Iran: U.S. Concerns and Policy Responses
Kenneth Katzman
Specialist in Middle Eastern Affairs
March 13, 2009
Congressional Research Service
7-5700
www.crs.gov
RL32048
CRS Report for Congress
P
repared for Members and Committees of Congress
Iran: U.S. Concerns and Policy Responses
Summary
The Bush Administration characterized Iran as a “profound threat to U.S. national security
interests,” a perception generated primarily by Iran’s nuclear program and its military assistance
to armed groups in Iraq and Afghanistan, to the Palestinian group Hamas, and to Lebanese
Hezbollah. The Bush Administration’s approach was to try to prevent a nuclear breakout by Iran
by applying multilateral economic pressure on Iran while also offering it potential cooperation
should it comply with the international demands to suspend its enrichment of uranium. The
incorporation of diplomacy and engagement into the overall U.S. strategy led the Administration
to approve the participation of a high-level State Department official at multilateral nuclear talks
with Iran on July 19, 2008. To strengthen its approach, the Bush Administration maintained a
substantial naval presence in the Persian Gulf, which U.S. commanders insist would prevent any
Iranian attempts to close the crucial Strait of Hormuz for any extended period.
President Obama has said his Administration shares the goals of the previous Administration on
Iran — and Secretary of State Clinton has said she shares the perception that Iran is trying to
undermine many U.S. goals in the Middle East — but Obama Administration officials say that
there is need for new strategies and approaches. First and foremost, according to President
Obama, is to look for opportunities to expand direct engagement with Iran. His Administration
also appears to be de-emphasizing potential U.S. military action, although without ruling that out
completely, and efforts to promote democracy in Iran. Yet, there is debate among experts over
whether such shifts would yield clearer results. The policy decisions come as Iran enters its run-
up to June 12, 2009 presidential elections, which, now that former President Mohammad Khatemi
and other reformists have entered the race, might produce more moderate leadership in Iran.
The multilateral efforts to pressure Iran include three U.N. Security Council resolutions (1737,
1747, and 1803) that ban weapons of mass destruction (WMD)-related trade with Iran; freeze the
assets of Iran’s nuclear and related entities and personalities; prevent Iran from transferring arms
outside Iran; ban or require reporting on international travel by named Iranians; call for
inspections of some Iranian sea and airborne cargo shipments; and call for restrictions on dealings
with some Iranian banks. Further U.N. Security Council sanctions have been under
consideration. Separate U.S. efforts to persuade European governments to curb trade, investment,
and credits to Iran; and to convince foreign banks not to do business with Iran, are beginning to
weaken Iran’s economy, compounding the effect of a sharp drop in oil prices since mid-2008.
Bills in the 110th Congress, including H.R. 1400, S. 970, S. 3227, S. 3445, H.R. 7112, H.Con.Res.
362, and S.Res. 580 – versions of which might be introduced in the 111th Congress – would
tighten U.S. sanctions on Iran.
This report is updated regularly. For further information, seeCRS Report RS20871, The Iran
Sanctions Act (ISA), by Kenneth Katzman, CRS Report RS22323, Iran's Activities and Influence
in Iraq, by Kenneth Katzman, and CRS Report RL34544, Iran’s Nuclear Program: Status, by
Paul K. Kerr.
Congressional Research Service
Iran: U.S. Concerns and Policy Responses
Contents
Political History .......................................................................................................................... 1
Regime Structure, Stability, and Elections ................................................................................... 2
The Supreme Leader, His Powers, and Other Governing Councils ................................... 2
The Presidency and the 2005 Election of Mahmoud Ahmadinejad ................................... 4
Ahmadinejad’s Policies ................................................................................................... 5
March 2008 Majles Elections and June 12, 2009 Presidential Elections ........................... 6
Human Rights and Dissent .......................................................................................................... 8
Dissidents ..................................................................................................................... 11
Exiled Opposition Groups: People’s Mojahedin Organization of Iran
(PMOI)/Camp Ashraf................................................................................................. 11
Other Armed Groups ..................................................................................................... 12
The Son of the Former Shah.......................................................................................... 12
Other Activists .............................................................................................................. 13
Iran’s Strategic Capabilities and Weapons of Mass Destruction Programs ................................. 13
Conventional Military/Revolutionary Guard/Qods Force ..................................................... 13
Nuclear Program and International Sanctions ...................................................................... 15
Establishment of “P5+1” Contact Group/June 2006 Incentive Package.......................... 18
Resolution 1696 ............................................................................................................ 19
Resolution 1737 ............................................................................................................ 19
Resolution 1747 and Results ......................................................................................... 19
Resolution 1803 and Additional Incentives .................................................................... 20
Resolution 1835 ............................................................................................................ 20
Chemical Weapons, Biological Weapons, and Missiles ........................................................ 21
Ballistic Missiles/Warheads........................................................................................... 22
Foreign Policy and Support for Terrorist Groups ....................................................................... 23
Relations with the Persian Gulf States ........................................................................... 23
Iranian Policy in Iraq..................................................................................................... 25
Supporting Palestinian Militant Groups ......................................................................... 26
Lebanese Hezbollah ...................................................................................................... 28
Central Asia and the Caspian......................................................................................... 29
Afghanistan and Pakistan .............................................................................................. 29
Al Qaeda....................................................................................................................... 31
Latin America ............................................................................................................... 31
India ............................................................................................................................. 32
Africa ........................................................................................................................... 32
U.S. Policy Responses, Options, and Legislation ....................................................................... 32
Policy During the Clinton and Bush Administrations ........................................................... 33
Bush Administration Policy........................................................................................... 33
Overview of Obama Administration Policy ......................................................................... 34
Containment and Possible Military Action........................................................................... 35
An Israeli Strike? .......................................................................................................... 35
Iranian Retaliatory Scenarios ........................................................................................ 36
Containment and the Gulf Security Dialogue................................................................. 37
Presidential Authorities and Legislation......................................................................... 38
Regime Change................................................................................................................... 38
Congressional Research Service
Iran: U.S. Concerns and Policy Responses
Funding ........................................................................................................................ 40
Engagement ........................................................................................................................ 41
Enhanced U.S. Interests Section .................................................................................... 41
Previous Engagement Efforts ........................................................................................ 42
“Grand Bargain Concept”.............................................................................................. 42
Further International and Multilateral Sanctions .................................................................. 43
European/Japanese/Other Foreign Country Policy on Sanctions and Trade
Agreements................................................................................................................ 45
World Bank Loans ........................................................................................................ 46
U.S. Sanctions..................................................................................................................... 46
Terrorism/Foreign Aid Sanctions ................................................................................... 46
Proliferation Sanctions .................................................................................................. 47
Targeted Financial Measures by Treasury Department ................................................... 48
U.S. Trade Ban/Subsidiaries.......................................................................................... 49
Subsidiaries .................................................................................................................. 50
The Iran Sanctions Act (ISA) ........................................................................................ 51
110th Congress Comprehensive Sanctions Legislation:................................................... 52
Counter-Narcotics ......................................................................................................... 53
Travel-Related Guidance............................................................................................... 53
Status of Some U.S.-Iran Assets Disputes ...................................................................... 53
Conclusion................................................................................................................................ 53
Figures
Figure 1. Structure of the Iranian Government ........................................................................... 55
Figure 2. Map of Iran ................................................................................................................ 56
Tables
Table 1. Major Factions and Personalities.................................................................................... 3
Table 2. Factions in the Eighth Majles ......................................................................................... 7
Table 3. Selected Economic Indicators ........................................................................................ 7
Table 4. Human Rights Practices ................................................................................................. 9
Table 5. Iran’s Conventional Military Arsenal............................................................................ 15
Table 6. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program (1737,
1747, and 1803) ..................................................................................................................... 21
Table 7. Iran’s Ballistic Missile Arsenal..................................................................................... 22
Table 8. Iran Democracy Promotion Funding ............................................................................ 40
Table 9. Entities Sanctioned Under U.N. Resolutions and U.S. Laws and Executive
Orders.................................................................................................................................... 57
Congressional Research Service
Iran: U.S. Concerns and Policy Responses
Contacts
Author Contact Information ...................................................................................................... 61
Congressional Research Service
Iran: U.S. Concerns and Policy Responses
uch of the debate over U.S. policy toward Iran has centered on the nature of the current
regime; some believe that Iran, a country of about 70 million people, is a threat to U.S.
M interests because hardliners in Iran’s regime dominate and set a policy direction
intended to challenge U.S. influence and allies in the region. President Bush, in his January 29,
2002, State of the Union message, labeled Iran part of an “axis of evil” along with Iraq and North
Korea.
Political History
The United States was an ally of the late Shah of Iran, Mohammad Reza Pahlavi (“the Shah”),
who ruled from 1941 until his ouster in February 1979. The Shah assumed the throne when
Britain and Russia forced his father, Reza Shah Pahlavi (Reza Shah), from power because of his
perceived alignment with Germany in World War II. Reza Shah had assumed power in 1921
when, as an officer in Iran’s only military force, the Cossack Brigade (reflecting Russian
influence in Iran in the early 20th century), he launched a coup against the government of the
Qajar Dynasty. Reza Shah was proclaimed Shah in 1925, founding the Pahlavi dynasty. The
Qajars had been in decline for many years before Reza Shah’s takeover. That dynasty’s
perceived manipulation by Britain and Russia had been one of the causes of the 1906
constitutionalist movement, which forced the Qajars to form Iran’s first Majles (parliament) in
August 1906 and promulgate a constitution in December 1906. Prior to the Qajars, what is now
Iran was the center of several Persian empires and dynasties, but whose reach shrunk steadily
over time. Since the 16th century, Iranian empires lost control of Bahrain (1521), Baghdad (1638),
the Caucasus (1828), western Afghanistan (1857), Baluchistan (1872), and what is now
Turkmenistan (1894). Iran adopted Shiite Islam under the Safavid Dynasty (1500-1722), which
brought Iran out from a series of Turkic and Mongol conquests.
The Shah was anti-Communist, and the United States viewed his government as a bulwark
against the expansion of Soviet influence in the Persian Gulf and a counterweight to pro-Soviet
Arab regimes and movements. Israel maintained a representative office in Iran during the Shah’s
time and the Shah supported a peaceful resolution of the Arab-Israeli dispute. In 1951, under
pressure from nationalists in the Majles (parliament) who gained strength in the 1949 Majles
elections, he appointed a popular nationalist parliamentarian, Dr. Mohammad Mossadeq, as Prime
Minister. Mossadeq was widely considered left-leaning, and the United States was wary of his
policies, which included his drive for nationalization of the oil industry. Mossadeq’s followers
began an uprising in August 1953 when the Shah tried to dismiss Mossadeq, and the Shah fled.
The Shah was restored in a successful CIA-supported uprising against Mossadeq.
The Shah tried to modernize Iran and orient it toward the West, but in so doing he also sought to
marginalize Iran’s Shiite clergy. He exiled Ayatollah Ruhollah Khomeini in 1964 because of
Khomeini’s active opposition, which was based on the Shah’s anti-clerical policies and what
Khomeini alleged was the Shah’s forfeiture of Iran’s sovereignty to the United States. Khomeini
fled to and taught in Najaf, Iraq, a major Shiite theological center that contains the Shrine of
Imam Ali, Shiism’s foremost figure. There, he was a peer of senior Iraqi Shiite clerics and, with
them, advocated direct clerical rule or velayat-e-faqih (rule by a supreme Islamic jurisprudent). In
1978, three years after the March 6, 1975, Algiers Accords between the Shah and Iraq’s Baathist
leaders, which settled territorial disputes and required each party to stop assisting each other’s
oppositionists, Iraq expelled Khomeini to France, from which he stoked the Islamic revolution.
Mass demonstrations and guerrilla activity by pro-Khomeini forces, allied with a broad array of
anti-Shah activists, caused the Shah’s government to collapse in February 1979. Khomeini
Congressional Research Service
1
Iran: U.S. Concerns and Policy Responses
returned from France and, on February 11, 1979, declared an Islamic Republic of Iran, as
enshrined in the constitution that was adopted in a public referendum in December 1979 (and
amended in 1989). Khomeini was strongly anti-West and particularly anti-U.S., and relations
between the United States and the Islamic Republic turned hostile even before the November 4,
1979, seizure of the U.S. Embassy by pro-Khomeini radicals.
Regime Structure, Stability, and Elections
About a decade after founding the Islamic republic, Ayatollah Ruhollah Khomeini died on June 3,
1989. The regime he established — enshrined in an Islamic republican constitution adopted in
1980 and amended in 1989 — consists of some elected and some appointed positions. It has
appeared relatively stable, but faces chronic but low-level unrest in areas inhabited by minorities,
and substantial unpopularity among many intellectuals, students, labor groups, and women.
Although Iran’s is widely considered to be an authoritarian regime, the various centers of power
are able, politically and constitutionally, to offer a degree of checks and balances and regular
popular input. National elections under the Islamic republic have always been held, and on time,
even during the eight year Iran-Iraq war.
The Supreme Leader, His Powers, and Other Governing Councils
Upon Khomeini’s death, one of his disciples, Ayatollah Ali Khamene’i, was selected Supreme
Leader by an elected “Assembly of Experts.”1 The Assembly of Experts is empowered to oversee
the work of the Supreme Leader and replace him if necessary, as well as to amend the
constitution. The fourth election for the Assembly was held on December 15, 2006. After that
election, Akbar Hashemi-Rafsanjani, still a major figure having served two terms as president
himself (1989-1997), was named deputy leader of the Assembly. After the death of the leader of
the body, Rafsanjani was elected head of the Assembly in September 2007, defeating the harder
line Ayatollah Ahmad Jannati. (An organizational chart on the Iranian regime is at the end of this
paper.)
Khamene’i has vast formal powers as Supreme Leader—he is Commander in Chief of the armed
forces, giving him the power to appoint commanders and to be represented on the highest national
security body, the Supreme National Security Council, composed of top military and civilian
security officials. He appoints half of the twelve-member Council of Guardians;2 and the
members of Iran’s Supreme Judicial Council, but he does not appoint the cabinet, which is named
by the President and confirmed by the Majles (parliament). Headed by Jannati, the conservative-
controlled Council of Guardians reviews legislation to ensure it conforms to Islamic law, and it
screens election candidates. Khamene’i also has the power, under the constitution, to remove the
elected President if either the Supreme Judicial Council or the elected Majles (parliament) say the
President should be removed, with cause. The Supreme Leader appoints members of the 42-
member Expediency Council, set up in 1988 to resolve legislative disagreements between the
Majles and the Council of Guardians. Expediency Council members serve five-year terms. The
1 The Assembly also has the power to amend Iran’s constitution.
2 The Council of Guardians consists of six Islamic jurists and six secular lawyers. The six Islamic jurists are appointed
by the Supreme Leader. The six lawyers on the Council are selected by the judiciary but confirmed by the Majles
(parliament).
Congressional Research Service
2
Iran: U.S. Concerns and Policy Responses
Council, appointed most recently in February 2007, is still headed by Rafsanjani; its executive
officer is former Revolutionary Guard commander-in-chief Mohsen Reza’i.
Table 1. Major Factions and Personalities
Conservatives
Supreme Leader Ali
Born in July 1939 to an Azeri (Turkic) family from Mashhad. Lost the use of his right arm in
Khamene’i
an assassination attempt in June 1981. Helped organize the Revolutionary Guard and other
post-revolution security organs. Served as elected president during 1981-1989 and was
selected Khomeini’s successor in June 1989 upon the Ayatollah’s death. Upon that selection,
his religious ranking was advanced in the state-run press and official organs to “Ayatollah”
from the lower ranking “Hojjat ol-Islam.” Has all the formal powers but not the undisputed
authority of his predecessor, founder of the revolutionary regime Ayatollah Ruhollah
Khomeini. Considered moderate-conservative despite frequent hardline rhetoric including
on Israel. Seeks to challenge U.S. hegemony and wants Israel defeated but respects U.S.
military power and fears military confrontation with United States. Generally supports the
business community (bazaaris), and opposes state intervention in the economy.
Akbar Hashemi-
Key strategist of the regime, longtime advocate of “grand bargain” to resolve all outstanding
Rafsanjani
issues with United States, although on Iran’s terms. A mid-ranking cleric, now leads both
Expediency Council and Assembly of Experts. Heads moderate-conservative faction known
as Executives of Construction. Was Majles speaker during 1981-89 and President 1989-1997.
One of Iran’s richest men, family owns large share of Iran’s total pistachio nut production.
President Mahmoud
See box later in this paper.
Ahmadinejad
Majles Speaker Ali
Overwhelming winner for Majles seat from Qom on March 14, 2008 and selected Majles
Larijani
Speaker on May 25 (237 out of 290 votes). Former state broadcasting head (1994-2004) and
Minister of Culture and Islamic Guidance (1993) , was head of Supreme National Security
Council and chief nuclear negotiator from August 2005 until October 2007 resignation.
Sought to avoid U.N. Security Council isolation. Politically close to Khamene’i. Potential
presidential contender in June 2009.
Mohammad Baqer
Former Revolutionary Guard Air Force commander and police chief, but a moderate-
Qalibaf
conservative and potential contestant in June 2009 presidential election. Encourages
comparisons of himself to Reza Shah, invoking an era of stability and strong leadership, while
also making use of modern media tools. Lost in the 2005 presidential elections, but
supporters won nine out of 15 seats on Tehran city council in December 2006 elections,
propelling him to current post as mayor of Tehran. Recruited moderate conservatives for
March 2008 Majles election.
Ayatollah Mohammad Founder of the hardline Haqqani school, and spiritual mentor of Ahmadinejad. Fared poorly
Taqi Mesbah-Yazdi
in December 2006 elections for Assembly of Experts. An assertive defender of the powers
of the Supreme Leader and a proponent of an “Islamic state” rather than the current “Islamic
republic,” and advocates isolation from the West. May harbor ambition to replace
Khamene’i.
Ayatollah Mahmud
Has headed the Supreme Judicial Council since 1999. Al y of Khamene’i and Rafsanjani, has
Hashemi Shahrudi
supported repeated crackdowns on independent media critical of the regime. But, has
cracked down on judicial corruption and on mistreatment of prisoners. Politically close to
Shiite Islamist parties in Iraq, he is hosting Moqtada Al Sadr, the radical young Iraqi cleric
who has been studying Islamic theology in Qom since late 2007.
Militant Clerics
Longtime organization of hardline clerics headed by Ayatollah Mohammad Mahdavi-Kani. Not
Association
to be confused with an organization with almost the same name, below.
Reformists
Mohammad Khatemi
Reformist president during 1997-2005 and declared he will run again for President in June
2009 elections with support of the reformist camp. Elected May 1997, with 69% of the vote;
Congressional Research Service
3
Iran: U.S. Concerns and Policy Responses
re-elected June 2001with 77%. Rode wave of sentiment for easing social and political
restrictions among students, intellectuals, youths, and women that seeks reform but not
outright replacement of the regime. Khatemi supporters held about 70% of the 290 seats in
the 2000-2004 Majles. Now heads International Center for Dialogue Among Civilizations.
Visited U.S. in September 2006 to speak at Harvard and the Washington National Cathedral
on “dialogue of civilizations.” Has hewed to staunch anti-Israel line of most Iranian officials,
but perceived as open to accepting a Palestinian-Israeli compromise. Others in this faction
include former Prime Minister Mir Hossein Musavi, a possible additional reformist candidate
in June 2009 election.
Society of Militant
Reformist grouping once led by Mehdi Karrubi. Karrubi formed a separate “National Trust”
Clerics
faction after losing 2005 presidential election.
Office of
Staunch reformists. Originally strong Khatemi supporters, but turned against him for failing
Consolidation Unity
to chal enge hardliners, particularly after July 1999 violent crackdown on student riots, in
(Daftar Tahkim-e-
which four students were killed. Generally dispersed and repressed under Ahmadinejad.
Vahdat)
Islamic Iran
The most prominent and best organized pro-reform grouping. Its leaders include Khatemi’s
Participation Front
brother, Mohammad Reza Khatemi (a deputy speaker in the 2000-2004 Majles) and Mohsen
(IIPF).
Mirdamadi.
Mojahedin of the
Composed mainly of left-leaning Iranian figures who support state control of the economy,
Islamic Revolution
but want greater political pluralism and relaxation of rules on social behavior. A major
Organization (MIR)
constituency of the reformist camp. Its leader is former Heavy Industries Minister Behzad
Nabavi.
The Presidency and the 2005 Election of Mahmoud Ahmadinejad
The President runs the cabinet, which he appoints, subject to parliament’s (Majles) confirmation.
Although subordinate to the Supreme Leader, the presidency is a coveted and intensely fought-
over position which provides vast opportunities for the President to empower and enrich his
political base. The current President is Mahmoud Ahmadinejad.
After suffering several election defeats at the hands of Mohammad Khatemi and the reformists
during 1997-2000— and losing the grip on power they held while Khomeini was alive — the
conservative camp argued that the reformists were deviating too far from Khomeini’s principles,
and gained strength after the February 28, 2003, municipal elections, when reformists largely
boycotted. The conservatives gained additional strength from the February 20, 2004, Majles
elections, in which the Council of Guardians disqualified about 3,600 mostly reformist
candidates, including 87 members of the incumbent Majles, enabling conservatives to win about
155 out of the 290 seats on turnout of about 51%. The Administration and the Senate (S.Res. 304,
adopted by unanimous consent on February 12, 2004) criticized the elections as unfair because of
the screening.
As the reformist faction suffered setbacks, the Council of Guardians narrowed the field of
candidates for the June 2005 presidential elections to 8 out of the 1,014 persons who filed.
Rafsanjani 3 was considered the favorite against several opponents more hardline than he is—
three had ties to the Revolutionary Guard: Ali Larijani (see Table 1); Mohammad Baqer Qalibaf
(see Table 1); and Tehran mayor Mahmoud Ahmadinejad. In the June 17, 2005 first round,
3 Rafsanjani was constitutionally permitted to run because a third term would not have been consecutive with his
previous two terms. In the 2001 presidential election, the Council permitted 10 out of the 814 registered candidates.
Congressional Research Service
4
Iran: U.S. Concerns and Policy Responses
turnout was about 63% (29.4 million votes out of 46.7 million eligible voters). With 21% and
19.5%, respectively, Rafsanjani and Ahmadinejad, who did unexpectedly well because of tacit
backing from Khamene’i and the Basij (an internal security force under the Revolutionary
Guard), moved to a run-off. Reformist candidates Mehdi Karrubi and Mostafa Moin fared worse
than expected. Ahmadinejad won a landslide victory in the June 24 runoff, receiving 61.8% to
Rafsanjani’s 35.7%. Turnout was 47%, less than the first round. He took office on August 6,
2005.
Ahmadinejad’s Policies
Ahmadinejad has been a controversial figure for statements often perceived as inflammatory. He
most notably upset world opinion at an October 26, 2005, Tehran conference entitled “A World
Without Zionism” that “Israel should be wiped off the map” and that “anybody who recognizes
Israel will burn in the fire of the Islamic nations’ fury.” A similar point of contention was his
insistence on the holding of a December 2006 conference in Tehran questioning the Holocaust, a
theme he has returned to several times since, including at a September 2007 speech at Columbia
University, a forum where he also denied that Iran had any homosexuals. A U.N. Security
Council statement and Senate and House resolutions (H.Res. 523 and S.Res. 292), passed in their
respective chambers, condemned the statement. On June 21, 2007, the House passed H.Con.Res.
21, calling on the United Nations Security Council to charge Ahmadinejad with violating the
1948 Convention on the Prevention and Punishment of the Crime of Genocide; the Convention
includes “direct and public incitement” to commit genocide as a punishable offense.
Some Iranian leaders, both conservative and reformist, and portions of the population, appear
concerned that Ahmadinejad’s defiance of the international community on the nuclear issue—as
well as his frequent visits and meetings with such anti-U.S. figures as Venezuela’s Hugo
Chavez—is isolating Iran. Several experts believe that Supreme Leader Khamene’i has sought, at
times, to rein in Ahmadinejad. The first decision that strengthened this view was the October
2005 grant of new governmental supervisory powers to the Expediency Council. In July 2006,
Khamene’i created a ten-person advisory “Foreign Policy Committee” consisting of former
defense and foreign ministers. In a further sign of rift over the damage to Iran’s economy that
international sanctions are inflicting, the Supreme Leader’s top foreign policy advisor, former
Foreign Minister Ali Akbar Velayati, said in July 2008 that Iran should consider Western offers to
settle the nuclear issue.
