 2003 earthquake
in Bam, Iran, which killed as many as 40,000 people40,000. The U.S. military flew in 68,000 kilograms of supplies to Bam.
Requirements for Removal from Terrorism List
Terminating the sanctions triggered by Iran
If the country
If the |
Section 330 of the Anti-Terrorism and Effective Death Penalty Act (P.L. 104-132) added a
Section 40A to the Arms Export Control Act that prohibits the sale or licensing of U.S. defense
articles and services to any country designated (by each May 15) as "“not cooperating fully with
U.S. anti-terrorism efforts."” The President can waive the provision upon determination that a
defense sale to a designated country is "“important to the national interests"” of the United States.
Every May since the enactment of this law, Iran has been designated as a country that is "“not fully cooperating"
cooperating” with U.S. antiterrorism efforts. However, the effect of the designation is largely
mooted by the many other authorities that prohibit U.S. defense sales to Iran.
Executive Order 13324 (September 23, 2001) mandates the freezing of the U.S.-based assets of
and a ban on U.S. transactions with entities determined by the Administration to be supporting
international terrorism. This order was issued two weeks after the September 11, 2001, attacks on
the United States, under the authority of the IEEPA, the National Emergencies Act, the U.N.
Participation Act of 1945, and Section 301 of the U.S. Code, initially targeting Al Qaeda.
E.O. 13224 is not specific to Iran and does not explicitly target Iranian arms exports to
movements, governments, or groups in the Middle East region. However, successive
Administrations have used the Order—and the orders discussed immediately below—to sanction
such Iranian activity by designating persons or entities that are involved in the delivery or receipt
of such weapons shipments. Some persons and entities that have been sanctioned for such activity
have been cited for supporting groups such as the Afghan Taliban organization and the Houthi
rebels in Yemen, which are not named as terrorist groups by the United States.
)
Section 105 of CAATSA, signed on August 2, 2017, mandates the imposition of E.O. 13324
penalties on the Islamic Revolutionary Guard Corps (IRGC) and its officials, agents, and affiliates
by October 30, 2017 (90 days after enactment). The IRGC was named as a terrorism-supporting
entity under E.O 13224 within that deadline. The Treasury Department made the designation of
the IRGC as a terrorism-supporting entity under that E.O. on October 13, 2017.
Implementation
As noted, no entities designated under E.O. 13224 were delisted to implement the JCPOA.
Additional Iran-related entities have been designated under the Order since JCPOA
implementation, as shown in the table at the end of this report.
Some sanctions have been imposed with the specific objective of trying to curtail Iran's ’s
destabilizing influence in the region.
In 1995, the Clinton Administration expanded U.S. sanctions against Iran by issuing Executive
Order 12959 (May 6, 1995) banning U.S. trade with and investment in Iran. The order was issued
under the authority primarily of the International Emergency Economic Powers Act (IEEPA, 50
U.S.C. 1701 et seq.),78 which gives the President wide powers to regulate commerce with a foreign
country when a "”state of emergency"” is declared in relations with that country. E.O. 12959
superseded Executive Order 12957 (March 15, 1995) barring U.S. investment in Iran'’s energy
sector, which accompanied President Clinton'’s declaration of a "“state of emergency"” with respect
to Iran. Subsequently, E.O 13059 (August 19, 1997) added a prohibition on U.S. companies' ’
knowingly exporting goods to a third country for incorporation into products destined for Iran.
Each March since 1995, the U.S. Administration has renewed the "“state of emergency"” with
respect to Iran. IEEPA gives the President the authority to alter regulations to license transactions
with Iran—regulations enumerated in Section 560 of the Code of Federal Regulations (Iranian
Transactions Regulations, ITRs).
8
The executive order was issued not only under the authority of IEEPA but also the National Emergencies Act (50
U.S.C. 1601 et seq.; §505 of the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa9) and §301 of Title 3, United States Code.
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Section 103 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
(CISADA, P.L. 111-195) codified the trade ban and reinstated the full ban on imports that was
relaxed by April 2000 regulations that allowed importation into the United States of Iranian nuts,
fruit products (such as pomegranate juice), carpets, and caviar. U.S. imports from Iran after that
time were negligible.89 Section 101 of the Iran Freedom Support Act (P.L. 109-293) separately
codified the ban on U.S. investment in Iran, but gives the President the authority to terminate this
sanction if the President notifies Congress 15 days in advance (or three days in advance if there
are "“exigent circumstances").
In accordance with the JCPOA, the ITRs were relaxed to allow U.S. importation of the Iranian
luxury goods discussed above (carpets, caviar, nuts, etc.), but not to permit general U.S.-Iran
trade. U.S. regulations were also altered to permit the sale of commercial aircraft to Iranian
airlines that are not designated for sanctions. The modifications were made in the Departments of
State and of the Treasury guidance issued on Implementation Day and since.910 In concert with the
May 8, 2018, U.S. withdrawal from the JCPOA, the easing of the regulations to allow for
importation of Iranian carpets and other luxury goods was reversed on August 6, 2018.
The following provisions apply to the U.S. trade ban on Iran as specified in regulations (Iran
Transaction Regulations, ITRs) written pursuant to the executive orders and laws discussed above
and enumerated in regulations administered by the Office of Foreign Assets Control (OFAC) of
the Department of the Treasury.
13
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20161222.aspx?platform=hootsuite.
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf.
15 The information in this bullet is taken from Jo Becker, “With U.S. Leave, Companies Skirt Iran Sanctions,” New
York Times, December 24, 2010.
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Application to Foreign Subsidiaries of U.S. Firms
The ITRs do not ban subsidiaries of U.S. firms from dealing with Iran, as long as the subsidiary is not "controlled"
not “controlled” by the parent company. Most foreign subsidiaries are legally considered foreign
persons subject to the laws of the country in which the subsidiaries are incorporated. Section 218
of the Iran Threat Reduction and Syrian Human Rights Act (ITRSHRA, P.L. 112-158) holds "controlled"
“controlled” foreign subsidiaries of U.S. companies to the same standards as U.S. parent firms,
defining a controlled subsidiary as (1) one that is more than 50% owned by the U.S. parent; (2)
one in which the parent firm holds a majority on the Board of Directors of the subsidiary; or (3)
one in which the parent firm directs the operations of the subsidiary. No waiver is specifically
provided under Section 218.
JCPOA Regulations
JCPOA Regulations and Reversal. To implement the JCPOA, the United States has licensed "controlled"
“controlled” foreign subsidiaries to conduct transactions with Iran that are permissible under
JCPOA (almost all forms of civilian trade). The Administration asserts that the President has
authority under IEEPA to license transactions with Iran, the ITRSHRA notwithstanding. This was
implemented with the Treasury Department'’s issuance of "“General License H: Authorizing
Certain Transactions Relating to Foreign Entities Owned or Controlled by a United States
Person."15”16 This licensing policy will revert to pre-JCPOA status as of November 5, 2018.
|
In 1996, Congress and the executive branch began a long process of pressuring Iran'’s vital energy
sector in order to deny Iran the financial resources to support terrorist organizations and other
armed factions or to further its nuclear and WMD programs. Iran'’s oil sector is as old as the
petroleum industry itself (early 20th20th century), and Iran'’s onshore oil fields are in need of
substantial investment. Iran has 136.3 billion barrels of proven oil reserves, the third largest after
Saudi Arabia and Canada. Iran has large natural gas resources (940 trillion cubic feet, exceeded
only by Russia), but Iran'’s gas export sector remains small but is expanding—most of Iran'’s gas
is injected into its oil fields to boost their production. The energy sector still generates about 20%
of Iran'’s GDP and as much as 30% of government revenue.
The Iran Sanctions Act (ISA) has been a pivotal component of U.S. sanctions against Iran's ’s
energy sector. Since its enactment in 1996, ISA'’s provisions have been expanded and extended to
other Iranian industries. ISA sought to thwart Iran'’s 1995 opening of the sector to foreign
investment in late 1995 through a "“buy-back"” program in which foreign firms gradually recoup
their investments as oil and gas is produced. It was first enacted as The Iran and Libya Sanctions
Act (ILSA, (P.L. 104-172, signed on August 5, 1996) but was later retitled the Iran Sanctions Act
after it terminated with respect to Libya in 2006. ISA was the first major "“extra-territorial sanction"
sanction” on Iran—a sanction that authorizes U.S. penalties against third country firms.
ISA consists of a number of "triggers"“triggers”—transactions with Iran that would be considered
violations of ISA and could cause a firm or entity to be sanctioned under ISA'’s provisions. The
triggers, as added by amendments over time, are detailed below:
The core trigger of ISA when first enacted was a requirement that the President sanction
companies (entities, persons) that make an "investment"16“investment”17 of more than $20 million17million18 in one year
in Iran'’s energy sector.1819 The definition of "investment"“investment” in ISA (§14 [9]) includes not only equity
and royalty arrangements but any contract that includes "“responsibility for the development of
petroleum resources"” of Iran. The definition includes additions to existing investment (added by
P.L. 107-24) and pipelines to or through Iran and contracts to lead the construction, upgrading, or
expansions of energy projects (added by CISADA).
This provision of ISA was not waived under the JCPOA.
.
The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added Section 5(b)(1)
of ISA, subjecting to ISA sanctions firms or persons determined to have sold to Iran (1) "
“chemical, biological, or nuclear weapons or related technologies"” or (2) "“destabilizing numbers
and types"” of advanced conventional weapons. Sanctions can be applied if the exporter knew (or
had cause to know) that the end-user of the item was Iran. The definitions do not specifically
include ballistic or cruise missiles, but those weapons could be considered "“related technologies" ”
or, potentially, a "“destabilizing number and type"” of advanced conventional weapon.
17
As amended by CISADA (P.L. 111-195), these definitions include pipelines to or through Iran, as well as contracts
to lead the construction, upgrading, or expansions of energy projects. CISADA also changes the definition of
investment to eliminate the exemption from sanctions for sales of energy-related equipment to Iran, if such sales are
structured as investments or ongoing profit-earning ventures.
18 Under §4(d) of the original act, for Iran, the threshold dropped to $20 million, from $40 million, one year after
enactment, when U.S. allies did not join a multilateral sanctions regime against Iran. P.L. 111-195 explicitly sets the
threshold investment level at $20 million. For Libya, the threshold was $40 million, and transactions subject to
sanctions included export to Libya of technology banned by Pan Am 103-related Security Council Resolutions 748
(March 31, 1992) and 883 (November 11, 1993).
19 The original ISA definition of energy sector included oil and natural gas, and CISADA added to that definition
liquefied natural gas (LNG), oil or LNG tankers, and products to make or transport pipelines that transport oil or LNG.
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The Iran Threat Reduction and Syria Human Rights Act (ITRSHRA, P.L. 112-158, signed August
10, 2012) created Section 5(b)(2) of ISA subjecting to sanctions entities determined by the
Administration to participate in a joint venture with Iran relating to the mining, production, or
transportation of uranium.
Implementation: No ISA sanctions have been imposed on any entities under these provisions.
Section 102(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
(CISADA, P.L. 111-195, signed July 1, 2010) amended Section 5 of ISA to exploit Iran's ’s
dependency on imported gasoline (40% dependency at that time). It followed enacted legislation
such as P.L. 111-85 that prohibited the use of U.S. funds to fill the Strategic Petroleum Reserve
with products from firms that sell gasoline to Iran; and P.L. 111-117 that denies Ex-Im Bank
credits to any firm that sold gasoline or related equipment to Iran. The section subjects the
following to sanctions:
Petrochemicals Production
Section 201 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHA, P.L.
112-158, signed August 10, 2012) codified an Executive Order, 13590 (November 21, 2011), by
adding Section 5(a)(5 and 6) to ISA sanctioning firms that
Section 201 of the ITRSHRA amends ISA by sanctioning entities the Administration determines
Separate provisions of the ITRSHR Act—which do not amend ISA——require the application of
ISA sanctions (the same 5 out of 12 sanctions as required in ISA itself) on any entity that
Implementation
Implementation. Section 312 of ITRSHRA required an Administration determination, within 45
days of enactment (by September 24, 2012) whether NIOC and NITC are IRGC agents or
affiliates. Such a determination would subject financial transactions with NIOC and NITC to
sanctions under CISADA (prohibition on opening U.S.-based accounts). On September 24, 2012,
the Department of the Treasury determined that NIOC and NITC are affiliates of the IRGC. On
November 8, 2012, the Department of the Treasury named NIOC as a proliferation entity under
Executive Order 13382—a designation that, in accordance with Section 104 of CISADA, bars
any foreign bank determined to have dealt directly with NIOC (including with a NIOC bank
account in a foreign country) from opening or maintaining a U.S.-based account.
Sanctions on dealings with NIOC and NITC were waived in accordance with the interim nuclear
deal and the JCPOA, and designations of these entities under Executive Order 13382 were
rescinded in accordance with the JCPOA. These entities will again be designated on November 5,
2018. Some NIOC partners were not sanctioned, including the Iranian Offshore Oil Company; the
National Iranian Gas Export Co.; and Petroleum Engineering and Development Co. Several
independent Iranian energy firms were not sanctioned, including Pasargad Oil Co., Zagros
Petrochem Co., Sazeh Consultants, Qeshm Energy, and Sadid Industrial Group. Their relations
with NIOC or the IRGC are unclear.
Status: Revoked
Status: Revoked (by E.O. 13716) but will back into effect as stipulated below
Executive Order 13622 (July 30, 2012) imposes specified sanctions on the ISA sanctions menu,
and bars banks from the U.S. financial system, for the following activities (EE.O. 13622 diddid not
amend ISA itself):
E.O. 13622 sanctions do not apply if the parent country of the entity has received an exemption
under Section 1245 of P.L. 112-81, discussed below. An exemption also is provided for projects
that bring gas from Azerbaijan to Europe and Turkey, if such project was initiated prior to the
issuance of the Order.
JCPOA Status: RevokedRevoked (by E.O 13716)) but most provisions below went back into effect as of
August 6, 2018 (90-day wind-down period).
Executive Order 13645 of June 3, 2013 (effective July 1, 2013), contains the provisions below.
(E.O. 13645 did not amend ISA itself.)
In the original version of ISA, there was no firm requirement, and no time limit, for the
Administration to investigate potential violations and determine that a firm has violated ISA's ’s
provisions. The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added a
provision calling for, but not requiring, a 180-day time limit for a violation determination.21 22
CISADA (Section 102[g][5]) mandated that the Administration begin an investigation of potential
ISA violations when there is "“credible information"” about a potential violation, and made
mandatory the 180-day time limit for a determination of violation.
The Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) defines the "credible information"“credible
information” needed to begin an investigation of a violation to include a corporate announcement
or corporate filing to its shareholders that it has undertaken transactions with Iran that are
potentially sanctionable under ISA. It also says the President maymay (not mandatory) use as credible
information reports from the Government Accountability Office and the Congressional Research
Service. In addition, Section 219 of ITRSHRA requires that an investigation of an ISA violation
begin if a company reports in its filings to the Securities and Exchange Commission (SEC) that it
has knowingly engaged in activities that would violate ISA (or Section 104 of CISADA or
transactions with entities designated under E.O 13224 or 13382, see below).
22
Other ISA amendments under that law included recommending against U.S. nuclear agreements with countries that
supply nuclear technology to Iran and expanding provisions of the USA Patriot Act (P.L. 107-56) to curb moneylaundering for use to further WMD programs.
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Available Sanctions Under ISA
Once a firm is determined to be a violator, the original version of ISA required the imposition of
1. denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the sanctioned entity 2. denial of licenses for the U.S. export of military or militarily useful technology to the entity (original ISA) 3. denial of U.S. bank loans exceeding $10 million in one year to the entity (original ISA)
4. if the entity is a financial institution, a prohibition on its service as a primary dealer in U.S. government bonds;
5. prohibition on U.S. government procurement from the entity (original ISA) 6. prohibitions in transactions in foreign exchange by the entity (added by CISADA) 7. prohibition on any credit or payments between the entity and any U.S. financial institution (added by CISADA)
8. prohibition of the sanctioned entity from acquiring, holding, using, or trading any U.S.-based property which the
9. restriction on imports from the sanctioned entity, in accordance with the International Emergency Economic
10. a ban on a U.S. person from investing in or purchasing significant amounts of equity or debt instruments of a
11. exclusion from the United States of corporate officers or controlling shareholders of a sanctioned firm (added
12. imposition of any of the ISA sanctions on principal offices of a sanctioned firm (added by ITRSHRA).
Mandatory Sanction: Prohibition on Contracts with the U.S. Government CISADA (§102[b]) added a requirement
Executive Order 13574 of May 23, 2011 |
Oversight
Several mechanisms for Congress to oversee whether the Administration is investigating ISA
violations were added by ITRSHRA. Section 223 of that law required a Government
Accountability Office report, within 120 days of enactment, and another such report a year later,
on companies that have undertaken specified activities with Iran that might constitute violations
of ISA. Section 224 amended a reporting requirement in Section 110(b) of CISADA by requiring
an Administration report to Congress every 180 days on investment in Iran'’s energy sector, joint
ventures with Iran, and estimates of Iran'’s imports and exports of petroleum products. The GAO
reports have been issued; there is no information available on whether the required
Administration reports have been issued as well.
The sections below provide information on how some key ISA provisions have been interpreted
and implemented.
ISA'
ISA’s definition of "investment"“investment” that is subject to sanctions has been consistently interpreted by
successive Administrations to include construction of energy pipelines to or through Iran. Such
pipelines are deemed to help Iran develop its petroleum (oil and natural gas) sector. This
interpretation was reinforced by amendments to ISA in CISADA, which specifically included in
the definition of petroleum resources "“products used to construct or maintain pipelines used to
transport oil or liquefied natural gas."” In March 2012, then-Secretary of State Clinton made clear
that the Obama Administration interprets the provision to be applicable from the beginning of
pipeline construction.22
The original version of ISA did not provide for sanctioning purchases of crude oil from Iran.
However, subsequent laws and executive orders took that step.
The Iran Freedom and Counterproliferation Act (IFCA, discussed below) authorized sanctions on
transactions with Iran'’s energy sector, but specifically excluded specifically excluded from sanctions purchases of
natural gas from Iran. But construction of gas pipelines involving Iran is subject to sanctions.
The effective dates of U.S. sanctions laws and Orders exclude long-standing joint natural gas
projects that involve some Iranian firms—particularly the Shah Deniz natural gas field and
related pipelines in the Caspian Sea. These projects involve a consortium in which Iran'’s Naftiran
Intertrade Company (NICO) holds a passive 10% share, and includes BP, Azerbaijan'’s natural gas
firm SOCAR, Russia'’s Lukoil, and other firms. NICO was sanctioned under ISA and other
provisions (until JCPOA Implementation Day), but an OFAC factsheet of November 28, 2012,
stated that the Shah Deniz consortium, as a whole, is not determined to be "“a person owned or
controlled by"” the government of Iran (as defined in Executive Order 13599) and that transactions
with the consortium were permissible.
The original version of ISA did not apply to the development by Iran of a liquefied natural gas
(LNG) export capability. Iran has no LNG export terminals, in part because the technology for
such terminals is patented by U.S. firms and unavailable for sale to Iran. CISADA specifically
included LNG in the ISA definition of petroleum resources and therefore made subject to
sanctions LNG investment in Iran or supply of LNG tankers or pipelines to Iran.
The definitions of investment and other activity that can be sanctioned under ISA include
financing for investment in Iran'’s energy sector, or for sales of gasoline and refinery-related
equipment and services. Therefore, banks and other financial institutions that assist energy
investment and refining and gasoline procurement activities could be sanctioned under ISA.
However, the definitions of financial institutions are interpreted not to apply to official credit
guarantee agencies—such as France'’s COFACE and Germany'’s Hermes. These credit guarantee
agencies are arms of their parent governments, and ISA does not provide for sanctioning
governments or their agencies.
Entities sanctioned under the Executive Orders or laws cited in this section are listed in the tables
at the end of this report. As noted, some of the Orders cited provide for blocking U.S.-based
assets of the entities designated for sanctions. OFAC has not announced the blocking of any U.S.-based property of the sanctioned entities, likely indicating that those entities sanctioned do not
have a presence in the United States.
Congressional Research Service RS20871 · VERSION 284 · UPDATED 19 Iran Sanctions ISA Waiver, Exemptions, and Sunset Provisions
The President can waive ISA sanctions in several ways—general, country-specific, or company-specific.