Some in the Majles have criticized Ahmadinejad for failing to add to Iran’s reserve fund (“Oil
Stabilization Fund”) when oil prices were high in mid-2008, leaving Iran unable to cope with the
fall in oil prices. Others say he has not moved to curb the dependence on oil revenues, which
account for about 20% of Iran’s gross domestic product (GDP), and its extensive imports of
refined gasoline. Major economic sectors or markets are controlled by the quasi-statal
“foundations” (bonyads), run by powerful former officials, and there are special trading privileges
for them and the bazaar merchants, a key constituency for some conservatives. The same
privileges reportedly apply to businesses run by the Revolutionary Guard, as discussed below.
However, Khamene’i’s public statements of support for Ahmadinejad since August 2008 could
indicate that the regime is rallying together against international pressure. That month, he praised
Ahmadinejad for refusing to bow to international demands on the nuclear issue and said the
cabinet should make plans for another four years. Khamene’i defended Ahmadinejad again on
September 19, 2008, by saying that the political elite should cease its squabbling over the
comments of a Vice President that Iran considers itself a friend of the Israeli people. Still, on
Congressional Research Service
5
Iran: U.S. Concerns and Policy Responses
November 4, 2008, the Majles impeached Interior Minister Ali Kordan for falsely claiming he
had an Oxford University degree. (Sadeq Mahsouli, a former Revolutionary Guard official, was
confirmed as replacement on November 18, 2008.) If one more Minister is fired or removed –
meaning half the cabinet changes during his term – Ahmadinejad would be constitutionally
required to submit the entire cabinet to a vote of confidence, although he could expand the
cabinet to avoid that consequence.
Mahmoud Ahmadinejad
First non-cleric to be president of the Islamic republic since the assassination of then president Mohammad Ali Rajai in
August 1981. About 54, he campaigned as a “man of the people,” the son of a blacksmith who lives in modest
circumstances, who would promote the interests of the poor and return government to the principles of the Islamic
revolution during the time of Ayatollah Khomeini. Has burnished that image as president through regular visits to
poorer, rural areas and through subsidies directed at the lower classes. His official biography says he served with the
“special forces” of the Revolutionary Guard, and he served subsequently (late 1980s) as a deputy provincial governor.
A part of the “Isargaran” faction composed of former Guard and Basij (volunteer popular forces) leaders and other
hardliners. U.S. intelligence reportedly determined he was not, as was thought by some, one of the holders of the 52
American hostages during November 1979-January 1981. Other accounts say Ahmadinejad believes his mission is to
prepare for the return of the 12th Imam— Imam Mahdi—whose return from occultation would, according to Twelver
Shiite doctrine, be accompanied by the establishment of Islam as the global religion. Earned clerical criticism in May
2008 for again invoking intervention by Imam Mahdi in present day state affairs. Regularly attends U.N. General
Assembly sessions in New York each September; attended again in 2008, giving interviews to American papers and
other media. In an October 2006 address, Ahmadinejad said, “I have a connection with God.” Sent letter of
congratulation to President-elect Barack Obama for his election victory. For more information, see CRS Report
RS22569, Iran: Profile of President Mahmoud Ahmadinejad, by Hussein D. Hassan.
March 2008 Majles Elections and June 12, 2009 Presidential Elections
Ahmadinejad is assumed to be running for re-election in the June 12, 2009 presidential election.
However, the number and profile of potential candidates on both the conservative and reformist
sides fluctuated frequently. Other reports in late 2008 indicated that moderate-conservatives were
meeting regularly with reformists to attempt to jointly mount a successful challenge to
Ahmadinejad. Candidates must register by thirty days prior to the election, and the Council of
Guardians is to finalize the list of permitted candidates about three weeks before the vote.
The election contest started to clarify on February 8, 2009, when Khatemi – who feared that his
running again would begin a potentially wrenching and divisive political battle between
conservatives and reformists – said that he would stand for the election. Although Khatemi is still
highly popular among intellectuals, women, students, and others who believe he tried his best to
institute political and social openness as President, the outcome of the election is uncertain.
Khatemi is believed to have lost substantial support during his presidency among working and
lower classes because of his perceived emphasis on human rights and international engagement
rather than on economic reform.
However, there are signs that the reformist camp might be divided. On March 11, 2009, another
reformist, former Prime Minister Mir Hossein Musavi, said he also might run. Some believe that
either Khatemi or Musavi might yield in favor of the other before the election, so as not to divide
the reformist vote.
Congressional Research Service
6
Iran: U.S. Concerns and Policy Responses
Ahmadinejad might have rivals in the conservative camp. The camp split into “pro-
Ahmadinejad” and “anti-Ahmadinejad” camps in the March 2008 Majles (parliament) elections.
In 2008, a number of “moderate-conservative” candidates – particularly Tehran Mayor
Mohammad Baqr Qalibaf – were regularly mentioned as potential opponents. Larijani continues
to be mentioned as a potential candidate as well, although he and Qalibaf seem to appeal to
similar constituencies.
The outcome of the election is difficult to foresee. In the urban areas, Ahmadinejad has been
greatly weakened by the perception that his defiance on the nuclear issue has caused Iran to
become isolated internationally and, for the first time ever, subjected to U.N. economic sanctions.
Further sentiment against him came in protests in November 2008 by bazaar merchants in major
cities against the imposition of sales taxation; the protests caused a suspension of the imposition
of the tax. Some business owners say the difficulty obtaining credit from foreign banks is
hurting their ability to operate. Students have conducted several high-profile anti-Ahmadinejad
protests in recent years, most recently in late February 2009 when authorities tried to rebury on
Amir Kabir University of Technology grounds the bodies of some killed in the Iran-Iraq war.
However, Ahmadinejad continues to exhibit some support among the lower classes and rural
voters, which could potentially carry him to re-election. He has raised wages and lowered interest
rates for poorer borrowers, cancelling some debts of farmers, and increased social welfare
payments and subsidies. Some believe these moves have fed inflation, but rural Iranians see him
as attentive to their economic plight. In addition, Ahmadinejad could benefit from the consistent
support for his government and his efforts expressed by the Supreme Leader, Ayatollah Ali
Khamene’i. It is believed that Khamene’i’s tacit backing helped Ahmadinejad to his unexpected
victory in the 2005 presidential election and that Khamene’i might assist his chances again in
2009.
Table 2. Factions in the Eighth Majles
(Elected March 14-April 25, 2008)
Pro-Ahmadinejad Conservatives (United Front of Principalists)
117
Anti-Ahmadinejad Conservatives (Coalition of Principalists)
53
Reformists (39 seats in eighth Majles)
46
Independents
71
Seats annulled or voided
3
Table 3. Selected Economic Indicators
Economic Growth 6.4% (2008 est.)
Per Capita Income
$13,100/yr purchasing power parity
Proven Oil Reserves
135 billion barrels (highest after Russia and Canada)
Oil
4.1 million barrels per day (mbd)/ 2.4 mbd exports. Exports could shrink to zero by 2015-
Production/Exports
2020 due to accelerating domestic consumption.
Major Oil/Gas
China—300,00 barrels per day (bpd); about 4% of China’s oil imports; Japan—600,000 bpd,
Customers
about 12% of oil imports; other Asia (mainly South Korea)—450,000 bpd; Italy—300,000
bpd; France—210,000 bpd; Netherlands 40,000 bpd; other Europe—200,000 bpd; India—
Congressional Research Service
7
Iran: U.S. Concerns and Policy Responses
Economic Growth 6.4% (2008 est.)
150,000 bpd (10% of its oil imports; Africa—200,000 bpd. Turkey—gas: 8.6 billion cubic
meters/yr
Refined Gasoline
Imports were $5 billion value per year in 2006, but now about $4 billion per year after
Import/ Suppliers
rationing. 60% is supplied by European oil trader Vitol (Switzerland), although there have
been interruptions in the Iran-Vitol trading relationship. Other traders and suppliers include
BP; Total (France); Trafigura (Switzerland/Nethelands); Reliance Energy (India, Jamnagar
refinery); Russia’s Lukoil; Kuwait, UAE, Turkey, Venezuela (Petroleos de Venezuela),
Singapore, the Netherlands, China, Turkmenistan, and Azerbaijan. Iran planning at least eight
new or upgrade refinery projects to expand capacity to about 3 million barrels per day from
1.5 mbd.
Major Export
Japan ($9.9 billion); China ($9.2 billion); Turkey ($5.1 billion); Italy ($4.45 billion); South
Markets (2006)
Korea ($4 billion); Netherlands ($3.2 billion); France ($2.7 billion); South Africa ($2.7
billion); Spain ($2.3 billion); Greece ($2 billion)
Major Imports From
Germany ($5.6 billion); China ($5 billion); UAE ($4 billion); S. Korea ($2.9 billion); France
($2.6 billion); Italy ($2.5 billion); Russia ($1.7 billion); India ($1.6 billion); Brazil ($1.3 billion);
(2006)
Japan ($1.3 billion).
Export Credit
Germany $715 million, down from $2 billion in 2005; France—$3.8 billion, down from $5.7
Guarantees (2006)
billion in 2005.
Major Non-Oil
Renault (France) and Mercedes (Germany)-automobile production in Karaj, Iran—valued at
Investments
$370 million; Renault (France), Peugeot (France) and Volkswagen (Germany)—auto parts
production; Turkey—Tehran airport, hotels; China—shipbuilding on Qeshm Island,
aluminum factory in Shirvan, cement plant in Hamadan; UAE financing Esfahan Steel
Company; India—steel plant, petrochemical plant; S. Korea—steel plant in Kerman Province;
S. Korea and Germany—$1.7 billion to expand Esfahan refinery.
Trade With U.S.
$320 million (trade is severely restricted by U.S. sanctions). Exports to U.S.—$173 million
(2007)
(large categories: pomegranate juice, caviar, pistachio nuts, carpets, medicines, artwork).
Imports from U.S.—$146 million (food, medicines, tobacco products, seeds).
“Oil Stabilization
$12.1 billion (August 2008, IMF estimate).
Fund” Reserves
External Debt
$19 billion (2005 est.)
Development
2003 (latest available): $136 million grant aid. Biggest donors: Germany ($38 million); Japan
Assistance Received
($17 million); France ($9 million).
Inflation
27+ (September 2008), according to Iranian economists.
Unemployment Rate
11%+
Source: CIA World Factbook, various press, IMF, Iran Trade Planning Division (2006), press.
Human Rights and Dissent
The regime appears to have a relatively firm grip on power, in part because it vigorously
suppresses dissent. However, Iranian opinion is hard to gauge and even seemingly low level
unrest has the potential to spiral into a potential threat to the regime. Some argue that reformist
groups such as students, women, labor leaders, intellectuals, and others might be able to galvanize
regime change unexpectedly despite the repression; all of these groups have conducted various
small protests during the past few years.
The latest State Department human rights report (released February 25, 2009), the 2008 State
Department “religious freedom” report (released September 19, 2008), and a report by the U.N.
Congressional Research Service
8
Iran: U.S. Concerns and Policy Responses
Secretary General on October 1, 2008, cite Iran for widespread serious abuses, including unjust
executions, politically motivated abductions by security forces, torture, arbitrary arrest and
detention, and arrests of women’s rights activists. The State Department human rights reports
said the government’s “poor human rights record worsened” during 2008. The Secretary
General’s report later became the basis of a U.N. General Assembly resolution, finalized on
December 18, 2008 by a vote of 69-54, citing Iran for these abuses and calling on it to allow
visits by U.N. personnel investigating the status of human rights practices in Iran. Subsequent to
the passage of the resolution, Iranian authorities raided the Tehran office of the Center for
Defenders of Human Rights, headed by Nobel Peace Prize laureate (2003) and Iran human rights
activist lawyer Shirin Abadi.
Table 4. Human Rights Practices4
Group/
Regime Practice/Recent Developments
Issue
Ethnic and Religious
Persians are about 51% of the population, and Azeris (a Turkic people) are about 24%.
Breakdown
Kurds are about 7% of the population, and about 3% are Arab. Of religions, Shiite
Muslims are about 90% of the Muslim population and Sunnis are about 10%. About 2% of
the population is non-Muslim, including Christians, Zoroastrians (an ancient religion in
what is now Iran), Jewish, and Baha’i.
Media
Since 2000, judicial hardliners have closed hundreds of reformist newspapers, although
many have tended to reopen under new names. Iran also has blocked hundreds of pro-
reform websites, and hardliners reportedly are blocking websites and blogs supportive
of the presidential candidacy of Khatemi. In August 2007, the government closed a
major reformist daily newspaper, Shargh, which had previously been suspended
repeatedly. In February 2008, the regime closed the main women’s magazine, Zanan
(women in Farsi) for allegedly highlighting gender inequality in Islamic law. In November
2008, the regime arrested famed Iranian blogger Hossein Derakshan. Canadian journalist
(of Iranian origin) Zahra Kazemi was detained in 2003 (for filming outside Tehran’s Evin
prison) and allegedly beaten to death in custody. An intelligence agent who allegedly
conducted the beating was acquitted July 25, 2004. An Iranian-American journalist,
Roxanna Saberi, was arrested in January 2009 al egedly because her press credentials had
expired; she remains incarcerated.
Labor
Independent unions are technical y legal but not al owed in practice. The sole
Unions/Students/Other
authorized national labor organization is a state-controlled “Workers’ House” umbrella.
Activists
However, some activists show independence and, in 2007, the regime arrested labor
activists for teachers’ associations, bus drivers’ unions, and a bakery workers’ union. A
bus drivers union leader, Mansur Osanloo, has been in jail since July 2007. The regime
reportedly also dissolved student unions and replaced them with regime loyalists
following student criticism of Ahmadinejad. In September 2008, Iran arrested several
HIV/AIDs researchers for alleged anti-government activities.
Women
Regime strictly enforcing requirement that women fully cover themselves in public,
generally with a garment called a chador, including through detentions. In March 2007,
the regime arrested 31 women activists who were protesting the arrest in 2006 of
several other women’s rights activists; all but 3 of the 31 were released by March 9. In
May 2006, the Majles passed a bill calling for increased public awareness of Islamic dress,
an apparent attempt to persuade women not to wear Western fashion. The bill did not
contain a requirement that members of Iran’s minority groups wear badges or distinctive
clothing. In April 2006, Ahmadinejad directed that women be al owed to attend soccer
matches, but the Supreme Leader reversed that move. Women can vote and run in
4 Sources: State Department reports on human rights and on religious freedom. http://www.state.gov/g/drl/rls/hrrpt/
2006/78852.htm; http://www.state.gov/g/drl/rls/irf/2005/51599.htm.
Congressional Research Service
9
Iran: U.S. Concerns and Policy Responses
Group/
Regime Practice/Recent Developments
Issue
parliamentary elections, but their candidacies for president have routinely been barred
by the Council of Guardians. Iranian women can drive, and many work outside the
home, including owning and running their own businesses. There are 9 women in the
290-seat Majles (13 in the last Majles).
Religious Freedom
Each year since 1999, the State Department religious freedom report has named Iran as
a “Country of Particular Concern” under the International Religious Freedom Act. No
sanctions added, on the grounds that Iran is already subject to extensive U.S. sanctions.
Continued deterioration in religious freedom noted in the International Religious
Freedom report for 2008 (September 19, 2008).
Baha’is
Iran repeatedly cited for repression of the Baha’i community, which Iran’s Shiite Muslim
clergy views as a heretical sect. The State Department cited Iran on February 13, 2009
for charging seven Bahai’s with espionage; thirty other Bahai’s remain imprisoned. In the
1990s, several Baha’is were executed for apostasy (Bahman Samandari in 1992; Musa
Talibi in 1996; and Ruhollah Ruhani in 1998). Another, Dhabihullah Mahrami, was in
custody since 1995 and died of unknown causes in prison in December 2005. In February
2000, Iran’s Supreme Court set aside the death sentences against three other Baha’is. A
wave of Baha’i arrests occurred in May 2006 and two-thirds of university students of the
Baha’i faith were expel ed from university in 2007. Several congressional resolutions have
condemned Iran’s treatment of the Baha’is, including in 1982, 1984, 1988, 1990, 1992,
1994, 1996, 2000, and 2006. In the 110th Congress, H.Res. 1008 condemns Iran’s
treatment of the Baha’is (passed House August 1, 2008).
Jews
Along with Christians, a “recognized minority,” with one seat in the Majles, the 30,000-
member Jewish community (the largest in the Middle East aside from Israel) enjoys
somewhat more freedoms than Jewish communities in several other Muslim states.
However, in practice the freedom of Iranian Jews to practice their religion is limited, and
Iranian Jews remain reluctant to speak out for fear of reprisals. During 1993-1998, Iran
executed five Jews al egedly spying for Israel. In June 1999, Iran arrested 13 Jews (mostly
teachers, shopkeepers, and butchers) from the Shiraz area that it said were part of an
“espionage ring” for Israel. After an April-June 2000 trial, ten of the Jews and two
Muslims accomplices were convicted (July 1, 2000), receiving sentences ranging from 4
to 13 years. An appeals panel reduced the sentences, and all were released by April
2003. On November 17, 2008, Iran hanged businessman Ali Ashtari (a Muslim), who was
arrested in 2006, for allegedly providing information on Iran’s nuclear program to Israel.
Sunnis
The cited reports note other discrimination against Sufis and Sunni Muslims, although
abuses against Sunnis could reflect that minority ethnicities, including Kurds, are mostly
Sunnis. Regime has repressed unrest since 2006 among the minority Azeri population, as
well as Arabs in southern province of Khuzestan.
Human Trafficking
The June 4, 2008 (latest annual), State Department “Trafficking in Persons” report
continues to place Iran in Tier 3 (worst level) for failing to take action to prevent
trafficking in persons. Girls purportedly are trafficked for sexual exploitation within Iran
and from Iran to Turkey, Pakistan, and the Gulf states.
Juvenile Executions
Iran has executed six persons under the age of 18 in 2008. No other country has
executed juvenile offenders in 2008. As a party to the International Covenant on Civil
and Political Reights and the Convention on the Rights of the Child, Iran is obligated to
abolish such executions.
Stonings
In 2002, the head of Iran’s judiciary issued a ban on stoning. However, Iranian officials
later called that directive “advisory” and could be ignored by individual judges. On
December 2, 2008, Iran confirmed the stoning deaths of two men in Mashhad who were
convicted of adultery.
Azeris
Azeris are one quarter of the population, but they complain of ethnic and linguistic
discrimination. In 2008, there were several arrests of Azeri students and cultural
activists who were pressing for their right to celebrate their culture and history.
Congressional Research Service
10
Iran: U.S. Concerns and Policy Responses
Dissidents
The regime is particularly concerned about dissidents who previously held senior regime
positions; these dissidents have followings inside Iran. One figure, Ayatollah Hossein Ali
Montazeri, was released in January 2003 from several years of house arrest, but he remains under
close watch. Montazeri was Khomeini’s designated successor until 1989, when Khomeini
dismissed him for allegedly protecting intellectuals and opponents of clerical rule.
Other dissidents have sought to challenge or expose the regime’s practices from inside Iran,
mainly focused on human rights and free speech. Journalist Akbar Ganji conducted hunger
strikes to protest regime oppression; he was released on schedule on March 18, 2006 after
sentencing in 2001 to six years in prison for alleging high-level involvement in 1999 murders of
Iranian dissident intellectuals that the regime had blamed on “rogue” security agents.
Exiled Opposition Groups: People’s Mojahedin Organization of Iran
(PMOI)/Camp Ashraf
Of the groups seeking to replace rather than moderate the regime, one of the best known is the
People’s Mojahedin Organization of Iran (PMOI).5 Secular and left-leaning, it was formed in the
1960s to try to overthrow the Shah of Iran and advocated Marxism blended with Islamic tenets. It
allied with pro-Khomeini forces during the Islamic revolution and supported the November 1979
takeover of the U.S. Embassy in Tehran but was later driven into exile. Even though it is an
opponent of Tehran, since the late 1980s the State Department has refused contact with the PMOI
and its umbrella organization, the National Council of Resistance (NCR). The State Department
designated the PMOI as a foreign terrorist organization (FTO) in October 19976 and the NCR was
named as an alias of the PMOI in the October 1999 re-designation. The FTO designation was
prompted by PMOI attacks in Iran that sometimes kill or injure civilians—although the group
does not appear to purposely target civilians. In August 14, 2003, the State Department
designated the NCR offices in the United States an alias of the PMOI, and NCR and Justice
Department authorities closed down those offices.
The State Department report on international terrorism for 2007 asserts that the organization—
and not just a radical element of the organization as the group asserts—was responsible for the
alleged killing of seven American defense advisers to the former Shah in 1975-1976. The report
again notes the group’s promotion of women in its ranks and again emphasizes the group’s “cult-
like” character, including indoctrination of its members and separation of family members,
including children, from its activists. The group’s alliance with Saddam Hussein’s regime in the
1980s and 1990s has contributed to the U.S. shunning of the organization.
Some advocate that the United States not only remove the group from the FTO list but also enter
an alliance with the group against Iran. The FTO designation was up for formal review in October
2008, and, in July 2008, the PMOI formally petitioned to the State Department that its
designation be revoked, on the grounds that it renounced any use of terrorism in 2001. However,
the State Department announced in mid-January 2009 that the group would remain listed; the next
5 Other names by which this group is known is the Mojahedin-e-Khalq Organization (MEK or MKO) and the National
Council of Resistance (NCR).
6 The designation was made under the authority of the Anti-Terrorism and Effective Death Penalty Act of 1996 (P.L.
104-132).
Congressional Research Service
11
Iran: U.S. Concerns and Policy Responses
review of that status would be in October 2009. The group is trying to build on recent legal
successes in Europe; on January 27, 2009, the European Union (EU) removed the group from its
terrorist group list; the group had been so designated by the EU in 2002. In May 2008, a British
appeals court determined that the group should no longer be considered a terrorist organization on
the grounds that the British government did not provide “any reliable evidence that supported a
conclusion that PMOI retained an intention to resort to terrorist activities in the future.” In June
2003, France arrested about 170 PMOI members, including its co-leader Maryam Rajavi (wife of
PMOI founder Masoud Rajavi, whose whereabouts are unknown). She was released and remains
based in France, and is occasionally received by European parliamentarians and other politicians.
The issue of group members in Iraq is increasingly pressing. U.S. forces attacked PMOI military
installations in Iraq during Operation Iraqi Freedom and negotiated a ceasefire with PMOI
military elements in Iraq, requiring the approximately 3,350 PMOI fighters to remain confined to
their Ashraf camp near the border with Iran. Its weaponry is in storage, guarded by U.S. and U.S.-
allied personnel. In July 2004, the United States granted the Ashraf detainees “protected persons”
status under the 4th Geneva Convention, meaning they will not be extradited to Tehran or forcibly
expelled as long as U.S. forces have a mandate to help secure Iraq. Another 350 PMOI fighters
have taken advantage of an arrangement between Iran and the ICRC for them to return to Iran if
they disavow further PMOI activities; none are known to have been persecuted since returning to
Iran.
The U.S.-led security mandate in Iraq was replaced on January 1, 2009 by a bilateral U.S.-Iraq
agreement that limits U.S. flexibility in Iraq. The group fears that, now that Iraqi forces have
begun to take control of Ashraf, Iraq will expel the group to Iran. The Iraqi government has tried
to calm those fears in January 2009 by saying that it would not do so. The EU “de-listing” might
help resolve the issue by causing EU governments to be willing to take in those at Ashraf.
Other Armed Groups
Some armed groups are operating in Iran’s border areas, and are generally composed of ethnic or
religious minorities. One such group is Jundullah, composed of Sunni Muslims primarily from
the Baluchistan region bordering Pakistan. Since mid-2008, it has conducted several successful
attacks on Iranian security personnel, claiming revenge for the poor treatment of Sunnis in Iran.
An armed Kurdish group operating out of Iraq is the Free Life Party, known by its acronym
PJAK. PJAK was designated in early February 2009 as a terrorism supporting entity under
Executive order 13224, although the designation statement indicated the decision was based
mainly on PJAK’s association with the Turkish Kurdish opposition group Kongra Gel, also
known as the PKK. Another militant group, the “Ahwazi Arabs,” operates in the largely Arab
inhabited areas of southwest Iran, bordering Iraq.
The Son of the Former Shah
Some Iranian exiles, as well as some elites still in Iran, want to replace the regime with a
constitutional monarchy led by Reza Pahlavi, the U.S.-based son of the late former Shah and a
U.S.-trained combat pilot. However, he does not appear to have large-scale support inside Iran. In
January 2001, the Shah’s son, who is about 50 years old, ended a long period of inactivity by
giving a speech in Washington, DC, calling for unity in the opposition and the institution of a
Congressional Research Service
12
Iran: U.S. Concerns and Policy Responses
constitutional monarchy and democracy in Iran. He has since broadcast messages into Iran from
Iranian exile-run stations in California.7 His political adviser is MIT-educated Shariar Ahy. No
U.S. assistance has been provided to exile-run stations. The conference report on the FY2006
regular foreign aid appropriations, P.L. 109-102, stated the sense of Congress that the
Administration consider such support.
Other Activists
Numerous Iranians-Americans in the United States want to see a change of regime in Tehran.
Many of them are based in California, where there is a large Iranian-American community, and
there are about 25 small-scale radio or television stations that broadcast into Iran. Some well-
known U.S.-based activists include The Abdorrahman Boroumand Foundation; and the Iran
Human Rights Documentation Center (IHDC). The center is run by persons mostly of Iranian
origin and affiliated with Yale University’s Griffin Center for Health and Human Rights. It is
documenting abuses in Iran, using contacts with Iranians in Iran. Another exile is Amir Abbas
Fakravar, a leader of the student dissidents who emerged in the July 1999 anti-regime student
riots.
Some organizations, such as The National Iranian American Council (NIAC), are not necessarily
seeking influence inside Iran. The mission of NIAC, composed largely of Iranian-Americans, is
to promote discussion of U.S. policy and the group has advocated engagement with Iran.
Iran’s Strategic Capabilities and
Weapons of Mass Destruction Programs
The Bush Administration’s “National Security Strategy” document released March 16, 2006 said
the United States “may face no greater challenge from a single country than from Iran.” The
perception, which many in the Obama Administration are said to share, is based largely on Iran’s
growing weapons of mass destruction (WMD) programs and its ability to exert influence in the
region counter to U.S. objectives.8 Many experts agree that Iran’s core national security goals are
to protect itself from foreign, primarily U.S., interference or attack, and to exert regional
influence that Iran believes is commensurate with its size and well developed concept of
nationhood. but Iran’s forces could still threaten U.S. forces and allies in the Gulf region.
Conventional Military/Revolutionary Guard/Qods Force
Iran’s armed forces are extensive but they are widely considered relatively combat ineffective
against a well-trained, sophisticated military such as that of the United States or a regional power
such as Turkey. The Iranian forces are believed sufficiently effective to deter or fend off
conventional threats from Iran’s weaker neighbors such as post-war Iraq, Turkmenistan,
Azerbaijan, and Afghanistan. Iran’s forces lack the logistical ability to project power much
beyond Iran’s borders. Iran’s armed forces have few formal relationships with foreign militaries,
7 Kampeas, Ron. “Iran’s Crown Prince Plots Nonviolent Insurrection from Suburban Washington.” Associated Press,
August 26, 2002.
8 See http://www.whitehouse.gov/nsc/nss/2006/.
Congressional Research Service
13
Iran: U.S. Concerns and Policy Responses
but Iran and India have a “strategic dialogue” and some Iranian naval officers reportedly are
being trained in India. Iran and Turkey have agreed in principle (April 2008) to jointly fight
terrorism along their border. Most of Iran’s other military-to-military relationships, such as with
Russia, Ukraine, Belarus, North Korea, and a few others, generally center on Iranian arms
purchases or upgrades.
Iran’s armed forces are divided. The Islamic Revolutionary Guard Corps (IRGC, known in
Persian as the Pasdaran)9 controls the Basij (mobilization) volunteer militia that enforces
adherence to Islamic customs. It is generally loyal to the hardliners politically and is clearly more
politically influential than is Iran’s regular military, which is numerically larger but was held over
from the Shah’s era. The IRGC and the regular military report to a Joint Headquarters, headed
by Hassan Firuzabadi.
The Revolutionary Guard
As described in a 2009 Rand Corporation study, “Founded by a decree from Ayatollah Khomeini shortly after the
victory of the 1978-1979 Islamic Revolution, Iran’s Islamic Revolutionary Guards Corps (IRGC) has evolved well
beyond its original foundations as an ideological guard for the nascent revolutionary regime. Today the IRGC
functions as an expansive socio-political-economic conglomerate whose influence extends into virtual y every corner
of Iranian political life and society. Bound together by the shared experience of war and the socialization of military
service, the Pasdaran have articulated a populist, authoritarian, and assertive vision for the Islamic Republic of Iran
that they maintain is a more faithful reflection of the revolution’s early ideals. The IRGC’s presence is particularly
powerful in Iran’s highly factionalized political system, in which [many senior figures] hail from the ranks of the IRGC.
Outside the political realm, the IRGC oversees a robust apparatus of media resources, training activities, education
programs designed to bolster loyalty to the regime, prepare the citizenry for homeland defense, and burnish its own
institutional credibility vis-a-vis other factional actors. It is in the economic sphere, however, that the IRGC has seen
the greatest growth and diversification – strategic industries and commercial services ranging from dam and pipeline
construction to automobile manufacturing and laser eye surgery have fallen under its sway, along with a number of
illicit smuggling and black market enterprises.”
As further evidence of the IRGC pre-eminence in the conventional command structure, Chairman of the Joint Chiefs
of Staff Admiral Mike Mullen said on November 29, 2007, that the IRGC Navy was given responsibility to patrol the
entire Persian Gulf, and that the regular Navy is patrolling the Strait of Hormuz and Gulf of Oman.
Through its Qods (Jerusalem) Force, the IRGC has a foreign policy role in exerting influence throughout the region
by supporting pro-Iranian movements, as discussed further below. The Qods Force numbers approximately 10,000-
15,000 personnel who provide advice, support, and arrange weapons deliveries to pro-Iranian factions in Lebanon,
Iraq, Persian Gulf states, Gaza/West Bank, Afghanistan, and Central Asia. It also operates a worldwide intelligence
network to give Iran possible terrorist option and to assist in procurement of WMD-related technology. The Qods
Force commander, Brig. Gen. Qassem Soleimani, is said to have his own independent channel to Supreme Leader
Khamene’i, bypassing the IRGC and Joint Staff command structure.
IRGC leadership developments are significant because of the political influence of the IRGC. On September 2, 2007,
Khamene’i replaced Rahim Safavi with Mohammad Ali Jafari as Commander In Chief of the Guard; Jafari is considered
a hardliner against political dissent and is reputedly close to the Supreme Leader and less so to Ahmadinejad. The Basij
has its own command structure but it reports to the IRGC Commander in Chief. It operates from thousands of
positions in Iran’s institutions. Command reshuffles in July 2008 that integrated the Basij more closely with
provincially-based IRGC units furthered the view that the Basij is playing a more active role in uncovering suspected
plotting by Iran’s minorities and others. More information on Iran’s military and how it might perform against the
United States is discussed under “military options” below.
As noted, the IRGC is also increasingly involved in Iran’s economy, acting through a network of contracting
businesses it has set up, most notably Ghorb (also called Khatem ol-Anbiya, Persian for “Seal of the Prophet”). Active
duty IRGC senior commanders reportedly serve on Ghorb’s board of directors. On October 21, 2007, the Treasury
9 For a more extensive discussion of the IRGC, see Katzman, Kenneth. “The Warriors of Islam: Iran’s Revolutionary
Guard,” Westview Press, 1993.
Congressional Research Service
14
Iran: U.S. Concerns and Policy Responses
Department designated several IRGC companies as proliferation entities under Executive Order 13382, as shown in
the table at the end of the paper. Also that day, the IRGC as a whole, the Ministry of Defense, several IRGC
commanders, and several Iranian banks were sanctioned under that same executive order. Simultaneously, the Qods
Force was named as a terrorism supporting entity under Executive Order 13224. Both orders freeze the U.S.-based
assets and prevent U.S. transactions with the named entities, but these entities are believed to have virtual y no U.S.-
based assets that could be frozen. The designations stopped short of concurring with provisions of bills in the 110th
Congress — H.R. 1400 (passed by the House on September 25), S. 970, and the FY2008 defense authorization bill
(P.L. 110-181, Senate amendment adopted September 6, 2007, by vote of 76-22) — for the Revolutionary Guard to
be designated a foreign terrorist organization, or FTO.
Source: Frederic Wehrey et al. “The Rise of the Pasdaran.” Rand Corporation. 2009. Katzman, Kenneth.
“The Warriors of Islam: Iran’s Revolutionary Guard.” Westview Press, 1993.
Table 5. Iran’s Conventional Military Arsenal
Defense
Military
Surface-
Combat
Budget
Personnel
Tanks
Air
Missiles
Aircraft
Ships
(billions
U.S. $)
545,000 (regular military and
1,693
150
280
200
6.6
Revolutionary Guard Corps
(incl.
I-Hawk plus
(incl. 25 MiG-
(incl. 10 Chinese-made
(IRGC). IRGC is about one-
480 T-
some Stinger 29 and 30 Su-
Hudong, 40 Boghammer,
third of total force.
72)
24)
3 frigates) Also has 3 Kilo
subs
Ship-launched cruise missiles. Iran is able to arm its patrol boats with Chinese-made C-802 cruise missiles. Iran
also has Chinese-supplied HY-2 Seerseekers emplaced along Iran’s coast.
Midget Subs. Iran is said to possess several, possibly purchased assembled or in kit form from North Korea. Iran
claimed on Nov. 29, 2007 to have produced a new smal sub equipped with sonar-evading technology.
Anti-aircraft missile systems. Russia has sold and now delivered to Iran (January 2007) 30 anti-aircraft missile
systems (Tor M1), worth over $1 billion. In September 2006, Ukraine agreed to sell Iran the Kolchuga radar system
that can improve Iran’s detection of combat aircraft. In December 2007, Russia agreed to sel the even more capable
S-300 (also known as SA-20 “Gargoyle”) air defense system, purportedly modeled after the U.S. Patriot system, which
U.S. officials say would greatly enhance Iran’s air defense capability. The value of the deal is estimated at $800 million.
Amid unclear or weak denials by Iranian and Russian officials, U.S. officials told journalists on December 11, 2008 that
Iran has indeed contracted for the missile. It is reportedly was due for delivery by March 2009 and to be operational
by June 2009, but Russian press reports in February 2009 about the visit of Iran’s Defense Minister to Moscow
indicate that Russia has placed delivery on hold due to “political considerations”—expectations of possible adverse
reaction by the Obama Administration.
Nuclear Program and International Sanctions
Since 2005, Iran and the international community appeared to be on a “collision course” over
Iran’s nuclear program as Iran has flouted international demands that it curb its nuclear program.
U.S. officials say they are operating under the assumption that Iran intends to develop a nuclear
weapon from that program. The Obama Administration faces policy choices as the International
Atomic Energy Agency (IAEA) reported on February 19, 2009 that Iran has now enriched enough
uranium for a nuclear weapon, although only if enriched to 90%, and that there continues to be no
evidence that Iran has diverted any nuclear material for a nuclear weapons program. Iran’s
enrichment thus far has been 5%, which is a level that would permit only civilian uses. Some
Administration officials have appeared to lean toward a more alarmist view of Iran’s capabilities,
while others, including Secretary of Defense Gates, have emphasized the less alarmist view,
saying on March 1, 2009, that Iran is “not close” to a nuclear weapon. The Bush Administration’s
December 2007 NIE assessed that Iran will likely be technically capable of producing enough
highly enriched uranium for a nuclear weapon some time during 2010-2015. This time frame was
Congressional Research Service
15
Iran: U.S. Concerns and Policy Responses
reiterated in February 12, 2009 testimony by Director of National Intelligence Dennis Blair and
by him again since then. The IAEA report says that Iran continues to run about 4,000
centrifuges, with another 1,400 likely available for installation. (A National Intelligence Estimate
(unclassified key judgments), released December 3, 2007,10 cast doubt on the most alarming
interpretations of Iran’s program (as well as on that of a previous NIE issued in May 2005),
saying that Iran had—but in late 2003 halted—a covert nuclear weapons program as a result of
increased international scrutiny.)
International scrutiny of Iran’s nuclear program intensified in 2002, when Iran confirmed PMOI
allegations that Iran was building two facilities that could potentially be used to produce fissile
material useful for a nuclear weapon: a uranium enrichment facility at Natanz and a heavy water
production plant at Arak,11 considered ideal for the production of plutonium. It was revealed in
2003 that the founder of Pakistan’s nuclear weapons program, A.Q. Khan, sold Iran nuclear
technology and designs.12 The International Atomic Energy Agency (IAEA), despite intensified
inspections of Iran’s facilities since late 2002, has said it cannot verify that Iran’s current program
is purely peaceful, and several of its reports (January 31, 2006, February 27, 2006, May 26, 2008,
and September 15, 2008) say it found documents that show a possible involvement of Iran’s
military in procuring technology for Iran’s program.
Iranian leaders continue to assert that Iran’s nuclear program is for electricity generation and that
enrichment is its “right” as a party to the NPT. Iran says its oil resources are finite and that
enriching uranium to make nuclear fuel is allowed under the 1968 Nuclear Non-Proliferation
Treaty,13 to which Iran is a party. An analysis was published by the National Academy of Sciences
challenging the U.S. view that Iran is petroleum rich and therefore has no need for a nuclear
power program. According to the analysis, the relative lack of investment is causing a decline in
Iranian oil exports to the point where Iran might have negligible exports of oil by 2015.14 U.S.
officials say that Iran’s gas resources make nuclear energy unnecessary.
Despite Iran’s professions that WMD is inconsistent with its ideology, the NIE says it is likely
that Iran will eventually try to develop a nuclear weapon. Iran’s factions appear to agree on the
utility of a nuclear weapons capability as a means of ending its perceived historic vulnerability to
invasion and domination by great powers, and as a symbol of Iran as a major nation. Others
believe a nuclear weapon represents the instrument with which Iran intends to intimidate its
neighbors and dominate the Persian Gulf region. There are also fears Iran might transfer WMD to
extremist groups or countries.
U.S. officials have generally been less concerned with Russia’s work, under a January 1995
contract, on an $800 million nuclear power plant at Bushehr. Russia insisted that Iran sign an
agreement under which Russia would provide reprocess the plant’s spent nuclear material; that
agreement was signed on February 28, 2005. The plant was expected to become operational in
10 Text at http://www.dni.gov/press_releases/20071203_release.pdf
11 In November 2006, the IAEA, at U.S. urging, declined to provide technical assistance to the Arak facility on the
grounds that it was likely for proliferation purposes.
12 Lancaster, John and Kamran Khan. “Pakistanis Say Nuclear Scientists Aided Iran.” Washington Post, January 24,
2004.
13 For Iran’s arguments about its program, see Iranian paid advertisement “An Unnecessary Crisis—Setting the Record
Straight About Iran’s Nuclear Program,” in the New York Times, November 18, 2005. P. A11.
14 Stern, Roger. “The Iranian Petroleum Crisis and United States National Security,” Proceedings of the National
Academy of Sciences of the United States of America. December 26, 2006.
Congressional Research Service
16
Iran: U.S. Concerns and Policy Responses
2007, but Russia had insisted (including during President Putin’s visit to Iran in October 2007)
that Iran first comply with the U.N. resolutions discussed below. In December 2007, perhaps to
signal disagreement with further pressure on Iran, Russia began fueling the reactor, and Iran says
it expects the plant to become operational in 2009. Some preliminary tests of the plant began in
late February 2009. As part of Russia’s work with Iran, Russia has trained 1,500 Iranian nuclear
engineers.
Diplomatic Efforts in 2003 and 2004/Paris Agreement
In 2003, France, Britain, and Germany (the “EU-3”) opened a separate diplomatic track to curb
Iran’s program. On October 21, 2003, Iran pledged, in return for peaceful nuclear technology, to
(1) fully disclose its past nuclear activities, (2) to sign and ratify the “Additional Protocol” to the
NPT (allowing for enhanced inspections), and (3) to suspend uranium enrichment activities. Iran
signed the Additional Protocol on December 18, 2003, although the Majles has not ratified it.
Iran abrogated the agreement after the IAEA reports of November 10, 2003, and February 24,
2004, stated that Iran had violated its NPT reporting obligations over an 18-year period.
In the face of the U.S. threat to push for Security Council action, the EU-3 and Iran reached a
more specific November 14, 2004, “Paris Agreement,” committing Iran to suspend uranium
enrichment (which it did as of November 22, 2004) in exchange for renewed trade talks and other
aid.15 EU-3—Iran negotiations on a permanent nuclear pact began on December 13, 2004, and
related talks on a trade and cooperation accord (TCA) began in January 2005. The Bush
Administration did not openly support the track until March 11, 2005 when it announced it would
support the talks, but not join them, by dropping U.S. objections to Iran’s application to the World
Trade Organization (which it did in May 2005) and to consider sales of U.S. civilian aircraft parts
to Iran.
Reference to the Security Council
The Paris Agreement broke down just after Ahmadinejad’s election; Iran rejected as insufficient
an EU-3 offer to assist Iran with peaceful uses of nuclear energy and provide limited security
guarantees in exchange for Iran’s (1) permanently ending uranium enrichment; (2) dismantling
the Arak heavy water reactor;16 (3) no-notice nuclear inspections; and (4) a pledge not to leave the
NPT (it has a legal exit clause). On August 8, 2005, Iran broke the IAEA seals and began
uranium “conversion” (one step before enrichment) at its Esfahan facility. On September 24,
2005, the IAEA Board voted to declare Iran in non-compliance with the NPT and to refer the
issue to the Security Council,17 but no time frame was set for the referral. In January 2006, Iran
resumed enrichment activities, and on February 4, 2006, the IAEA board voted 27-318 to report
15 For text of the agreement, see http://www.iaea.org/NewsCenter/Focus/IaeaIran/eu_iran14112004.shtml.
16 In November 2006, the IAEA, at U.S. urging, declined to provide technical assistance to the Arak facility on the
grounds that it was likely for proliferation purposes.
17Voting in favor: United States, Australia, Britain, France, Germany, Canada, Argentina, Belgium, Ghana, Ecuador,
Hungary, Italy, Netherlands, Poland, Portugal, Sweden, Slovakia, Japan, Peru, Singapore, South Korea, India. Against:
Venezuela. Abstaining: Pakistan, Algeria, Yemen, Brazil, China, Mexico, Nigeria, Russia, South Africa, Sri Lanka,
Tunisia, and Vietnam.
18 Voting no: Cuba, Syria, Venezuela. Abstaining: Algeria, Belarus, Indonesia, Libya, South Africa.
Congressional Research Service
17
Iran: U.S. Concerns and Policy Responses
Iran to the U.N. Security Council. On March 29, 2006, the Council agreed on a presidency
“statement” setting a 30-day time limit (April 28, 2006) for ceasing enrichment.19
Establishment of “P5+1” Contact Group/June 2006 Incentive Package
Taking a multilateral approach, the Bush Administration offered on May 31, 2006, to join the
nuclear talks with Iran if Iran first suspends its uranium enrichment. Such talks would center on a
package of incentives and possible sanctions—formally agreed to on June 1, 2006—by a newly
formed group of negotiating nations, the so-called “Permanent Five Plus 1” (P5+1: United States,
Russia, China, France, Britain, and Germany). EU representative Javier Solana formally
presented the P5+1 offer to Iran on June 6, 2006. (The package is formally outlined in Annex I to
U.N. Resolution 1747.)
Incentives:
• Negotiations on an EU-Iran trade agreements and acceptance of Iran into the
World Trade Organization.
• Easing of U.S. sanctions to permit sales to Iran of commercial aircraft or aircraft
parts.
• Sale to Iran of a light-water nuclear reactor and guarantees of nuclear fuel
(including a five year buffer stock of fuel), and possible sales of light-water
research reactors for medicine and agriculture applications.
• An “energy partnership” between Iran and the EU, including help for Iran to
modernize its oil and gas sector and to build export pipelines.
• Support for a regional security forum for the Persian Gulf, and support for the
objective of a WMD free zone for the Middle East.
• The possibility of eventually allowing Iran to resume uranium enrichment if it
complies with all outstanding IAEA requirements and can prove that its nuclear
program is purely peaceful.
Reported Sanctions:20
• Denial of visas for Iranians involved in Iran’s nuclear program and for high-
ranking Iranian officials.
• A freeze of assets of Iranian officials and institutions; a freeze of Iran’s assets
abroad; and a ban on some financial transactions.
• A ban on sales of advanced technology and of arms to Iran; and a ban on sales to
Iran of gasoline and other refined oil products.
• An end to support for Iran’s application to the WTO.
19 See http://daccessdds.un.org/doc/UNDOC/GEN/N06/290/88/PDF/N0629088.pdf?OpenElement.
20 One source purports to have obtained the contents of the package from ABC News: http://www.basicint.org/pubs/
Notes/BN060609.htm
Congressional Research Service
18
Iran: U.S. Concerns and Policy Responses
Resolution 1696
Iran did not immediately give a formal response to the incentive offer. On July 31, 2006, the
Security Council voted 14-1 (Qatar voting no) for U.N. Security Council Resolution 1696, giving
Iran until August 31, 2006, to fulfill the longstanding IAEA nuclear demands (enrichment
suspension, etc). Purportedly in deference to Russia and China, it was passed under Article 40 of
the U.N. Charter, which makes compliance mandatory, but not under Article 41, which refers to
economic sanctions, or Article 42, which would authorize military action. It called on U.N.
member states not to sell Iran WMD-useful technology. On August 22, 2006, Iran submitted a
formal response to the June proposal. Iran’s response (not fully disclosed) reportedly did not
offer to suspend uranium enrichment, instead proposing broader engagement with the West and
guarantees that the United States would not seek regime change.
Resolution 1737
With the backing of the P5+1, chief EU negotiator Javier Solana negotiated with Iran to try
arrange a temporary enrichment suspension, but talks ended on September 28, 2006, without
agreement. After almost four months of negotiations, the Security Council agreed to U.N.
Security Council Resolution 1737. It was passed unanimously on December 23, 2006, under
Chapter 7, Article 41 of the U.N. Charter. It prohibits sale to Iran—or financing of such sale—of
technology that could contribute to Iran’s uranium enrichment or heavy-water reprocessing
activities. It also required U.N. member states to freeze the financial assets of 10 named Iranian
nuclear and missile firms and 12 persons related to those programs (see Table 8). It did not
mandate the banning of travel by these personalities, but called on member states not to admit
them. It also provided an exemption, sought by Russia, for the Bushehr reactor.
Resolution 1747 and Results
Resolution 1737 demanded enrichment suspension by February 21, 2007. With no sign of Iran
doing so, on March 24, 2007, after only three weeks of P5+1 negotiations, Resolution 1747 was
adopted unanimously, which:
• added 10 military/WMD-related entities; 3 Revolutionary Guard entities; 8
persons, and 7 Revolutionary Guard commanders listed in Table 8. Bank Sepah
is among the entities sanctioned.
• banned arms transfers by Iran, a provision targeted at Iran’s alleged arms supplies
to Lebanese Hezbollah and to Shiite militias in Iraq.
• required all countries to report to the United Nations when the sanctioned Iranian
persons travel to their territories.
• called for (but did not require) countries to avoid selling arms or dual use items
to Iran and to avoid any new lending or grants to Iran.
Resolution 1747 demanded Iran suspend enrichment by May 24, 2007. Iran did not comply, but,
suggesting it wanted to avoid further isolation, in August 2007, Iran agreed to sign with the IAEA
an agreement to clear up outstanding questions on Iran’s past nuclear activities by the end of
2007. On that basis, the P5+1 grouping—along with the EU itself—agreed to a joint statement
on September 28, 2007 in which all the undersigned, including Russia and China, said they would
negotiate another sanctions resolution if there is no progress reported by the IAEA in
Congressional Research Service
19
Iran: U.S. Concerns and Policy Responses
implementing the August 2007 agreement or in separate continued negotiations with EU
representative Javier Solana. The IAEA report was circulated on November 15, 2007, saying
that Iran had provided additional information on its past programs, but Solana characterized a
November 30, 2007, meeting with new Iranian negotiator Sayid Jallili as “disappointing,”
suggesting no progress.
Resolution 1803 and Additional Incentives
After several months of negotiations, Resolution 1803 was adopted by a vote of 14-0 (Indonesia
abstaining) on March 3, 2008. It: (1) bans sales of dual use items to Iran; (2) authorizes, but does
not require, inspections of cargo (carried by Iran Air Cargo and Islamic Republic of Iran Shipping
Line) suspected of shipping WMD-related goods; (3) imposes a firm travel ban on five Iranians
named in Annex II to the Resolution and requires reports on international travel by 13 individuals
named in Annex I; (4) calls for, but does not require, a prohibition on financial transactions with
Iran’s Bank Melli and Bank Saderat; and (5) adds 12 entities to those sanctioned under Resolution
1737. Although these provisions do not directly address civilian trade or investment, the Bush
Administration hailed the Resolution as demonstrating that the international community remained
unified on Iran. (On June 23, 2008, the EU, acting under Resolution 1803, froze the assets of
Bank Melli and several IRGC entities and commanders.)