General Waiver. Under Section 4(c)(1)(a), the President can waive (for six months at a time) the requirement to Country-Specific Waiver. Under Section 4(c)(1)(B), the President can waive ISA sanctions (for 12 months at a time)
Company-Specific Waiver. Under Section 9(c), the President can waive ISA sanctions (for one year at a time) on any
Once ISA snaps back into effect, some governments reportedly might seek the country-specific or country-specific
ISA (§5[f]) also contains several exceptions such that the President is not required to impose sanctions that
Under a provision added by CISADA (§102[g][5]), ISA provides a means—a so-called Administration Termination Process and Requirements
The Administration can immediately terminate all ISA provisions if the Administration certifies that Iran:
(1) has ceased its efforts to acquire WMD; (2) has been removed from the U.S. list of state sponsors of terrorism; 24
This termination provision, and the sunset provision discussed below Sunset (Automatic Termination) Provisions
Sunset and Other Expiration Provisions
ISA was scheduled to sunset on December 31, 2016, as provided for by CISADA. This followed prior sunset |
In 2011, Congress sought to reduce Iran'’s exportation of oil by imposing sanctions on the
mechanisms that importers use to pay Iran for oil. The Obama Administration asserted that such
legislation could lead to a rise in oil prices and harm U.S. relations with Iran'’s oil customers, and
President Obama, in his signing statement on the bill, indicated he would implement the provision
so as not to damage U.S. relations with partner countries.
The law imposed penalties on transactions with Iran'’s Central Bank. Section 1245 of the FY2012
National Defense Authorization Act (NDAA, P.L. 112-81, signed on December 31, 2011):
Implementation
The EU embargo on purchases of Iranian oil, which took full effect by July 1, 2012, helped all
EU oil customers of Iran obtain the SRE (sanctions exception). The table below on major Iranian
oil customers indicates cuts made by major customers compared to 2011.
The January 2016 waivers issued to implement the JCPOA suspended the requirement for a
country to cut oil purchases from Iran in order to maintain their exceptions, and Iran'’s historic oil
customers quickly resumed buying Iranian oil. The provision went back into effect on November
5, 2018, and countries were required to have cut their oil purchases since May 2018 in order to
requalify for an exception.2526 On June 26, 2018, a senior State Department official, in a
background briefing, stated that department officials, in meetings with officials of countries that
import Iranian oil, were urging these countries to cease buying Iranian oil entirely by November
4, 2018.2627 However, Administration officials later indicated that requests for exceptions will be
evaluated on a case-by-case basis, taking into account the ease of substituting for Iranian oil,
country-specific needs, and the need for global oil market stability.
Department of State. Background Briefing on President Trump’s Decision to Withdraw from the JCPOA. May 8,
2018.
27 Department of State. “Senior State Department Official on U.S. Efforts to Discuss the Reimposition of Sanctions on
Iran with Partners Around the World.” June 26, 2018.
26
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Waiver and Termination Provisions
The law provides for the President to waive the sanctions for 120 days, renewable for successive 120-day periods,
This provision was waived to implement the JPA (to allow Iran Waivers to Implement the JCPOA
The provision (Section 1245(d)(5)) was waived on January 18, 2017, just before the Obama Administration left office. |
The ability of Iran to repatriate hard currency—U.S. dollars are the primary form of payment for
oil—to its Central Bank was impeded by a provision of the ITRSHRA which went into effect on
February 6, 2013 (180 days after enactment). Section 504 of the ITRSHRA amended Section
1245 of the FY2012 NDAA (adding "“clause ii"” to Paragraph D[1]) by requiring that any funds
paid to Iran as a result of exempted transactions (oil purchases, for example) be credited to an
account located in the country with primary jurisdiction over the foreign bank making the
transaction.
This provision essentially prevents Iran from repatriating to its Central Bank any hard currency
Iran held in foreign banks around the world. Most of Iran'’s funds held abroad are in banks located
in Iran'’s main oil customers. The provision largely compels Iran to buy the products of the oil
customer countries. Some press reports refer to this arrangement as an "“escrow account,"” but
State Department officials describe the arrangement as "restricted" accounts.
“restricted” accounts.
Waiver for Bank Account Restriction
The waiver provision that applies to the sanctions imposed under the FY2012 NDAA (P.L. 112-81) applies to this
To implement the JPA, a waiver was issued under P.L. 112-81 (Section 212 and 213) to allow Iran to receive some Waivers to Implement the JCPOA
Sections 212(d)(10 and 2134(b)(1) of ITRSHRA |
|
Country/Bloc |
2011 Average |
JPA period average (2014-2016) |
|
November 2018 |
|
European Union (particularly Italy, Spain, Greece) |
600,000 |
Negligible |
520,000 + |
0 |
|
China |
550,000 |
410,000 |
700,000 |
600,000 |
|
Japan |
325,000 |
190,000 |
133,000 |
0 |
|
India |
320,000 |
190,000 |
620,000 |
200,000 |
|
South Korea |
230,000 |
130,000 |
100,000 |
0 |
|
Turkey |
200,000 |
120,000 |
200,000 |
0 |
|
South Africa |
80,000 |
negligible |
negligible |
0 |
|
90,000 |
negligible |
negligible |
0 |
|
Taiwan |
35,000 |
10,000 |
67,000 |
0 |
|
Singapore |
20,000 |
negligible |
negligible |
0 |
|
Syria |
negligible |
negligible |
33,000 |
0 |
|
Other (UAE, Iraq swaps, unknown) |
55,000 |
negligible |
100,000 |
201,000 |
|
Total (mbd) |
2.5 |
1.06 |
2.45 |
1.0 |
Sourceswaps, unknown)
Total (mbd)
520,000 +
0
201,000
2.45
1.0
Source and Note: and Note: Bloomberg News and other press articles on Iran oil customer purchase volumes. Initial
information on actual Iranian exports is often preliminary, incomplete, and inaccurate, and this table therefore
contains figures from at least one month prior. Figures might not reflect actual deliveries due to reported
activities by Iran and various oil customers to conceal purchases or avoid tracking of oil tankers. Figures do not
include purchases of condensates, which are light petroleum liquids that are associated with oil and natural gas
production. South Korea is a large customer for Iranian condensates, and as of August 2018 it had cut its
purchases of that product from Iran to zero.
Several laws and executive orders seek to bar Iran from obtaining U.S. or other technology that
can be used for weapons of mass destruction (WMD) programs. Sanctions on Iran'’s exportation
of arms are discussed in the sections above on sanctions for Iran'’s support for terrorist groups.
The Iran-Iraq Arms Nonproliferation Act (Title XIV of the FY1993 National Defense
Authorization Act, P.L. 102-484, signed in October 1992) imposes a number of sanctions on
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Iran Sanctions
foreign entities that supply Iran with WMD technology or "“destabilizing numbers and types of
advanced conventional weapons."27 ”28 Advanced conventional weapons are defined as follows:
(1) such long-range precision-guided munitions, fuel air explosives, cruise missiles, low
observability aircraft, other radar evading aircraft, advanced military aircraft, military satellites,
electromagnetic weapons, and laser weapons as the President determines destabilize the military
balance or enhance the offensive capabilities in destabilizing ways;
(2) such advanced command, control, and communications systems, electronic warfare systems,
or intelligence collections systems as the President determines destabilize the military balance or
enhance offensive capabilities in destabilizing ways; and
(3) such other items or systems as the President may, by regulation, determine necessary for the
purposes of this title.
The definition is generally understood to include technology used to develop ballistic missiles.
Sanctions to be Imposed: Sanctions imposed on violating entities include
If the violator is determined to be a foreign country, sanctions to be imposed are
Section 1603 of the act amended an earlier law, the Iraq Sanctions Act of 1990 (Section 586G(a)
of P.L. 101-513), to provide for a "“presumption of denial"” for all dual use exports to Iran
(including computer software).
Implementation
A number of entities were sanctioned under the act in the 1990s, as shown in the tables at the end
of this paper. None of the designations remain active, because the sanctions have limited duration.
Waiver
Waiver
Section 1606 of the act provides a presidential waiver for the provisions of the act, and for those imposed |
Another law reinforces the authority of the President to sanction governments that provide aid or
sell arms to Iran (and other terrorism list countries). Under Sections 620G and 620H of the
Foreign Assistance Act, as added by the Anti-Terrorism and Effective Death Penalty Act of 1996
(Sections 325 and 326 of P.L. 104-132), the President is required to withhold foreign aid from any
country that provides to a terrorism list country financial assistance or arms. Waiver authority is
provided. Section 321 of that act also makes it a criminal offense for U.S. persons to conduct
financial transactions with terrorism list governments.
No foreign assistance cuts or other penalties under this law have been announced.
As noted above, Section 5(b)(1) of ISA subjects to ISA sanctions firms or persons determined to
have sold to Iran (1) technology useful for weapons of mass destruction (WMD) or (2) "
“destabilizing numbers and types"” of advanced conventional weapons. ThisThis, and Section 5(b)(2)
pertaining to joint ventures to mine uranium, are the only provisions of ISA that werewere not waived
to implement the JCPOA.
As noted earlier, no sanctions under this section of ISA have been imposed.
The Iran Nonproliferation Act (P.L. 106-178, signed in March 2000) is now called the Iran-North
Korea-Syria Nonproliferation Act (INKSNA) after amendments applying its provisions to North
Korea and to Syria. It authorizes sanctions—for two years unless renewed—on foreign persons persons
(individuals or corporations, not governments) that are determined in a report by the
Administration to have assisted Iran'’s WMD programs. Sanctions imposed include (1) a
prohibition on U.S. exportation of arms and dual use items to the sanctioned entity; and (2) a ban
on U.S. government procurement and of imports to the United States from the sanctioned entity
under Executive Order 12938 (of November 14, 1994). INKSNA also banned U.S. extraordinary
payments to the Russian Aviation and Space Agency in connection with the international space
station unless the President certified that the agency had not transferred any WMD or missile
technology to Iran within the year prior.28
29
Implementation
Entities that have been sanctioned under this law are listed in the tables at the end of the report.
Designations more than two years old are no longer active. The JCPOA required the United States
to suspend INKSNA sanctions against "“the acquisition of nuclear-related commodities and
services for nuclear activities contemplated in the JCPOA,"” but no entities were "delisted" to “delisted” to
implement the JCPOA.
29
The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit
U.S. access to the international space station after April 2006, when Russia started charging the United States for
transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision
in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria.
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Iran Sanctions
Waiver and Termination
Section 4 gives the President the authority to not impose sanctions if the President justifies that decision to
Termination of this law would require congressional action. |
“Delisted”
Executive Order 13382 (June 28, 2005) allows the President to block the assets of proliferators of
weapons of mass destruction (WMD) and their supporters under the authority granted by the
International Emergency Economic Powers Act (IEEPA; 50 U.S.C. 1701 et seq.), the National
Emergencies Act (50 U.S.C. 1601 et seq.), and Section 301 of Title 3, United States Code.
.
Implementation. The numerous entities sanctioned under the order for dealings with Iran are
listed in the tables at the end of this report. Entities delisted and which were to be delisted in
accordance with the JCPOA (in October 2023) are in italics and boldface type, respectively. All
entities delisted to implement the JCPOA are to be relisted on November 5, 2018, according to
the Treasury Department.
)
The CAATSA law, signed on August 2, 2017, mandates sanctions on arms sales to Iran and on
entities that "“materially contribute"” to Iran'’s ballistic missile program.
Congressional Research Service RS20871 · VERSION 284 · UPDATED 27 Iran Sanctions Sanctions on the Islamic Revolutionary Guard Corps (IRGC)
Numerous sanctions discussed in this report target Iran
No IRGC-related laws or executive orders were waived or suspended to implement the JCPOA and no IRGC affiliates were |
Some past foreign aid appropriations have withheld U.S. assistance to the Russian Federation
unless it terminates technical assistance to Iran'’s nuclear and ballistic missiles programs. The
provision applied to the fiscal year for which foreign aid is appropriated. Because U.S. aid to
Russia generally has not gone to the Russian government, little or no funding was withheld as a
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Iran Sanctions
result of the provision. The JCPOA makes no reference to any U.S. commitments to waive this
sanction or to request that Congress not enact such a provision.
”
Title III of CISADA established authorities to sanction countries that allow U.S. technology that
Iran could use in its nuclear and WMD programs to be reexported or diverted to Iran. Section 303
of CISADA authorizes the President to designate a country as a "“Destination of Diversion Concern"
Concern” if that country allows substantial diversion of goods, services, or technologies
characterized in Section 302 of that law to Iranian end-users or Iranian intermediaries. The
technologies specified include any goods that could contribute to Iran'’s nuclear or WMD
programs, as well as goods listed on various U.S. controlled-technology lists such as the
Commerce Control List or Munitions List. For any country designated as a country of diversion
concern, there would be prohibition of denial for licenses of U.S. exports to that country of the
goods that were being reexported or diverted to Iran.
Implementation
Implementation: To date, no country has been designated a "“Country of Diversion Concern." ”
Some countries adopted or enforced antiproliferation laws apparently to avoid designation.
Waiver and Termination
Waiver: The President may waive sanctions on countries designated as of Diversion Concern for 12 months, and
re-exports.
Termination: The designation terminates on the date the President certifies to Congress that the country has |
U.S. efforts to shut Iran out of the international banking system were a key component of the
2010-2016 international sanctions regime.
During 2006-2016, the Department of the Treasury used longstanding authorities to persuade
foreign banks to cease dealing with Iran, in part by briefing them on Iran'’s use of the international
financial system to fund terrorist groups and acquire weapons-related technology. According to a
GAO report of February 2013, the Department of the Treasury made overtures to 145 banks in 60
countries, including several visits to banks and officials in the UAE, and convinced at least 80
foreign banks to cease handling financial transactions with Iranian banks. Upon implementation
of the JCPOA, the Treasury Department largely dropped this initiative, and instead largely sought
to encourage foreign banks to conduct normal transactions with Iran.
U.S. regulations ban Iran from direct access to the U.S. financial system. The ITRs (C.F.R. Section 560.516) allow U.S. banks to send funds (including U.S. dollars) to Iran for
allowed (licensed) transactions. However, the U.S. dollars cannot be directly transferred to an
Iranian bank, but must instead be channeled through an intermediary financial institution, such as
a European bank. Section 560.510 specifically allows for U.S. payments to Iran to settle or pay
judgments to Iran, such as those reached in connection with the U.S.-Iran Claims Tribunal,
discussed above. However, the prohibition on dealing directly with Iranian banks still applies.
Ban on U-Turn Transactions. There is no blanket ban on foreign banks or persons paying Iran for goods using U.S. dollars. However: on November 6, 2008, the Department of the Treasury barred
On November 6, 2008, the Department of the Treasury broadened restrictions on Iran’s access to
the U.S. financial system by barring U.S. banks from handling any transactions with foreign
banks that are handling transactions on behalf of an Iranian bank ("“U-turn transactions").29”).30 This
means a foreign bank or person that pays Iran for goods in U.S. dollars cannot access the U.S.
financial system (through a U.S. correspondent account, which most foreign banks have) to
acquire dollars for any transaction involving Iran. This ban remained in effect under the JCPOA
implementation, and Iran argued that these U.S. restrictions deter European and other banks from
reentering the Iran market, as discussed later in this report.
Recent Developments
Then-Treasury Secretary Lew in March and April 2016 suggested the Obama Administration was
considering licensing transactions by foreign (non-Iranian) clearinghouses to acquire dollars that
might facilitate transactions with Iran, without providing Iran with dollars directly.3031 However,
doing so was not required by the JCPOA and the Administration declined to take that step.
Instead, the Obama Administration encouraged bankers to reenter the Iran market without fear of
being sanctioned. The Trump Administration has not, at any time, expressed support for allowing
Iran greater access to dollars, and the. The reimposition of U.S. sanctions has further reduced the
willingness and ability of foreign firms to use dollars in transactions with Iran.
Punishments/Fines Implemented against Some Banks.
The Department of the Treasury and other U.S. authorities has announced financial settlements
(forfeiture of assets and imposition of fines) with various banks that have helped Iran (and other
countries such as Sudan, Syria, and Cuba) access the U.S. financial system. The settlement dollar
amounts were reportedly determined, at least in part, by the dollar value, number, and duration of
illicit transactions conducted, and the strength of the evidence collected by the accusing U.S.
regulators,3132 but is not known from published sources how final settlement amounts compare to
the amounts sought by U.S. regulators. (As noted above, the FY2016 Consolidated Appropriation (
30
For text of the OFAC ruling barring U-Turn transactions, see https://www.treasury.gov/resource-center/sanctions/
Documents/fr73_66541.pdf.
31 See Katherine Bauer. “Potential U.S. Clarification of Financial Sanctions Regulations.” April 5, 2016.
http://www.washingtoninstitute.org/policy-analysis/view/potential-u.s.-clarification-of-financial-sanctions-regulations.
32 Analyst conversations with U.S. banking and sanctions experts. 2010-2015.
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Iran Sanctions
(P.L. 114-113) provides for use of the proceeds of the settlements above to pay compensation to
victims of Iranian terrorism.)
(1) In 2004, UBS paid a $100 million settlement for the unauthorized movement of U.S. dollars
to Iran and other sanctioned countries; (2) in December 2005, Dutch bank ABN Amro paid an
$80 million settlement for failing to fully report the processing of financial transactions involving Iran'
Iran’s Bank Melli; (3) in December 2009, Credit Suisse paid a $536 million settlement for illicitly
processing Iranian transactions with U.S. banks;3233 (4) in June 2012, Dutch bank ING paid a $619
million settlement for concealing the movement of billions of dollars through the U.S. financial
system on behalf of Iranian and Cuban clients;3334 (5) in August 2012, Standard Chartered paid a
$340 million settlement to New York State regulators for allegations that it had processed
transactions on behalf of Iran;3435 (6) in January 2014, Luxembourg-based Clearstream Banking
paid $152 million for helping Iran evade U.S. banking restrictions; (7) in January 2014, the Bank
of Moscow paid a $9.5 million settlement for illicitly allowing Bank Melli to access the U.S.
financial system;3536 and (8) in June 2014, BNP Paribas pled guilty to helping Iran (and Sudan and
Cuba) violate U.S. sanctions and forfeited $8.9 billion and paid $140 million in fines.36
Section 104 of CISADA requires the Secretary of the Treasury to forbid U.S. banks from opening
new "“correspondent accounts"” or "“payable-through accounts"” (or force the cancellation of
existing such accounts) for37
One additional intent of the provision was to reduce the ability of Iran'’s pivotal import-export
community (referred to in Iran as the "“bazaar merchants"” or “bazaaris” or "bazaaris") from obtaining "letters “letters
of credit"” (trade financing) to buy or sell goods. The Department of the Treasury has authority to
determine what constitutes a "significant"“significant” financial transaction.
Waiver and Termination
Under Section 401(a) of CISADA, the Section 104 sanctions provisions would terminate 30 days after the
The Secretary of the Treasury may waive sanctions under Section 104, with the waiver taking effect 30 days after
As noted, Section 104 was not waived to implement the JCPOA, but many entities with which transactions would |
On July 31, 2012, the United States sanctioned the Bank of Kunlun in China and the Elaf Islamic
Bank in Iraq under Section 104 of CISADA. On May 17, 2013, the Department of the Treasury
lifted sanctions on Elaf Islamic Bank in Iraq, asserting that the bank had reduced its exposure to
the Iranian financial sector and stopped providing services to the Export Development Bank of
Iran.
On November 21, 2011, the Obama Administration identified Iran as a "“jurisdiction of primary
money laundering concern"38”39 under Section 311 of the USA Patriot Act (31 U.S.C. 5318A), based
on a determination that Iran'’s financial system, including the Central Bank, constitutes a threat to
governments or financial institutions that do business with Iran'’s banks. The designation imposed
additional requirements on U.S. banks to ensure against improper Iranian access to the U.S.
financial system.
The Administration justified the designation as implementation of recommendations of the
Financial Action Task Force (FATF)—a multilateral standard-setting body for anti-money
laundering and combating the financing of terrorism (AML/CFT). The FATF characterizes Iran as
a high-risk and noncooperative jurisdiction with respect to AMF/CFT issues.3940 On June 24, 2016,
the FATF welcomed an "“Action Plan"” filed by Iran to address its strategic AML/CFT deficiencies
and decided to suspend, for one year, "countermeasures"“countermeasures”—mostly voluntary recommendations of
39
http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx.
http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statementfebruary-2016.html.
40
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increased due diligence with respect to Iran transactions—pending an assessment of Iran's ’s
implementation of its Action Plan. The FATF continued the suspension of countermeasures in
June and November 2017, and February 2018,4041 but Iran remained blacklisted because of its
refusal to implement anti-terrorism financing measures, such as accession to the Convention for
the Suppression of Financing of Terrorism. Iranian bodies, including its Supreme National
Security Committee and its Majles (parliament) sought in May 2018 to condition that accession
on its not applying to Iran'’s support for groups Iran supports, such as Hezbollah and Hamas,
which Iran does not consider to be terrorist groups.4142 On October 19, 2018, the FATF stated that
Iran had only acted on 9 out of 10 of its guidelines, and that Iran'’s Majles had not completed
legislation to adopt international standards. The FATF continued to suspend countermeasures and
gave Iran until February 2019 to fully accede to all FATF guidelines.
On October 12, 2018, one week prior to the FATF meeting discussed above, the Treasury
Department Financial Crimes Enforcement Network (FINCEN) issued a warning to U.S. banks to
guard against likely Iranian efforts to evade U.S. financial sanctions. Earlier, in January 1, 2013,
OFAC issued an Advisory to highlight Iran'’s use of hawalashawalas (traditional informal banking and
money exchanges) in the Middle East and South Asia region to circumvent U.S. financial
sanctions. Because the involvement of an Iranian client is often opaque, banks have sometimes
inadvertently processed hawalahawala transactions involving Iranians.
Section 220 of the ITRSHRA required reports on electronic payments systems, such as the
Brussels-based SWIFT (Society of Worldwide Interbank Financial Telecommunications), that do
business with Iran. That law also authorizes—but neither it or any other U.S. law or Executive
Order mandates—sanctions against SWIFT or against electronic payments systems per se. Still,
as noted, many transactions with Iran are subject to U.S. sanctions, no matter the payment
mechanism.
The National Defense Authorization Act for FY2013 (H.R. 4310, , P.L. 112-239, signed January 2,
2013)—Subtitle D, "“The Iran Freedom and Counter-Proliferation Act"” (IFCA) sanctions a wide
swath of Iran'’s economy. (Its provisions on Iran'’s human rights record are discussed elsewhere.)
Several sections of IFCA impose ISA sanctions on entities determined to have engaged in
specified transactions below. (The provisions The provisions apply ISA sanctions but do not amend ISA.)
Implementation
On August 29, 2014, the State Department sanctioned UAE-based Goldentex FZE in accordance
with IFCA for providing support to Iran'’s shipping sector. It was "delisted"“delisted” from sanctions on
Implementation Day of the JCPOA.
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Waiver and Termination
Sections 1244 and 1245 of IFCA provide for a waiver of sanctions for 180 days, renewable for 180-day periods, if |
Executive Order 13608 of May 1, 2012, gives the Department of the Treasury the ability to
identify and sanction (cutting them off from the U.S. market) foreign persons who help Iran (or
Syria) evade U.S. and multilateral sanctions.
Several persons and entities have been designated for sanctions, as shown in the tables at the end
of the report.
The Trump Administration appears to be making increasing use of executive orders issued during
the Obama Administration to sanction Iranian entities determined to be engaged in malicious
cyberactivities or in transnational crime. Iranian entities have attacked, or attempted to attack,
using cyberactivity, infrastructure in the United States, Saudi Arabia, and elsewhere. Iran'’s ability
to conduct cyberattacks appears to be growing. Separately, the Justice Department has prosecuted
Iranian entities for such activity. The section below discusses Executive Order 13694 on
malicious cyberactivities and Executive Order 13581 on transnational crime.
Executive Order 13694 blocks U.S.-based property of foreign entities determined to have
engaged in cyber-enabled activities that (1) harm or compromise the provision of services by
computers or computer networks supporting in the critical infrastructure sector; (2) compromise
critical infrastructure; (3) disrupt computers or computer networks; or (4) cause misappropriation
of funds, trade secrets, personal identifiers, or financial information for financial advantage or
gain.
Executive Order 13581 blocks the U.S.-based property of entities determined (1) to be a foreign
person that constitutes a significant transnational criminal organization; (2) to have materially
assisted any person sanctioned under this order; or (3) to be owned or controlled by or to have
acted on behalf of a person sanctioned under the order.
Implementation
Iran-related entities sanctioned under the Orders are listed in the tables at the end of this report.
Some U.S. laws require or call for divestment of shares of firms that conduct certain transactions
with Iran. A divestment-promotion provision was contained in CISADA, providing a "safe harbor"“safe
harbor” for investment managers who sell shares of firms that invest in Iran'’s energy sector at
levels that would trigger U.S. sanctions under the Iran Sanctions Act. As noted above, Section
219 of the ITRSHRA of 2012 requires companies to reports to the Securities and Exchange
Commission whether they or any corporate affiliate has engaged in any transactions with Iran that
could trigger sanctions under ISA, CISADA, and E.O 13382 and 13224.
Implementation
Implementation: Numerous states have adopted laws, regulations, and policies to divest from—or
avoid state government business with—foreign companies that conduct certain transactions with
Iran. The JCPOA requires the United States to work with state and local governments to ensure
that state-level sanctions do not conflict with the sanctions relief provided by the federal
government under the JCPOA. Most states that have adopted Iran sanctions continue to enforce
those measures.
”43
A trend in U.S. policy and legislation since the June 12, 2009, election-related uprising in Iran has
been to support the ability of the domestic opposition in Iran to communicate and to sanction
Iranian officials that commit human rights abuses. Sanctions on the IRGC represent one facet of
that trend because the IRGC is key suppressive instrument. Individuals and entities designated
under the executive orders and provisions discussed below are listed in the tables at the end of
this report. For those provisions that ban visas to enter the United States, the State Department
interprets the provisions to apply to all members of the designated entity.43
Some laws and Administration action focus on expanding internet freedom in Iran or preventing
the Iranian government from using the internet to identify opponents. Subtitle D of the FY2010
Defense Authorization Act (P.L. 111-84), called the "VOICE"“VOICE” (Victims of Iranian Censorship)
Act, contained several provisions to increase U.S. broadcasting to Iran and to identify (in a report
to be submitted 180 days after enactment) companies that are selling Iran technology equipment
that it can use to suppress or monitor the internet usage of Iranians. The act authorized funds to
document Iranian human rights abuses since the June 2009 Iranian presidential election. Section
1241 required an Administration report by January 31, 2010, on U.S. enforcement of sanctions
against Iran and the effect of those sanctions on Iran.
Promote the Opposition
Some legislation has sought to sanction regime officials involved in suppressing the domestic
opposition in Iran or in human rights abuses more generally. Much of this legislation centers on
amendments to Section 105 of CISADA.
U.N. sanctions on Iran, enacted by the Security Council under Article 41 of Chapter VII of the
U.N. Charter,4748 applied to all U.N. member states. During 2006-2008, three U.N. Security
Council resolutions—1737, 1747, and 1803—imposed sanctions on Iran'’s nuclear program and
weapons of mass destruction (WMD) infrastructure. Resolution 1929, adopted on June 9, 2010,
was key for its assertion that major sectors of the Iranian economy support Iran'’s nuclear
program—giving U.N. member states authorization to sanction civilian sectors of Iran's ’s
economy. It also imposed strict limitations on Iran'’s development of ballistic missiles and imports
and exports of arms.
47
http://www.state.gov/r/pa/prs/ps/2013/05/210102.htm.
Security Council resolutions that reference Chapter VII of the U.N. Charter represent actions taken with respect to
threats to international peace and acts of aggression. Article 41 of that Chapter, in general, provides for enforcement of
the resolution in question through economic and diplomatic sanctions, but not through military action.
48
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and exports of arms.
Table 2. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program(1737, 1747, 1803, 1929, and 2231)
|
Iran required to suspend uranium enrichment, to suspend construction of the heavy-water reactor at Arak, ratify the "Additional Protocol" to Iran's IAEA Safeguards Agreement. (1737) No longer applicable. |
|
Assets frozen of Iranian persons and entities named in annexes to the resolutions, and countries required to ban the travel of named Iranians. (Initial list in Resolution 1737, and additional designations in subsequent resolutions). |
|
Transfer to Iran of nuclear, missile, and dual use items to Iran prohibited, except for use in light-water reactors (1737 and 1747). Resolution 2231 delegates to a Joint Commission the authority to approve Iran's applications to purchase dual-use items. |
|
Resolution 1747 prohibited Iran from exporting arms. Resolution 2231 requires Iran to obtain Security Council approval to export arms for a maximum of five years. |
|
Resolution 1929 prohibited Iran from investing abroad in uranium mining, related nuclear technologies or nuclear capable ballistic missile technology, and prohibits Iran from developing, including testing, nuclear-capable ballistic missiles. |
|
Resolution 1929 mandated that countries not export major combat systems to Iran, but does not bar sales of missiles that are not on the U.N. Registry of Conventional Arms. Resolution 2231 makes arms sales to Iran and exportation of arms from Iran subject to approval by the U.N. Security Council, for a maximum of five years from Adoption Day (until October 2020). |
|
Resolution 1929 called for restraint on transactions with Iranian banks, particularly Bank Melli and Bank Saderat. Not applicable under Resolution 2231. |
|
Resolution called for "Vigilance" (but not a ban) on making international lending to Iran and providing trade credits and other financing. Not applicable under Resolution 2231. |
|
Resolution 1929 called on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran Shipping Lines—or by any ships in national or international waters—if there are indications they carry cargo banned for carriage to Iran. Searches in international waters would require concurrence of the country where the ship is registered. Resolution 2231 requires U.N. member states to continue to enforce all remaining restrictions on shipment of banned items to Iran. |
|
A Sanctions Committee, composed of the 15 members of the Security Council, monitored implementation of all Iran sanctions and collected and disseminated information on Iranian violations and other entities involved in banned activities. A "panel of experts" was empowered by 1929 to assist the U.N. sanctions committee in implementing the resolution and previous Iran resolutions, and to suggest ways of more effective implementation. |
Source: Text of U.N. Security Council resolutions 1737, 1747, 1803, 1929, and 2231. http://www.un.org.
Resolution 2231 and U.N. Sanctions Eased U.N. Security Council Resolution 2231 of July 20, 2015
No change to the status of Resolution 2231 is anticipated as a consequence of the May 8, 2018,
U.S. announcement that it will cease participating in the JCPOA.
U.N. and International Atomic Energy Agency reports since the JCPOA began implementation
have stated that Iran is complying with its nuclear obligations under the JCPOA. That assessment
was corroborated by U.S. intelligence leaders in January 29, 2019 testimony before the Senate
Select Committee on Intelligence.49
U.N. reports on Iranian compliance with Resolution 223148223150 have noted assertions by several U.N.
Security Council members, including the United States, that Iranian missile tests have been
inconsistent with the Resolution. U.S. officials have called some of Iran’s launches of its
Khorramshahr missile as violations of the Resolution. The reports required by Resolution 2231,
as well as those required by other Resolutions pertaining to various regional crises, such as that in
Yemen, also note apparent violations of the Resolution 2231 restrictions on Iran'’s exportation of
arms. The Security Council is responsible for prescribing penalties on Iran for violations, and no
U.N. Security Council actions have been taken against Iran for these violations to date.
Under Paragraph 6(c) of Annex B of Resolution 2231, entities sanctioned by the previous Iran-relatedIranrelated Resolutions would continue to be sanctioned for up to eight years from Adoption Day
(until October 2023). An attachment to the Annex listed 36 entities for which this restriction
would no longer apply (entities "delisted"“delisted”) as of Implementation Day. Most of the entities
49
https://www.dni.gov/index.php/newsroom/congressional-testimonies/item/1947-statement-for-the-record-worldwidethreat-assessment-of-the-us-intelligence-community
50 The report is reprinted in, Iran Watch, at http://www.iranwatch.org/library/multilateral-organizations/united-nations/
un-secretary-general/third-report-secretary-general-implementation-security-council-resolution-2231.
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Iran Sanctions
immediately delisted were persons and entities connected to permitted aspects of Iran'’s nuclear
program and its civilian economy. According to press reports, two entities not on the attachment
list, Bank Sepah and Bank Sepah International PLC, also were delisted on Implementation Day
by separate Security Council action.4951 Paragraph 6(c) provides for the Security Council to be able
to delist a listed entity at any time, as well as to add new entities to the sanctions list. Delisted
entities are in italics in the table of U.N.-listed sanctioned entities at the end of the report.
The following sections discuss sanctions relief provided under the November 2013 interim nuclear agreement (JPA) and, particularly, the JCPOA. Later sections discuss the degree to which Iran is receiving the expected benefits of sanctions relief.
U.S. officials said that the JPA provided "limited, temporary, targeted, and reversible" easing of
Table 2. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program
(1737, 1747, 1803, 1929, and 2231)
Resolution 1737 required Iran to suspend uranium enrichment, to suspend construction of the heavy-water
reactor at Arak, ratify the “Additional Protocol” to Iran’s IAEA Safeguards Agreement. (1737) No longer
applicable.
Assets frozen of Iranian persons and entities named in annexes to the resolutions, and countries required to ban
the travel of named Iranians. (Initial list in Resolution 1737, and additional designations in subsequent resolutions).
Transfer to Iran of nuclear, missile, and dual use items to Iran prohibited, except for use in light-water reactors
(1737 and 1747). Resolution 2231 delegates to a Joint Commission the authority to approve Iran’s applications to
purchase dual-use items.
Resolution 1747 prohibited Iran from exporting arms. Resolution 2231 requires Iran to obtain Security Council
approval to export arms for a maximum of five years.
Resolution 1929 prohibited Iran from investing abroad in uranium mining, related nuclear technologies or nuclear
capable ballistic missile technology, and prohibits Iran from developing, including testing, nuclear-capable ballistic
missiles.
1929 mandated that countries not export major combat systems to Iran, but did not bar sales of missiles that are
not on the U.N. Registry of Conventional Arms. Resolution 2231 makes arms sales to Iran and exportation of
arms from Iran subject to approval by the U.N. Security Council, for a maximum of five years from Adoption Day
(until October 2020).
1929 called for restraint on transactions with Iranian banks, particularly Bank Melli and Bank Saderat. Not
applicable under Resolution 2231.
Resolution called for “Vigilance” (but not a ban) on making international lending to Iran and providing trade credits
and other financing. Not applicable under Resolution 2231.
Resolution 1929 called on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran
Shipping Lines—or by any ships in national or international waters—if there are indications they carry cargo
banned for carriage to Iran. Searches in international waters would require concurrence of the country where the
ship is registered. Resolution 2231 requires U.N. member states to continue to enforce all remaining restrictions
on shipment of banned items to Iran.
A Sanctions Committee, composed of the 15 members of the Security Council, monitored implementation of all
Iran sanctions and collected and disseminated information on Iranian violations and other entities involved in
banned activities. A “panel of experts” was empowered by 1929 to assist the U.N. sanctions committee in
implementing the resolution and previous Iran resolutions, and to suggest ways of more effective implementation.
Source: Text of U.N. Security Council resolutions 1737, 1747, 1803, 1929, and 2231. http://www.un.org.
51
http://www.wsj.com/articles/u-s-signed-secret-document-to-lift-u-n-sanctions-on-iranian-banks-1475193723.
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Sanctions Application under Nuclear Agreements
The following sections discuss sanctions relief provided under the November 2013 interim
nuclear agreement (JPA) and, particularly, the JCPOA. Later sections discuss the degree to which
Iran is receiving the expected benefits of sanctions relief.
Sanctions Eased by the JPA
U.S. officials said that the JPA provided “limited, temporary, targeted, and reversible” easing of
international sanctions. Under the JPA (in effect January 20, 2014-January 16, 2016)52
Iran’international sanctions. Under the JPA (in effect January 20, 2014-January 16, 2016)50
Re-imposition
Under the JCPOA, sanctions relief occurred at Implementation Day (January 16, 2016), following
IAEA certification that Iran had completed stipulated core nuclear tasks. U.S. secondary sanctions
were waived or terminated, but most sanctions on direct U.S.-Iran trade. The secondary sanctions
eased included55eased included53 (1) sanctions that limited Iran'’s exportation of oil and sanction foreign sales to
52
The Administration sanctions suspensions and waivers are detailed at http://www.state.gov/p/nea/rls/220049.htm.
Daniel Fineren, “Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales,” Reuters, November 24, 2013.
54 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program,” November 23, 2013.
55 http://iranmatters.belfercenter.org/blog/translation-iranian-factsheet-nuclear-negotiations; and author conversations
with a wide range of Administration officials, think tank, and other experts, in Washington, DC, 2015.
53
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Iran of gasoline and energy sector equipment, and which limit foreign investment in Iran'’s energy
sector; (2) financial sector sanctions; and (3) sanctions on Iran'’s auto sector and trading in the rial.
rial. The EU lifted its ban on purchases of oil and gas from Iran; and Iranian banks were
readmitted to the SWIFT electronic payments system. All U.N. sanctions were lifted.
All of the U.S. sanctions that were eased will go back into effect on November 4, 2018, in
accordance with the May 8, 2018, announcement that the United States will cease participating in
the JCPOA. The Administration has stated that the purpose of reimposingre-imposing the sanctions is to
deny Iran the revenue with which to conduct regional malign activities and advance its missile,
nuclear, and conventional weapons programs.
Some sanctions went back into effect on August 7, 2018, after a 90-day wind-down period. These
include U.S. sanctions on
The sanctions that go back into effect on November 4 (effective November 5) affect
Re-imposition56
The JCPOA-related suspension of U.S. sanctions required issuing waivers of the laws below.
These waivers were issued on January 16, 2016, and the Obama Administration and Trump
Administration renewed all waivers by their prescribed date until the May 8 U.S. announcement
of its exit from the JCPOA. Treasury and State Department documents issued on May 8 state that
the waivers are all being revoked, rendering post-May 8 waiver expiration deadlines moot. All the
provisions discussed below will go back into effect on November 5, 2018.
The JCPOA did not commit the United States to suspend U.S. sanctions on Iran for terrorism or
human rights abuses, on foreign arms sales to Iran or sales of proliferation-sensitive technology
such as ballistic missile technology, or on U.S.-Iran direct trade (with the selected exceptions of
the latter discussed above). The sanctions below remained in place during JCPOA
implementation and remain in effect now:
Aside from reimposing U.S. sanctions, sanctions
Sanctions might have also been reimposed by congressional action in accordance with President Trump'
Trump’s withholding of certification of Iranian compliance with the JCPOA. Such certification
under the Iran Nuclear Agreement Review Act (INARA, P.L. 114-17), was withheld in October
2017 and January and April of 2018. Congress had the opportunity to act on legislation, under
expedited procedures, to reimpose sanctions that were suspended. Congress did not take such action. For more information on these options, see CRS Report R44942, U.S. Decision to Cease Implementing the Iran Nuclear Agreement, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].
action.60
Additionally, the JCPOA (paragraph 36 and 37) contains a mechanism for the "“snap back"” of
U.N. sanctions if Iran does not satisfactorily resolve a compliance dispute. According to the
JCPOA (and Resolution 2231), the United States (or any veto-wielding member of the U.N.
Security Council) would be able to block a U.N. Security Council resolution that would continue
the lifting of U.N. sanctions despite Iran'’s refusal to resolve the dispute. In that case "“... the
provisions of the old U.N. Security Council resolutions would be re-imposed, unless the U.N.
Security Council decides otherwise."” There are no indications that the Administration plans to try
to snap back U.N. sanctions under this process.
During 2010-2016, converging international views on Iran produced substantial global consensus to pressure
58
The JCPA does commit the United States to terminate sanctions with respect to some entities designated for
sanctions under INKSNA.
59 https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf.
60 For more information on this option, see CRS Report R44942, U.S. Decision to Cease Implementing the Iran
Nuclear Agreement, by Kenneth Katzman, Paul K. Kerr, and Valerie Heitshusen.
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International Implementation and Compliance61
During 2010-2016, converging international views on Iran produced global consensus to pressure
Iran through sanctions. In addition to asserting that the international community needed to ensure
that Iran did not develop a nuclear weapon, some countries joined the sanctions regime primarily as a means of heading off unwanted military action against Iran by the United States or by Israel, and someto head
off unwanted U.S. or other military action against Iran. Some countries cooperated in order to
preserve their close relationships with the United States. This section assesses international
cooperation and compliance with U.S. sanctions, and cooperation with U.S. sanctions reimposed re-imposed
as a consequence of the May 8, 2018, U.S. exit from the JCPOA. All the JCPOA parties publicly
opposed the U.S. decision to exit the JCPOA and have sought to keep their companies engaged in
the Iran market in order to continue to provide the JCPOA'’s economic benefits to Iran.
A comparison between U.S., U.N., and EU sanctions against Iran is contained in Table 3 below.
Broader issues of Iran'’s relations with the countries discussed in this section can be found in CRS
Report R44017, Iran'Iran’s Foreign and Defense Policies, by [author name scrubbed].