Resolution 1803 also stated that “China, France, Germany, the Russian Federation, the United
Kingdom and the United States are willing to take further concrete measures on exploring an
overall strategy of resolving the Iranian nuclear issue through negotiation on the basis of their
June 2006 proposals.” Appearing to want to preserve a unified front, the Bush Administration
agreed to expand the June 2006 incentive package to induce Iranian cooperation. The P5+1 met
on April 16, 2008, in Shanghai, China but it was not until a meeting in London on May 2, 2008,
that the powers agreed on a “refreshed” package of incentives to augment those in the June 2006
package. According to press reports (the exact offer was not made public), the powers included,
beyond that in the June 2006 proposal, an offer of political cooperation with Iran, and enhanced
incentives on energy cooperation. EU envoy Solana presented the package (which included a
signature by Secretary of State Rice) on June 14, 2008, but Iran was non-committal.
Perhaps sensing increasing international pressure, Iranian Foreign Minister Mottaki indicated on
July 2, 2008, that Iran might be ready to negotiate on the June 2008 incentive package by first
accepting a proposed six week “freeze for freeze”—the P5+1 would freeze further sanctions
efforts and Iran would freeze any further expansion of uranium enrichment (though not suspend
outright). To try to take advantage of what seemed to be divisions within Iran on whether to
negotiate a settlement, the Administration decided to send Undersecretary of State for Political
Affairs William Burns to join Solana and the other P5+1 representatives at a meeting in Geneva
on July 19, 2008 to receive Iran’s response to the “freeze for freeze” idea. Again, Iran did not
supply a direct answer either then, or by an extended deadline of August 2, 2008, instead focusing
on elements of a final nuclear settlement.
Resolution 1835
As a result of the lack of progress, the P5+1 began attempting to agree on another sanctions
resolution. Ideas reportedly under consideration included adding more Iranian banks to those with
which business would be banned, or banning insurance for Iran’s tanker fleet. On August 7, 2008,
separately from any U.N. action but intended to increase pressure on Iran, the EU not only
Congressional Research Service
20
Iran: U.S. Concerns and Policy Responses
implemented those sanctions specified in Resolution 1803, including the authority to inspect
suspect shipments, but also called on its member states to refrain from providing new credit
guarantees on exports to Iran. However, the August 2008 crisis between Russia and Georgia set
back U.S.-Russia relations, and Russia opposed a new resolution to sanction Iran. In an effort to
demonstrate to Iran continued unity, the Council did adopt (September 27, 2008) Resolution
1835. It called on Iran to comply with previous resolutions, but it reaffirmed a willingness to
continue to negotiate a solution with Iran and did not impose any new sanctions.
With Iran still not complying, the P5+1 met again on October 21, 2008, and in Paris on
November 13, 2008. However, with U.S. partner officials uncertain about what U.S. policy
toward Iran might be under a new U.S. Administration, no P5+1 consensus was reached on
imposing new sanctions on Iran. Since President Obama was inaugurated, the P5+1 has met in
Germany (February 4, 2009), which reportedly focused on how the new U.S. Administration
planned to change the U.S. approach on Iran. The P5+1 countries issued a statement
recommitting to the “two track” strategy of offering Iran incentives and diplomacy while
continuing to increase sanctions as long as Iran remains defiant.21 Discussions among P5+1
officials on a way forward have been ongoing since.
Some experts are trying to float compromise proposals. Former senior U.S. diplomat Thomas
Pickering and other experts said in April 2008 that U.S. and Iranian former officials and
academics have been meeting to discuss formulas under which Iran might continue to enriched
uranium to non bomb-grade levels under monitoring.
Table 6. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program
(1737, 1747, and 1803)
Require Iran to suspend uranium enrichment
Prohibit transfer to Iran of nuclear, missile, and dual use items to Iran, except for use in light water reactors
Prohibit Iran from exporting arms or WMD-useful technology
Freeze the assets of 40 named Iranian persons and entities, including Bank Sepah, and several Iranian front companies
Require that countries exercise restraint with respect to travel of 35 named Iranians and ban the travel of 5 others
Cal s on states not to export arms to Iran or support new business with Iran
Calls for vigilance with respect to the foreign activities of all Iranian banks, particularly Bank Melli and Bank Saderat
Calls on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran Shipping Lines if there are
indications they carry cargo banned for carriage to Iran.
Chemical Weapons, Biological Weapons, and Missiles
Official U.S. reports and testimony continue to state that Iran is seeking a self-sufficient chemical
weapons (CW) infrastructure, and that it “may have already” stockpiled blister, blood, choking,
and nerve agents—and the bombs and shells to deliver them. This raises questions about Iran’s
compliance with its obligations under the Chemical Weapons Convention (CWC), which Iran
signed on January 13, 1993, and ratified on June 8, 1997. These officials and reports also say that
Iran “probably maintain[s] an offensive [biological weapons] BW program ... and probably has
the capability to produce at least small quantities of BW agents.”
21 Dempsey, Judy. “U.S. Urged to Talk With Iran.” International Herald Tribune, February 5, 2009.
Congressional Research Service
21
Iran: U.S. Concerns and Policy Responses
Ballistic Missiles/Warheads
At the 2009 Annual Threat Assessment of the Intelligence Community, Director of National
Intelligence, Dennis Blair, testified “although many of their statements are exaggerations, Iranian
officials throughout the past year have repeatedly claimed greater ballistic missile capabilities that
could threaten U.S. and allied interests.”22 Tehran appears to view its ballistic missiles as an
integral part of its strategy to deter or retaliate against forces in the region, including U.S. forces.
To reinforce that point, during July 9-10, 2008, Iran conducted several highly publicized test
launches of a variant of the Shahab missile that Iran says has a 1,250 mile range, putting most key
U.S. allies in the region at risk; other missiles were tested on those days as well. Some analyses
suggested Iran might have falsified photos and other accounts of exactly how many missiles were
tested and their capabilities. Iran claimed a successful test of a “Sijil” solid-fuel missile, with a
range of 1,200 miles, on November 12, 2008.
However, Iran’s technical capabilities are a matter of some debate among experts. As of August
19, 2008, the Bush Administration has reached agreements with Poland and the Czech Republic
to establish a missile defense system to counter Iranian ballistic missiles. These agreements were
reached over Russia’s opposition, which was based on the belief that the missile defense system
would be used to neutralize Russian capabilities. The Obama Administration has indicated it
might de-emphasize this program if progress could be made in curbing Iran’s nuclear program.
Table 7. Iran’s Ballistic Missile Arsenal
Shahab-3
800 mile range. Two of first three tests (July 1998, July 2000, and September 2000) reportedly
(“Meteor”) unsuccessful. After successful test in June 2003, Iran called missile operational (capable of hitting Israel).
Despite claims, some U.S. experts say the missile not completely reliable—some observers said Iran
detonated in mid-flight a purportedly more accurate version on August 12, 2004. On May 31, 2005,
Iran announced it had tested a solid-fuel version.
Shahab-4
1,200 mile range. In October 2004, Iran announced it had extended range of the Shahab-3 to 1,200
miles, and it added in early November 2004 that it is capable of “mass production” of it. Agence France
Presse report (February 6, 2006) said January 2006 test succeeded. Related missiles claimed produced
by Iran—both of about 1,200 mile range, include the “Ashoura” (claimed in November 2007); the
“Ghadr” (displayed at military parade in September 2007); and the “Sijil,” tested on November 12,
2008 (solid fuel). If claims are accurate, large portions of the Near East and Southeastern Europe
would be in range, including U.S. bases in Turkey. On March 31, 2006, Iran claimed to have tested a
missile, possibly a Shahab-4, with separately targeted warheads. Tested again in July 2008, but number
of other tests and degree of success uncertain.
BM-25
1,500 mile range. On April 27, 2006, Israel’s military intelligence chief said that Iran had received a
shipment of North Korean-supplied BM-25 missiles. Missile said to be capable of carrying nuclear
warheads. The Washington Times appeared to corroborate this reporting in a July 6, 2006, story, which
asserted that the North Korean-supplied missile is based on a Soviet-era “SS-N-6” missile.
ICBM
U.S. officials believe Iran might be capable of developing an intercontinental ballistic missile (3,000 mile
range) by 2015. In February 2008 Iran claimed to have launched a probe into space, suggesting its
missile technology might be improving to the point where an Iranian ICBM is an increasingly realistic
possibility.
Other
On September 6, 2002, Iran said it successfully tested a 200 mile range “Fateh 110” missile (solid
Missiles
propel ent), and Iran said in late September 2002 that it had begun production. Iran also possesses a
few hundred short-range ballistic missiles, including the Shahab-1 (Scud-b), the Shahab-2 (Scud-C), and
the Tondar-69 (CSS-8). In January 2009, Iran claimed to have tested a new air-to-air missile.
22 Annual Threat Assessment of the Intelligence for the Senate Select Committee on Intelligence, Dennis C. Blair,
Director of National Intelligence, February 12, 2009.
Congressional Research Service
22
Iran: U.S. Concerns and Policy Responses
Shahab-3
800 mile range. Two of first three tests (July 1998, July 2000, and September 2000) reportedly
(“Meteor”) unsuccessful. After successful test in June 2003, Iran called missile operational (capable of hitting Israel).
Despite claims, some U.S. experts say the missile not completely reliable—some observers said Iran
detonated in mid-flight a purportedly more accurate version on August 12, 2004. On May 31, 2005,
Iran announced it had tested a solid-fuel version.
Space
Iran claimed to have launched a rocket capable of carrying a satellite into space (August 17, 2008). U.S.
Vehicle
officials quoted in press articles said that the second stage of the rocket failed. In early February 2009,
Iran successfully launched a small, low-earth satellite on a Safir-2 rocket (range about 155 miles). The
Pentagon said the launch was “clearly a concern of ours” because “there are dual-use capabilities here
which could be applied toward the development of long-range missiles.”
Warheads
Wall Street Journal report of September 14, 2005, said that U.S. intelligence believes Iran is working to
adapt the Shahab-3 to deliver a nuclear warhead. Subsequent press reports say that U.S. intelligence
captured an Iranian computer in mid-2004 showing plans to construct a nuclear warhead for the
Shahab.23 The IAEA is seeking additional information from Iran.
Foreign Policy and Support for Terrorist Groups
Iran’s foreign policy is a product of the ideology of Iran’s Islamic revolution, blended with long-
standing national interests, and is intended largely to overturn the “status quo” in the Middle East
that Iran believes favors the United States, Israel, and Sunni Muslim regimes. The State
Department report on international terrorism for 2007, released April 30, 2008, again stated (as it
has for more than a decade) that Iran “remained the most active state sponsor of terrorism” in
2007, and it again attributed the terrorist activity primarily to the Revolutionary Guard
[presumably the Qods Force]. The report focused particular attention on Iran’s lethal support to
Shiite militias in Iraq as well as on shipments to Taliban fighters in Afghanistan.24 On October 27,
2008, the deputy commander of the Basij became the first top Guard leader to public
acknowledge that Iran supplies weapons to “liberation armies” in the region, a reference to pro-
Iranian movements discussed below. During a visit to the Middle East in March 2009, Secretary
of State Clinton said, after meeting with several Arab and Israeli leaders in the region, that “There
is a great deal of concern about Iran from this whole region...”
Relations with the Persian Gulf States
The Persian Gulf monarchy states (Gulf Cooperation Council, GCC: Saudi Arabia, Kuwait,
Bahrain, Qatar, Oman, and the United Arab Emirates) fear the growing strategic influence of Iran
but they do not openly support U.S. conflict with Iran that might cause Iran to retaliate against
Gulf state targets. At the same time, since the mid-1990s, Iran has tried to blunt Gulf state fears
of Iran by curtailing activity, conducted during the 1980s and early 1990s, to sponsor Shiite
Muslim extremist groups in these states, all of which are run by Sunni governments. Iran
undertook this activity through the Qods Force and the MOIS. Iran found, to its detriment, that
subversion caused the Gulf states to ally closely with the United States. In part to counter Iran’s
perceived growing influence in the Gulf, in December 2006 the summit of the GCC leaders
23 Broad, William and David Sanger. “Relying On Computer, U.S. Seeks to Prove Iran’s Nuclear Aims.” New York
Times, November 13, 2005.
24 U.S. Department of State. Country Reports on Terrorism 2007. Released April 30, 2008. http://www.state.gov/s/ct/
rls/crt/2007/103711.htm.
Congressional Research Service
23
Iran: U.S. Concerns and Policy Responses
announced that the GCC states might jointly study their own development of “peaceful nuclear
technology.” On the other hand, seeking to avoid further tensions with Iran, the GCC leaders
invited Ahmadinejad to speak at the December 2-3, 2007, summit of the GCC leaders in Doha,
Qatar, marking the first time an Iranian president has been invited since the GCC was formed in
1981. His speech reiterated a consistent Iranian theme that the Gulf countries, including Iran,
should set up their own security structure without the help of “outside powers” but also called for
a “new chapter” in Iran-GCC relations.
• Saudi Arabia. Many observers closely watch the relationship between Iran and
Saudi Arabia because of Saudi alarm over the emergence of a pro-Iranian
government in Iraq and Iran’s ascendancy in Lebanon. Saudi Arabia sees itself as
leader of the Sunni Muslim world and views Shiite Muslims as heretical and
disloyal internally. The Saudis, who do not want a repeat of Iran’s sponsorship of
disruptive and sometimes violent demonstrations at annual Hajj pilgrimages in
Mecca in the 1980s and 1990s—or an increase in Iranian support for Saudi Shiite
dissidents—are receptive to easing tensions with Iran. They hosted Ahmadinejad
in the Kingdom in March 2007 and again for the Hajj in December 2007. The
Saudis continue to blame a pro-Iranian movement in the Kingdom, Saudi
Hezbollah, for the June 25, 1996, Khobar Towers housing complex bombing,
which killed 19 U.S. airmen.25 After restoring relations in December 1991 (after a
four-year break), Saudi-Iran ties progressed to high-level contacts during
Khatemi’s presidency, including Khatemi visits in 1999 and 2002.
• United Arab Emirates (UAE) concerns about Iran never fully recovered from the
April 1992 Iranian expulsion of UAE security forces from the Persian Gulf island
of Abu Musa, which it and the UAE shared under a 1971 bilateral agreement. (In
1971, Iran, then ruled by the U.S.-backed Shah, seized two other islands, Greater
and Lesser Tunb, from the emirate of Ras al-Khaymah, as well as part of Abu
Musa from the emirate of Sharjah.) The UAE (particularly the federation capital,
Abu Dhabi, which takes a harder line than Dubai, which has an Iranian-origin
resident community as large as 300,000 and business ties to Iran) wants to refer
the dispute to the International Court of Justice (ICJ), but Iran insists on resolving
the issue bilaterally. The UAE has not pressed the issue vigorously in recent
years, although it formally protested Iran’s setting up of a maritime and ship
registration office on Abu Musa in July 2008. The UAE insists the islands dispute
be kept on the agenda of the U.N. Security Council (which it has been since
December 1971). The United States supports UAE proposals but takes no formal
position on sovereignty. As an indicator of the degree to which the issue has
faded, in May 2007 the UAE received Ahmadinejad (the highest level Iranian
visit since the 1979 revolution) and allowed him to lead an anti-U.S. rally of a
reported several hundred Iranian-origin residents of Dubai at a soccer stadium
there. On the other hand, tensions have flared since late 2008 over UAE’s policy
of fingerprinting of Iranian visitors.
25 Walsh, Elsa. “Annals of Politics: Louis Freeh’s Last Case.” The New Yorker, May 14, 2001. The June 21, 2001,
federal grand jury indictments of 14 suspects (13 Saudis and a Lebanese citizen) in the Khobar bombing indicate that
Iranian agents may have been involved, but no indictments of any Iranians were announced. In June 2002, Saudi
Arabia reportedly sentenced some of the eleven Saudi suspects held there. The 9/11 Commission final report asserts
that Al Qaeda might have had some as yet undetermined involvement in the Khobar Towers attacks.
Congressional Research Service
24
Iran: U.S. Concerns and Policy Responses
• Qatar is wary that Iran might seek to encroach on its large North Field (natural
gas), which it shares with Iran (called South Pars on Iran’s side) and through
which Qatar earns large revenues for natural gas exports. Qatar’s fears were
heightened on April 26, 2004, when Iran’s deputy Oil Minister said that Qatar is
probably producing more gas than “her right share” from the field and that Iran
“will not allow” its wealth to be used by others. These concerns might have
prompted Qatar to invite Ahmadinejad to the December 2007 GCC summit in
Qatar and to push for his invitation to the summit in December 2008.
• Bahrain is about 60% Shiite, many of whom are of Persian origin, but its
government is dominated by the Sunni Muslim Al Khalifa family. In 1981 and
again in 1996, Bahrain publicly accused Iran of supporting Bahraini Shiite
dissidents (the Islamic Front for the Liberation of Bahrain, Bahrain-Hezbollah,
and other Bahraini dissident groups) in efforts to overthrow the ruling Al Khalifa
family. Bahraini fears that Iran would try to interfere in Bahrain’s November 25,
2006, parliamentary elections by providing support to Shiite candidates did not
materialize, although the main Shiite opposition coalition won 18 out of the 40
seats of the elected body. Tensions have flared several times since July 2007
when Iranian editorialists have re-asserted that Bahrain is part of Iran—that
question was the subject of the 1970 U.N.-run referendum in which Bahrainis
opted for independence. The issued flared again after a February 20, 2009,
statement by Ali Akbar Nateq Nuri, an adviser to Khamene’i, that Bahrain was at
one time an Iranian province. The statement caused major criticism of Iran
throughout the region, and contributed to a decision by Morocco to break
relations with Iran. Still, Bahrain has sought not to antagonize Iran and has
apparently allowed Iran’s banks to establish a presence in Bahrain’s vibrant
banking sector. On March 12, 2008, the Treasury Department sanctioned the
Bahrain-based Future Bank under Executive order 13382 that sanctions
proliferation entities. Future Bank purportedly is controlled by Bank Melli.
Iranian Policy in Iraq
The U.S. military ousting of Saddam Hussein benefitted Iran strategically,26 and U.S.-Iran
differences in Iraq widened to the point where some were describing the competition as a U.S.-
Iran “proxy war” inside Iraq. The acute source of tension was evidence, detailed by U.S.
commanders in Iraq, that the Qods Force is providing arms (including highly lethal “explosively
forced projectiles,” EFPs, that have killed over 200 U.S. soldiers in Iraq), training, guidance, and
financing to “special groups” of Shiite militias involved in sectarian violence and anti-U.S.
activities. The New York Times reported on May 5, 2008, that Lebanese Hezbollah militants, who
are Arabs, are providing some of the training to the Iraq militants at training camps near Tehran;
in August 2008, the U.S.-led coalition arrested nine Hezbollah operatives allegedly involved in
funneling arms to Shiite militiamen.
However, then Secretary of State Rice said in late December 2008 that the U.S. pressure has
contributed to a recently-observed lessening of Iranian interference in Iraq, and U.S. commanders
have since noted they are observing that the Iranian shipments have diminished. The Shiite
26 This issue is covered in greater depth in CRS Report RS22323, Iran's Activities and Influence in Iraq, by Kenneth
Katzman.
Congressional Research Service
25
Iran: U.S. Concerns and Policy Responses
militias and political parties that benefit most from Iranian support fared poorly in the January 31,
2009 provincial elections in Iraq, and the results were viewed as a setback for Iran’s influence in
Iraq. Despite substantial effort, Iran was unable to derail the U.S.-Iraq defense pact (which took
effect January 1, 2009). In January 2009, Iraqi Prime Minister Nuri al-Maliki visited Iran for the
fourth time since he became Prime Minister, this time reportedly to reassure Iran that the pact was
not a threat to Iran. However, Iran had already muted its public opposition to the pact because the
final version says that the United States cannot use Iraq as a base to attack other countries.
Iran also has signed a number of agreements with Iraq on transportation, energy cooperation, free
flow of Shiite pilgrims, border security, intelligence sharing, and other cooperation; several more
agreements, including a $1 billion credit line for Iranian exports to Iraq, were signed during
Ahmadinejad’s March 2-3, 2008, visit to Iraq; implementing agreements were signed in April
2008. The two countries now do about $4 billion in bilateral trade. Additional Iranian credits and
trade issues were reportedly discussed during a March 2009 visit to Iran by Iraqi President Jalal
Talabani, although many suspect there were also discussions of additional Iranian help to develop
the Kurdish region of Iraq (Talabani is a Kurd).
The “Iraq Study Group” (Recommendations 9, 10, and 11) in its December 2006 report,
recommended U.S. dialogue with Iran on Iraq but President Bush initially appeared to reject that
idea. The Bush Administration might have later judged that its 2007 “troop surge” and other
military moves in the Gulf (extra aircraft carrier deployments) strengthened the U.S. position, and
the Bush Administration supported and attended several regional conferences on Iraq, attended by
Iran. No substantive U.S.-Iran talks took place at any of these regional meetings on Iraq.
The Bush Administration undertook more significant bilateral talks with Iran on the Iraq issue.
The first such meeting, in Baghdad, was on May 28, 2007; the two sides met at the home of
Prime Minister Maliki, who opened the meeting. According to Ambassador Crocker (the Iranian
side was represented by the Iranian Ambassador to Iraq), the two sides agreed on broad principles
for Iraq’s political evolution and stability, but the United States would judge the dialogue by the
indications, discussed above, of Iranian cooperation in stopping military supply of Shiite militias.
Another round of talks was held on July 24, 2007, resulting in an agreement to establish a
working group to discuss ways to stabilize Iraq. This group met for the first time on August 6,
2007. Because of signs that Iran had slowed weapons flows into Iraq, another round of talks was
tentatively scheduled for December 18, 2007, but Iran repeatedly postponed the talks because of
differences over the agenda and the level of talks (Iran wanted them to be at the ambassador
level). On May 5, 2008, Iran indefinitely suspended this dialogue, and, in February 2009, Iran
said there was no need to resume that dialogue.
A provision of the FY2008 defense authorization bill (P.L. 110-181) requires a report to Congress
on Iran’s interference in Iraq, but it does not authorize or recommend use of U.S. force to stop
these actions. On January 9, 2008, the Treasury Department took action against suspected Iranian
and pro-Iranian operatives in Iraq by designating four individuals and one organization as a threat
to stability in Iraq under the July 17, 2007 Executive Order 13438, which freezes the assets and
bans transactions with named individuals. The named entities, which includes a senior Qods
Forces leader, are in the tables on sanctioned entities.
Supporting Palestinian Militant Groups
Iran’s support for Palestinian militant groups has long concerned U.S. Administrations,
particularly since doing so gives Tehran an opportunity to try to obstruct Israeli-Palestinian peace
Congressional Research Service
26
Iran: U.S. Concerns and Policy Responses
prospects. Ahmadinejad’s various statements on Israel were discussed above, although other
Iranian leaders have made similar statements in the past. In the 1990s, Khamene’i called Israel a
“cancerous tumor” and made other statements suggesting that he seeks Israel’s destruction. He
used that term again during a March 4, 2009, press conference in Tehran. In December 2001,
Rafsanjani said that it would take only one Iranian nuclear bomb to destroy Israel, whereas a
similar strike against Iran by Israel would have far less impact because Iran’s population is large.
Iran has sometimes openly incited anti-Israel violence, including hosting conferences of anti-
peace process organizations (April 24, 2001, and June 2-3, 2002). During his presidency,
Khatemi also issued sharp criticisms and recriminations against Israel, but he also conversed with
Israel’s president at the 2005 funeral of Pope John Paul II. Khatemi was perceived as supporting
the Iranian Foreign Ministry, considered a bastion of moderates, which states that Iran’s official
position is that it would not seek to block an Israeli-Palestinian settlement but that the peace
process is too weighted toward Israel to result in a fair settlement.
Iran and Hamas
The State Department report on terrorism for 2007 (mentioned above) again accused Iran of
providing “extensive” funding, weapons, and training to Hamas, Palestinian Islamic Jihad (PIJ),
the Al Aqsa Martyr’s Brigades, and the Popular Front for the Liberation of Palestine-General
Command (PFLP-GC). All are named as foreign terrorist organizations (FTO) by the State
Department for their use of violence to undermine the Arab-Israeli peace process. Some saw
Iran’s regional policy further strengthened by Hamas’s victory in the January 25, 2006,
Palestinian legislative elections, and even more so by Hamas’s June 2007 armed takeover of the
Gaza Strip. The Hamas gains positioned it to block moves toward peace, and Hamas continues
to oppose a two-state solution with Israel.