After the passage of Resolution 1929 in June 2010, European Union (EU) sanctions on Iran
became nearly as extensive as those of the United States—a contrast from most of the 1990s,
when the EU countries refused to join the 1995 U.S. trade and investment ban on Iran and (along
with Japanese creditors) rescheduled $16 billion in Iranian debt bilaterally. In July 2002, Iran
tapped international capital markets for the first time since the Islamic revolution, selling $500
million in bonds to European banks and, during 2002-2005, there were negotiations between the
EU and Iran on a "“Trade and Cooperation Agreement"” (TCA) that would have lowered the tariffs
or increased quotas for Iranian exports to the EU countries.59
62
Under the JCPOA, EU sanctions, most of which were imposed in 2012, were lifted, including the
following:
Note: CRS has no mandate or capability to “judge” compliance of any country with U.S. or other sanctions against Iran. This section is intended to analyze some major trends in third country cooperation with U.S. sanctions. 62 During the active period of talks, which began in December 2002, there were working groups focused not only on the TCA terms and proliferation issues but also on Iran’s human rights record, Iran’s efforts to derail the Middle East peace process, Iranian-sponsored terrorism, counter-narcotics, refugees, migration issues, and the Iranian opposition PMOI. 61 Congressional Research Service RS20871 · VERSION 284 · UPDATED 46 Iran Sanctions The cutoff of 14 EU-sanctioned Iranian banks from the Brussels-based SWIFT electronic payments system was lifted, and the Iranian banks resumed accessing the system in February 2016. A large number of entities were “delisted” from sanctions by the EU on Implementation Day. The entities had been sanctioned by EU Council decisions and regulations over the years. EU diplomats have indicated they will not relist any delisted entities in cooperation with the U.S. exit from the JCPOA. The following EU sanctions remained in place:
EU diplomats have said that none of the EU sanctions will be reimposed by EU governments in
concert with the U.S. exit from the JCPOA, and European diplomats have indicated that they
intend to try to protect their economic relations with Iran despite the U.S. pullout from the
JCPOA. However, to avoid risk to their position in the large U.S. market, more than 100
companies—mostly in Europe—have announced they are leaving Iran. Press reports indicate that
European exports to Iran have fallen as well, including German exports down about 4% in the
first eight months of 2018. In some cases, European companies have stopped doing business with
Iran after being threatened with U.S. sanctions by U.S. diplomats.63 And, as noted in the table
above, only two EU countries were still buying Iranian oil at the end of 2018—and their
purchases were lower than earlier in the year—suggesting that European refiners are trying to
avoid any risk of U.S. sanctions. Italy and Greece were given SRE sanctions exemptions on
November 5, 2018.
Some of the post-2016 European investments in/transactions with Iran that have bee unwound
intend to try to protect their economic relations with Iran despite the U.S. pullout from the JCPOA.
On August 6, 2018, a 1996 EU "blocking statute" took effect which seeks to protect EU firms from reimposed U.S. sanctions. With the blocking statute widely assessed as likely to provide only limited protection from U.S. sanctions, EU countries have discussed mechanisms under which EU countries could continue to import Iranian oil and pay with hard currency. On September 25, 2018, Germany, France, and Britain, joined by Russia and China, as well as Iran, endorsed the creation of a "special purpose vehicle"—an entity that would process payments for non-dollar denominated transactions with Iran and thereby presumably not be subject to U.S. sanctions. Secretary of State Michael Pompeo denounced the plan as counterproductive, and likely to "solidify[] Iran's ranking as the No. 1 state sponsor of terrorism." Some experts assessed the new vehicle as unlikely to succeed because its personnel and operations could be made subject to additional U.S. sanctions or sanctions designations. Perhaps indicating the difficulty of implementing that plan, reports in late October 2018 indicate that no European country is offering to host the special purpose vehicle.60 In September 2018, EU countries announced small amounts of development assistance to Iran, apparently in order to demonstrate that the EU is making good faith efforts to provide Iran the economic benefits of the JCPOA.
Still, apparently seeking to avoid risk to their position in the large U.S. market, more than 100 companies—mostly in Europe—have announced they are leaving Iran. Press reports indicate that European exports to Iran have fallen as well, including German exports down about 4% in the first eight months of 2018. And, as noted in the table above, only two EU countries bought any Iranian oil in October 2018—and their purchases were lower than earlier in the year—suggesting that European refiners are trying to avoid any risk of U.S. sanctions. Italy and Greece were given SRE sanctions exemptions on November 5, 2018.
Some of the post-2016 European investments in/transactions with Iran that are being unwound include the following:61
The management of the Brussels-based Swift electronic payments system has sought to balance
financial risks with the policies of the EU governments. In March 2012, SWIFT acceded to an EU
request to expel sanctioned Iranian banks.6468 Some Iranian banks were still able to conduct
electronic transactions with the European Central Bank via the "“Target II"” system. EU diplomats
indicated they would not comply with U.S. requests to ask SWIFT to expel Iranian banks again,
and no EU request to SWIFT to again expel sanctioned Iranian banks was made. However,
SWIFT is run by an independent board and seeks to avoid risk of U.S. penalties. In late 2018, the
system again disconnected the Iranian banks that were "relisted"“relisted” for U.S. sanctions as of
November 5, 2018.
Russia and China, two permanent members of the U.N. Security Council, historically have
imposed only those sanctions required by Security Council resolutions. Both countries' ’
governments, which are parties to the JCPOA, have said they will not cooperate with reimposed
U.S. secondary sanctions. Many observers expect that, because companies in both countries have
67
68
https://www.gov.uk/government/news/joint-statement-on-the-new-mechanism-to-facilitate-trade-with-iran
Avi Jorish, “Despite Sanctions, Iran’s Money Flow Continues,” Wall Street Journal, June 25, 2013.
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limited U.S. exposure and are strongly influenced by their governments, much of Iran'’s trade and
economic engagement will shift to China and Russia from EU countries and Japan and South
Korea.69
Russia
Korea.65
Increasingly close politically primarily on the issue of the conflict in Syria, Iran and Russia have
discussed expanding energy and trade cooperation. The two countries reportedly agreed on broad
energy development deals during President Putin'’s visit to Tehran in late October 2017, with an
estimated investment value of up to $30 billion,6670 although implementation remains uncertain. In
December 2018, Iran signed a free trade deal with the Russia-led "“Eurasian Economic Union," ”
suggesting Russian intent not to abide by reimposed U.S. sanctions on Iran.
In April 2015, Russia lifted its own restriction on delivering the S-300 air defense system that it
sold Iran in 2007 but refused to deliver after Resolution 1929 was adopted—even though that
Resolution technically did not bar supply of that defensive system. In April 2016, Russia began
delivering the five S-300 batteries. Iran'’s Defense Minister visited Russia in February 2016 to
discuss a possible purchase of major combat systems—a sale that would require an unlikely
approval of the U.N. Security Council. Alternatively, the two countries might complete the sale
without such approval, presumably calculating a limited penalty for doing so. There has been no
announcement that such sales have been concluded, to date.
China
China is a major factor in the effectiveness of any sanctions regime on Iran because China is Iran'
Iran’s largest oil customer. During 2012-2016, China was instrumental in reducing Iran'’s total oil
exports because it complied with U.S. sanctions by cutting its buys of oil from Iran to about
435,000 barrels per day from its 2011 average of nearly 600,000 barrels per day. At that time, the
State Department asserted that, because China was the largest buyer of Iranian oil, percentage
cuts by China had a large impact in reducing Iran'’s oil sales by volume and China merited a
Section 1245 (P.L. 112-81) ") “significant reductions exception"” (SRE). After sanctions were lifted
in early 2016, China increased its purchases of Iranian oil to levels that sometimes exceeded those
of 2011. Several Chinese energy firms that invested in Iran'’s energy sector put those projects on
hold in 2012, but resumed or considered resuming work in earnest, subject to energy market
considerations, after sanctions were eased in 2016. Chinese firms might also take over some
investments in Iran'’s energy sector that EU firms will abandon in order to avoid the risk of
reimposed U.S. sanctions. Some reports indicate that China asked its refiners to cut imports of
Iranian oil as the November 4, 2018, reimposition of U.S. energy sanctions approached, and
China appears to have reduced its oil imports from Iran (see chart). The Administration gave
China a SRE sanctions exception on November 5, in part to recognize import reductions but also
possibly to avoid further complicating U.S. relations with China.
Sanctions on Iran'’s energy sector have complicated Iran-China banking and trade relations.
During 2012-2016, China settled much of its trade balance with Iran with goods rather than hard
currency. Doing so was highly favorable to China financially. Press reports indicated that Iran's ’s
automotive sector—the largest industrial sector aside from the energy sector—obtained a
significant proportion of its parts from China, and subsidiaries of two China-based companies,
69
70
“Iran’s Door to the West is Slamming Shut, and That Leaves China,” Bloomberg News, May 10, 2018.
https://www.yahoo.com/news/putin-visits-tehran-talks-syria-nuclear-deal-133507932.html.
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Geelran and Chery, produce cars in Iran. Iran'’s auto production fell about 60% during 2011-2013
because of sanctions, but recovered somewhat after the JPA went into effect.6771 Iran'’s auto parts
imports increased as Iran was able to obtain at least some trade financing. Iran and China also
have a separate escrow account to pay for China'’s infrastructure projects in Iran, such as the long
Niayesh Tunnel, funded by about $20 billion of Iran'’s hard currency reserves. However,
suggesting that settling their trade balance has again complicated Iran-China banking relations, China'
China’s Kunlun Bank—an affiliate of China'’s energy company CNPC and which was sanctioned
under CISADA in 2012 as the main channel for money flows between the two countries—
reportedly stopped accepting Euro and then China currency-denominated payments from Iran in
November 2018.6872 Existing Iranian accounts at the bank presumably can still be used to pay for
Iranian imports from China.
In the days after JCPOA Implementation Day, China'’s President Xi Jinping visited Iran and other
Middle East countries, and stated that Iran is a vital link in an effort to extend its economic
influence westward through its "“One Belt, One Road"” initiative. Chinese firms and entrepreneurs
are integrating Iran into this vision by modernizing Iran'’s rail and other infrastructure,
particularly where that infrastructure links to that of neighboring countries, including the
Sultanate of Oman, funded by loans from China.6973 Iran'’s place in this initiative offers China's ’s
government and firms further incentive to avoid cooperating with reimposed U.S. sanctions.
In April 2018, the Commerce Department (Bureau of Industry and Security, BIS, which
administers Export Administration Regulations) issued a denial of export privileges action against
China-based ZTE Corporation and its affiliates. The action was taken on the grounds that ZTE
did not uphold the terms of March 2017 settlement agreement with BIS over ZTE'’s shipment of
prohibited U.S. telecommunications technology to Iran (and North Korea).
During 2010-2016, in part in deference to their alliances with the United States, Japan and South
Korea enforced sanctions on Iran similar to those imposed by the United States and the EU. Both
countries cut imports of Iranian oil sharply after 2011. Banks in the two countries were the
repositories of a large part of the approximately $115 billion in foreign exchange that Iran held
abroad—a balance that represents payments for oil shipments. Since 2016, both countries
continued to import Iranian oil at about half of 2011 volumes, and Iran has been able to access
funds in banks in both countries.
Japan exports to Iran significant amounts of chemical and rubber products, as well as consumer
electronics. South Korean firms have been active in energy infrastructure construction in Iran,
and its exports to Iran are mainly iron, steel, consumer electronics, and appliances.
Both countries—and their companies—have historically been unwilling to undertake transactions
with Iran that could violate U.S. sanctions, and firms in both countries have said they will comply
with reimposed U.S. sanctions. In part to avoid economic disruption, both countries have asked
the Trump Administration for some exceptions to U.S. sanctions. For example, South Korea
depends heavily on Iranian exports of condensates (a petroleum product sometimes considered as
Nahid Kalbasi.”Have International Sanctions Crippled Iran’s Auto Industry?” Washington Institute for Near East
Policy, June 3, 2015.
72 “As U.S. Sanctions Loom, China’s Bank of Kunlun to Stop Receiving Iran Payments – Sources.” Reuters, October
23, 2018.
73 Thomas Erdbrink. “China’s Push to Link East and West Puts Iran at ‘Center of Everything.’” New York Times, July
25, 2017.
71
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crude oil), and has asked to be able to import condensates from Iran at existing levels. Both
countries reduced their Iranian oil purchases to zero in October 2018 and both countries received
SRE sanctions exceptions.
The following firms have announced their postures following the U.S. exit from the JCPOA:
North Korea, like Iran, has been subject to significant international sanctions. North Korea has
never pledged to abide by international sanctions against Iran, and it reportedly cooperates with
Iran on a wide range of WMD-related ventures, particularly the development of ballistic missiles.
A portion of the oil that China buys from Iran (and from other suppliers) is reportedly sent to
North Korea, but it is not known if North Korea buys any Iranian oil directly. The potential for
North Korea to try to buy Iranian oil illicitly increased in the wake of the adoption in September
2017 of U.N. Security Council sanctions that limit North Korea'’s importation of oil, but there are
no publicly known indications that it is doing so. While serving as Iran'’s president in 1989, the
current Supreme Leader, Ayatollah Ali Khamene'’i, visited North Korea. North Korea'’s titular
head of state Kim Yong Nam attended President Rouhani'’s second inauguration in August 2017,
and during his visit signed various technical cooperation agreements of unspecified scope.71
75
Taiwan
Taiwan has generally been a small buyer of Iranian oil. It resumed imports of Iranian oil after
sanctions were eased in 2016. In the wake of the May 8, 2018, U.S. exit from the JCPOA, a
Taiwan refiner, Formosa Petrochemical Corp, said it is considering ending imports of Iran'’s oil.
Taiwan bought no Iranian oil in September or October 2018 and was given an SRE sanctions
exemption on November 5.
74
75
“Some Top Oil Buyers Are Thinking about Shunning Iran Oil.” Bloomberg News, June 27, 2018.
https://www.thedailybeast.com/north-koreas-deadly-partnership-with-iran.
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South Asia
India
During 2011-2016, India, citing U.N. Security Council resolutions on Iran, generally cooperated
with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran. Its private
sector assessed Iran as a "“controversial market"”—a term used by many international firms to
describe markets that entail reputational and financial risks. India'’s central bank ceased using a
Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran, and the
two countries agree to settle half of India'’s oil buys from Iran in India'’s currency, the rupee. Iran
used the rupee accounts to buy India'’s wheat, pharmaceuticals, rice, sugar, soybeans, auto parts,
and other products.
India reduced its imports of Iranian oil substantially after 2011, lowering purchases to 6% of its
oil imports by 2013, from over 16% in 2008, in the process incurring significant costs to retrofit
refineries that were handling Iranian crude. However, since sanctions were eased, India'’s oil
imports from Iran increased to as much as 800,000 bpd in July 2018—well above 2011 levels.
Indian firms ended or slowed work on investments in Iranian oil and gas fields during 2012-2016,
but reportedly resumed work after sanctions were lifted. After international sanctions were lifted,
India reportedly also paid Iran the $6.5 billion it owed for oil purchased during 2012-2016.72
76
The degree to which Indian firms and the government of India are cooperating with reimposed
U.S. sanctions is not certain. Indian leaders assert that Iran did not violate the JCPOA and
sanctions should not be reimposed on it.7377 In June 2018, the two countries again agreed to use
rupee accounts for their bilateral trade. Nonetheless, major Indian refiners Reliance Ltd. and
Indian Oil Corp—citing a decision by the State Bank of India to cease transactions with Iran—
announced that they would cut oil buys from Iran. India'’s purchases of Iranian oil fell from July
to October 2018, totaling about 350,000 barrels per day in October—still a substantial amount—
but apparently enough of a reduction to earn India an SRE sanctions exception on November 5.74 78
India reduced its purchases from Iran further for all of November 2018, but it might buy more oil
from Iran after receiving its SRE, which applies for six months from November 5, 2018.
In 2015, India and Iran agreed that India would help develop Iran'’s Chahbahar port that would
enable India to trade with Afghanistan unimpeded by Pakistan. With sanctions lifted, the project
no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra
Modi visited Iran and signed an agreement to invest $500 million to develop the port and related
infrastructure. Construction at the port is proceeding. During a late June 2018 visit to India, U.S.
Ambassador to the United Nations Nikki Haley said that "“We know the port has to happen and
the United States is going to work with India to do that."75”79 This suggested the Administration
might use the "“Afghanistan reconstruction"” exception under Section 1244(f) of IFCA to allow for
firms to continue developing it.
One test of Pakistan'
“India Seeks to Pay $6.5 Billion to Iran for Oil Imports.” Economic Times of India. May 16, 2016.
CRS conversations with Indian officials and U.S. experts on India. 2017-18.
78 The Hill. Thehill.com September 14, 2018.
79 “U.S. Envoy Haley tells Modi Important to Cut Imports of Iranian Oil.” Reuters, June 27, 2018.
76
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Pakistan
One test of Pakistan’s compliance with sanctions was a pipeline project that would carry Iranian
gas to Pakistan—a project that U.S. officials on several occasions stated would be subject to ISA
sanctions. Despite that threat, agreement on the $7 billion project was finalized on June 12, 2010,
and construction was formally inaugurated in a ceremony attended by the Presidents of both
countries on March 11, 2013. In line with an agreed completion date of mid-2014, Iran reportedly
completed the pipeline on its side of the border. China'’s announcement in April 2015 of a $3
$3 billion investment in the project seemed to remove financial hurdles to the line'’s completion,
and the JCPOA removed sanctions impediments to the project.7680 However, during President
Hassan Rouhani'’s visit to Pakistan in March 2016, Pakistan still did not commit to complete the
line, and observers note that there are few indications of progress on the project. In 2009, India
dissociated itself from the project over concerns about the security of the pipeline, the location at
which the gas would be transferred to India, pricing of the gas, and tariffs.
Iran has substantial economic relations with Turkey and the countries of the South Caucasus.
Turkey
Turkey buys about 40% of its oil from Iran, and bought about 6% of its total gas imports from
Iran in 2017. Turkey did reduce purchases of oil from Iran during 2012-2016, but its purchases
returned to 2011 levels after sanctions on Iran were eased in 2016. Turkey also is Iran'’s main gas
customer via a pipeline built in 1997, which at first was used for a swap arrangement under which
gas from Turkmenistan was exported to Turkey. Turkey'’s leaders have said that the country will
not cooperate with reimposed U.S. sanctions, but its oil import volumes from Iran have remained
about 33% below what they were before the U.S. pullout from the JCPOA in May 2018. Turkey
received an SRE sanctions exemption on November 5.
Direct Iranian gas exports to Turkey through the line began in 2001 (with additional such exports
through a second pipeline built in 2013), but no ISA sanctions were imposed on the grounds that
the gas supplies were crucial to Turkey'’s energy security. Prior to the October 2012 EU ban on
gas purchases from Iran, this pipeline was a conduit for Iranian gas exports to Europe (primarily
Bulgaria and Greece).
Pre-JCPOA, in response to press reports that Turkey'’s Halkbank was settling Turkey'’s payments
to Iran for energy with gold, U.S. officials testified on May 15, 2013, that the gold going from
Turkey to Iran consists mainly of Iranian private citizens'’ purchases of Turkish gold to hedge
against the value of the rialrial. A U.S. criminal case involved a dual Turkish-Iranian gold dealer,
Reza Zarrab, arrested in the United States in 2016 for allegedly violating U.S. sanctions
prohibiting helping Iran deal in precious metals.
Among past cases of possible Turkish violations of Iran sanctions, on November 7, 2016, the U.S.
Attorney for New York'’s Southern District indicted several individuals for using money services
businesses in Turkey and in the UAE for conspiring to conceal from U.S. banks transactions on
behalf of and for the benefit of sanctioned Iranian entities, including Mahan Air.7781 On January 6,
80
Asia Times, March 21, 2014, http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html.
https://www.justice.gov/usao-sdny/pr/manhattan-united-states-attorney-announces-superseding-indictment-chargingturkish-and.
81
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2014, the Commerce Department blocked a Turkey-based firm (3K Aviation Consulting and
Logistics) from reexporting two U.S.-made jet engines to Iran'’s Pouya Airline.78
The rich energy reserves of the Caspian Sea create challenges for U.S. efforts to deny Iran
financial resources. The Clinton and George W. Bush Administrations cited potential ISA
sanctions to deter oil pipeline routes involving Iran—thereby successfully promoting an the
alternate route from Azerbaijan (Baku) to Turkey (Ceyhan), which became operational in 2005.
Section 6 of Executive Order 13622 exempts from sanctions any pipelines that bring gas from
Azerbaijan to Europe and Turkey.
Agreements reached in 2018 between Russia and the Caspian Sea states on the legal division of
the sea could spawn new energy development in the Caspian. Iran'’s energy firms will
undoubtedly become partners in joint ventures to develop the Caspian'’s resources, and Iran's ’s
involvement in such projects will require the Administration to determine whether to impose
sanctions.
Iran'
Iran’s relations with Azerbaijan—even though that country is inhabited mostly by Shiite
Muslims—are hindered by substantial political and ideological differences. Iran and Azerbaijan
have in recent years tried to downplay these differences for joint economic benefit, and they have
been discussing joint energy and infrastructure projects among themselves and with other powers,
including Russia.
Iran and Armenia—Azerbaijan'’s adversary—have long enjoyed extensive economic relations:
Armenia is Iran'’s largest direct gas customer, after Turkey. In May 2009, Iran and Armenia
inaugurated a natural gas pipeline between the two, built by Gazprom of Russia. No
determination of ISA sanctions was issued. Armenia has said its banking controls are strong and
that Iran is unable to process transactions illicitly through Armenia'’s banks.7983 However, observers
in the South Caucasus assert that Iran is using Armenian banks operating in the Armenia-occupied
Nagorno-Karabakh territory to circumvent international financial sanctions.80
Iraq85
The Persian Gulf countries of the Gulf Cooperation Council (GCC: Saudi Arabia, UAE, Qatar,
Kuwait, Bahrain, and Oman) are oil exporters and close allies of the United States. As Iranian oil
exports decreased after 2012, the Gulf states supplied the global oil market with additional oil.
Since the U.S. exit from the JCPOA, U.S. officials have said that they are working with Gulf oil
exporters to make sure the oil market is well supplied as U.S. officials work to reduce Iranian oil
exports. However, largely in order not to antagonize Iran, the Gulf countries maintained relatively
normal trade with Iran. Some Gulf-based shipping companies, such as United Arab Shipping
Company reportedly continued to pay port loading fees to such sanctioned IRGC-controlled port
operators as Tidewater, despite the imposition of sanctions on that company.82
86
“US Acts to Block Turkish Firm from Sending GE Engines to Iran,” Reuters, January 6, 2014.
Louis Charbonneau, “Iran Looks to Armenia to Skirt Banking Sanctions,” Reuters, August 21, 2012.
84 Information provided to the author by regional observers. October 2013.
85 The CRS Report RL32048, Iran: Internal Politics and U.S. Policy and Options, by Kenneth Katzman, discusses the
relations between Iran and other Middle Eastern states.
86 Mark Wallace, “Closing U.S. Ports to Iran-Tainted Shipping. Op-ed,” Wall Street Journal, March 15, 2013.
82
83
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The UAE has been particularly closely watched by U.S. officials because of the large presence of
Iranian firms there. Several UAE-based firms have been sanctioned for efforts to evade sanctions,
as noted in the tables at the end of the report. U.S. officials praised the UAE'’s March 1, 2012, ban
on transactions with Iran by Dubai-based Noor Islamic Bank, which Iran reportedly used to
process oil payments. Some Iranian gas condensates (120,000 barrels per day) were imported by
Emirates National Oil Company (ENOC) and refined mostly into jet fuel. Subsequent to the May
8, 2018, U.S. exit from the JCPOA, ENOC officials said they are trying to find alternative
supplies of the hydrocarbon products it buys from Iran.83
87
Iran and several of the Gulf states have had discussions on various energy and related projects,
but few have materialized because of broad regional disputes between Iran and the Gulf states.
Kuwait and Iran have held talks on the construction of a 350-mile pipeline that would bring
Iranian gas to Kuwait, but the project does not appear to be materializing. Bahrain'’s discussions
of purchasing Iranian gas have floundered over sharp political differences.8488 Qatar and Iran share
the large gas field in the Gulf waters between them, and their economic relations have become
closer in light of the isolation of Qatar by three of its GCC neighbors, Saudi Arabia, UAE, and
Bahrain. The only GCC state that has moved forward with economic joint ventures with Iran is
Oman, particularly in the development of Oman'’s priority project to expand its port at Al Duqm
port, which Oman and Iran envision as a major hub for regional trade. In September 2015, the
two countries also recommitted to a gas pipeline joint venture.
Omani banks, some of which operate in Iran, were used to implement some of the financial
arrangements of the JPA and JCPOA.8589 As a consequence, a total of $5.7 billion in Iranian funds
had built up in Oman'’s Bank Muscat by the time of implementation of the JCPOA in January
2016. In its efforts to easily access these funds, Iran obtained from the Office of Foreign Assets
Control (OFAC) of the Treasury Department a February 2016 special license to convert the funds
(held as Omani rials) to dollars as a means of easily converting the funds into Euros. Iran
ultimately used a different mechanism to access the funds as hard currency, but the special license
issuance resulted in a May 2018 review by the majority of the Senate Permanent Subcommittee
on Investigation to assess whether that license was consistent with U.S. regulations barring Iran
access to the U.S. financial system.86
Iraq'90
Iraq
Iraq’s attempts to remain close to its influential neighbor, Iran, have complicated Iraq'’s efforts to
rebuild its economy yet avoid running afoul of the United States and U.S. sanctions on Iran. As
noted above, in 2012, the United States sanctioned an Iraqi bank that was a key channel for Iraqi
payments to Iran, but lifted those sanctions when the bank reduced that business. Iraq presented
the United States with a sanctions-related dilemma in July 2013, when it signed an agreement
with Iran to buy 850 million cubic feet per day of natural gas through a joint pipeline that enters Iraq at Diyala province and would supply several power plants. No sanctions were imposed on the arrangement, which was agreed while applicable sanctions were in effect. In May 2015, the Treasury Department sanctioned Iraq's Al Naser Airlines for helping Mahan Air (sanctioned
87
Some Top Oil Buyers Are Thinking about Shunning Iran Oil, op. cit.
http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?
nn=8901181055.
89 Omani banks had a waiver from U.S. sanctions laws to permit transferring those funds to Iran’s Central Bank, in
accordance with Section 1245(d)(5) of the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-81). For
text of the waiver, see a June 17, 2015, letter from Assistant Secretary of State for Legislative Affairs Julia Frifield to
Senate Foreign Relations Committee Chairman Bob Corker, containing text of the “determination of waiver.”
90 “Obama Misled Congress, Tried and Failed to Give Iran Secret Access to US Banks Before the Deal.” Business
Insider, June 6, 2018; Permanent Subcommittee on Investigations of the U.S. Senate. Majority Report. “Review of U.S.
Treasury Department’s License to Convert Iranian Assets Using the U.S. Financial System.” May 2018.
88
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Iraq at Diyala province and would supply several power plants. No sanctions were imposed on
the arrangement, which was agreed while applicable sanctions were in effect. In May 2015, the
Treasury Department sanctioned Iraq’s Al Naser Airlines for helping Mahan Air (sanctioned
entity) acquire nine aircraft.91
entity) acquire nine aircraft.87
The Trump Administration reportedly is seeking to accommodate Iraq'’s need for Iranian
electricity supplies and other economic interactions. As of October 2018, Iraq reportedly has
discontinued crude oil swaps with Iran—about 50,000 barrels per day—in which Iranian oil
flowed to the Kirkuk refinery and Iran supplied oil to Iraq'’s terminals in the Persian Gulf. Iraq did
not receive an SRE sanctions exception on November 5, 2018. On the other hand, the
Administration reportedly has given Iraq permission—renewable at 45-day intervals—to buy the
Iranian natural gas that runs Iraq'’s power plants. The limited "waiver"“waiver” reportedly will provide
time for Iraq to line up alternative supplies and equipment to generate electricity.8892 U.S. sanctions
laws do not apply to the purchase of natural gas, and no U.S. law provides for a waiver lasting
exactly 45 days, so presumably the U.S. permission represents, rather than a legal determination,
an understanding that the United States will refrain from sanctioning Iraqi banks or payment
mechanisms for Iranian gas.
Iran is supplying advisers and weapons to help Iraq try to defeat Islamic State forces. The Iranian
support to the Iraqi government has not been sanctioned, even though Iranian arms exports
remain prohibited by Resolution 2231.
Iran has extensive economic relations with both Syria and Lebanon, countries where Iran asserts
that core interests are at stake. The compliance of Syrian or Lebanese banks and other institutions
with international sanctions against Iran was limited even during 2012-2015. Iran reportedly uses
banks in Lebanon to skirt financial sanctions, according to a wide range of observers, and these
banks are among the conduits for Iran to provide financial assistance to Hezbollah as well as to
the regime of Syrian President Bashar Al Assad. In January 2017, Iran and Syria signed a series
of economic agreements giving Iranian firms increased access to Syria'’s mining, agriculture, and
telecommunications sectors, as well as management of a Syrian port.89
During the presidency of Ahmadinejad, Iran looked to several Latin American and African
countries to try to circumvent international sanctions. For the most part, however, Iran'’s trade and
other business dealings with these regions are apparently too modest to weaken the effect of
international sanctions significantly.
The united approach to sanctions on Iran during 2010-2016 carried over to international lending
to Iran. The United States representative to international financial institutions is required to vote
against international lending, but that vote, although weighted, is not sufficient to block
international lending. No new loans have been approved to Iran since 2005, including several environmental projects under the Bank's "Global Environmental Facility" (GEF). The initiative
Eli Lak, “Iran Sanctions Collapsing Already,” Bloomberg News, May 11, 2015.
U.S. Grants Iraq Sanctions Relief in Bid to Boost Business Deals. Wall Street Journal, December 21, 2018.
93 Iran Signs Phone, Gas Deals with Syria. Agence France Presse, January 17, 2017.
91
92
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environmental projects under the Bank’s “Global Environmental Facility” (GEF). The initiative
slated more than $7.5 million in loans for Iran to dispose of harmful chemicals.9094 The 2016 lifting
of sanctions increased international support for new international lending to Iran, but the U.S. exit
from the JCPOA will likely lead to differences between the United States and other lenders over
extending any new loans to Iran.
Earlier, in 1993, the United States voted its 16.5% share of the World Bank against loans to Iran
of $460 million for electricity, health, and irrigation projects, but the loans were approved. To
block that lending, the FY1994-FY1996 foreign aid appropriations (P.L. 103-87, , P.L. 103-306, ,
and P.L. 104-107) cut the amount appropriated for the U.S. contribution to the bank by the
amount of those loans, contributing to a temporary halt in new bank lending to Iran. But, in May
2000, the United States'’ allies outvoted the United States to approve $232 million in loans for
health and sewage projects. During April 2003-May 2005, a total of $725 million in loans were
approved for environmental management, housing reform, water and sanitation projects, and land
management projects, in addition to $400 million in loans for earthquake relief.
WTO Accession
An issue related to sanctions is Iran'’s request to join the World Trade Organization (WTO). Iran
began accession talks in 2006 after the George W. Bush Administration dropped its objection to Iran'
Iran’s application as part of an effort to incentivize Iran to reach an interim nuclear agreement.
The lifting of sanctions presumably paves the way for talks to accelerate, but the accession
process generally takes many years. Accession generally takes place by consensus of existing
WTO members. Iran'’s accession might be complicated by the requirement that existing members
trade with other members; as noted above, the U.S. ban on trade with Iran remains in force. The
Trump Administration does not advocate Iran'’s admission to that convention.
Table 3. Comparison Between U.S., U.N., and EU and Allied Country Sanctions
(Prior to Implementation Day)
U.S. Sanctions
U.N. Sanctions
EU and Other Allied
Countries
(Prior to Implementation Day)
|
U.S. Sanctions |
U.N. Sanctions |
EU and Other Allied Countries |
General Observation: Most |
As of 2010, U.N. sanctions were
Post-JCPOA: Resolution 2231 is the |
EU closely aligned its sanctions Japan, South Korean, and China |
Ban on U.S. Trade with | U.N. sanctions did not at any time | No comprehensive EU ban on
Japan and South Korea did not ban |
|
No U.N. equivalent existed. |
With certain exceptions, the EU
Japanese and South Korean |
Ban on Foreign Assistance:
U.S. foreign assistance to Iran—
other than purely humanitarian | ). No U.N. equivalent |
EU measures of July 27, 2010,
Japan and South Korea measures |
Ban on Arms Exports to Iran:
Iran is ineligible for U.S. arms |
As per Resolution 1929 (paragraph | EU sanctions include a postJCPOA.
No similar Japan and South Korean |
Restriction on Exports to Iran ”:
Primarily under §6(j) of the Export |
U.N. resolutions on Iran banned the |
EU banned the sales of dual use postJCPOA.
Japan and S. Korea have announced |
Sanctions Against Lending to Iran:
|
Resolution 1747 (oper. paragraph 7) |
The July 27, 2010, measures
Japan and South Korea banned |
Sanctions Against
Several laws and regulations provide |
Resolution 1737 (oper. paragraph |
The EU measures imposed July 27,
Japan and South Korea froze assets |
Ban on Transactions
Executive Order 13224 bans |
No direct equivalent, but Resolution |
No direct equivalent, but many of
Japan and S. Korea did not impose |
Human Rights Sanctions:
CISADA provides for a prohibition |
No U.N. sanctions were imposed on | EU sanctions include 87 named
Japan and South Korea have |
|
Restrictions on Iranian Shipping: Under Executive Order 13382, the U.S. Department of the Treasury has named Islamic Republic of Iran Shipping Lines and several affiliated entities as entities whose U.S.-based property is to be frozen. |
Resolution 1803 and 1929 authorize countries to inspect cargoes carried by Iran Air and Islamic Republic of Iran Shipping Lines (IRISL)—or any ships in national or international waters—if there is an indication that the shipments include goods whose export to Iran is banned. These resolutions no longer apply. |
The EU measures announced July 27, 2010, bans Iran Air Cargo from access to EU airports. The measures also freeze the EU-based assets of IRISL and its affiliates. Insurance and reinsurance for Iranian firms are banned. These sanctions now lifted. Japan and South Korean measures took similar action against IRISL and Iran Air. Sanctions now lifted. |
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EU and Other Allied
Countries
U.S. Sanctions
U.N. Sanctions
Restrictions on Iranian
Shipping:
Under Executive Order 13382, the
U.S. Department of the Treasury
has named Islamic Republic of Iran
Shipping Lines and several affiliated
entities as entities whose U.S.-based
property is to be frozen.
Resolution 1803 and 1929 authorize
countries to inspect cargoes carried
by Iran Air and Islamic Republic of
Iran Shipping Lines (IRISL)—or any
ships in national or international
waters—if there is an indication that
the shipments include goods whose
export to Iran is banned.
These resolutions no longer apply.
The EU measures announced July
27, 2010, bans Iran Air Cargo from
access to EU airports. The
measures also freeze the EU-based
assets of IRISL and its affiliates.
Insurance and reinsurance for
Iranian firms are banned. These
sanctions now lifted.
Japan and South Korean measures
took similar action against IRISL
and Iran Air. Sanctions now lifted.
Banking Sanctions:
During 2006-2011, several Iranian
CISADA prohibits banking
FY2012 Defense Authorization (P.L. | No direct equivalent
However, two Iranian banks were |
The EU froze Iran Central Bank
Brussels-based SWIFT expelled Japan and South Korea took similar |
Ballistic Missiles: U.S. |
Resolution 1929 (paragraph 9) | EU measures on July 27, 2010, |
It can be argued that the question "“are sanctions on Iran 'working'?"‘working’?” should be assessed based on
an analysis of the goals of the sanctions. The following sections try to assess the effectiveness of
Iran sanctions according to a number of criteria.
The sanctions regime of 2011-2015 is widely credited with increasing Iran'’s willingness to accept
restraints on its nuclear program, at least for a long period of time, as stipulated in the JCPOA.
Hassan Rouhani was elected president of Iran in June 2013 in part because of his stated
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commitment to achieving an easing of sanctions and ending Iran'’s international isolation—a
commitment that would undoubtedly require accepting such restraints. Still, as to the long-term
effects of sanctions, the intelligence community assesses that it "“does not know"” whether Iran
plans to eventually develop a nuclear weapon.91
95
It remains uncertain whether Iran will remain in the JCPOA despite the U.S. exit from it.9296 There
are no indications that Iranian leaders will answer the Trump Administration call for negotiations
on a new agreement that would cover not only Iran'’s nuclear program but also its missile program
and its regional malign activities. Both President Trump and President Rouhani have publicly said
they would accept bilateral talks without conditions, but both leaders generally indicate that the other'
other’s demands are too extensive to make such a meeting productive.
There is little evidence that even the strict sanctions of 2011-2016 slowed Iran'’s nuclear program
or its missile program. And, even though U.S. and EU sanctions remain on Iran'’s missile
programs, U.S. intelligence officials have testified that Iran continues to expand the scale, reach,
and sophistication of its ballistic missile arsenal. Still, some U.S. officials have asserted that Iran'
Iran’s nuclear and missile programs might have advanced faster were sanctions not imposed.93
97
Sanctions have apparently prevented Iran from buying significant amounts of major combat
systems since the early 1990s. Iran has been able to acquire defensive systems; Russia delivered
the S-300 air defense system in April 2016. However, Iran'’s indigenous arms industry has grown
over the past two decades and Iran might have acquired some systems from foreign suppliers
such as North Korea that do not abide by U.N. restrictions.9498 U.S. intelligence directors testified
in February 2018 that Iran is fielding increasingly lethal weapons systems, including more
advanced naval mines and ballistic missiles, small but capable submarines, armed UAVs
(unmanned aerial vehicles), coastal defense cruise missile batteries, attack craft, and anti-ship
ballistic missiles.95
Strict sanctions during 2012-2016, and U.N. restrictions and U.S. sanctions against Iran's ’s
exportation of weaponry, did not prevent Iran from supplying arms, including missiles, to its
regional allies, such as the Asad regime in Syria, the Houthi rebels in Yemen, Lebanese
Hezbollah, or Shiite militia groups in Iraq. Iran apparently is able to manufacture domestically the
weaponry it suppliers to such entities, and sanctions do not appear to be an effective tool to limit
such Iranian efforts. Nor did sanctions prevent Iran from sending thousands of IRGC advisers to
help the Asad regime in Syria beginning in 2013.
Iran has remained engaged in these regional conflicts since sanctions were eased in early 2016. In
his May 8, 2018, announcement of withdrawal from the JCPOA, President Donald Trump stated
that Iran'’s defense budget had increased 40% since Implementation Day, but it is not clear that
the extra defense funds contributed to any expansion of Iran'’s regional activities. The President stated on August 6, 2018, the day that many U.S. sanctions were reimposed on Iran, that "Since the deal [JCPOA] was reached, Iran's aggression has only increased. The regime has used the windfall of newly accessible funds it received under the JCPOA to build nuclear-capable missiles, fund terrorism, and fuel conflict across the Middle East and beyond.... The reimposition of nuclear-related sanctions through today's actions further intensifies pressure on Tehran to change its conduct."96 However, there are no indications that the reimposition of U.S. sanctions has caused any Iranian regional retrenchment, to date.
“Worldwide Threat Assessment of the U.S. Intelligence Community.” Testimony before the Senate Select
Committee on Intelligence. May 11, 2017. This language was not contained in the 2018 version of the testimony.
96 This possibility is examined in detail in: CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by Paul K.
Kerr and Kenneth Katzman and CRS In Focus IF10916, Iran: Efforts to Preserve Economic Benefits of the Nuclear
Deal, by Cathleen D. Cimino-Isaacs, Kenneth Katzman, and Derek E. Mix.
97 Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011.
98 Department of Defense, Annual Report of Military Power of Iran, April 2012.
99 Worldwide Threat Assessment of the U.S. Intelligence Community, February 13, 2018.
95
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stated on August 6, 2018, the day that many U.S. sanctions were reimposed on Iran, that “Since
the deal [JCPOA] was reached, Iran’s aggression has only increased. The regime has used the
windfall of newly accessible funds it received under the JCPOA to build nuclear-capable missiles,
fund terrorism, and fuel conflict across the Middle East and beyond.... The reimposition of
nuclear-related sanctions through today’s actions further intensifies pressure on Tehran to change
its conduct.”100 However, there are no indications that the reimposition of U.S. sanctions has
caused any Iranian regional retrenchment, to date.
In terms of congressional oversight, a provision of the FY2016 Consolidated Appropriation (P.L.
114-113) requires an Administration report to Congress on how Iran has used the financial
benefits of sanctions relief. And, a provision of the Iran Nuclear Agreement Review Act (P.L.
114-17) requires that a semiannual report on Iran'’s compliance with the JCPOA include
information on any Iranian use of funds to support acts of terrorism.
Political Effects
No U.S. Administration, including the Trump Administration, has asserted that sanctions on Iran
are intended to bring about the change of Iran'’s regime, although some experts assert that this
might be a desired U.S. goal in the 2018 reimpositionre-imposition of U.S. sanctions. But, the support of
Iranians seeking reintegration with the international community and sanctions relief helped propel Rouhani—
the most moderate of the candidates permitted to run—to a first round victory in the June 2013 presidential election, and to reelection in Mayrelatively moderate Rouhani to election victories in both 2013 and 2017. Many Iranians
cheered the finalization of the JCPOA on July 15, 2015, undoubtedly contributing to Supreme
Leader Khamene'i'’i’s acceptance of the deal.