In the December 27, 2008 - January 17, 2009 Israel-Hamas battles in Gaza, Iran allegedly
provided material support to Hamas. Joint Chiefs Chairman Adm. Mike Mullen said on January
27, 2009 that the United States boarded but did not seize a ship carrying light arms to Hamas
from Iran; the ship later went to Cyprus. Hamas appeared to corroborate allegations of Iranian
weapons supplies when its exiled leader, Khaled Meshal, on February 1, 2009, publicly praised
Iran for helping Hamas achieve “victory” over Israel in the conflict.27 On December 29, 2008,
Khamene’i said that Muslims worldwide were “duty-bound” to defend Palestinians in the Gaza
Strip against the Israeli offensive against the Hamas-run leadership there, but the Iranian
leadership did not attempt to send Iranian volunteers to Gaza to fight on Hamas’ behalf. Iran has
sent humanitarian relief to Gaza, although Iran accused Israel of stopping at least one shipment
off the Gaza coast. On March 11, 2009, a U.N. committee monitoring Iran’s compliance with
Resolution 1747, which bans Iranian arms exports, said Iran might have violated that resolution
with an alleged attempted weapons shipment to Hamas, which was intercepted by the U.S. Navy
and ordered to port in Cyprus.
Hamas activists downplay Iranian influence on them, asserting that Iran is mostly Shiite, while
Hamas members are Sunni Muslims.28 Hamas was reputed to receive about 10% of its budget in
the early 1990s from Iran, although since then Hamas has cultivated funding from wealthy
Persian Gulf donors and supporters in Europe and elsewhere.
27 Hamas Leader Praises Iran’s Help in Gaza ‘Victory.’ CNN.com. February 1, 2009.
28 CNN “Late Edition” interview with Hamas co-founder Mahmoud Zahar, January 29, 2006.
Congressional Research Service
27
Iran: U.S. Concerns and Policy Responses
Lebanese Hezbollah
Iran has maintained a close relationship with Hezbollah since the group was formed in 1982 by
Lebanese Shiite clerics who were sympathetic to Iran’s Islamic revolution and belonged to the
Lebanese Da’wa Party. Hezbollah was responsible for several acts of anti-U.S. and anti-Israel
terrorism in the 1980s and 1990s.29 Hezbollah’s attacks on Israeli forces in southern Lebanon
contributed to an Israeli withdrawal in May 2000, but, despite United Nations certification of
Israel’s withdrawal, Hezbollah maintained military forces along the border. Hezbollah continued
to remain armed and outside Lebanese government control, despite U.N. Security Council
Resolution 1559 (September 2, 2004) that required its dismantlement. In refusing to disarm,
Hezbollah says it was resisting Israeli occupation of small tracts of Lebanese territory (Shib’a
Farms).
Neither Israel nor the United States opposed Hezbollah’s progressively increased participation in
peaceful Lebanese politics. In March 2005, President Bush indicated that the United States might
accept Hezbollah as a legitimate political force in Lebanon if it disarms. In the Lebanese
parliamentary elections of May—June 2005, Hezbollah expanded its presence in the parliament
to 14 out of the 128-seat body, and it gained two cabinet seats. As a matter of policy, the United
States does not meet with any Hezbollah members, even those in the parliament or cabinet.
Hezbollah is a designated FTO, but that designation bars financial transactions by the group and
does not specifically ban meeting with members of the group.
Whether or not Iran instigated Lebanese Hezbollah to provoke the July August 2006 crisis, Iran
has long been its major arms supplier. Hezbollah fired Iranian-supplied rockets on Israel’s
northern towns during the fighting. As part of a package of aid to Hezbollah said to exceed $100
million per year, reported Iranian shipments to Hezbollah over the past five years have included
the “Fajr” (dawn) and Khaybar series of rockets that were fired at the Israeli city of Haifa (30
miles from the border), and over 10,000 Katyusha rockets that were fired at cities within 20 miles
of the Lebanese border.30 Iran also supplied Hezbollah with an unmanned aerial vehicle (UAV),
the Mirsad, that Hezbollah briefly flew over the Israel-Lebanon border on November 7, 2004, and
April 11, 2005; at least three were shot down by Israel during the conflict. On July 14, 2006,
Hezbollah apparently hit an Israeli warship with a C-802 sea-skimming missile probably provided
by Iran. (See above for information on Iran’s acquisition of that weapon from China.) Iran also
purportedly provided advice during the conflict; about 50 Revolutionary Guards Qods Force
personnel were in Lebanon (down from about 2,000 when Hezbollah was formed, according to a
Washington Post report of April 13, 2005) when the conflict began; that number might have
increased during the conflict to help Hezbollah operate the Iranian-supplied weaponry.
Even though Hezbollah reduced its overt military presence in southern Lebanon in accordance
with the conflict-related U.N. Security Council Resolution 1701 (July 31, 2006), Hezbollah was
perceived as a victor in the war for holding out against heavy Israeli air-strikes and some ground
29 Hezbollah is believed responsible for the October 1983 bombing of the U.S. Marine barracks in Beirut, as well as
attacks on U.S. Embassy Beirut facilities in April 1983 and September 1984, and for the hijacking of TWA Flight 847
in June 1985 in which Navy diver Robert Stetham was killed. Hezbollah is also believed to have committed the March
17, 1992, bombing of Israel’s embassy in that city, which killed 29 people. Its last known terrorist attack outside
Lebanon was the July 18, 1994, bombing of a Jewish community center in Buenos Aires, which killed 85. On October
31, 2006, Argentine prosecutors asked a federal judge to seek the arrest of Rafsanjani, former Intelligence Minister Ali
Fallahian, former Foreign Minister Ali Akbar Velayati, and four other Iranian officials for this attack.
30“Israel’s Peres Says Iran Arming Hizbollah.” Reuters, February 4, 2002.
Congressional Research Service
28
Iran: U.S. Concerns and Policy Responses
action. Iran supported Hezbollah’s demands and provided it with leverage by resupplying it with
rockets, reportedly increasing its stockpile to 27,000 rockets, more than double what Hezbollah
had at the start of the 2006 war.31 Among the deliveries are 500 Iranian-made “Zelzal”
(Earthquake) missiles with a range of 186 miles, enough to reach Tel Aviv from south Lebanon.
Iran also made at least $150 million available for Hezbollah to distribute to Lebanese citizens
(mostly Shiite supporters of Hezbollah) whose homes were damaged in the Israeli military
campaign.32
Perhaps emboldened by the supplies, Hezbollah, perhaps for the first time, used its military wing
for internal Lebanese political purposes. In mid May 2008, Hezbollah fighters took over large
parts of Beirut in response to an attempt by the U.S. and Saudi-backed Lebanese government to
curb Hezbollah’s media and commercial operations. The success of its fighters contributed to a
Qatar-brokered settlement on May 21, 2008, in which the government rescinded its actions
against Hezbollah and agreed to give Hezbollah and its allies enough seats in a new cabinet to be
able to veto government decisions. Hezbollah agreed to the compromise candidate of Lebanese
Army commander Michel Suleiman to become the new president. The new cabinet, in which
Hezbollah has one cabinet seat but its allies have seven others, giving Hezbollah its long-sought
veto power, was appointed in June 2008.
Central Asia and the Caspian
Iran’s policy in Central Asia has thus far emphasized Iran’s rights to Caspian Sea resources,
particularly against Azerbaijan. That country’s population, like Iran’s, is mostly Shiite Muslim,
but its leadership is secular. In addition, Azerbaijan is ethnically Turkic, and Iran fears that
Azerbaijan nationalists might stoke separatism among Iran’s large Azeri Turkic population, which
demonstrated some unrest in 2006. These factors could explain why Iran has generally tilted
toward Armenia, which is Christian, even though it has been at odds with Azerbaijan over
territory and control of ethnic Armenians. In July 2001, Iranian warships and combat aircraft
threatened a British Petroleum (BP) ship on contract to Azerbaijan out of an area of the Caspian
that Iran considers its own. The United States called that action provocative, and it is engaged in
border security and defense cooperation with Azerbaijan directed against Iran (and Russia). The
United States successfully backed construction of the Baku-Tblisi-Ceyhan oil pipeline, intended
in part to provide alternatives to Iranian oil. Along with India and Pakistan, Iran has been given
observer status at the Central Asian security grouping called the Shanghai Cooperation
Organization (SCO – Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan). In
April 2008, Iran applied for full membership in the organization, which opposes a long-term U.S.
presence in Central Asia.
Afghanistan and Pakistan33
Iran is viewed by U.S. officials as pursuing a multi-track strategy – attempting to help develop
Afghanistan and enhance its influence there, while also building leverage against the United
States by arming anti-U.S. militant groups. Iran is particularly interested in restoring some of its
31 Rotella, Sebastian. “In Lebanon, Hezbollah Arms Stockpile Bigger, Deadlier.” Los Angeles Times, May 4, 2008.
32 Shadid, Anthony. “Armed With Iran’s Millions, Fighters Turn to Rebuilding.” Washington Post, August 16, 2006.
33 See CRS Report RL30588, Afghanistan: Post-Taliban Governance, Security, and U.S. Policy, by Kenneth Katzman.
Congressional Research Service
29
Iran: U.S. Concerns and Policy Responses
traditional sway in eastern, central, and northern Afghanistan where Persian-speaking Afghans
predominate.
The State Department terrorism report for 2007 accuses the Qods Force of supplying various
munitions, including 107mm rockets, to Taliban and other militants in Afghanistan; some Taliban
commanders openly say they are obtaining Iranian weapons. On April 17, 2007, U.S. military
personnel in Afghanistan captured a shipment of Iranian weapons that purportedly was bound for
Taliban fighters. On June 6, 2007 and again on September 6, 2007, NATO officers said they
directly intercepted Iranian shipments of heavy arms, C4 explosives, and advanced roadside
bombs (explosively forced projectiles, or EFPs, such as those found in Iraq) to Taliban fighters in
Afghanistan. U.S. commanders in Afghanistan maintain that the intercepted shipments are large
enough that the Iranian government would have to have known about them. On January 27, 2009,
Secretary of Defense Gates testified (Senate Armed Services Committee) that Iran has slightly
increased shipments of EFP’s (see Iraq section) into Afghanistan. Some U.S. officials alleged in
March 2009 that Iran might also have contact with the militant faction of Jalalludin Haqqani, who
is purportedly based in Pakistan and is fighting the Afghan government and U.S. forces there.
These shipments and contacts have caused debate over Iran’s goals because Iran long opposed the
regime of the Taliban in Afghanistan on the grounds that it oppressed Shiite Muslim and other
Persian-speaking minorities. Iran nearly launched a military attack against the Taliban in
September 1998 after Taliban fighters captured and killed nine Iranian diplomats based in
northern Afghanistan, and Iran provided military aid to the Northern Alliance factions. During the
major combat phase of the post-September 11 U.S.-led war in Afghanistan, Iran offered search
and rescue of any downed service-persons and the trans-shipment to Afghanistan of humanitarian
assistance. Iran and U.S. diplomats were in continuous contact in forging a post-Taliban
government in Afghanistan at the December 2001 “Bonn Conference.” In March 2002, Iran
expelled Gulbuddin Hikmatyar, an Afghan militant leader; it froze his Iran-based assets in
January 2005.
After 2004, Iran’s influence waned somewhat as Northern Alliance figures were marginalized in
Afghan politics. To compensate, Iran has funded projects in Afghanistan that total about $1.2
billion million since 2001 (close to a pledged amount in international donors conferences), mostly
in neighboring Herat but also in Kabul (Shiite theological seminaries there). Iran’s construction of
Shiite mosques and seminaries could indicate Iran is trying to support Afghanistan’s Shiite
(Hazara tribe) minority, and Iran has funded several media outlets in Afghanistan catering to
Shiites.
At the same time, some commanders, including CENTCOM Commander Gen. David Petraeus,
has said in January 2009 that U.S. engagement with Iran on Afghanistan might help U.S.
stabilization efforts there. Others say that working with Iran on Afghanistan might help build a
broader understanding with Iran on other issues, including the nuclear issue. Some press reports
say that, despite Iran’s assistance to the Taliban, Defense Department planners might even be
evaluating the feasibility of using an Iranian route to ship U.S. equipment into Afghanistan as an
alternative to the frequently attacked route through Pakistan. Other accounts say an Iranian
supply route might be used by non-U.S. partners of NATO for their missions in Afghanistan.
Perhaps in recognition of Iran’s role in Afghanistan, or as part of a broader effort to build
dialogue with Iran, Secretary of State Clinton said publicly in early March 2009 that Iran would
be invited to an international conference on Afghanistan to be held in the Netherlands on March
31, 2009.
Congressional Research Service
30
Iran: U.S. Concerns and Policy Responses
Pakistan
Iran’s relations with Pakistan have been partly a function of events in Afghanistan. Iran had a
burgeoning military cooperation with Pakistan in the early 1990s, and as noted Iran’s nuclear
program benefitted from the A.Q. Khan network. However, Iran-Pakistan relations became
strained in the 1990s when Pakistan was supporting the Taliban in Afghanistan, which committed
alleged atrocities against Shiite Afghans (Hazara tribe), and which seized control of Persian-
speaking areas of Afghanistan. Currently, Iran remains suspicious that Pakistan might want to
again implant the Taliban in power in Afghanistan — and Iran itself is aiding the Taliban to some
extent — but Iran and Pakistan now have a broad agenda that includes a potential major gas
pipeline project, discussed further below.
Al Qaeda
Iran is not a natural ally of Al Qaeda, largely because Al Qaeda is an orthodox Sunni Muslim
organization. The 9/11 Commission report said several of the September 11 hijackers and other
plotters, possibly with official help, might have transited Iran, but the report does not assert that
the Iranian government cooperated with or knew about the plot. Another bin Laden ally, Abu
Musab al-Zarqawi, killed by U.S. forces in Iraq on June 7, 2006, reportedly transited Iran after
the September 11 attacks and took root in Iraq, becoming an insurgent leader there.
However, Iran might see possibilities for tactical alliance with Al Qaeda, and U.S. officials have
said since January 2002 that Iran has not prosecuted or extradited senior Al Qaeda operatives
(spokesman Sulayman Abu Ghaith, top operative Sayf Al Adl, and Osama bin Laden’s son,
Saad34). All have been believed to be in Iran,35 although some U.S. officials said in January 2009
that Saad bin Laden might have left Iran and could be in Pakistan. That information was
publicized a few days after the Treasury Department (on January 16, 2009) designated four Al
Qaeda operatives in Iran, including Saad bin Laden (and three lesser known figures) as terrorist
entities under Executive Order 13224. (U.S. officials blamed Saad bin Laden, Adl, and Abu
Ghaith for the May 12, 2003, bombings in Riyadh, Saudi Arabia against four expatriate housing
complexes on these operatives, saying they have been able to contact associates outside Iran.36)
Iran asserted on July 23, 2003, that it had “in custody” senior Al Qaeda figures. However, some
experts believe that hardliners in Iran might want to use Al Qaeda activists as leverage against the
United States and its allies. Some say Iran might want to exchange them for a U.S. hand-over of
People’s Mojahedin activists under U.S. control in Iraq. Possibly attempting to show that it is an
adversary and not an ally of Al Qaeda, on July 16, 2005, Iran’s Intelligence Minister said that 200
Al Qaeda members are in Iranian jails.37
Latin America
A growing concern has been Iran’s developing relations with countries and leaders in Latin
America considered adversaries of the United States, particularly Cuba and Venezuela’s Hugo
34 Gertz, Bill. “Al Qaeda Terrorists Being Held by Iran.” Washington Times, July 24, 2003.
35 Keto, Alex. “White House Reiterates Iran Is Harboring Al Qaeda.” Dow Jones Newswires, May 19, 2003.
36 Gertz, Bill. “CIA Points to Continuing Iran Tie to Al Qaeda.” Washington Times, July 23, 2004.
37 “Tehran Pledges to Crack Down on Militants.” Associated Press, July 18, 2005.
Congressional Research Service
31
Iran: U.S. Concerns and Policy Responses
Chavez. In February 2006, Secretary of State Rice referred to Venezuela and Cuba as “sidekicks”
of Iran because of their votes in the IAEA against referring Iran to the Security Council. On
January 27, 2009, Secretary of Defense Gates said Iran was trying to build influence in Latin
America by expanding front companies and opening offices in countries there. On October 30,
2007, Secretary of Homeland Security Michael Chertoff said that Iran’s relationship with
Venezuela is an emerging threat because it represents a “marriage” of Iran’s extremist ideology
with “those who have anti-American views.” Chavez has visited Iran on several occasions,
offering Iran additional gasoline during Iran’s fuel shortages in 2007 as well as joint oil and gas
projects. The two countries have established direct air links, and 400 Iranian engineers have
reportedly been sent to Venezuela to work on infrastructure projects there. The State Department
terrorism report for 2006 said that Cuba maintains “close relationships with other state sponsors
of terrorism such as Iran.” In October 2007, Uruguayan parliamentary investigators said they
blocked an attempt by the government to buy arms from Iran, using a diversion through
Venezuela.38 Iran is also trying to extend its influence in Latin America by offering Bolivia $1
billion in aid and investment, according to an Associated Press report of November 23, 2008.
India
Iran and India have cultivated good relations with each other in order to enable each to pursue its
own interests and avoid mutual conflict. The two backed similar anti-Taliban factions in
Afghanistan during 1996-2001 and have a number of mutual economic and even military-to-
military relationships and projects, discussed further in CRS Report RS22486, India-Iran
Relations and U.S. Interests, by K. Alan Kronstadt and Kenneth Katzman: India-Iran Relations
and U.S. Interests, by K. Alan Kronstadt and Kenneth Katzman.
One aspect of the relationship involves not only the potential building of a natural gas pipeline
from Iran, through Pakistan, to India, but also the supplies of gasoline to Iran. A key supplier is
Reliance Industries Ltd., which by some accounts supplies up to 40% of Iran’s imports of
gasoline. In December 2008, some Members of Congress expressed opposition to a decision by
the Export-Import Bank to provide up to $900 million in loan guarantees to Reliance, because of
its relationship with Iran. Reliance subsequently announced that it was ending new gas sales to
Iran following the December 31, 2008 expiration of existing contracts. Another source of U.S.
concern has been visits to India by some Iranian naval personnel.
Africa
Some Members of Congress are concerned that Iran is support radical Islamist movements in
Africa. In the 111th Congress, H.Con.Res. 16 cites Hezbollah for engaging in raising funds in
Africa by trafficking in “conflict diamonds.” Iran also might have supplied Islamists in Somalia
with anti-aircraft and anti-tank weaponry.
U.S. Policy Responses, Options, and Legislation
The February 11, 1979 fall of the Shah of Iran, a key U.S. ally, opened the long and deep rift in
U.S.-Iranian relations. On November 4, 1979, radical “students” seized the U.S. Embassy in
38 Arostegui, Martin. “Uruguay Caught Buying Iran Arms.” Washington Times, October 12, 2007.
Congressional Research Service
32
Iran: U.S. Concerns and Policy Responses
Tehran and held its diplomats hostage until minutes after President Reagan’s inauguration on
January 20, 1981. The United States broke relations with Iran on April 7, 1980 (just after the
failed U.S. military attempt to rescue the hostages) and the two countries have had only limited
official contact since.39 The United States tilted toward Iraq in the 1980-1988 Iran-Iraq war,
including U.S. diplomatic attempts to block conventional arms sales to Iran, providing battlefield
intelligence to Iraq40 and, during 1987-1988, direct skirmishes with Iranian naval elements in the
course of U.S. efforts to protect international oil shipments in the Gulf from Iranian mines and
other attacks. In one battle on April 18, 1988 (“Operation Praying Mantis”), Iran lost about a
quarter of its larger naval ships in a one-day engagement with the U.S. Navy, including one
frigate sunk and another badly damaged. Iran strongly disputed the U.S. assertion that the July 3,
1988, U.S. shoot-down of Iran Air Flight 655 by the U.S.S. Vincennes over the Persian Gulf
(bound for Dubai, UAE) was an accident.
In his January 1989 inaugural speech, President George H.W. Bush laid the groundwork for a
rapprochement, saying that, in relations with Iran, “goodwill begets goodwill,” implying better
relations if Iran helped obtain the release of U.S. hostages held by Hezbollah in Lebanon. Iran
reportedly did assist in obtaining their releases, which was completed in December 1991, but no
thaw followed, possibly because Iran continued to back groups opposed to the U.S.-sponsored
Middle East peace process, a major U.S. priority.
Policy During the Clinton and Bush Administrations
Upon taking office in 1993, the Clinton Administration moved to further isolate Iran as part of a
strategy of “dual containment” of Iran and Iraq. In 1995 and 1996, the Clinton Administration and
Congress added sanctions on Iran in response to growing concerns about Iran’s weapons of mass
destruction, its support for terrorist groups, and its efforts to subvert the Arab-Israeli peace
process. The election of Khatemi in May 1997 precipitated a U.S. shift toward engagement; the
Clinton Administration offered Iran official dialogue, with no substantive preconditions. In
January 1998, Khatemi publicly agreed to “people-to-people” U.S.-Iran exchanges as part of his
push for “dialogue of civilizations, but he ruled out direct talks. In a June 1998 speech, then
Secretary of State Albright stepped up the U.S. outreach effort by calling for mutual confidence
building measures that could lead to a “road map” for normalization of relations. Encouraged by
the reformist victory in Iran’s March 2000 parliamentary elections, Secretary Albright, in a March
17, 2000, speech, acknowledged past U.S. meddling in Iran, announcing some minor easing of
the U.S. trade ban with Iran, and promised to try to resolve outstanding claims disputes. In
September 2000 U.N. “Millennium Summit” meetings, Albright and President Clinton sent a
positive signal to Iran by attending Khatemi’s speeches.
Bush Administration Policy
The Bush Administration policy priority was to prevent Iran from obtaining a nuclear weapons
capability, believing that a nuclear Iran would be even more assertive in attempting to undermine
39 An exception was the abortive 1985-1986 clandestine arms supply relationship with Iran in exchange for some
American hostages held by Hezbollah in Lebanon (the so-called “Iran-Contra Affair”). Iran has an interest section in
Washington D.C. under the auspices of the Embassy of Pakistan; it is staffed by Iranian-Americans. The U.S. interest
section in Tehran has no American personnel; it is under the Embassy of Switzerland.
40 Sciolino, Elaine. The Outlaw State: Saddam Hussein’s Quest for Power and the Gulf Crisis. New York: John Wiley
and Sons, 1991. p. 168.
Congressional Research Service
33
Iran: U.S. Concerns and Policy Responses
U.S. objectives in the Middle East than it already is. The Bush Administration undertook multi-
faceted efforts to limit Iran’s strategic capabilities through international diplomacy and
sanctions—both international sanctions as well as sanctions enforced by its allies, outside
Security Council mandate. At the same time, the Administration engaged in bilateral diplomacy
with Iran on specific priority issues, such as stabilizing Afghanistan and Iraq. The policy
framework was supported by maintenance of a large U.S. conventional military capabilities in the
Persian Gulf and through U.S. alliances with Iran’s neighbors.
At times, the Bush Administration considered or, to some extent, pursued harder line options.
Some Administration officials, reportedly led by Vice President Cheney, believed that policy
should focus on using the leverage of possible military confrontation with Iran or on U.S. efforts
to change Iran’s regime.41 Legislation in the 110th Congress indicated support for increasing U.S.
sanctions and for steps to compel other foreign companies to curtail their business dealings with
Iran.42
Overview of Obama Administration Policy
Obama Administration officials say the Administration shares the goals of the previous
Administration to prevent Iran from acquiring a nuclear weapons capability, as well as the
longstanding assessment that Iran is meddling in the affairs of its neighbors and trying to frustrate
some regional U.S. initiatives. However, President Obama has said the United States would be
responsive to an Iranian “unclenched fist,” and that the Administration is developing a “new
approach” that includes more direct diplomacy with Iran than was the case during the Bush
Administration. At a February 9, 2009 news conference, President Obama said that “My national
security team is currently reviewing our existing Iran policy, looking at areas where we can have
constructive dialogue, where we can directly engage with them. And my expectation is in the
coming months we will be looking for openings that can be created where we can start sitting
across the table, face to face, diplomatic overtures that will allow us to move our policy in a new
direction.” In response, Iranian President Mahmoud Ahmadinejad said that Iran is ready for
direct talks with the United States if they were conducted in a “fair atmosphere with mutual
respect.” In contrast to the Bush Administration, Obama Administration officials have not
indicated support for military action should Iran continue to pursue its nuclear program—
although that option has not been explicitly taken “off the table” by President Obama—or for
regime-change options to accomplish those goals.