Still, the IRGC and other hardliners control domestic security and the judiciary, and these factions
have criticized Rouhani'’s compromises, particularly in light offollowing the U.S. exit from the JCPOA.
The security forces have continued to arrest U.S. and dual nationals and to prosecute Rouhani
allies on various charges. In July 2018, the IRGC and Iran'’s parliament (Majles) called for
cabinet changes to address economic mismanagement and, in September 2018, the Majles
compelled Rouhani to be questioned about the economic situation.97101 In July 2018, Rouhani
replaced Iran'’s Central Bank governor as an apparent gesture to indicate responsiveness to
economic concerns expressed by members of Iran'’s political establishment. Still, apparently out of hardliner concern that forcing Rouhani out could touch off massive unrest, there does not , there does not
appear to be an imminent threat to Rouhani'’s grip on his office.
Some assert that the sanctions relief of the JCPOA played a role in the widespread unrest that
erupted in Iran in late December 2017-January 2018 by feeding unrealized public expectations of
better economic conditions. Others note that the unrest illustrates that sanctions relief of the
JCPOA did not yield the domestic stability that Iran'’s regime expected to achieve. The U.S.
pullout from the JCPOA on May 8 has begun to cause economic effects, discussed below, that led
to protests in the Tehran bazaar in late June 2018, subsequent demonstrations in several cities, and
labor strikes and unrest beginning in late summer 2018. However, experts on Iran assess thatsummer 2018 and continuing, although sporadically.
However, the level of unrest in Iran is not does not appear sufficient to threaten the regime.
Economic Effects
sufficient to cause a change in regime.
Sanctions took a substantial toll on Iran'’s economy, and sanctions relief caused Iran'’s economy to
rebound, although perhaps not to the extent that Iranians expected. Assessing the effects of the
100
101
Statement from the President on the Reimposition of United States Sanctions with Respect to Iran. August 6, 2018.
https://en.radiofarda.com/a/iran-rouhani-irgc-demands/29413585.html.
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U.S. exit from the JCPOA will likely require time for most economic indicators to be accurately
measured.
Iran had some success mitigating the economic effect of sanctions, and which will likely be used
to try to cope with reimposed U.S. sanctions.
Promoting a Broader Range of ExportsExports. Over the past 10 years, Iran has promoted sales of nonoil
products such as minerals, cement, urea fertilizer, and other agricultural and basic industrial
goods. Such "nonoil"“nonoil” exports now generate much of the revenue that funds Iran'’s imports.106
110
Oil Products/Condensate Sales. Iran has increased sales of oil products such as petrochemicals
and condensates, earning about $4.7 billion in revenue from that source by 2016.107111 Condensates
are not generally included in figures for Iran'’s export of crude oil.
Reallocation of Investment Funds and Import Substitution. Sanctions compelled some Iranian
manufacturers to increase domestic production of some goods as substitutes for imports. This
trend was hailed by Iranian economists and Supreme Leader Khamene'’i, who has long
maintained that Iran should build a "“resistance economy"” less dependent on imports and foreign
investment.
Partial Privatization/IRGC in the Economy. Over the past few years, portions of Iran's state-owned’s stateowned enterprises have been transferred to the control of quasi-governmental or partially private
entities. Some of them are incorporated as holding companies, foundations, or investment groups.
Based on data from the Iranian Privatization Organization, there are about 120 such entities that
account for a significant proportion of Iran'’s GDP.108112 Rouhani has sought to push the IRGC out
of Iran'’s economy through divestment, to the extent possible. However, a substantial part of the
economy remains controlled by government-linked conglomerates, including the IRGC. Although
estimates vary widely, the IRGC'’s corporate affiliates are commonly assessed as controlling at
least 20% of Iran'’s economy, although there is little available information on the degree of IRGC-affiliatedIRGCaffiliated ownership stakes.109
113
Subsidy Reductions. In 2007, the Ahmadinejad government began trying to wean the population
off of generous subsidies by compensating families with cash payments of about $40 per month.
Gasoline prices were raised to levels similar to those in other regional countries, and far above the
subsidized price of 40 cents per gallon. Rouhani has continued to reduce subsidies, including by
raising gasoline and staple food prices further and limiting the cash payments to only those
families who could claim financial hardship. Rouhani also has improved collections of taxes and
of price increases for electricity and natural gas utilities.110
114
110
Testimony of Patrick Clawson before the Senate Banking Committee. January 21, 2015.
“Iran Reaps Less Cash from Eased Sanctions Than Predicted,” op. cit.
112 Kevan Harris, “Iran’s Political Economy Under and After the Sanctions,” Washington Post blogs, April 23, 2015.
113 https://www.thenational.ae/world/us-sanctions-on-revolutionary-guards-causes-iran-investment-rethink-1.733028.
114 Patrick Clawson testimony, January 21, 2015, op. cit.
111
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Import Restrictions/Currency Controls.. To conserve hard currency, Iran has at times reduced the
supply of hard currency to importers of luxury goods, such as cars or cellphones, in order to
maintain hard currency supplies to importers of essential goods. These restrictions eased after
sanctions were lifted in 2016 but have been reimposed in 2018 to deal with economic unrest and
the falling value of the rial.
The Iran Sanctions Act (ISA) was enacted in large part to reduce Iran'’s oil and gas production
capacity over the longer term by denying Iran the outside technology and investment to maintain
or increase production. U.S. officials estimated in 2011 that Iran had lost $60 billion in
investment in the sector as numerous major firms pulled out of Iran. Iran says it needs $130
billion-$145 billion in new investment by 2020 to keep oil production capacity from falling.111 115
Further development of the large South Pars gas field alone requires $100 billion.112
116
During 2012-2016, there was little development activity at Iran'’s various oil and gas development
sites, as energy firms sought to avoid sanctions (see Table 4). Some work abandoned by foreign
investors was assumed by domestic companies, particularly those linked to the IRGC. However,
the Iranian firms are not as technically capable as the international firms that have withdrawn.
The lifting of sanctions in 2016 lured at least some foreign investors back into the sector,
encouraged by Iran'’s more generous investment terms under a concept called the "“Iran Petroleum
Contract."” That contract gives investing companies the rights to a set percentage of Iran'’s oil
reserves for 20-25 years.113117 Iran signed a number of new agreements with international energy
firms since mid-2016 but, as noted in the tables and other information above, major energy firms
have begun to divest in response to the U.S. exit from the JCPOA.
Sanctions relief also opened opportunities for Iran to resume developing its gas sector. Iran has
used its gas development primarily to reinject into its oil fields rather than to export. Iran exports
about 3.6 trillion cubic feet of gas, primarily to Turkey and Armenia. Sanctions have rendered
Iran unable to develop a liquefied natural gas (LNG) export business. However, it was reported in
March 2017 that the Philippine National Oil Company is seeking to build a 2-million-ton LNG
plant in Iran, suggesting that patent issues do not necessarily preclude Iran from pursuing LNG.
|
Date |
Field/Project |
Company(ies)/Status (If Known) |
Value |
|
|
Feb. 1999 |
115
Khajehpour presentation at CSIS, op. cit.
“Iran Faces Steep Climb to Join Gas Superpowers by 2017,” International Oil Daily, April 29, 2014.
117 Thomas Erdbrink. “New Iran Battle Brews over Foreign Oil Titans.” New York Times, February 1, 2016.
116
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Table 4. Post-1999 Major Investments in Iran’s Energy Sector
Date
Company(ies)/Status
(If Known)
Field/Project
Value
Output/
Goal
Feb. 1999
Doroud (oil)
Total and ENI exempted from sanctions |
Total (France)/ENI (Italy)
$1 billion
205,000 bpd
Apr. 1999
Dec./May
2016
|
$1 billion |
205,000 bpd |
|
Apr. 1999 Dec./May 2016 |
Balal (oil) Balal (oil) Initial development completed in 2004
Dec. 2016: Thailand PTTEP signed agreement
May 2016: KOGAS signed a memorandum of |
Total/ Bow Valley Thailand PTTEP KOGAS (South Korea) |
$300 million |
40,000 bpd |
|
Nov. 1999 |
Soroush and Nowruz (oil) Soroush and Nowruz (oil)
Royal Dutch exempted from sanctions because |
Royal Dutch Shell |
$800 million |
190,000 bpd |
|
Apr. 2000 |
Anaran bloc (oil) Anaran bloc (oil)
Lukoil and Statoil invested in 2000 but | Lukoil (Russia) and Statoil |
$105 million |
65,000 |
|
Jul. 2000 |
Phase 4 and 5, South Pars (gas) On stream as of 2005. ENI exempted from sanctions based on pledge to exit Iran market |
ENI |
$1.9 billion |
2 billion cu. ft./day (cfd) |
|
Mar. 2001 |
ft./day (cfd)
Mar. 2001
Caspian Sea oil exploration—construction |
GVA Consultants (Sweden) |
$225 million |
NA |
|
Jun. 2001 |
GVA Consultants (Sweden)
$225 million
NA
Jun. 2001
Darkhovin (oil)
ENI exited in 2013 and doing so enabled the |
ENI Field in production |
$1 billion |
100,000 bpd |
|
May 2002 |
Masjid-e-Soleyman (oil) |
Masjid-e-Soleyman (oil)
Sheer Energy |
$80 million |
25,000 bpd |
|
Sept. 2002 |
Phase 9 + 10, South Pars (gas) On stream as of early 2009 |
On stream as of early 2009
GS Engineering and |
$1.6 billion |
2 billion cfd |
|
Oct. 2002 |
Phase 6, 7, 8, South Pars (gas) Field began producing late 2008; operational |
Statoil (Norway) |
$750 million |
3 billion cfd |
Statoil (Norway)
$750 million
3 billion cfd
Jan. 2004
Dec. 2016 | Dec. 2016 Azadegan (oil)—South and North
Oct. 2010: original investor Inpex sold its stake
Dec. 2016: Royal Dutch Shell and Petronas | Inpex (Japan) CNPC (China)
Royal Dutch Shell/Petronas |
$200 million (Inpex stake); China $2.5 billion |
260,000 bpd |
|
Jan. 2004 |
Tusan Block Oil found in block in Feb. 2009, but not in commercial quantity, according to the firm. |
Petrobras (Brazil) |
$178 million |
|
Oct. 2004
| Yadavaran (oil) Yadavaran (oil)
In 2014, Iran says Sinopec has
December 2016: Royal Dutch Shell signed MoU |
Sinopec (China), deal |
$2 billion |
300,000 bpd |
|
2005 |
Saveh bloc (oil) Saveh bloc (oil)
GAO report, cited below
PTT (Thailand)
Jun. 2006
|
PTT (Thailand) |
||
|
Jun. 2006 |
Garmsar bloc (oil) Garmsar bloc (oil) Deal finalized in June 2009
|
Sinopec (China) |
$20 million |
|
|
Jul. 2006 |
.) Sinopec (China) $20 million Jul. 2006 Arak Refinery expansion
(GAO reports; Fimco FZE Machinery website; | Itemid=78.)
Sinopec (China); JGC |
$959 million (major initial expansion; extent of Hyundai work unknown) |
Expansion to produce 250,000 bpd |
|
Sept. 2006 |
unknown) Expansion to produce 250,000 bpd Sept. 2006 Khorramabad block (oil)
Seismic data gathered, but no production is |
Norsk Hydro and Statoil |
$49 million |
no estimates |
|
Dec. 2006 |
|
China National Offshore |
$16 billion |
3.6 billion cfd |
|
Feb. 2007 |
LNG Tanks at Tombak Port LNG Tanks at Tombak Port
Contract to build three LNG tanks at Tombak,
(May not constitute |
Daelim (S. Korea) |
$320 million |
200,000 ton capacity |
|
Feb. 2007 |
Phase 13, 14—South Pars (gas) Deadline to finalize (May 2009) not met; firms submitted revised proposals to Iran in June 2009. State Department said on September 30, 2010, that Royal Dutch Shell and Repsol will not pursue this project any further. |
Repsol will not pursue this project any further.
Royal Dutch Shell, Repsol |
$4.3 billion |
|
|
Mar. 2007 |
Esfahan refinery upgrade |
Daelim (S. Korea) |
NA |
|
|
Jul. 2007 |
Phase 22, 23, 24—South Pars (gas) Pipeline to transport Iranian gas to Turkey, and on to Europe and building three power plants in Iran. Contract not finalized to date. |
Turkish Petroleum Company (TPAO) |
$12. billion |
2 billion cfd |
|
Dec. 2007 |
Contract modified but reaffirmed December | Petrofield Subsidiary of SKS |
$15 billion |
3.4 billion cfd of gas/250,000 bpd of oil |
|
2007 |
bpd of oil 2007 Jofeir Field (oil)
GAO report cited below. Belarusneft, a | Belarusneft (Belarus) under
No production to date
$500 million
40,000 bpd
2008
|
$500 million |
40,000 bpd |
|
2008 |
Dayyer Bloc (Persian Gulf, offshore, oil)
GAO reports.
Edison (Italy)
$44 million
PGNiG (Polish Oil and Gas
Company, Poland), divested
to Iranian firms in 2011
$2 billion
Lavan field (offshore natural gas)
Mar. 2008
|
Edison (Italy) |
$44 million |
|
|
Feb. 2008 |
Lavan field (offshore natural gas) | PGNiG (Polish Oil and Gas Company, Poland), divested to Iranian firms in 2011 |
$2 billion |
|
|
Mar. 2008 |
Danan Field (on-shore oil)
|
Petro Vietnam Exploration | ||
|
Apr. 2008 |
Iran's Kish Gas Field Includes pipeline from Iran to Oman. |
Includes pipeline from Iran to Oman.
Oman (cofinancing of |
$7 billion |
1 billion cfd |
|
Apr. 2008 |
Moghan 2 (onshore oil and gas, Ardebil | INA (Croatia), but firm |
$40-$140 million |
|
|
2008 |
Kermanshah petrochemical plant (new construction) construction)
GAO reports.
Uhde (Germany)
Jun. 2008
Resalat Oilfield
|
Uhde (Germany) |
300,000 metric tons/yr |
|
|
Jun. 2008 |
Resalat Oilfield Status of work unclear. |
Status of work unclear.
Amona (Malaysia). Joined in |
$1.5 billion |
47,000 bpd |
|
Jan. 2009 |
Bushehr Polymer Plants Bushehr Polymer Plants
Production of polyethelene at two polymer |
Sasol (South Africa), but |
Capacity is 1 million tons per year. |
|
|
Mar. 2009 |
Phase 12 South Pars (gas)—Incl. LNG |
Indian firms: Oil and Natural |
$8 billion |
20 million tonnes of LNG annually by 2012 |
|
Aug. 2009 |
Abadan refinery Upgrade and expansion; building a new refinery |
Sinopec |
Sinopec
Up to $6 | |
|
Oct. 2009 |
South Pars Gas Field—Phases 6-8, Gas
CRS conversation with Embassy of S. Korea in
Contract signed but then abrogated by S. | G and S Engineering and |
$1.4 billion |
|
|
Nov. 2009 |
South Pars: Phase 12—Part 2 and Part 3
| Print/?id=110308.)
Daelim (S. Korea)—Part 2; |
$4 billion ($2 | |
|
Feb. 2010/July 2017 |
South Pars: Phase 11 Phase 11
Project originally awarded to CNPC in 2010, |
Total SA (France) and CNPC (China), with Iran Petropars |
$4.7 billion |
|
|
2011 |
In November 2018, Total exited and CNPC
became operator. CNPC exited in December
2018, leaving production status unclear.
Total SA (France) and
CNPC (China), with Iran
Petropars
$4.7 billion
2011
Azar Gas Field
Iran cancelled Gazprom |
Gazprom (Russia) |
||
|
Dec. 2011 |
Zagheh Oil Field Zagheh Oil Field
Preliminary deal signed December 2011
Tatneft (Russia)
Jul. 2016
|
Tatneft (Russia) |
$1 billion |
55,000 barrels per day |
|
Jul. 2016 |
Aban Oil Field Aban Oil Field Zarubezhneft signed a MoU to assess the field. |
Zarubezhneft (Russia) |
||
|
Jul. 2016 |
Zarubezhneft (Russia) Jul. 2016 Paydar Garb Oil Field Zarubezhneft signed a MoU to assess the field. |
Zarubezhneft (Russia) |
||
|
Nov. 2016 |
Zarubezhneft (Russia) Nov. 2016 Parsi and Rag E-Sefid Schlumberger signed a MoU to assess the fields. |
Schlumberger (France) |
||
|
Nov. 2016 |
Schlumberger (France) Nov. 2016 South Pars Phase 11
Total has announced it will divest in response |
Total SA (France)/CNPC |
$4.8 billion |
1.8 billion cu ft/day |
|
Nov. 2016 |
Sumar Oil Field Sumar Oil Field
Polish Oil and Gas Company (PGNiG) signed a |
PGNiG (Poland) |
||
|
Nov. 2016 |
Karanj
PGNiG (Poland)
Nov. 2016
Karanj
International Pergas Consortium signed a MoU |
Pergas (consortium of 15 | ||
|
Dec. 2016 |
Changuleh Oil Field Companies signed MoU's to assess field. |
s to assess field.
Gazprom (Russia), PTTEP | ||
|
Dec. 2016 |
Kish Gas Field Royal Dutch Shell signed MoU to assess the field |
Royal Dutch Shell |
||
|
Dec. 2016 |
Chesmekosh Gas Field Chesmekosh Gas Field Gazprom signed MoU to assess the field |
Gazprom (Russia) and | ||
|
Mar. 2017 |
Shadegan Oil Field Shadegan Oil Field
Khuzestan province (southern Iran). Currently |
Tatneft (Russia) |
Tatneft (Russia)
500,000 bpd |
Sources: Various oil and gas journals, as well as CRS conversations with some U.S. and company officials. Some
information comes from various GAO reports, the latest of which was January 13, 2015 (GAO-15-258R).
Note: CRS has no mandate, authority, or means to determine violations of the Iran Sanctions Act, and no way
to confirm the status of any of the reported investments. The investments are private agreements between Iran
and the firms involved, which are not required to reveal the terms of their arrangements. Reported $20 million+
investments in oil and gas fields, refinery upgrades, and major project leadership are included in this table.
Responsibility for a project to develop Iran'’s energy sector is part of ISA investment definition.
As the enactment of U.S. sanctions on the sale of gasoline to Iran became increasingly likely in
2010, several suppliers apparently stopped selling gasoline to Iran.114118 Others ceased after the
enactment of CISADA. Gasoline deliveries to Iran fell from about 120,000 barrels per day before
CISADA to about 30,000 barrels per day immediately thereafter, although importation later
increased to about 50,000 barrels per day. In 2017, Iranian officials said Iran had become largely
self-sufficient in gasoline production.
It is difficult to draw any direct relationship between sanctions and Iran'’s human rights practices.
Recent human rights reports by the State Department and the U.N. Special Rapporteur on Iran's ’s
human rights practices generally assess that there has been some modest improvement in some of Iran'
Iran’s practices in recent years, particularly relaxation of enforcement of the public dress code for
women. But the altered policies cannot necessarily be attributed to sanctions relief.
Since at least 2012, foreign firms have generally refrained from selling the Iranian government
equipment to monitor or censor social media use. Such firms include German
telecommunications firm Siemens, Chinese internet infrastructure firm Huawei, and South
African firm MTN Group. In October 2012, Eutelsat, a significant provider of satellite service to Iran'
Iran’s state broadcasting establishment, ended that relationship after the EU sanctioned the then
head of the Islamic Republic of Iran Broadcasting (IRIB), Ezzatollah Zarghami. However, the
regime retains the ability to monitor and censor social media use.
Humanitarian Effects
During 2012-2016, sanctions produced significant humanitarian-related effects, particularly in
limiting the population'’s ability to obtain expensive Western-made medicines, such as
chemotherapy drugs. Some of the scarcity was caused by banks'’ refusal to finance such sales,
even though doing so was not subject to any sanctions. Some observers say the Iranian
Information in this section derived from Javier Blas, “Traders Cut Iran Petrol Line,” Financial Times, March 8,
2010.
118
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government exaggerated reports of medicine shortages to generate opposition to the sanctions.