Some Obama Administration officials, including Dennis Ross, who was named in late February
2009 as an adviser to Secretary of State Clinton for “Southwest Asia,” a formulation understood
to center on Iran, believe that direct diplomacy alone will not necessarily persuade Iran to alter
course. Ambassador Ross has, in outside writings, called for U.S. partners to present Iran with
clear alternatives to its policies—both clearer incentives and clearer punishments if Iran continues
to refuse cooperation on the nuclear issue, in particular. At the same time, as discussed above,
Obama Administration official Susan Rice (Ambassador to the U.N.) has said the U.S. diplomacy
41 Cooper, Helene and David Sanger. “Strategy on Iran Stirs New Debate at White House.” New York Times, June 16,
2007.
42 The FY2007 defense authorization law (P.L. 109-364) called for a report by the Administration on all aspects of U.S.
policy and objectives on Iran (and required the DNI to prepare a national intelligence estimate on Iran, which was
released on December 3, 2007 as discussed above).
Congressional Research Service
34
Iran: U.S. Concerns and Policy Responses
with Iran will complement, not supplant, the multilateral diplomacy that was begun during the
Bush Administration.
Containment and Possible Military Action
The Bush Administration consistently maintained that military action to delay or halt Iran’s
nuclear program was an option that was “on the table” but, as noted, the Obama Administration
has not indicated a similar inclination to highlight this option. Although some Members publicly
oppose most forms of military action against Iran, others fear that diplomacy and sanctions might
not succeed and that preventing Iran from acquiring a working nuclear device is paramount. A
U.S. ground invasion to remove Iran’s regime has not, at any time, appeared to be under serious
consideration in part because of the heavy strains on U.S. forces from the Afghanistan and Iraq
conflicts.
Proponents of U.S. air and missile strikes against suspected nuclear sites argue that military
action could set back Iran’s nuclear program because there are only a limited number of key
targets, and these targets are known to U.S. planners and could be struck, even those that are
hardened or buried.43 Estimates of the target set range from 400 nuclear and other WMD-related
targets, to potentially a few thousand targets whose destruction would cripple Iran’s economic
and military infrastructure. At least 75 targets are underground or hardened. Those who take an
expansive view of the target set argue that the United States would need to reduce Iran’s potential
for retaliation by striking not only nuclear facilities but also Iran’s conventional military,
particularly its small ships and coastal missiles.
Still others argue that there are military options available that do not involve air or missile strikes.
Some say that a naval embargo or related embargo is possible that could pressure Iran into
reconsidering its stand on the nuclear issue. Such action was “demanded” in H.Con.Res. 362 (see
more on this bill below). Others say that the imposition of a “no-fly zone” over Iran might also
serve that purpose. Either action could still be considered acts of war, and could escalate into
hostilities.
Most U.S. allies in Europe, not to mention Russia and China, oppose military action. These states
tend to agree with experts who maintain that the United States is not necessarily aware of or
militarily able to reach all relevant sites; other opponents believe any benefits would be minor, or
only temporary, and that the costs of a strike are too high. Some believe that a U.S. strike would
cause the Iranian public to rally around Iran’s regime, setting back efforts to promote moderation
within Iran. On the other hand, some European and other diplomats say that France and Britain
might back or even join a military strike if Iran were to begin an all-out drive toward a nuclear
weapon.
An Israeli Strike?
Israeli officials view a nuclear armed Iran as an existential threat and have repeatedly refused to
rule out the possibility that Israel might strike Iran’s nuclear infrastructure. Speculation about this
possibility increased on June 7, 2008, when Israeli deputy prime minister Shaul Mofaz said that
43 For an extended discussion of U.S. air strike options on Iran, see Rogers, Paul. Iran: Consequences Of a War. Oxford
Research Group, February 2006.
Congressional Research Service
35
Iran: U.S. Concerns and Policy Responses
an attack on Iran is becoming “unavoidable” because it continues to refuse to curb its nuclear
program. Speculation increased further in mid-June 2008 when Israeli officials confirmed reports
that Israel had practiced a long range strike such as that which would be required to hit Iranian
nuclear sites. Press reports in January 2009 say the Bush Administration actively discouraged a
purported Israeli plan in 2008 to undertake such a mission. Still, some believe that recent Israeli
statements highlighting Iran’s nuclear progress suggests increasing Israeli nervousness that might
prompt Israeli leaders to act, with or without U.S. approval.
Although Israeli strategists say this might be a viable option, several experts doubt that Israel has
the capability to make such action sufficiently effective to justify the risks. U.S. military leaders
are said by observers to believe that an Israeli strike would inevitably draw the United States into
a conflict with Iran yet without the degree of planning, preparation, or capability that would make
a similar U.S. action a success.
Iranian Retaliatory Scenarios 44
Some officials and experts warn that a U.S. military strike on Iran could provoke unconventional
retaliation, using the equipment discussed in the section on “conventional military capabilities,”
that could be difficult to counter. At the very least, such conflict is likely to raise world oil prices
significantly out of fear of an extended supply disruption. Others say such action would cause
Iran to withdraw from the NPT and refuse any IAEA inspections. Other possibilities include
firing missiles at Israel—and Iran’s July 2008 missile tests could have been intended to
demonstrate this retaliatory capability—or directing Lebanese Hezbollah or Hamas to fire rockets
at Israel. Iran could also step up arms shipments to anti-U.S. militias in Iraq and Afghanistan.
Iran has acquired a structure and doctrine for unconventional warfare that partly compensates for
its conventional weakness. Then CENTCOM commander Gen. John Abizaid said in March 2006
that the Revolutionary Guard Navy, through its basing and force structure, is designed to give
Iran a capability to “internationalize” a crisis in the Strait of Hormuz. On January 30, 2007, his
replacement at CENTCOM, Admiral William Fallon, said that “Based on my read of their
military hardware acquisitions and development of tactics ... [the Iranians] are posturing
themselves with the capability to attempt to deny us the ability to operate in [the Strait of
Hormuz].” (General David Petraeus became CENTCOM commander in September 2008.) In July
2008 Iran again claimed it could close the Strait in a crisis but the then commander of U.S. naval
forces in the Gulf, Admiral Kevin Cosgriff, backed by Joint Chiefs Chairman Mullen, said U.S.
forces could quickly reopen the waterway.
Iran has nonetheless tried to demonstrate that it is a capable force in the Gulf. It has conducted at
least five major military exercises since August 2006, including exercises simultaneous with U.S.
exercises in the Gulf in March 2007. Iran has repeatedly stated it is capable of closing the Strait
of Hormuz and would do so, if attacked. In early 2007, Iranian ships were widening their patrols,
coming ever closer to key Iraqi oil platforms in the Gulf. In February 2007, Iran seized 15 British
sailors that Iran said were patrolling in Iran’s waters, although Britain says they were in Iraqi
waters performing coalition-related searches. They were held until April 5, 2007. On January 6,
2008, the U.S. Navy reported a confrontation in which five IRGC Navy small boats approached
three U.S. Navy ships to the point where they manned battle stations. The IRGC boats veered off
44 See also, Washington Institute for Near East Policy. The Last Resort: Consequences of Preventive Military Action
Against Iran, by Patrick Clawson and Michael Eisenstadt. June 2008.
Congressional Research Service
36
Iran: U.S. Concerns and Policy Responses
before any shots were fired, but the Bush Administration called it a “provocative act” and filed a
formal protest with Tehran. The IRGC could have been testing U.S. rules of engagement
following the U.S. sanctions imposed on the IRGC and its subunits. Another incident occurred in
April 2008 when a ship under U.S. contract fired a shot to warn off Iranian boats in the Gulf. In
October 2008, Iran announced it is building several new naval bases along the southern coast,
including at Jask, indicating enhanced capability to threaten the entry and exit to the Strait of
Hormuz.
If there were a conflict in the Gulf, some fear that Iran might try to use large numbers of boats to
attack U.S. ships, or to lay mines, in the Strait. In April 2006, Iran conducted naval maneuvers,
including test firings of what Iran claims are underwater torpedos that can avoid detection,
presumably for use against U.S. ships in the Gulf, and a surface-to-sea radar-evading missile
launched from helicopters or combat aircraft. U.S. military officials said the claims might be an
exaggeration. The Gulf states fear that Iran will fire coastal-based cruise missiles at their oil
loading or other installations across the Gulf, as happened during the Iran-Iraq war.
Containment and the Gulf Security Dialogue
The Bush Administration tried to strengthen containment of Iran by enhancing the military
capabilities of U.S. regional allies. An assertive military containment component of Bush
Administration policy was signaled in the January 10, 2007, Iraq “troop surge” statement by
President Bush. In that statement, he announced that the United States was sending a second U.S.
aircraft carrier group into the Gulf,45 extending deployment of Patriot anti-missile batteries in the
Gulf, reportedly in Kuwait and Qatar, and increasing intelligence sharing with the Gulf states.
Secretary of Defense Gates said at the time that he saw the U.S. buildup as a means of building
leverage against Iran that could be useful in bolstering U.S. diplomacy. An April 2008
deployment of a second carrier group to the Gulf was, according to Secretary Gates, a “reminder”
to Iran of U.S. capabilities in the Gulf.
The U.S. Gulf deployments build on a containment strategy inaugurated in mid-2006 by the State
Department, primarily the Bureau of Political-Military Affairs (“Pol-Mil”). The State Department
effort represented an effort to revive some of the U.S.-Gulf state defense cooperation that had
begun during the Clinton Administration but had since languished as the United States focused on
the post-September 11 wars in Afghanistan and Iraq. In a December 8, 2007 speech in Bahrain,
Secretary Gates said the “Gulf Security Dialogue” has six key pillars, including:
• Defense cooperation (with the Gulf states).
• Developing a shared assessment and agenda on Iraq.
• Regional stability, especially with respect to Iran.
• Energy infrastructure security.
• Counter-proliferation
• Counter-terrorism
45 Shanker, Thom. “U.S. and Britain to Add Ships to Persian Gulf in Signal to Iran,” New York Times, December 21,
2006.
Congressional Research Service
37
Iran: U.S. Concerns and Policy Responses
One goal of the initiative is on boosting Gulf state capabilities fueled speculation about major
new weapons sales to the GCC states. The emphasis of the sales is to improve Gulf state missile
defense capabilities, for example by sales of the upgraded Patriot Advanced Capability-3 (PAC-
3),46 as well as to improve border and maritime security equipment through sales of combat
littoral ships, radar systems, and communications gear. The initial sales, including PAC-3 related
sales to UAE and Kuwait, and Joint Direct Attack Munitions (JDAMs) to Saudi Arabia and UAE
were notified to Congress in December 2007 and January 2008. A sale to UAE of the very
advanced “THAAD” (Theater High Altitude Area Defense) has also been notified.
The Obama Administration has not stated a position on whether it will continue the Gulf Security
Dialogue program at all, or in the same form. Some believe that the new Administration’s
emphasis on diplomacy will likely lead to a downgrading or perhaps discontinuation of the
policy.
Presidential Authorities and Legislation
A decision to take military action might raise the question of presidential authorities. In the 109th
Congress, H.Con.Res. 391, introduced on April 26, 2006, called on the President to not initiate
military action against Iran without first obtaining authorization from Congress. A similar bill,
H.Con.Res. 33, was introduced in the 110th Congress. Other bills requiring specific congressional
authorization for use of force against Iran (or prohibiting U.S. funds for that purpose) include
S.Res. 356, H.J.Res. 14, H.R. 3119, S.Con.Res. 13, S. 759, and H.R. 770. An amendment to H.R.
1585, the National Defense Authorization Act for FY2008, was defeated 136 to 288. A provision
that sought to bar the Administration from taking military action against Iran without
congressional authorization was taken out of an early draft of an FY2007 supplemental
appropriation (H.R. 1591) to fund additional costs for Iraq and Afghanistan combat (which was
vetoed on May 1, 2007). Other provisions, including requiring briefings to Congress about
military contingency planning related to Iran’s nuclear program, is in the House-passed FY2009
defense authorization bill (H.R. 5658).
Regime Change
A major feature of Bush Administration policy for part of 2006—promotion of “regime
change”—later appeared to recede. The Obama Administration is emphasizing dialogue with
Iran, and has already begun to distance itself from the prior Administration’s attraction to this
option.
The Bush Administration said that the democracy promotion programs discussed below were
intended to promote political evolution in Iran and change regime behavior, not to overthrow the
regime. A few accounts, such as “Preparing the Battlefield” by Seymour Hersh in the New
Yorker (July 7 and 14, 2008) say that President Bush authorized U.S. covert operations to
destabilize the regime,47 involving assistance to some of the ethnic-based armed groups discussed
above. CRS has no way to confirm assertions in the Hersh article that up to $400 million was
46 “New Persian Gulf Security Effort Expected to Fuel Arms Sales in FY-07.” Inside the Pentagon, November 9, 2006.
47 Ross, Brian and Richard Esposito. Bush Authorizes New Covert Action Against Iran. http://blogs.abcnews.com/
theblotter/2007/05/bush_authorizes.html.
Congressional Research Service
38
Iran: U.S. Concerns and Policy Responses
appropriated and/or used to aid the groups mentioned. In January 2009, Iran tried four Iranians on
charges of trying to overthrow the government with the support of the United States.
There has been some support in the United States for regime change since the 1979 Islamic
revolution; the United States provided some funding to anti-regime groups, mainly pro-
monarchists, during the 1980s.48 The Bush Administration’s belief in this option became apparent
after the September 11, 2001, attacks, when President Bush described Iran as part of an “axis of
evil” in his January 2002 State of the Union message. President Bush’s second inaugural address
(January 20, 2005) and his State of the Union messages of February 2, 2005, and January 31,
2006, suggested a clear preference for a change of regime by stating, in the latter speech, that “...
our nation hopes one day to be the closest of friends with a free and democratic Iran.” Indications
of affinity for this option include increased public criticism of the regime’s human rights record
as well as the funding of Iranian pro-democracy activists. However, the Bush Administration
shifted away from this option as a strategy employing multilateral sanctions and diplomacy took
form in 2006, in part because U.S. partner countries believe regime change policies harm
diplomacy.
Legislation in the 109th Congress exemplified the preference of some Members for regime change
in Iran by authorizing funding for democracy promotion, among other provisions. In the 109th
Congress, H.R. 282 passed the House on April 26, 2006, by a vote of 397-21. A companion, S.
333, was introduced in the Senate. The Administration supported the democracy-promotion
sections of these bills. Major provisions were included in H.R. 6198, which was introduced on
September 27, 2006, passed by both chambers, and signed September 30, 2006 (P.L. 109-293).
Entitled the Iran Freedom Support Act, it authorized funds (no specific dollar amount) for Iran
democracy promotion and modified the Iran Sanctions Act.
Many question the prospects of U.S.-led Iran regime change through democracy promotion or
other means, short of all-out-U.S. military invasion, because of the weakness of opposition
groups. Providing overt or covert support to anti-regime organizations, in the view of many
experts, would not make them materially more viable or attractive to Iranians. The regime
purportedly also conducts extensive regime surveillance of democracy activists or other internal
dissidents. Iran has been arresting civil society activists by alleging they are accepting the U.S.
democracy promotion funds, while others have refused to participate in U.S.-funded programs,
fearing arrest. The highest profile such arrest came in May 2007 – Iranian-American scholar
Haleh Esfandiari, of the Woodrow Wilson Center in Washington, DC, was subsequently
imprisoned for several months. 49
The State Department has been the implementer of U.S. democracy promotion programs. In
2006, the Administration began increasing the presence of Persian-speaking U.S. diplomats in
48 CRS conversations with U.S. officials responsible for Iran policy. 1980-1990. After a period of suspension of such
assistance, in 1995, the Clinton Administration accepted a House-Senate conference agreement to include $18-$20
million in funding authority for covert operations against Iran in the FY1996 Intelligence Authorization Act (H.R.
1655, P.L. 104-93), according to a Washington Post report of December 22, 1995. The Clinton Administration
reportedly focused the covert aid on changing the regime’s behavior, rather than its overthrow.
49 Three other Iranian Americans were arrested and accused by the Intelligence Ministry of actions contrary to national
security in May 2007: U.S. funded broadcast (Radio Farda) journalist Parnaz Azima (who was not in jail but was not
allowed to leave Iran); Kian Tajbacksh of the Open Society Institute funded by George Soros; and businessman and
peace activist Ali Shakeri. Several congressional resolutions called on Iran to release Esfandiari (S.Res. 214 agreed to
by the Senate on May 24; H.Res. 430, passed by the House on June 5; and S.Res. 199). All were released by October
2007.
Congressional Research Service
39
Iran: U.S. Concerns and Policy Responses
U.S. diplomatic missions around Iran, in part to help identify and facilitate Iranian participate in
U.S. democracy-promotion programs. The Iran unit at the U.S. consulate in Dubai has been
enlarged significantly into a “regional presence” office, and new “Iran-watcher” positions have
been added to U.S. diplomatic facilities in Baku, Azerbaijan; Istanbul, Turkey; Frankfurt,
Germany; London; and Ashkabad, Turkmenistan, all of which have large expatriate Iranian
populations and/or proximity to Iran.50 An enlarged (eight person) “Office of Iran Affairs” has
been formed at State Department, and it is reportedly engaging in contacts with U.S.-based exile
groups such as those discussed earlier. The State Department has used funds provided in recent
appropriations to support pro-democracy programs run by 26 organizations based in the United
States in Europe; the Department refuses to name grantees for security reasons. Part of the
program has been to promote people-to-people exchanges which might help alter the image of the
United States in Iran; to date the State Department has sponsored exchanges with about 150
Iranian academics, professionals, athletes, artists, and medical professionals. The Department has
also formed a Persian-language website. Iran asserts that funding democracy promotion
represents a violation of the 1981 “Algiers Accords” that settled the Iran hostage crisis and
provide for non-interference in each others’ internal affairs.
Funding
As shown below, $67 million has been appropriated for Iran democracy promotion ($19.6 million
through DRL and $48.6 million through the Bureau of Near Eastern Affairs/USAID). Of that, as
of October 2008, $42.7 million has been obligated, and $20.8 million disbursed. Additional funds,
discussed in the chart below, have been appropriated for cultural exchanges, public diplomacy,
and broadcasting to Iran. However, the Obama Administration did not request funding for
democracy promotion in Iran in its FY2010 budget request, an indication that the new
Administration views this effort as inconsistent with its belief in dialogue with Iran. Funding for
radio and TV broadcasting programs to Iran are expected to continue, however.
Table 8. Iran Democracy Promotion Funding
FY2004
Foreign operations appropriation (P.L. 108-199) earmarked $1.5 million for “educational, humanitarian
and non-governmental organizations and individuals inside Iran to support the advancement of democracy
and human rights in Iran.” The State Department Bureau of Democracy and Labor (DRL) gave $1 million
to the IHDC organization, see above; $500,000 to National Endowment for Democracy (NED).
FY2005 $3
million from FY2005 foreign aid appropriation (P.L. 108-447) for democracy promotion. Priority areas:
political party development, media development, labor rights, civil society promotion, and human rights.
FY2006
$11.15 for democracy promotion from regular FY2006 foreign aid appropriation (P.L. 109-102). $4.15
million administered by DRL and $7 million for the Bureau of Near Eastern Affairs.
regular
FY2006
Total of $66.1 million (of $75 million requested) from FY2006 supplemental (P.L. 109-234): $20 million
supp.
for democracy promotion ($5 million above request); $5 million for public diplomacy directed at the
Iranian population (amount requested); $5 million for cultural exchanges (amount requested); and $36.1
million for Voice of America-TV and “Radio Farda” broadcasting ($13.9 million less than request). Of all
FY2006 funds, the State Department said on June 4, 2007 that $16.05 million was obligated for democracy
promotion programs, as was $1.77 million for public diplomacy and $2.22 million for cultural exchanges
(bringing Iranian professionals and language teachers to the United States). Broadcasting funds provided
through the Broadcasting Board of Governors; began under Radio Free Europe/Radio Liberty (RFE/RL), in
partnership with the VOA, in October 1998.51 Farda (“Tomorrow” in Farsi) received $14.7 million of
50 Stockman, Farah. “‘Long Struggle’ With Iran Seen Ahead.” Boston Globe, March 9, 2006.
51The service began when Congress funded it at $4 million in the FY1998 Commerce/State/Justice appropriation (P.L.
(continued...)
Congressional Research Service
40
Iran: U.S. Concerns and Policy Responses
FY2004
Foreign operations appropriation (P.L. 108-199) earmarked $1.5 million for “educational, humanitarian
and non-governmental organizations and individuals inside Iran to support the advancement of democracy
and human rights in Iran.” The State Department Bureau of Democracy and Labor (DRL) gave $1 million
to the IHDC organization, see above; $500,000 to National Endowment for Democracy (NED).
FY2006 funds; now broadcasts 24 hours/day. VOA Persian services (radio and TV) combined cost about
$10 million per year. VOA-TV began on July 3, 2003, and now is broadcasting to Iran 12 hours a day.
FY2007
FY2007 continuing resolution provided $6.55 million for Iran (and Syria) to be administered through DRL.
$3.04 million was used for Iran. No funds were requested.
FY2008
$60 million (of $75 million requested) is contained in Consolidated Appropriation (H.R. 2764, P.L. 110-
161), of which $21.6 million is ESF for pro-democracy programs, including non-violent efforts to oppose
Iran’s meddling in other countries. $7.9 million is “Development Funds” for use by DRL. Appropriation
also fully funds additional $33.6 million requested for Iran broadcasting: $20 million for VOA Persian
service; and $8.1 million for Radio Farda; and $5.5 million for exchanges with Iran.
FY2009
Request was for $65 million in ESF “to support the aspirations of the Iranian people for a democratic and
open society by promoting civil society, civic participation, media freedom, and freedom of information.”
H.R. 1105 (P.L. 111-8) provides $15 million for democracy promotion programs in Iran and several other
countries.
Engagement
The Obama Administration’s belief in sustained, direct engagement with Iran is a pronounced
difference with its predecessor. However, there continues to be debate within the Obama
Administration over the degree of engagement, the level, and the timing of the diplomacy,
particularly that which is to be conducted before Iran’s June 2009 election. As noted, the clearest
initiative to date has been the public invitation for Iran to attend the March 31, 2009, conference
on Afghanistan, to be held in the Netherlands. President Ahmadinejad has said Iran is ready for
such dialogue if it is part of a fundamental change in the U.S. stance from what Iran sees as
hostility. At the same time, Secretary of State Clinton reportedly has expressed to some Arab
leaders substantial skepticism over whether the engagement would cause Iran to moderate its
regional policies.
Enhanced U.S. Interests Section
On specific steps toward greater engagement, the Bush Administration said in late 2008 that it
considered staffing the U.S. interests section in Tehran with U.S. personnel, who would mostly
process Iranian visas and help facilitate U.S.-Iran people-to-people contacts. The current interests
section is under the auspices of the Swiss Embassy. The Bush Administration said in November
2008 that it would leave this decision to the Obama Administration, which appears inclined
toward that step as well but which has said no decision has been made, to date. Some Iranian
leaders, including Ahmadinejad, have said they might accept a U.S. interests section, but others
have said this will not be approved by the Iranian side. A potential factor in the interests section
decision could be a storming of a British diplomatic facility by 50 Iranian students on December
30, 2008, protesting what they said was Britain’s bias toward Israel. In a related development, in
February 2009, the British Council, a global cultural institution run by the British government,
said it had been forced to suspend its activities in Iran because of purported intimidation of its
(...continued)
105-119). It was to be called Radio Free Iran but was never formally given that name by RFE/RL.
Congressional Research Service
41
Iran: U.S. Concerns and Policy Responses
staff in Tehran. Further clouding the prospects for enhanced exchanges, in February 2009 Iran
denied visas to a female badminton team to compete in Iran.
Previous Engagement Efforts
Prior to 2008, the Bush Administration directly engaged Iran on specific regional priority
(Afghanistan and Iraq) and humanitarian issues. The United States had a dialogue with Iran on
Iraq and Afghanistan from late 2001 until May 2003, when the United States broke off the talks
following the May 12, 2003, terrorist bombing in Riyadh. At that time, the United States and Iran
publicly acknowledged that they were conducting direct talks in Geneva on those two issues,52 the
first confirmed direct dialogue between the two countries since the 1979 revolution. The United
States briefly resumed some contacts with Iran in December 2003 to coordinate U.S. aid to
victims of the December 2003 earthquake in Bam, Iran, including a reported offer—rebuffed by
Iran—to send a high-level delegation to Iran including Senator Elizabeth Dole and reportedly
President Bush’s sister, Dorothy. Bilateral meetings on Iraq were discussed above.