Other accounts say that Iranians, particularly those with connections to the government, took
advantage of medicine shortages by cornering the import market for key medicines. However,
some of these shortages resurfaced in 2018 following the reimposition of sanctions by the Trump
Administration. For example, reports in 2018 indicated that the reimposition of U.S. sanctions
may be inhibiting the flow of humanitarian goods to the Iranian people and reportedly
contributing to shortages in medicine to treat ailments such as multiple sclerosis and cancer.115 119
Other reports indicate that Cargill, Bunge, and other global food traders have halted supplying
Iran because of the evaporation of available transactions financing.116120 EU officials have called on
the United States to produce a "“white list"” that would "“give clear guidelines about what channels
European banks and companies should follow to conduct legitimate [humanitarian] transactions
with Iran without fear of future penalties."117
”121
Other reports say that pollution in Tehran and other big cities is made worse by sanctions because
Iran produces gasoline itself with methods that cause more impurities than imported gasoline. As
noted above, Iran'’s efforts to deal with environmental hazards and problems might be hindered
by denial of World Bank lending for that purpose.
In the aviation sector, some Iranian pilots complained publicly that U.S. sanctions caused Iran's ’s
passenger airline fleet to deteriorate to the point of jeopardizing safety. Since the U.S. trade ban
was imposed in 1995, 1,700 passengers and crew of Iranian aircraft have been killed in air
accidents, although it is not clear how many of the crashes, if any, were due to difficultly in
acquiring U.S. spare parts.118
122
Air Safety
Sanctions relief ameliorated at least some of the humanitarian difficulties discussed above. In the
aviation sector, several sales of passenger aircraft have been announced, and licensed by the
Department of the Treasury, since Implementation Day. However, as noted, the licenses are being
revoked and deliveries will not proceed beyond November 2018.
The JCPOA, its implications, and related Iran issues have been the subject of legislation. The
JCPOA states that as long as Iran fully complies with the JCPOA, the sanctions that were
suspended or lifted shall not be reimposed on other bases (such as terrorism or human rights).
114th Congress
The Obama Administration stated that it would adhere to that provision but that some new
sanctions that seek to limit Iran'’s military power, its human rights abuses, or its support for
militant groups might not necessarily violate the JCPOA. During 2015-2016, supporters of the
bills below asserted that they addressed weaknesses of the agreement or unrelated Iran issues, or
increased oversight of the JCPOA.
)
The Iran Nuclear Agreement Review Act of 2015 (INARA, P.L. 114-17) provided for a 30- or 60-day60day congressional review period after which Congress could pass legislation to approve or to
disapprove of the JCPOA, or do nothing. No such legislation of disapproval was enacted.
There are several certification and reporting requirements under INARA:
The FY2016 Consolidated Appropriation (P.L. 114-113) contained a provision amending the Visa
Waiver Program to require a visa to visit the United States for any person who has visited Iraq,
Syria, or any terrorism list country (Iran and Sudan are the two aside from Syria still listed) in the
previous five years. Iran argued that the provision represented a violation of at least the spirit of
the JCPOA by potentially deterring European businessmen from visiting Iran. The Obama
Administration issued a letter to Iran stating it would implement the provision in such a way as
not to not impinge on sanctions relief, and allowances for Iranian students studying in the United
States were made in the implementing regulations. Another provision of that law requires an
Administration report to Congress on how Iran has used the benefits of sanctions relief.
President Trump has issued and amended executive orders that, in general, prohibit Iranian
citizens (as well as citizens from several other countries) from entering the United States. This
marked a significant additional restriction beyond the FY2016 Consolidated Appropriation.
The 114th
The 114th Congress acted to prevent ISA from expiring in its entirety on December 31, 2016. The
Iran Sanctions Extension Act (H.R. 6297), which extended ISA until December 31, 2026, without
any other changes, passed the House on November 15 by a vote of 419-1 and then passed the
Senate by 99-0. President Obama allowed the bill to become law without signing it (P.L. 114-277114277), even though the Administration considered it unnecessary because the President retains
ample authority to reimpose sanctions on Iran. Iranian leaders called the extension a breach of the
JCPOA,119123 but the JCPOA's "’s “Joint Commission"” did not determine it breached the JCPOA.
The conference report on the FY2017 National Defense Authorization Act (S. 2943, , P.L. 114-328) )
contained a provision (Section 1226) requiring a quarterly report to Congress on Iran'’s missile
launches the imposition of U.S. sanctions with respect to Iran'’s ballistic missile launches until
December 31, 2019. The conference report on the FY2018 NDAA (P.L. 115-91) extended that
reporting requirement until December 31, 2022. The report is to include efforts to sanction
entities or individuals that assist those missile launches.
Some Iran sanctions legislation in the 114th114th Congress appeared to be intended to address Iran's ’s
objectionable behavior, but was not enacted:
Even before the Trump Administration pulled the United States out of the JCPOA, Congress
acted on or considered additional Iran sanctions legislation. Some of the legislation appeared to
avoid violating U.S. JCPOA commitments. Because the Trump Administration has exited the
pact, there is increased potential for the 116th116th Congress to consider legislation that sanctions those
Iranian economic sectors that could not be sanctioned under the JCPOA.
The following is some of the Iran sanctions legislation enacted or considered in the 115th Congress.
)
A bill, S. 722, which initially contained only Iran-related sanctions, was reported out by the
Senate Foreign Relations Committee on May 25, 2017. After incorporating an amendment adding
sanctions on Russia, the bill was passed by the Senate on June 15, 2017, by a vote of 98-2. A
companion measure, H.R. 3203, was introduced in the House subsequent to the Senate passage of
S. 722, and contained Iran-related provisions virtually identical to the engrossed Senate version of
S. 722. Following a reported agreement among House and Senate leaders, H.R. 3364, with
additional sanctions provisions related to North Korea (and provisions on Iran remaining virtually
unchanged from those of the engrossed S. 722), was introduced and passed both chambers by
overwhelming margins. President Trump signed it into law on August 2, 2017 (P.L. 115-44), ),
accompanied by a signing statement expressing reservations about the degree to which provisions
pertaining to Russia might conflict with the President'’s constitutional authority.
CAATSA'
CAATSA’s Iran-related provisions are analyzed above. Overall, CAATSA does not appear to
conflict with the JCPOA insofar as it does not reimpose U.S. secondary sanctions on Iran's ’s
civilian economic sectors. The JCPOA did not require the United States to refrain from imposing
additional sanctions—as CAATSA does—on Iranian proliferation, human rights abuses,
Congressional Research Service
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Iran Sanctions
terrorism, or the IRGC. Section 108 of CAATSA requires an Administration review of all
designated entities to assess whether such entities are contributing to Iran'’s ballistic missile
program or contributing to Iranian support for international terrorism.
Several bills similar or virtually identical to those introduced previously have
been introduced, imposing sanctions on Iranian proxies in Iraq and elsewhere.
These bills include: H.R. 361, the Iranian Proxies Terrorist Sanctions Act of
2019, and H.R. 571, the Preventing Destabilization of Iraq Act of 2019.
Other Possible U.S. and International Sanctions127
There are a number of other possible sanctions that might receive consideration—either in a
global or multilateral framework. These possibilities are analyzed in CRS In Focus IF10801,
Possible Additional Sanctions on Iran, by Kenneth Katzman.
126
127
https://www.politico.com/story/2018/11/01/gop-trump-iran-policy-956660.
See CRS In Focus IF10801, Possible Additional Sanctions on Iran, by [author name scrubbed].
, by Kenneth Katzman.
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Table 5. Entities Sanctioned Under U.N. Resolutions and U.S. Laws and Executive Orders
U.S. Laws and Executive Orders
Persons listed are identified by the positions they held when designated; some have since changed. For
U.S. executive order, names in italics are entities and individuals that were delisted to implement the
JCPOA. Entities in boldface were to be delisted on Transition Day (October 2023). However, all delisted
entities will be relisted on November 5, 2018, and no entities will be delisted.
U.N. Security Council Resolutions
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities/Persons Added by Resolution 1747 (resolution no longer active) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities Added by Resolution 1803 (resolution no longer active) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Requires that countries report when the following persons enter or transit their territories:
Travel banned for five Iranians sanctioned under Resolutions 1737 and 1747.
Adds entities to the sanctions list:
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities Added by Resolution 1929 (resolution no longer active) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Over 40 entities added; makes mandatory a previously nonbinding travel ban on most named Iranians of previous resolutions.
The following Revolutionary Guard affiliated firms (several are subsidiaries of Khatam ol-Anbiya, the main Guard construction
- Sepanir
The following entities owned or controlled by Islamic Republic of Iran Shipping Lines (IRISL): Irano Hind Shipping Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
.
Entities Designated Under U.S. Executive Order 13382
(many designations coincide with designations under U.N. resolutions)
Entity
Shahid Hemmat Industrial Group (Iran)
Shahid Bakeri Industrial Group (Iran)
Atomic Energy Organization of Iran (AEOI). AEOI and 23 subsidaries remain delisted for secondary
sanctions under E.O. 13382 but are still designated as Iran-owned or controlled entities.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Entity |
Date Named |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shahid Hemmat Industrial Group (Iran) |
June 2005, September 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shahid Bakeri Industrial Group (Iran) |
June 2005, February 2009 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Atomic Energy Organization of Iran |
June 2005 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Novin Energy Company (Iran) and Mesbah Energy Company |
January 2006 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Iran)
Four Chinese entities: Beijing Alite Technologies, LIMMT Economic and Trading Company, China |
June 2006 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sanam Industrial Group (Iran) and Ya Mahdi Industries Group (Iran) |
July 2006 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Bank Sepah (Iran) |
January 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Kalaye Electic Company |
February 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Defense Industries Organization (Iran) |
March 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Sepah (Iran)
Kalaye Electic Company
Defense Industries Organization (Iran)
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Date Named
June 2005, September
2007
June 2005, February 2009
June 2005
January 2006
June 2006
July 2006
January 2007
February 2007
March 2007
81
Iran Sanctions
Pars Trash (Iran, nuclear program), Farayand Technique (Iran, nuclear program), Fajr Industries |
June 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aerospace Industries Organization (AIO) (Iran); Korea Mining and Development Corp. (N. Korea). |
September 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Islamic Revolutionary Guard Corps (IRGC); Ministry of Defense and Armed Forces Logistics; |
October 21, 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individuals: Bahmanyar Morteza Bahmanyar (AIO, Iran missile official, see above under Resolution |
October 21, 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Bank (Bahrain-based but allegedly controlled by Bank Melli) |
March 12, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 2007
Yahya Rahim Safavi (former IRGC Commander in Chief); Mohsen Fakrizadeh-Mahabadi (senior |
July 8, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Karaj Nuclear Research Center; Esfahan Nuclear Fuel Research and Production Center (NFRPC); |
August 12, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Islamic Republic of Iran Shipping Lines (IRISL) and 18 affiliates, including Val Fajr 8 |
September 10, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
IRISL Malta
Firms affiliated to the Ministry of Defense, including Armament Industries Group; Farasakht |
September 17, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Export Development Bank of Iran (EDBI). Provides financial services to Iran |
October 22, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assa Corporation (alleged front for Bank Melli involved in managing property in New York City on |
December 17, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 Entities Tied to Bank Melli: Bank Melli Iran Investment (BMIIC); |
March 3, 2009 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
IRGC General Rostam Qasemi, head of Khatem ol-Anbiya Construction Headquarters (main IRGC |
February 10, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
- Rah Sahel and Sepanir Oil and Gas Engineering (for ties to Khatem ol-Anibya IRGC construction - Mohammad Ali Jafari—IRGC Commander-in-Chief since September 2007
- Ahmad Vahedi—Defense Minister
- Naval Defense Missile Industry Group (SAIG, controlled by the Aircraft Industries Org that
- Five front companies for IRISL: Hafiz Darya Shipping Co.; Soroush Sarzamin Asatir Ship Management .
Also identified on June 16 were 27 vessels linked to IRISKL and 71 new names of already designated
Several Iranian entities were also designated as owned or controlled by Iran for purposes of the ban |
June 16, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europaisch-Iranische Handelsbank (EIH) for providing financial services to Bank Sepah, Mellat, EDBI, |
September 7, 2010 |
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Pearl Energy Company (formed by First East Export Bank, a subsidiary of Bank Mellat, Pearl Energy |
November 30, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mohammad Haji Pajand.
Bonyad (foundation) Taavon Sepah, for providing services to the IRGC; Ansar Bank (for providing |
December 21, 2010 |
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|
Bank of Industry and Mine (BIM) |
May 17, 2011 |
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Bank of Industry and Mine (BIM) Tidewater Middle East Company; Iran Air; Mehr-e Eqtesad Iranian Investment Co. |
June 23, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
For proscribed nuclear activities, including centrifuge development and heavy water research: By .
By Treasury—Javad Rahiqi |
November 21, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
; Simatic
Development Co
Iran Maritime Industrial Company SADRA (owned by IRGC engineering firm Khatem-ol-Anbiya, has |
March 28, 2012 |
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Electronic Components Industries Co. (ECI) and Information Systems Iran (ISIRAN); Advanced |
July 12, 2012 |
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National Iranian Oil Company; Tehran Gostaresh, company owned by Bonyad Taavon Sepah; Imam |
November 8, 2012 |
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Atomic Energy Organization of Iran (AEOI) chief Fereidoun Abbasi Davani |
December 13, 2012 |
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SAD Import Export Company (also designated by U.N. Sanctions Committee a few days earlier for |
December 21, 2012 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Babak Morteza Zanjani—chairmen of Sorinet Group that Iran uses to finance oil sales abroad; |
April 11, 2013 |
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Iranian-Venezuelan Bi-National Bank (IVBB), for activities on behalf of the Export Development Bank of |
May 9, 2013 |
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For supporting Iran Air, the IRGC, and NIOC: Aban Air |
May 23, 2013 |
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Bukovnya AE (Ukraine) for leasing aircraft to Iran Air. |
May 31, 2013 |
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Several Iranian firms and persons: Eyvaz Technic Manufacturing Company; The Exploration |
December 12, 2013 |
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Ali Canko (Turkey) and Tiva Sanat Group, for procuring IRGC-Navy fast boats; |
February 6, 2014 |
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Karl Lee (aka Li Fangwei) and 8 China-based front companies: Sinotech Industry Co. Ltd.; MTTO |
April 29, 2014 |
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By State: Organization of Defensive Innovation and Research (nuclear esearch); Nuclear
By Treasury: Mohammad Javad Imarad and Arman Imanirad (for acting on behalf of |
April 29, 2014 (by both State and Treasury) |
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11 ballistic missile-related entities: Mabrooka Trading Co LLC (UAE); Hossein Pournaghshband; | January 17, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Two Iranian entities subordinate to SHIG: Shahid Nuri Industries and Shahid Movahed Industries. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
17 ballistic missile-related Entities. Abdollah Asgharzadeh Network (for supporting SHIG): Abdollah | February 3, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ballistic missile-related entities. Rahim Ahmadi (linked to Shahid Bakeri Industrial Group); Morteza | May 17, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
May 17, 2017
12 IRGC/military and ballistic missile entities designated by Treasury and two by State. By Treasury: | July 18, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Missile entities related to Iran Simorgh space launch on July 27: six subordinate entities to Shahid | July 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| October 13, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Five ballistic missile entities (owned or controlled by Shahid Bakeri Industrial Group, SBIG) : Shahid | January 4, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
January 4, 2018
Green Wave Telecommunications (Malaysia) and Morteza Razavi (for supporting Fanamoj, |
January 12, 2018 |
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Sayyed Mohammad Ali Haddadnezhad Tehrani, for supporting the IRGC Research and |
May 22, 2018 |
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January 12, 2018
Bank Tejarat (for providing servides to support Bank Sepah); Trade Capital Bank (Belarus); Morteza |
November 5, 2018 |
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|
Iran-Related Entities Sanctioned Under Executive Order 13224 (Terrorism Entities) |
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Two Iran-recruited Afghan and Pakistani-staffed militia entities fighting in Syria: Fatemiyoun Division and Zaynabiyoun Brigade. Qeshm Fars Air and Flight Travel LLC – Mahan Air affiliates - for weapons deliveries into Syria. January 24, 2019 Determinations and Sanctions under the Iran Sanctions Act | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total SA (France); Gazprom (Russia); and Petronas (Malaysia)—$2 billion project to develop South |
May 18, 1998 |
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.
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Naftiran Intertrade Co. (NICO), Iran and Switzerland. Sanctioned for activities to develop Iran |
Sept. 30, 2010 |
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Sept. 30, 2010
Total (France); Statoil (Norway); ENI (Italy); and Royal Dutch Shell.
Exempted under ISA |
Sept. 30, 2010 |
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Sept. 30, 2010
Inpex (Japan)
Exempted under the Special rule for divesting its remaining 10% stake in Azadegan oil field |
Nov. 17, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
.
Nov. 17, 2010
Belarusneft (Belarus, subsidiary of Belneftekhim) Sanctioned for $500 million contract with NICO |
March 29, 2011 |
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Sanctions remain.
March 29, 2011
Petrochemical Commercial Company International (PCCI) of Bailiwick of Jersey and Iran; Royal
Sanctioned under CISADA amendment to ISA imposing sanctions for selling gasoline to Iran or |
May 24, 2011 |
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May 24, 2011
Zhuhai Zhenrong Co. (China); Kuo Oil Pte Ltd. (Singapore); FAL Oil Co. (UAE)
Sanctioned for brokering sales or making sales to Iran of gasoline. Sanctions lifted under JCPOA |
January 12, 2012 |
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.
January 12, 2012
Sytrol (Syria), for sales of gasoline to Iran. |
August 12, 2012 |
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Sanctions remain.
August 12, 2012
Dr. Dimitris Cambis; Impire Shipping; Kish Protection and Indemnity (Iran); and Bimeh
Sanctioned under ISA provision on owning vessels that transport Iranian oil or providing insurance |
March 14, 2013 |
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March 14, 2013
Tanker Pacific; SAMAMA; and Allvale Maritime
Sanctions lifted. Special rule applied after |
April 12, 2013 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ferland Co. Ltd. (Cyprus and Ukraine)
Sanctioned for cooperating with National Iranian Tanker Co. to illicitly sell Iranian crude oil. |
May 31, 2013 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dettin SPA .
May 31, 2013
Dettin SPA
Sanctioned. Italy-based company sanctioned for providing goods and services to Iran |
August 29, 2014 |
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August 29, 2014
Entities Sanctioned Under the Iran North Korea Syria Nonproliferation Act or Executive
The designations are under the Iran, North Korea, Syria Nonproliferation Act (INKSNA) unless specified. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Baltic State Technical University and Glavkosmos, both of Russia. (Both "delisted" in 2010) |
July 30, 1998 |
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(Both “delisted” in 2010)
July 30, 1998
D. Mendeleyev University of Chemical Technology of Russia and Moscow Aviation Institute (Both |
January 8, 1999 |
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|
Changgwang Sinyong Corp. (North Korea) |
January 2, 2001 |
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Changgwang Sinyong Corp. (North Korea) and Jiangsu Yongli Chemicals and Technology |
June 14, 2001 |
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|
Three entities from China |
January 16, 2002 |
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Armen Sargsian and Lizen Open Joint Stock Co. (Armenia); Cuanta SA and Mikhail Pavlovich Vladov |
May 9, 2002 |
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|
Norinco (China). For alleged missile technology sale to Iran. |
May 2003 |
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|
Taiwan Foreign Trade General Corporation (Taiwan) |
July 4, 2003 |
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Tula Instrument Design Bureau (Russia). For alleged sales of laser-guided artillery shells to Iran. (Also |
September 17, 2003 |
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September 17, 2003
13 entities sanctioned including companies from Russia, China, Belarus, Macedonia, North Korea, UAE, |
April 1, 2004 |
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14 entities from China, North Korea, Belarus, India (two nuclear scientists, Dr. Surendar and Dr. Y.S.R. |
September 23, 2004 |
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September 23, 2004
14 entities, mostly from China, for supplying of Iran |
December 2004 and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine entities, including those from China (Norinco, Hondu Aviation, Dalian Sunny Industries, Zibo |
December 23, 2005 |
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December 23, 2005
Two Indian chemical companies (Balaji Amines and Prachi Poly Products); two Russian firms |
July 28, 2006 |
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July 28, 2006
Abu Hamadi (Iraq); Aerospace Logistics Services (Mexico); Al Zargaa Optical and Electronics (Sudan); |
December 28, 2006 |
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December 28, 2006
Rosobornexport, Tula Design, and Komna Design Office of Machine Building, and Alexei Safonov | January 2007 (see | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
14 entities, including Lebanese Hezbollah. Some were penalized for transactions with Syria. Among the |
April 17, 2007 |
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April 17, 2007
China Xinshidai Co.; China Shipbuilding and Offshore International Corp.; Huazhong CNC (China); |
October 23, 2008 |
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BelTechExport (Belarus); Dalian Sunny Industries (China); Defense Industries Organization (Iran); Karl |
July 14, 2010 |
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16 entities: Belarus: Belarusian Optical Mechanical Association; Beltech Export; China: Karl Lee; Dalian |
May 23, 2011 |
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May 23, 2011
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Belvneshpromservice (Belarus); Dalian Sunny Industries (China); Defense Industries Organization (Iran); |
December 20, 2011 |
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December 20, 2011
Al Zargaa Engineering Complex (Sudan); BST Technology and Trade Co. (China); China Precision |
February 5, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Al Zargaa Engineering Complex (Sudan); Belvneshpromservice (Belarus); HSC Mic NPO |
December 19, 2014. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
included
BST Technology and Trade Co. (China); Dalian Sunny Industries (China); Li Fang Wei (China); Tianjin |
August 28, 2015. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asaib Ahl Haq (Iraqi Shiite militia); Katai | June 28, 2016
Sanctions still active. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 entities sanctions for transfers of sensitive items to Iran |
March 21, 2017 |
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March 21, 2017 Entities Designated under the Iran-Iraq Arms Non-Proliferation Act of 1992 (all designations have expired or were lifted) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mohammad al-Khatib (Jordan); Protech Consultants Private (India) |
December 13, 2003 |
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December 13, 2003
China Machinery and Electric Equipment Import and Export Corp. (China); China Machinery and |
July 9, 2002 |
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July 9, 2002 Entities Designated as Threats to Iraqi Stability under Executive Order 13438 (July 17, 2007) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iranians Designated Under Executive Order 13553 on Human Rights Abusers (September 29, 2010)
These persons are named in a semiannual report to Congress, required under CISADA. Virtually all of the persons on this list, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Iranian Entities Sanctioned Under Executive Order 13572 for Repression of the Syrian People | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolutionary Guard—Qods Force (IRGC-QF) |
April 29, 2011 |
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April 29, 2011
Qasem Soleimani (Qods Force Commander); Mohsen Chizari (Commander of Qods Force operations |
May 18, 2011 |
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|
Ministry of Intelligence and Security (MOIS) |
February 16, 2012 |
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Iranian Entities Sanctioned Under Executive Order 13606 (GHRAVITY, April 23, 2012)) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ministry of Intelligence and Security (MOIS); IRGC (Guard Cyber Defense Command); Law |
April 23, 2012 |
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|
IRGC Electronic Warfare and Cyber Defense Organization |
January 12, 2018 |
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|
Hanista Programming Group. For operating technology that monitors or tracks computers |
May 30, 2018 |
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Entities Sanctioned Under Executive Order 13608 Targeting Sanctions Evaders (May 1, 2012) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ferland Company Ltd. for helping NITC deceptively sell Iranian crude oil |
May 31, 2013 |
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91
Iran Sanctions
Three persons based in the Republic of Georgia: Pourya Nayebi, Houshang Hosseinpour, and Houshang
|
February 6, 2014 |
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February 6, 2014
Entities Named as Iranian Government Entities Under Executive Order 13599 (February 5, 2012)
Hundreds of entities—many of which are names and numbers of individual ships and aircraft—were designated under this Order | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
November 5, 2018
Entities Sanctioned Under Executive Order 13622 for Oil and Petrochemical Purchases from All entities were delisted (and are italicized) and the Order was revoked to implement the JCPOA | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goldentex FZE (UAE)
August 29, 2014
Entities Designated as Human Rights Abusers or Limiting Free Expression under Executive Order 13628 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
May 30, 3018
Entities Designated under E.O. I3645 on Auto production, Rial Trading, and Precious Stones (June All entities were delisted (and are italicized) and the Order was revoked to implement the JCPOA | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Author Contact Information
Acknowledgments
The author wishes to acknowledge that Sarah Manning, Research Associate, Foreign Affairs, Defense, and
Trade Division contributed research to this report.
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service
RS20871 · VERSION 284 · UPDATED
95
Trade Division contributed research to this report.
| 1. |
On November 13, 2012, the Administration published in the Federal Register (Volume 77, Number 219) "Policy Guidance" explaining how it implements many of the sanctions, and in particular defining what products and chemicals constitute "petroleum," "petroleum products," and "petrochemical products" that are used in the laws and executive orders discussed below. See http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf. |
| 2. |
http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf. |
| 3. |
"U.S. Court Reverses Record Forfeiture Order over Iran Assets." Associated Press. July 21, 2016. |
| 4. |
http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication; and Department of Treasury announcement of June 4, 2013. |
| 5. |
For a full list of entities designated under E.O. 13599, go to the following link: https://www.treasury.gov/ofac/downloads/13599/13599list.pdf. |
| 6. |
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181105_names.aspx. |
| 7. |
The executive order was issued not only under the authority of IEEPA but also the National Emergencies Act (50 U.S.C. 1601 et seq.; §505 of the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9) and §301 of Title 3, United States Code. |
| 8. |
Imports were mainly of artwork for exhibitions around the United States, which are counted as imports even though the works return to Iran after the exhibitions conclude. |
| 9. |
The text of the guidance is at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf. |
| 10. |
Shipping insurers granted the waiver include Assuranceforeningen Skuld, Skuld Mutual Protection and Indemnity Association, Ltd. (Bermuda), Gard P and I Ltd. (Bermuda), Assuranceforeningen Gard, the Britannia Steam Ship Insurance Association Limited, The North of England Protecting and Indemnity Association Ltd., the Shipowners' Mutual Protection and Indemnity Association (Luxembourg), the Standard Club Ltd., the Standard Club Europe Ltd., The Standard Club Asia, the Steamship Mutual Underwriting Association Ltd. (Bermuda), the Swedish Club, United Kingdom Mutual Steam Ship Assurance Association Ltd. (Bermuda), United Kingdom Mutual Steam Ship Association Ltd. (Europe), and the West of England Ship Owners Mutual Insurance Association (Luxembourg). |
| 11. |
Reuters, February 21, 2014; "Exclusive: Boeing Says Gets U.S. License to Sell Spare Parts to Iran," Reuters, April 4, 2014. |
| 12. | |
| 13. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf. |
| 14. |
The information in this bullet is taken from Jo Becker, "With U.S. Leave, Companies Skirt Iran Sanctions," New York Times, December 24, 2010. |
| 15. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf. |
| 16. |
As amended by CISADA (P.L. 111-195), these definitions include pipelines to or through Iran, as well as contracts to lead the construction, upgrading, or expansions of energy projects. CISADA also changes the definition of investment to eliminate the exemption from sanctions for sales of energy-related equipment to Iran, if such sales are structured as investments or ongoing profit-earning ventures. |
| 17. |
Under §4(d) of the original act, for Iran, the threshold dropped to $20 million, from $40 million, one year after enactment, when U.S. allies did not join a multilateral sanctions regime against Iran. P.L. 111-195 explicitly sets the threshold investment level at $20 million. For Libya, the threshold was $40 million, and transactions subject to sanctions included export to Libya of technology banned by Pan Am 103-related Security Council Resolutions 748 (March 31, 1992) and 883 (November 11, 1993). |
| 18. |
The original ISA definition of energy sector included oil and natural gas, and CISADA added to that definition liquefied natural gas (LNG), oil or LNG tankers, and products to make or transport pipelines that transport oil or LNG. |
| 19. |
A definition of chemicals and products considered "petrochemical products" is found in a Policy Guidance statement. See Federal Register, November 13, 2012, http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf. |
| 20. |
A definition of what chemicals and products are considered "petroleum products" for the purposes of the order are in the policy guidance issued November 13, 2012, http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf. |
| 21. |
Other ISA amendments under that law included recommending against U.S. nuclear agreements with countries that supply nuclear technology to Iran and expanding provisions of the USA Patriot Act (P.L. 107-56) to curb money-laundering for use to further WMD programs. |
| 22. |
|
| 23. |
This termination requirement added by P.L. 109-293 formally removed Libya from the act. Application of the act to Libya terminated on April 23, 2004, with a determination that Libya had fulfilled U.N. requirements. |
| 24. |
Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner, January 19, 2012. |
| 25. |
Department of State. Background Briefing on President Trump's Decision to Withdraw from the JCPOA. May 8, 2018. |
| 26. |
Department of State. "Senior State Department Official on U.S. Efforts to Discuss the Reimposition of Sanctions on Iran with Partners Around the World." June 26, 2018. |
| 27. |
The act originally only applied to advanced conventional weapons. The extension to WMD, defined as chemical, biological, or nuclear weapons-related technology was added by the FY1996 National Defense Authorization Act (P.L. 104-106). |
| 28. |
The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit U.S. access to the international space station after April 2006, when Russia started charging the United States for transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria. |
| 29. |
For text of the OFAC ruling barring U-Turn transactions, see https://www.treasury.gov/resource-center/sanctions/Documents/fr73_66541.pdf. |
| 30. |
See Katherine Bauer. "Potential U.S. Clarification of Financial Sanctions Regulations." April 5, 2016. http://www.washingtoninstitute.org/policy-analysis/view/potential-u.s.-clarification-of-financial-sanctions-regulations. |
| 31. |
Analyst conversations with U.S. banking and sanctions experts. 2010-2015. |
| 32. | |
| 33. | |
| 34. |
Jessica Silver-Greenberg, "Regulator Says Bank Helped Iran Hide Deals," New York Times, August 7, 2012. |
| 35. |
Rick Gladstone. "U.S. Announces Actions to Enforce Iran Sanctions." New York Times, April 29, 2014. |
| 36. |
http://www.reuters.com/article/2015/05/01/us-bnp-paribas-settlement-sentencing-idUSKBN0NM41K20150501. |
| 37. |
Foreign banks that do not have operations in the United States typically establish correspondent accounts or payable-through accounts with U.S. banks as a means of accessing the U.S. financial system. |
| 38. |
http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx. |
| 39. | |
| 40. | |
| 41. |
Katherine Bauer. "Pushing Iran to Take Steps against Terrorist Financing." Washington Institute for Near East Policy, February 20, 2018. |
| 42. |
Sections 5-7 and 15 of Executive Order 13628 which have to do primarily with Iran's energy sector, were revoked, but the remaining sections, which concern human rights issues, remain in place. |
| 43. |
U.S. Department of the Treasury, Office of Public Affairs, Treasury Sanctions Iranian Security Forces for Human Rights Abuses, June 9, 2011. |
| 44. |
Christopher Rhoads, "Iran's Web Spying Aided by Western Technology," Wall Street Journal, June 22, 2009. |
| 45. |
Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran, March 20, 2012. |
| 46. | |
| 47. |
Security Council resolutions that reference Chapter VII of the U.N. Charter represent actions taken with respect to threats to international peace and acts of aggression. Article 41 of that Chapter, in general, provides for enforcement of the resolution in question through economic and diplomatic sanctions, but not through military action. |
| 48. |
The report is reprinted in, Iran Watch, at http://www.iranwatch.org/library/multilateral-organizations/united-nations/un-secretary-general/third-report-secretary-general-implementation-security-council-resolution-2231. |
| 49. | |
| 50. |
The Administration sanctions suspensions and waivers are detailed at http://www.state.gov/p/nea/rls/220049.htm. |
| 51. |
Daniel Fineren, "Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales," Reuters, November 24, 2013. |
| 52. |
White House Office of the Press Secretary. "Fact Sheet: First Step Understandings Regarding the Islamic Republic of Iran's Nuclear Program," November 23, 2013. |
| 53. |
http://iranmatters.belfercenter.org/blog/translation-iranian-factsheet-nuclear-negotiations; and author conversations with a wide range of Administration officials, think tank, and other experts, in Washington, DC, 2015. |
| 54. |
http://www.politico.com/story/2015/07/full-text-iran-deal-120080.html. |
| 55. |
For more information on these Executive Orders and their provisions, see CRS Report RS20871, Iran Sanctions, by [author name scrubbed]; and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by [author name scrubbed]. |
| 56. |
The JCPA does commit the United States to terminate sanctions with respect to some entities designated for sanctions under INKSNA. |
| 57. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf. |
| 58. |
Note: CRS has no mandate or capability to "judge" compliance of any country with U.S. or other sanctions against Iran. This section is intended to analyze some major trends in third country cooperation with U.S. sanctions. |
| 59. |
During the active period of talks, which began in December 2002, there were working groups focused not only on the TCA terms and proliferation issues but also on Iran's human rights record, Iran's efforts to derail the Middle East peace process, Iranian-sponsored terrorism, counter-narcotics, refugees, migration issues, and the Iranian opposition PMOI. |
| 60. | |
| 61. |
"Iran Nuclear Deal: The EU's Billion-Dollar Deals at Risk," BBC News, May 11, 2018. |
| 62. |
Germany's Central Bank Imposes Rule to Stop Cash Delivery to Tehran. Jerusalem Post, August 6, 2018. |
| 63. |
"U.S. Grants BP, Serica Lic4ense to Run Iran-Owned North Sea Field." Reuters, October 9, 2018. |
| 64. |
Avi Jorish, "Despite Sanctions, Iran's Money Flow Continues," Wall Street Journal, June 25, 2013. |
| 65. |
"Iran's Door to the West is Slamming Shut, and That Leaves China," Bloomberg News, May 10, 2018. |
| 66. |
https://www.yahoo.com/news/putin-visits-tehran-talks-syria-nuclear-deal-133507932.html. |
| 67. |
Nahid Kalbasi."Have International Sanctions Crippled Iran's Auto Industry?" Washington Institute for Near East Policy, June 3, 2015. |
| 68. |
"As U.S. Sanctions Loom, China's Bank of Kunlun to Stop Receiving Iran Payments – Sources." Reuters, October 23, 2018. |
| 69. |
Thomas Erdbrink. "China's Push to Link East and West Puts Iran at 'Center of Everything.'" New York Times, July 25, 2017. |
| 70. |
"Some Top Oil Buyers Are Thinking about Shunning Iran Oil." Bloomberg News, June 27, 2018. |
| 71. |
https://www.thedailybeast.com/north-koreas-deadly-partnership-with-iran. |
| 72. |
"India Seeks to Pay $6.5 Billion to Iran for Oil Imports." Economic Times of India. May 16, 2016. |
| 73. |
CRS conversations with Indian officials and U.S. experts on India. 2017-18. |
| 74. |
The Hill. Thehill.com September 14, 2018. |
| 75. |
"U.S. Envoy Haley tells Modi Important to Cut Imports of Iranian Oil." Reuters, June 27, 2018. |
| 76. |
Asia Times, March 21, 2014, http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html. |
| 77. | |
| 78. |
"US Acts to Block Turkish Firm from Sending GE Engines to Iran," Reuters, January 6, 2014. |
| 79. |
Louis Charbonneau, "Iran Looks to Armenia to Skirt Banking Sanctions," Reuters, August 21, 2012. |
| 80. |
Information provided to the author by regional observers. October 2013. |
| 81. |
The CRS Report RL32048, Iran: Internal Politics and U.S. Policy and Options, by [author name scrubbed], discusses the relations between Iran and other Middle Eastern states. |
| 82. |
Mark Wallace, "Closing U.S. Ports to Iran-Tainted Shipping. Op-ed," Wall Street Journal, March 15, 2013. |
| 83. |
Some Top Oil Buyers Are Thinking about Shunning Iran Oil, op. cit. |
| 84. |
http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?nn=8901181055. |
| 85. |
Omani banks had a waiver from U.S. sanctions laws to permit transferring those funds to Iran's Central Bank, in accordance with Section 1245(d)(5) of the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-81). For text of the waiver, see a June 17, 2015, letter from Assistant Secretary of State for Legislative Affairs Julia Frifield to Senate Foreign Relations Committee Chairman Bob Corker, containing text of the "determination of waiver." |
| 86. |
"Obama Misled Congress, Tried and Failed to Give Iran Secret Access to US Banks Before the Deal." Business Insider, June 6, 2018; Permanent Subcommittee on Investigations of the U.S. Senate. Majority Report. "Review of U.S. Treasury Department's License to Convert Iranian Assets Using the U.S. Financial System." May 2018. |
| 87. |
Eli Lak, "Iran Sanctions Collapsing Already," Bloomberg News, May 11, 2015. |
| 88. |
U.S. Grants Iraq Sanctions Relief in Bid to Boost Business Deals. Wall Street Journal, December 21, 2018. |
| 89. |
Iran Signs Phone, Gas Deals with Syria. Agence France Presse, January 17, 2017. |
| 90. |
Barbara Slavin, "Obama Administration Holds Up Environmental Grants to Iran," Al Monitor, June 23, 2014. |
| 91. |
"Worldwide Threat Assessment of the U.S. Intelligence Community." Testimony before the Senate Select Committee on Intelligence. May 11, 2017. This language was not contained in the 2018 version of the testimony. |
| 92. |
This possibility is examined in detail in: CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by [author name scrubbed] and [author name scrubbed] and CRS In Focus IF10916, Iran: Efforts to Preserve Economic Benefits of the Nuclear Deal, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. |
| 93. |
Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011. |
| 94. |
Department of Defense, Annual Report of Military Power of Iran, April 2012. |
| 95. |
Worldwide Threat Assessment of the U.S. Intelligence Community, February 13, 2018. |
| 96. |
Statement from the President on the Reimposition of United States Sanctions with Respect to Iran. August 6, 2018. |
| 97. |
https://en.radiofarda.com/a/iran-rouhani-irgc-demands/29413585.html. |
| 98. |
Department of the Treasury. Remarks of Secretary Jacob J. Lew at the Washington Institute for Near East Policy 30th Anniversary Gala. April 29, 2015. |
| 99. |
"Foreign Investors Flock to Iran as U.S. Firms Watch on the Sidelines." Wall Street Journal, March 27, 2017. |
| 100. |
Forecast Says Sharp Drop in Iran's Economic Growth Rate. Radio Farda, September 2, 2018. |
| 101. |
"Why Higher Iran Oil Exports Are Not Roiling Nuclear Deal," Reuters, June 13, 2014. |
| 102. |
CRS conversation with Department of the Treasury officials. July 2015. |
| 103. |
"A Year after Iran Deal, Oil Flows but the Money's Stuck." op. cit. |
| 104. | |
| 105. |
Radio Farda, op.cit. |
| 106. |
Testimony of Patrick Clawson before the Senate Banking Committee. January 21, 2015. |
| 107. |
"Iran Reaps Less Cash from Eased Sanctions Than Predicted," op. cit. |
| 108. |
Kevan Harris, "Iran's Political Economy Under and After the Sanctions," Washington Post blogs, April 23, 2015. |
| 109. | |
| 110. |
Patrick Clawson testimony, January 21, 2015, op. cit. |
| 111. |
Khajehpour presentation at CSIS, op. cit. |
| 112. |
"Iran Faces Steep Climb to Join Gas Superpowers by 2017," International Oil Daily, April 29, 2014. |
| 113. |
Thomas Erdbrink. "New Iran Battle Brews over Foreign Oil Titans." New York Times, February 1, 2016. |
| 114. |
Information in this section derived from Javier Blas, "Traders Cut Iran Petrol Line," Financial Times, March 8, 2010. |
| 115. |
https://www.washingtonpost.com/world/middle_east/fresh-sanctions-on-iran-are-already-choking-off-medicine-imports-economists-say/2018/11/17/c94ce574-e763-11e8-8449-1ff263609a31_story.html; https://www.bloomberg.com/news/articles/2018-11-21/trump-s-sanctions-are-proving-a-bitter-pill-for-iran-s-sick; https://www.csmonitor.com/World/Middle-East/2018/1029/In-Iran-US-sanctions-are-being-felt-with-harsher-measures-to-come. |
| 116. |
"Global Traders Halt New Iran Food Deals as U.S. Sanctions Bite." Reuters, December 21, 2018. |
| 117. |
https://www.theguardian.com/world/2018/nov/02/iran-sanctions-us-european-humanitarian-supplies. |
| 118. |
Thomas Erdbink, "Iran's Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions," July 14, 2012. |
| 119. |
An Iranian letter to the U.N. Security Council submitted July 20, 2015, indicates Iran's view that "reintroduction or reimposition, including through extension, of the sanctions and restrictive measures will constitute significant nonperformance which would relieve Iran from its commitments in whole or in part." Iran Letter to the President of the U.N. Security Council, July 20, 2015, (S/2015/550). |
| 120. |
For more information on the issue of judgments for victims of Iranian terrorism, see CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by [author name scrubbed]. |
| 121. |
Author conversations with experts in Washington, DC, November, 2017, and various press reports. |
| 122. |
https://www.politico.com/story/2018/11/01/gop-trump-iran-policy-956660. |
| 123. |
See CRS In Focus IF10801, Possible Additional Sanctions on Iran, by [author name scrubbed]. |