Regarding a broader dialogue with Iran on nuclear and other issues, since 2006—and prior to the
July 2008 decision to have Undersecretary Burns attend the July 19 nuclear issues meeting—the
Bush Administration maintained it would join multilateral nuclear talks, or even potentially
engage in direct bilateral talks, only if Iran first suspends uranium enrichment. Some believe the
Administration position was based on a view that offering to participate in a nuclear dialogue
with Iran would later increase international support for sanctions and other pressure mechanisms
by demonstrating the willingness of the Administration to resolve the issue diplomatically. Others
believed that this precondition lessened the likelihood of a positive response by Iran and should
be unambiguously dropped.
As part of the U.S. declared openness to talk with Iran if it complies on nuclear issues, the Bush
Administration indicated that it considers Iran a great nation and respects its history; such themes
were prominent in speeches by President Bush such as at the Merchant Marine Academy on June
19, 2006, and his September 18, 2006, speech to the U.N. General Assembly. Then Secretary of
State Rice said in January 2008 that the United States does not consider Iran a “permanent
enemy.” An amendment by then Senator Biden (adopted June 2006) to the FY2007 defense
authorization bill (P.L. 109-364) supported the Administration’s offer to join nuclear talks with
Iran.
“Grand Bargain Concept”
Some argue that the issues that divide the United States and Iran cannot be segregated, and that
the key to resolving the nuclear issue is striking a “grand bargain” on all outstanding issues. The
Bush Administration did not offer Iran an unconditional, direct U.S.-Iran bilateral dialogue on all
issues of U.S. concern: nuclear issues, Iranian support of militant movements, involvement in
Iraq, and related issues. Some view this as a “missed opportunity,” saying that U.S. officials
rebuffed a reported overture from Iran just before the May 12, 2003, Riyadh bombing to negotiate
all outstanding U.S.-Iran issues as part of a so-called “grand bargain” that has been reported in
various press articles. The Washington Post reported on February 14, 2007 (“2003 Memo Says
Iranian Leaders Backed Talks”), that the Swiss Ambassador to Iran in 2003, Tim Guldimann, had
52 Wright, Robin. “U.S. In ‘Useful’ Talks With Iran.” Los Angeles Times, May 13, 2003.
Congressional Research Service
42
Iran: U.S. Concerns and Policy Responses
informed U.S. officials of a comprehensive Iranian proposal for talks with the United States.
However, State Department officials and some European diplomats based in Tehran at that time
question whether that proposal represented an authoritative communication from the Iranian
government. Others argue that the offer was unrealistic because an agreement would have
required Iran to abandon key tenets of its Islamic revolution, including support for Hezbollah.
Further International and Multilateral Sanctions
The Obama Administration, although promoting the concept of sustained dialogue, continues to
support the approach of the Bush Administration to continue to increase international pressure on
Iran to present it with a clear costs to retaining all aspects of its nuclear program. Should Iran
continue to refuse any proposed compromises on its nuclear program, the following represent
sanctions that the Security Council might impose, along with some discussion of key positions
expressed by some Security Council or other nations on those ideas. U.S. officials have said that
these or other additional sanctions might also be considered by a “coalition” of countries, outside
Security Council authorization. On the other hand, some U.S. allies, such as Germany, oppose
sanctions outside Council action on the grounds that doing so would undermine the Security
Council process.53 Among the further U.N. or multilateral sanctions widely discussed are the
following:
• Mandating Reductions in Diplomatic Exchanges with Iran or Prohibiting Travel
by Iranian Officials. As noted above, Resolution 1803 imposes a ban on travel by
some named Iranian officials. One option is to further expand that list of Iranian
officials. A further option is to limit sports or cultural exchanges with Iran, such
as Iran’s participation in the World Cup soccer tournament. However, many
experts oppose using sporting events to accomplish political goals.
• Banning International Flights to and from Iran. Bans on flights to and from
Libya were imposed on that country in response to the finding that its agents
were responsible for the December 21, 1988, bombing of Pan Am 103 (now
lifted). There are no indications that a passenger aircraft flight ban is under
consideration among the P5+1. As noted above, inspections of Iranian
international cargo flights and shipping is authorized in Resolution 1803.
• A Ban on Exports to Iran of Refined Oil Products or of Other Products. Some
members of the U.N. Security Council oppose this sanction as likely to halt
prospects for a diplomatic solution to Iran’s nuclear program, and the sanction
does not appear to be under Security Council consideration. A gasoline exports
ban would almost certainly hurt Iran’s economy because Iran does not refine
enough gasoline to meet demand and must import it, although some experts
believe Iran would be able to circumvent this sanction by offering premium
prices to suppliers. Some countries that supply gasoline to Iran, such as those
listed in Table 3, might oppose this sanction. A bill in the 110th Congress, H.R.
2880, would apply the Iran Sanctions Act (see below) to entities that sell gasoline
to Iran. H.Con.Res. 362 and S.Res. 580 called for (but did not mandate) that
sanction.
53 Berlin Says U.S. and France Guilty of Hypocrisy. Spiegel Online, September 24, 2007. http://www.spiegel.de/
international/world/0,1518,507443,00.html
Congressional Research Service
43
Iran: U.S. Concerns and Policy Responses
• Financial and Trade Sanctions, Such as a Freeze on Iran’s Financial Assets
Abroad. Existing U.N. resolutions do not freeze all Iranian assets abroad, and
such a broad freeze does not appear to be under Security Council consideration at
this time. Resolution 1803 authorizes countries to curtail banking relationships
with Iran’s Bank Melli and Bank Saderat. A future resolution could add more
Iranian banks to those under sanction, or even entirely ban transactions with any
Iranian banks. Fearing that possibility, Iran reportedly moved $75 billion out of
European banks in May 2008.
• Limiting Lending to Iran by Banks or International Financial Institutions.
Another option is to ban lending to Iran by international financial institutions, or
to mandate a reduction of official credit guarantees. British Prime Minister
Brown indicated British support a limitation of official credits on November 12,
2007. As discussed below, EU countries and their banks have begun taking these
steps, even without a specific U.N. mandate.
• Banning Worldwide Investment in Iran’s Energy Sector. This option would
represent an internationalization of the U.S. “Iran Sanctions Act,” which is
discussed below and in CRS Report RS20871, The Iran Sanctions Act (ISA), by
Kenneth Katzman. In his November 12, 2007 comments, Prime Minister Brown
expressed support for a worldwide financing of energy projects in Iran as a
means of cutting off energy development in Iran. A version of this option would
prevent companies of U.N. member states from shipping to Iran parts or
technology needed to construct oil refineries or related installations.
• Banning Insurance for Iranian Shipping. One option, reportedly under
consideration by the P5+1, is to ban the provision of insurance for Iran’s tanker
fleet. Shipments of Iranian oil require insurance against losses from military
action, accidents, or other causes. A broad ban on provision of such insurance
could make it difficult for Iran to Islamic Republic of Iran Shipping Lines
(IRISL) to operate and force Iran to rely on more expensive shipping options.
Iran said in September 2008 that it would have ways to circumvent the effect of
this sanction if it is imposed. (The United States has imposed sanctions on IRISL,
as noted in the table below.)
• Imposing a Worldwide Ban on Sales of Arms to Iran. Resolution 1747 called
for—but did not require—U.N. member states to exercise restraint in selling
arms to Iran. A future resolution might mandate such an arms sales ban. Another
option under discussion is to eliminate the Resolution 1737 exemption from
sanctions for the Bushehr nuclear reactor project, although Russian support for
such a move is in doubt.
• Imposing an International Ban on Purchases of Iranian Oil or Other Trade. This
is widely considered the most sweeping of sanctions that might be imposed, and
would be unlikely to be considered in the Security Council unless Iran was found
actively developing an actual nuclear weapon. Virtually all U.S. allies conduct
extensive trade with Iran, and would oppose sanctions on trade in civilian goods
with Iran. A ban on oil purchases from Iran is unlikely to be imposed because of
the potential to return world oil prices to the high levels of the summer of 2008.
Congressional Research Service
44
Iran: U.S. Concerns and Policy Responses
European/Japanese/Other Foreign Country Policy on Sanctions and Trade
Agreements
Most U.S. allies still favor engagement and incentives—not just economic or political
punishments—as tools to change Iran’s behavior. In this, U.S. allies might identify with the
Obama Administration approach more so than the Bush Administration approach that was
perceived as primarily punitive against Iran. During 1992-1997, when the United States was
tightening its own sanctions against Iran, the European Union (EU) countries maintained a policy
of “critical dialogue” with Iran, and the EU and Japan refused to join the 1995 U.S. trade and
investment ban on Iran. The European dialogue with Iran was suspended in April 1997 in
response to the German terrorism trial (“Mykonos trial”) that found high-level Iranian
involvement in killing Iranian dissidents in Germany, but resumed in May 1998 during Khatemi’s
presidency.
With Iran defiant on nuclear issues, the European countries, Japan, and other countries moved
closer to the U.S. position since 2005. The EU is no longer negotiating new trade agreements and
other economic interaction with Iran, but rather it has begun to implement some sanctions that
exceed those mandated in Security Council resolutions. For example, several EU countries are
discouraging their companies from making any new investments in or soliciting any new business
with Iran. In addition, several EU countries report that civilian trade with Iran is down because
Iran’s defiance on the nuclear issue is introducing more perceived risk to trading with Iran. As
noted above, some EU countries say they have reduced credit guarantee exposure to Iran since
Resolution 1737 was passed in December 2006. The table at the beginning of this paper lists
some countries that have dramatically cut back credit guarantees for Iran. Previously, the EU
countries and their banks maintained that financing for purely civilian goods is not banned by any
U.N. resolution and that exporters of such goods should not be penalized.
Negotiations with Iran on a “Trade and Cooperation Agreement” (TCA) are no longer being held;
such an agreement would have lowered the tariffs or increased quotas for Iranian exports to the
EU countries. 54 Similarly, there is insufficient international support to grant Iran membership in
the World Trade Organization (WTO) until there is progress on the nuclear issue. Iran first
attempted to apply to join the WTO in July 1996. On 22 occasions after that, representatives of
the Clinton and then the Bush Administration blocked Iran from applying (applications must be
by consensus of the 148 members). As discussed above, as part of an effort to assist the EU-3
nuclear talks with Iran, the Administration announced on March 11, 2005, that it would drop
opposition to Iran’s applying for WTO membership. At a WTO meeting in May 2005, no
opposition to Iran’s application was registered, and Iran formally began accession talks.
In the 1990s, European and Japanese creditors—over U.S. objections—rescheduled about $16
billion in Iranian debt. These countries (governments and private creditors) rescheduled the debt
bilaterally, in spite of Paris Club rules that call for multilateral rescheduling. Iran’s improved
external debt led most European export credit agencies to restore insurance cover for exports to
54 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.
Congressional Research Service
45
Iran: U.S. Concerns and Policy Responses
Iran. In July 2002, Iran tapped international capital markets for the first time since the Islamic
revolution, selling $500 million in bonds to European banks.
World Bank Loans
The EU and Japan appear to have made new international lending to Iran contingent on Iran’s
response to international nuclear demands. This represents a narrowing of past differences
between the United States and its allies on this issue. Acting under provisions of successive
foreign aid laws, 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. The legislation contributed to a temporary halt in new Bank lending to
Iran. During 1999-2005, Iran’s moderating image had led the World Bank to consider new loans
over U.S. opposition. 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. (A provision of H.R. 1400 and S. 970, introduced in the 110th Congress,
would impose a new restriction on U.S. contributions to the World Bank in proportion to the
Bank’s lending to Iran.)
U.S. Sanctions
Any additional international or U.S. sanctions would add to the wide range of U.S. sanctions in
place since the November 4, 1979, seizure of the U.S. hostages in Tehran.55 Some experts believe
that, even before U.S. allies had begun to impose some sanctions on Iran, U.S. sanctions alone
were slowing Iran’s economy.56 However, a report on U.S. sanctions by the Government
Accountability Office (GAO), published December 2007 (GAO-08-58: Iran Sanctions: Impact in
Furthering U.S. Objectives Is Unclear and Should Be Reviewed ) found that the extent of the
impact on Iran is “difficult to determine.” The GAO studied said that, despite the U.S. sanctions,
Iran’s global trade has continued to expand from 1987 (when sanctions first began to be imposed)
to 2006, and that Iran had signed $20 billion in energy investment deals with foreign firms,
although these agreements might not ultimately be carried out, as discussed below. (Section 7043
of P.L. 111-8, the FY09 omnibus appropriation, requires, within 180 days, an Administration
report on U.S. sanctions, including which companies are believed to be violators, and what the
Administration is doing to enforce sanctions. The provision appears to apply primarily to the Iran
Sanctions Act, discussed below and in CRS Report RS20871, The Iran Sanctions Act (ISA).)
Terrorism/Foreign Aid Sanctions
In January 1984, following the October 1983 bombing of the U.S. Marine barracks in Lebanon
(believed perpetrated by Hezbollah) Iran was added to the “terrorism list.” The list was
55 On November 14, 1979, President Carter declared a national emergency with respect to Iran, renewed every year
since 1979.
56 “The Fight Over Letting Foreigners Into Iran’s Oilfields.” The Economist, July 14, 2001.
Congressional Research Service
46
Iran: U.S. Concerns and Policy Responses
established by Section 6(j) of the Export Administration Act of 1979, sanctioning countries
determined to have provided repeated support for acts of international terrorism.
• The terrorism list designation restricts sales of U.S. dual use items (Export
Administration Act, as continued by executive order), and, under other laws, bans
direct U.S. financial assistance (Foreign Assistance Act, FAA) and arms sales
(Arms Export Control Act), and requires the United States to vote to oppose
multilateral lending to the designated countries (Anti-Terrorism and Effective
Death Penalty Act of 1996, P.L. 104-132). Waivers are provided under these
laws, but successive foreign aid appropriations laws since the late 1980s ban
direct assistance to Iran (loans, credits, insurance, Eximbank credits) without
providing for a waiver.
• Section 307 of the FAA (added in 1985) names Iran as unable to benefit from
U.S. contributions to international organizations, and require proportionate cuts if
these institutions work in Iran. No waiver is provided for.
• Under the Anti-Terrorism and Effective Death Penalty Act, the President is
required to withhold U.S. foreign assistance to any country that provides to a
terrorism list country foreign assistance or arms. Waivers are provided.
• U.S. sanctions laws do not bar disaster aid and the United States donated
$125,000, through relief agencies, to help victims of two earthquakes in Iran
(February and May 1997), and another $350,000 worth of aid to the victims of a
June 22, 2002 earthquake. (The World Bank provided some earthquake related
lending as well.) The United States provided $5.7 million in assistance (out of
total governmental pledges of about $32 million, of which $17 million have been
remitted) to the victims of the December 2003 earthquake in Bam, Iran, which
killed as many as 40,000 people and destroyed 90% of Bam’s buildings. The
United States flew in 68,000 kilograms of supplies to Bam with U.S. military
aircraft.
• Executive Order 13324 (September 23, 2001) authorizes the President to freeze
the assets of and transactions with entities determined to be supporting
international terrorism. Iranian entities named and sanctioned under this order are
in the tables at the end of this paper.
Proliferation Sanctions
Iran is prevented from receiving advanced technology from the United States under relevant and
Iran-specific anti-proliferation laws57 and by Executive Order 13382 of June 28, 2005. The Iran-
Iraq Arms Nonproliferation Act (P.L. 102-484) requires denial of license applications for exports
to Iran of dual use items, and imposes sanctions on foreign countries that transfer to Iran
“destabilizing numbers and types of conventional weapons,” as well as WMD technology. The
Iran Nonproliferation Act (P.L. 106-178, now called the Iran-Syria-North Korea Non-
Proliferation Act) authorizes sanctions on foreign entities that assist Iran’s WMD programs. It
bans U.S. extraordinary payments to the Russian Aviation and Space Agency in connection with
the international space station unless the President can certify that the agency or entities under its
57 Such laws include the Atomic Energy Act of 1954 and the Energy Policy Act of 2005 (P.L. 109-58).
Congressional Research Service
47
Iran: U.S. Concerns and Policy Responses
control had not transferred any WMD or missile technology to Iran within the year prior. 58 (A
provision of a Continuing Resolution for FY2009, which would fund the U.S. government until
March 2009, essentially waives this law to allow NASA to continue to use Russian vehicles to
access the International Space Station.) Executive Order 13382 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.
Reflecting a Bush Administration decision to impose sanctions for violations, the Bush
Administration sanctioned numerous entities as discussed below. The Obama Administration
sanctioned several entities on February 2, 2009, suggesting it is continuing that policy. Iranian
entities designated under these laws and orders are listed in the tables at the end of this paper.
Despite these efforts, Iran has used loopholes and other devices, such as front companies, to elude
U.S. and international sanctions. Some of these efforts focus on countries perceived as having lax
enforcement of export control laws, such as UAE and Malaysia. In some cases, Iran has been
able, according to some reports, to obtain sophisticated technology even from U.S. firms.59
In addition, successive foreign aid appropriations punish the Russian Federation for assisting Iran
by withholding 60% of any U.S. assistance to the Russian Federation unless it terminates
technical assistance to Iran’s nuclear and ballistic missiles programs.
Targeted Financial Measures by Treasury Department
U.S. officials, particularly Undersecretary of the Treasury Stuart Levey (who is remaining on in
the Obama Administration), say the United States is having substantial success in separate
unilateral efforts (“targeted financial measures”) to persuade European governments and
companies to stop financing commerce with Iran on the grounds that doing so entails financial
risk and furthers terrorism and proliferation. Treasury and State Departments officials, in April
17, 2008, testimony before the House Foreign Affairs Committee, said they had persuaded at least
40 banks not to provide financing for exports to Iran or to process dollar transactions for Iranian
banks. Among those that have pulled out of Iran are UBS and Credit Suisse (Switzerland), HSBC
(Britain), Germany’s Commerzbank A.G and Deutsche Bank AG. U.S. pressure has reportedly
convinced Kuwaiti banks to stop transactions with Iranian accounts,60 and South Korean banks
are considering doing the same. The International Monetary Fund and other sources report that
these measures are making it more difficult to fund energy industry and other projects in Iran, and
particularly hurting small Iranian businesses who have to pay new fees and premiums in order to
collect on accounts earned by outside trade. The Organization for Economic Cooperation and
Development (OECD) in 2006 raised the financial risk rating for Iran.
58 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.
59 Warrick, Joby. “Iran Using Fronts to Get Bomb Parts From U.S.” Washington Post, January 11, 2009; Institute for
Science and International Security. “Iranian Entities’ Illicit Military Procurement Networks.” David Albright, Paul
Brannan, and Andrea Scheel. January 12, 2009.
60 Mufson, Steven and Robin Wright. “Iran Adapts to Economic Pressure.” Washington Post, October 29, 2007.
Congressional Research Service
48
Iran: U.S. Concerns and Policy Responses
Some of these moves by European banks have come about by U.S. pressure. In 2004, the
Treasury Department fined UBS $100 million for the unauthorized movement of U.S. dollars to
Iran and other sanctioned countries, and in December 2005, the Treasury Department fined Dutch
bank ABN Amro $80 million for failing to fully report the processing of financial transactions
involving Iran’s Bank Melli (and another bank partially owned by Libya).
In action intended to cut Iran off from the U.S. banking system, on September 6, 2006, the
Treasury Department barred U.S. banks from handling any indirect transactions (“U-turn
transactions, meaning transactions with non-Iranian foreign banks that are handling transactions
on behalf of an Iranian bank) with Iran’s Bank Saderat (see above), which the Administration
accuses of providing funds to Hezbollah.61 Bank Sepah is subject to asset freezes and transactions
limitations as a result of their naming as sanctionable entities under Resolution 1737 and 1747.
The Treasury Department extended that U-Turn restriction to all Iranian banks on November 6,
2008 (http://www.treasury.gov/press/releases/hp1257.htm)
Thus far, the Treasury Department has not gone so far as to sanction any bank for dealing with
Iran by designating it a “money laundering entity” under Section 311 of the USA Patriot Act,
although some say that step has been threatened at times. Nor has Treasury imposed any specific
sanctions against Bank Markazi (Central Bank) which, according to a February 25, 2008, Wall
Street Journal story, is helping other Iranian banks circumvent the U.S. and U.N. banking
pressure. However, the European countries reportedly oppose such a sanction as an extreme step
with potential humanitarian consequences, for example by preventing Iran from keeping its
currency stable. S. 3445, a Senate bill in the 110th Congress, and a counterpart passed by the
House on September 26, 2008 (H.R. 7112), call for this sanction.
In enforcing U.S. sanctions, on December 17, 2008 the U.S. Attorney for the Southern District of
New York filed a civil action seeking to seize the assets of the Assa Company, a U.K-chartered
entity. Assa allegedly was maintaining the interests of Bank Melli in an office building in New
York City. An Iranian foundation, the Alavi Foundation, also allegedly maintains a part interest in
the building.
U.S. Trade Ban/Subsidiaries
On May 6, 1995, President Clinton issued Executive Order 12959 banning U.S. trade and
investment in Iran.62 This followed an earlier March 1995 executive order barring U.S.
investment in Iran’s energy sector. The trade ban was intended to blunt criticism that U.S. trade
with Iran made U.S. appeals for multilateral containment of Iran less credible. Each March since
1995 (and most recently on March 11, 2009), the U.S. Administration has renewed a declaration
of a state of emergency that triggered the investment ban. Some modifications to the trade ban
since 1999 account for the trade that does exist between the United States and Iran. H.R. 1400,S.
970 S. 3445, and H.R. 7112, see below, would have reimposed many of the restrictions.)
The following conditions and modifications, as administered by the Office of Foreign Assets
Control (OFAC) of the Treasury Department, apply:
61 Kessler, Glenn. “U.S. Moves to Isolate Iranian Banks.” Washington Post, September 9, 2006.
62 An August 1997 amendment to the trade ban (Executive Order 13059) prevented U.S. companies from knowingly
exporting goods to a third country for incorporation into products destined for Iran.
Congressional Research Service
49
Iran: U.S. Concerns and Policy Responses
• Some goods related to the safe operation of civilian aircraft may be licensed for
export to Iran, and as recently as September 2006, the Bush Administration, in
the interests of safe operations of civilian aircraft, permitted a sale by General
Electric of Airbus engine spare parts to be installed on several Iran Air passenger
aircraft (by European airline contractors). H.R. 1400 would ban such sales of
spare parts.
• OFAC regulations do not permit U.S. firms to negotiate investment deals with
Iran or to trade Iranian oil overseas.
• Since April 1999, commercial sales of food and medical products to Iran have
been allowed, on a case-by-case basis and subject to OFAC licensing. According
to OFAC in April 2007, licenses for exports of medicines to treat HIV and
leukemia are routinely expedited for sale to Iran, and license applications are
viewed favorably for business school exchanges, earthquake safety seminars,
plant and animal conservation, and medical training in Iran. Private letters of
credit can be used to finance approved transactions, but no U.S. government
credit guarantees are available, and U.S. exporters are not permitted to deal
directly with Iranian banks. The FY2001 agriculture appropriations law (P.L.
106-387) contained a provision banning the use of official credit guarantees for
food and medical sales to Iran and other countries on the U.S. terrorism list,
except Cuba, although allowing for a presidential waiver to permit such credit
guarantees. Neither the Clinton Administration nor the Bush Administration
provided the credit guarantees.
• In April 2000, the trade ban was further eased to allow U.S. importation of
Iranian nuts, dried fruits, carpets, and caviar. The United States was the largest
market for Iranian carpets before the 1979 revolution, but U.S. anti-dumping
tariffs imposed on Iranian products in 1986 dampened of many Iranian products.
The tariff on Iranian carpets is now about 3%-6%, and the duty on Iranian caviar
is about 15%. In December 2004, U.S. sanctions were further modified to allow
Americans to freely engage in ordinary publishing activities with entities in Iran
(and Cuba and Sudan). As of mid-2007, the product most imported from Iran by
U.S. importers is pomegranate juice concentrate. (In the 110th Congress, H.R.
1400, S. 970, S. 3445, and H.R. 7112 would have re-imposed the ban on
importation of such goods.)
• The trade ban permits U.S. companies to apply for licenses to conduct “swaps”
of Caspian Sea oil with Iran, but, as part of a U.S. policy to route Central Asian
energy around Iran (and Russia), a Mobil Corporation application to do so was
denied in April 1999.
Subsidiaries
The U.S. trade ban does not bar subsidiaries of U.S. firms from dealing with Iran, as long as the
subsidiary has no operational relationship to the parent company. Some U.S. companies have
come under scrutiny for dealings by their subsidiaries with Iran. In the 110th Congress, S. 970, S.
3227, S. 3445, and three House-passed bills (H.R. 1400, H.R. 7112, and H.R. 957)—would apply
sanctions to the parent companies of U.S. subsidiaries if those subsidiaries are directed or formed
to trade with Iran. Among subsidiaries that have traded with Iran are the following.
Congressional Research Service
50
Iran: U.S. Concerns and Policy Responses
• On January 11, 2005, Iran said it had contracted with U.S. company Halliburton,
and an Iranian company, Oriental Kish, to drill for gas in Phases 9 and 10 of
South Pars. Halliburton reportedly provided $30 million to $35 million worth of
services per year through Oriental Kish, leaving unclear whether Halliburton
would be considered in violation of the U.S. trade and investment ban or the Iran
Sanctions Act (ISA)63—because the deals involved a subsidiary of Halliburton
(Cayman Islands-registered Halliburton Products and Service, Ltd, based in
Dubai). On April 10, 2007, Halliburton announced that its subsidiaries had, as
promised in January 2005, completed all contractual commitments with Iran and
that it is no longer operating there, but Halliburton has said it is setting up a
headquarters in Dubai to pursue business in the region.
• General Electric (GE) announced in February 2005 that it would seek no new
business in Iran, and it reportedly is expected to wind down the already agreed
contracts by July 2008. GE was selling Iran equipment and services for
hydroelectric, oil and gas services, and medical diagnostic projects through
Italian, Canadian, and French subsidiaries. The trade ban appears to bar any
Iranian company from buying a foreign company that has U.S. units.
• Subsidiaries of several other U.S. energy equipment firms are apparently still in
the Iranian market. These include Foster Wheeler, Dresser Rand, Schlumberger,
Natco Group, and Overseas Shipholding Group. 64 Another company that has
performed work in the energy sector, UOP, apparently is owned by Honeywell
Corp.
• An Irish subsidiary of the Coca Cola company provides syrup for the U.S.-brand
soft drink to an Iranian distributor, Khoshgovar. Local versions of both Coke and
of Pepsi (with Iranian-made syrups) are also marketed in Iran by distributors who
licensed the recipes for those soft drinks before the Islamic revolution and before
the trade ban was imposed on Iran.
The Iran Sanctions Act (ISA)
The Iran Sanctions Act penalizes foreign (or U.S.) investment of more than $20 million in one
year in Iran’s energy sector.65 No projects have actually been sanctioned under ISA, and
numerous investment agreements with Iran since its enactment have helped Iran slow
deterioration of its energy export sector. (A chart illustrating the list of publicly announced
investments and investment decisions is contained in CRS Report RS20871, The Iran Sanctions
Act (ISA), by Kenneth Katzman).
In the 110th Congress, H.R. 1400, passed by the House on September 25, 2007, would remove the
Administration’s ability to waive application of sanctions under ISA. The Bush Administration
opposed that provision on the grounds that requiring sanctions on allied companies would divide
the United States and its allies on Iran policy. However, H.R. 1400 did not impose on the
63 “Iran Says Halliburton Won Drilling Contract.” Washington Times, January 11, 2005.
64 Prada, Paulo, and Betsy McKay. Trading Outcry Intensifies. Wall Street Journal, March 27, 2007; Brush, Michael.
Are You Investing in Terrorism? MSN Money, July 9, 2007.
65 Originally called the Iran-Libya Sanctions Act, or ILSA; P.L. 104-172, August 5, 1996. It was renewed by P.L. 107-
24, August 3, 2001; renewed again for two months by P.L. 109-267; and renewed and amended by P.L. 109-293.
Congressional Research Service
51
Iran: U.S. Concerns and Policy Responses
Administration a time limit to determine whether a project is sanctionable. H.R. 1400, S. 970, S.
3227, S. 3445, H.R. 7112, and H.R. 957 would amend the definitions of sanctionable entities to
include official credit guarantee agencies, such as France’s COFACE and Germany’s Hermes, and
both bills would also clearly apply ISA sanctions to pipeline and liquified natural gas (LNG)
projects. H.R. 1400 required the president to select a ban procurement from a sanctioned entity
as one of the two sanctions to impose. Other ideas circulating in the 111th Congress include
making shipping insurance for Iran, or the provision of materials to build refineries in Iran,
sanctionable under ISA.
Divestment
A growing trend not only in Congress but in several states is to require or call for or require
divestment of shares of firms that have invested in Iran’s energy sector (at the same levels
considered sanctionable under the Iran Sanctions Act).66 Legislation in the 110th Congress, H.R.
1400, did not require divestment, but requires a presidential report on firms that have invested in
Iran’s energy sector. Another bill, H.R. 1357, required government pension funds to divest of
shares in firms that have made ISA-sanctionable investments in Iran’s energy sector and bar
government and private pension funds from future investments in such firms. Two other bills,
H.R. 2347 (passed by the House on July 31, 2007) and S. 1430, would protect mutual fund and
other investment companies from shareholder action for any losses that would occur from
divesting in firms that have investing in Iran’s energy sector. S. 3445 and H.R. 7112 contain
extensive provisions to encourage divestment from Iran. In the 111th Congress, H.R. 1327, a bill
similar to H.R. 2347 of the previous Congress, has been introduced.
110th Congress Comprehensive Sanctions Legislation:
H.R. 1400, S. 970, S. 3227, S. 3445, H.R. 7112, H.Con.Res. 362, and S.Res. 580.
Legislation in the 110th Congress—primarily the Iran Counter-Proliferation Act of 2007, H.R.
1400 and S. 970, and variants such as S. 3227, S. 3445, and H.R. 7112 (a House version of S.
3445)—would attempt to compel foreign adoption of tighter sanctions against Iran. The most
sweeping among them was H.R. 1400, passed by the House on September 25, 2007 by a vote of
397-16, would remove presidential waiver authority to avoid sanctioning such companies. It
would also mandate cuts in U.S. contributions to the World Bank for lending to Iran and
preventing Russia from obtaining a nuclear agreement with the United States if it continues
supplying nuclear technology to Iran. S. 3445 and H.R. 7112 seek instead to prevent the diversion
of WMD-related technology via such countries as the UAE. H.R. 1400, S. 970, S. 3445, and
H.R. 7112 would would rescind the easing of the U.S. trade ban with Iran. H.R. 7112 was passed
by the House on September 26, 2008, by unanimous consent but was not taken up in the Senate.
H.Con.Res. 362 expressed the sense of Congress for imposition of strong additional sanctions,
including sanctioning Iran’s Central Bank, imposing sanctions under the Iran Sanctions Act,
banning gasoline exports to Iran, and strict inspections for all cargo, vehicles, and persons leaving
or entering Iran. Some considered this provision as tantamount to committing aggression against
Iran, since Iran would view such a strict embargo as an act of war. It was not brought to a floor
66 For information on the steps taken by individual states, see National Conference of State Legislatures. State
Divestment Legislation.
Congressional Research Service
52
Iran: U.S. Concerns and Policy Responses
vote. A Senate version, S.Res. 580, did not call for a ban on gasoline exports to Iran or for a
comprehensive inspections regime.
Counter-Narcotics
In February 1987, Iran was first designated as a state that failed to cooperate with U.S. anti-drug
efforts or take adequate steps to control narcotics production or trafficking. U.S. and U.N. Drug
Control Program (UNDCP) assessments of drug production in Iran prompted the Clinton
Administration, on December 7, 1998, to remove Iran from the U.S. list of major drug producing
countries. This exempts Iran from the annual certification process that kept drug-related U.S.
sanctions in place on Iran. According to several governments, over the past few years Iran has
augmented security on its border with Afghanistan in part to prevent the flow of narcotics from
that country into Iran. Britain has sold Iran some night vision equipment and body armor for the
counter-narcotics fight. Iran also reportedly is providing aid to Afghan farmers to grow crops
other than poppy.
Travel-Related Guidance
Use of U.S. passports for travel to Iran is permitted. Iranians entering the United States are
required to be fingerprinted, and Iran has imposed reciprocal requirements. In May 2007, the
State Department increased its warnings about U.S. travel to Iran, based largely on the arrests of
the dual Iranian-American nationals discussed earlier.
Status of Some U.S.-Iran Assets Disputes
A U.S.-Iran Claims Tribunal at the Hague continues to arbitrate cases resulting from the 1980
break in relations and freezing of some of Iran’s assets. Major cases yet to be decided center on
hundreds of Foreign Military Sales (FMS) cases between the United States and the Shah’s
regime, which Iran claims it paid for but were unfulfilled. About $400 million in proceeds from
the resale of that equipment was placed in a DOD FMS account, and about $22 million in Iranian
diplomatic property remains blocked, although U.S. funds have been disbursed—credited against
the DOD FMS account—to pay judgments against Iran for past acts of terrorism against
Americans. Other 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, in accordance with an ICJ
judgment, 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 has not compensated Iran for
the airplane itself. As it has in past similar cases, the Administration has opposed a terrorism
lawsuit against Iran by victims of the U.S. Embassy Tehran seizure on the grounds of diplomatic
obligation.67
Conclusion
Mistrust between the United States and Iran’s Islamic regime has run deep almost three decades
and many argue that it is unlikely to be quickly overcome, even if the Obama Administration
67 See CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by Jennifer K. Elsea.
Congressional Research Service
53
Iran: U.S. Concerns and Policy Responses
initiates—and Iran accepts—comprehensive direct talks with Iran. Many experts say that all
factions in Iran are united on major national security issues and that U.S.-Iran relations might not
improve unless or until the Islamic regime is removed or moderates substantially, even if a
nuclear deal is reached and implemented. Many experts believed that Iran has become
emboldened by the installation of pro-Iranian regimes in Iraq and Afghanistan, and the new
strength of Hezbollah in Lebanon and Hamas in Gaza, and that Iran now seeks to press its
advantage to strengthen regional Shiite movements and possibly drive the United States out of the
Gulf. Others reach an opposite conclusion, stating that Iran now feels more encircled than ever
by pro-U.S. regimes and U.S. forces guided by a policy of pre-emption, and Iran is redoubling its
efforts to develop WMD and other capabilities to deter the United States. Some say that, despite
Ahmadinejad’s presidency, the United States and Iran have a common interest in stability in the
Persian Gulf and South Asia regions in the aftermath of the defeat of the Taliban and the regime
of Saddam Hussein and that major diplomatic overtures might now yield fruit.
Congressional Research Service
54
Figure 1. Structure of the Iranian Government
CRS-55
Iran: U.S. Concerns and Policy Responses
Figure 2. Map of Iran
Source: Map Resources. Adapted by CRS (April 2005).
Congressional Research Service
56
Iran: U.S. Concerns and Policy Responses
Table 9. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders
(Persons listed are identified by the positions they held when designated;
some have since changed.)
Entities Named for Sanctions Under Resolution 1737
Atomic Energy Organization of Iran (AEIO)
Mesbah Energy Company (Arak supplier)
Kalaye Electric
(Natanz supplier)
Pars Trash Company
Farayand Technique
Defense
(centrifuge program)
(centrifuge program)
Industries
Organization
(DIO)
7th of Tir
Shahid Hemmat Industrial Group
Shahid Bagheri
(DIO subordinate)
(SHIG)—missile program
Industrial Group
(SBIG)
missile program
Fajr Industrial Group
Mohammad Qanadi, AEIO Vice President
Behman
(missile program)
Asgarpour
(Arak manager)
Dawood Agha Jani
Ehsan Monajemi
Jafar Mohammadi
(Natanz official)
(Natanz construction manager)
(adviser to AEIO)
Ali Hajinia Leilabadi
Lt. Gen. Mohammad Mehdi Nejad Nouri
Gen Hosein Salimi
(director of Mesbah Energy)
(Malak Ashtar University of Defence
(Commander,
Technology rector)
IRGC Air Force)
Ahmad Vahid Dastjerdi
Reza Gholi Esmaeli
Bahmanyar
(head of Aerospace Industries Org., AIO)
(AIO official)
Morteza
Bahmanyar
(AIO official)
Maj. Gen. Yahya Rahim Safavi (Commander in
Chief, IRGC)
Entities Added by Resolution 1747
Ammunition and Metal urgy Industries Group
Esfahan Nuclear Fuel Research and
Kavoshyar
(controls 7th of Tir)
Production Center and Esfahan Nuclear
Company
Technology Center
(subsidiary of
AEIO)
Parchin Chemical Industries
Karaj Nuclear Research Center
Novin Energy
(branch of DIO)
Company
Cruise Missile Industry Group
Bank Sepah
Sanam Industrial
(funds AIO and subordinate entities)
Group
(subordinate to
AIO)
Ya Mahdi Industries Group
Qods Aeronautics Industries
Pars Aviation
(produces UAV’s, para-gliders for IRGC
Services Company
asymmetric warfare)
(maintains IRGC
Air Force
equipment)
Sho’a Aviation
Fereidoun Abbasi-Davani
Mohasen
(produces IRGC light aircraft for asymmetric
(senior defense scientist)
Fakrizadeh-
warfare)
Mahabai
(defense scientist)
Seyed Jaber Safdari
Amir Rahimi
Mohsen Hojati
Congressional Research Service
57
Iran: U.S. Concerns and Policy Responses
(Natanz manager)
(head of Esfahan nuclear facilities)
(head of Fajr
Industrial Group)
Mehrdada Akhlaghi Ketabachi (head of SBIG)
Naser Maleki
Ahmad
(head of SHIG)
Derakshandeh
(head of Bank
Sepah)
Brig. Gen. Morteza Reza’i
Vice Admiral Ali Akbar Ahmadiyan
Brig. Gen.
(Deputy commander-in-chief, IRGC)
(chief of IRGC Joint Staff)
Mohammad Reza
Zahedi
(IRGC ground
forces
commander)
Rear Admiral Morteza Safari
Brig. Gen. Mohammad Hejazi
Brig. Gen. Qasem
(commander, IRGC Navy)
(Basij commander)
Soleimani
(Qods Force
commander)
Gen. Mohammad Baqr Zolqadr
(IRGC officer serving as deputy Interior Minister
Entities Added by Resolution 1803
Thirteen Iranians named in Annex 1 to Resolution
Abzar Boresh Kaveh Co.
Barzaganin Tejaral
1803; al reputedly involved in various aspects of
(centrifuge production)
Tavanmad Saccal
nuclear program
Electro Sanam Co.
Ettehad Technical Group
Industrial
(AIO front co.)
Factories of
Precision
Jabber Ibn Hayan
Joza Industrial Co.
Khorasan
Metallurgy
Industries
Niru Battery Manufacturing Co.
Pshgam (Pioneer) Energy Industries
Safety Equipment
(Makes batteries for Iranian military and missile
Procurement
systems)
(AIO front,
involved in
missiles)
Tamas Co.
(involved in uranium enrichment)
Entities Designated Under U.S. Executive Order 13382
(many designations coincident with designations under U.N. resolutions)
Entity
Date Named
Shahid Hemmat Industrial Group (Iran)
June 2005, Sept.
07
Shahid Bakeri Industrial Group (Iran)
June 2005, Feb.
2009
Atomic Energy Organization of Iran
June 2005
Novin Energy Company (Iran)
January 2006
Mesbah Energy Company (Iran)
January 2006
Four Chinese entities: Beijing Alite Technologies, LIMMT Economic and Trading Company,
June 2006
China Great Wall Industry Corp, and China National Precision Machinery Import/Export Corp.
Sanam Industrial Group (Iran)
July 2006
Congressional Research Service
58
Iran: U.S. Concerns and Policy Responses
Ya Mahdi Industries Group (Iran)
July 2006
Bank Sepah (Iran)
January 2007
Defense Industries Organization (Iran)
March 2007
Pars Trash (Iran, nuclear program)
June 2007
Farayand Technique (Iran, nuclear program)
June 2007
Fajr Industries Group (Iran, missile program)
June 2007
Mizan Machine Manufacturing Group (Iran, missile prog.)
June 2007
Aerospace Industries Organization (AIO) (Iran)
Sept. 2007
Korea Mining and Development Corp. (N. Korea)
Sept. 2007
Islamic Revolutionary Guard Corps (IRGC)
October 21, 2007
Ministry of Defense and Armed Forces Logistics
October 21, 2007
Bank Melli (Iran’s largest bank, widely used by the Guard); Bank Melli Iran Zao (Moscow); Melli
October 21, 2007
Bank PC (U.K.)
Bank Kargoshaee
October 21, 2007
Arian Bank (joint venture between Melli and Bank Saderat). Based in Afghanistan
October 21, 2007
Bank Mellat (provides banking services to Iran’s nuclear sector); Mellat Bank SB CJSC (Armenia). October 21, 2007
Reportedly has $1.4 billion in assets in UAE
Persia International Bank PLC (U.K.)
October 21, 2007
Khatam ol Anbiya Gharargah Sazendegi Nooh (Revolutionary Guard construction, contracting
October 21, 2007
arm, with $7 billion in oil, gas deals
Oriental Oil Kish (Iranian oil exploration firm)
October 21, 2007
Ghorb Karbala; Ghorb Nooh (synonymous with Khatam ol Anbiya)
October 21, 2007
Sepasad Engineering Company (Guard construction affiliate)
October 21, 2007
Omran Sahel (Guard construction affiliate)
October 21, 2007
Sahel Consultant Engineering (Guard construction affiliate) October
21,
2007
Hara Company
October 21, 2007
Gharargahe Sazandegi Ghaem
October 21, 2007
Bahmanyar Morteza Bahmanyar (AIO, Iran missile official, see above under Resolution 1737)
October 21, 2007
Ahmad Vahid Dastjerdi (AIO head, Iran missile program)
October 21, 2007
Reza Gholi Esmaeli (AIO, see under Resolution 1737)
October 21, 2007
Morteza Reza’i (deputy commander, IRGC) See also Resolution 1747
October 21, 2007
Mohammad Hejazi (Basij commander). Also, Resolution 1747
October 21, 2007
Ali Akbar Ahmadian (Chief of IRGC Joint Staff). Resolution 1747
October 21, 2007
Hosein Salimi (IRGC Air Force commander). Resolution 1737
October 21, 2007
Qasem Soleimani (Qods Force commander). Resolution 1747
October 21, 2007
Future Bank (Bahrain-based but allegedly controlled by Bank Melli) March 12, 2008
Yahya Rahim Safavi (former IRGC Commander in Chief
July 8, 2008
Mohsen Fakrizadeh-Mahabadi (senior Defense Ministry scientist)
July 8, 2008
Dawood Agha-Jani (head of Natanz enrichment site)
July 8, 2008
Congressional Research Service
59
Iran: U.S. Concerns and Policy Responses
Mohsen Hojati (head of Fajr Industries, involved in missile program)
July 8, 2008
Mehrdada Akhlaghi Ketabachi (heads Shahid Bakeri Industrial Group)
July 8, 2008
Naser Maliki (heads Shahid Hemmat Industrial Group)
July 8, 2008
Tamas Company (involved in uranium enrichment)
July 8, 2008
Shahid Sattari Industries (makes equipment for Shahid Bakeri)
July 8, 2008
7th of Tir (involved in developing centrifuge technology)
July 8, 2008
Ammunition and Metal urgy Industries Group (partner of 7th of Tir)
July 8, 2008
Parchin Chemical Industries (deals in chemicals used in ballistic missile programs)
July 8, 2008
Karaj Nuclear Research Center
August 12, 2008
Esfahan Nuclear Fuel Research and Production Center (NFRPC)
August 12, 2008
Jabber Ibn Hayyan (reports to Atomic Energy Org. of Iran, AEIO)
August 12, 2008
Safety Equipment Procurement Company
August 12, 2008
Joza Industrial Company (front company for Shahid Hemmat Industrial Group, SHIG)
August 12, 2008
Islamic Republic of Iran Shipping Lines (IRISL) and 18 affiliates, including Val Fajr 8; Kazar;
September 10,
Irinvestship; Shipping Computer Services; Iran o Misr Shipping; Iran o Hind; IRISL Marine
2008
Services; Iriatal Shipping; South Shipping; IRISL Multimodal; Oasis; IRISL Europe; IRISL Benelux;
IRISL China; Asia Marine Network; CISCO Shipping; and IRISL Malta
Firms affiliated to the Ministry of Defense, including Armament Industries Group; Farasakht
September 17,
Industries; Iran Aircraft Manufacturing Industrial Co.; Iran Communications Industries; Iran
2008
Electronics Industries; and Shiraz Electronics Industries
Export Development Bank of Iran. Provides financial services to Iran’s Ministry of Defense and
October 22, 2008
Armed Forces Logistics
Assa Corporation (alleged front for Bank Melli involved in managing property in New York City
December 17,
on behalf of Iran)
2008
11 Entities Tied to Bank Melli: Bank Melli Iran Investment (BMIIC); Bank Melli Printing and
March 3, 2009
Publishing; Melli Investment Holding; Mehr Cayman Ltd.; Cement Investment and Development;
Mazandaran Cement Co.; Shomal Cement; Mazandaran Textile; Melli Agrochemical; First
Persian Equity Fund; BMIIC Intel. General Trading
Entities Sanctioned Under Executive Order 13224 (Terrorism Entities)
Qods Force
October 21, 2007
Bank Saderat (al egedly used to funnel Iranian money to Hezbollah, Hamas, PIJ, and other Iranian October 21, 2007
supported terrorist groups)
Al Qaeda Operatives in Iran: Saad bin Laden; Mustafa Hamid; Muhammad Rab’a al-Bahtiyti; Alis
Jan. 16, 2009
Saleh Husain
Entities Sanctioned Under the Iran Non-Proliferation Act and other U.S. Proliferation Laws
Norinco (China). For al eged missile technology sale to Iran.
May 2003
Taiwan Foreign Trade General Corporation (Taiwan)
July 4, 2003
Tula Instrument Design Bureau (Russia). For alleged sales of laser-guided artillery shells to Iran.
September 17,
2003
13 entities sanctioned including companies from Russia, China, Belarus, Macedonia, North
April 7, 2004
Korea, UAE, and Taiwan.
14 entities from China, North Korea, Belarus, India (two nuclear scientists, Dr. Surendar and
September 29,
Dr. Y.S.R. Prasad), Russia, Spain, and Ukraine.
2004
14 entities, mostly from China, for al eged supplying of Iran’s missile program. Many, such as
December 2004
Congressional Research Service
60
Iran: U.S. Concerns and Policy Responses
North Korea’s Changgwang Sinyong and China’s Norinco and Great Wall Industry Corp, have
and January 2005
been sanctioned several times previously. Newly sanctioned entities included North Korea’s
Paeksan Associated Corporation, and Taiwan’s Ecoma Enterprise Co.
9 entities, including those from China (Norinco yet again), India (two chemical companies), and
December 26,
Austria. Sanctions against Dr. Surendar of India (see September 29, 2004) were ended,
2005
presumably because of information exonerating him.
7 entities. Two Indian chemical companies (Balaji Amines and Prachi Poly Products); two Russian August 4, 2006
firms (Rosobornexport and aircraft manufacturer Sukhoi); two North Korean entities (Korean
Mining and Industrial Development, and Korea Pugang Trading); and one Cuban entity (Center
for Genetic Engineering and Biotechnology).
9 entities. Rosobornesksport, Tula Design, and Komna Design Office of Machine Building, and
January 2007
Alexei Safonov (Russia); Zibo Chemical, China National Aerotechnology, and China National
Electrical (China). Korean Mining and Industrial Development (North Korea) for WMD or
advanced weapons sales to Iran (and Syria).
14 entities, including Lebanese Hezbollah. Some were penalized for transactions with Syria.
April 23, 2007
Among the new entities sanctioned for assisting Iran were Shanghai Non-Ferrous Metals Pudong
Development Trade Company (China); Iran’s Defense Industries Organization; Sokkia Company
(Singapore); Challenger Corporation (Malaysia); Target Airfreight (Malaysia); Aerospace
Logistics Services (Mexico); and Arif Durrani (Pakistani national).
13 entities: China Xinshidai Co.; China Shipbuilding and Offshore International Corp.; Huazhong
October 23, 2008
CNC (China); IRGC; Korea Mining Development Corp. (North Korea); Korea Taesong Trading
Co. (NK); Yolin/Yullin Tech, Inc. (South Korea); Rosoboronexport (Russia sate arms export
agency); Sudan Master Technology; Sudan Technical Center Co; Army Supply Bureau (Syria); R
and M International FZCO (UAE); Venezuelan Military Industries Co. (CAVIM);
Entities Designated as Threats to Iraqi Stability under Executive Order 13438
Ahmad Forouzandeh. Commander of the Qods Force Ramazan Headquarters, accused of
January 9, 2008
fomenting sectarian violence in Iraq and of organizing training in Iran for Iraqi Shiite militia
fighters
Abu Mustafa al-Sheibani. Iran based leader of network that funnels Iranian arms to Shiite militias
January 9, 2008
in Iraq.
Isma’il al-Lami (Abu Dura). Shiite militia leader, breakaway from Sadr Mahdi Army, alleged to
January 9, 2008
have committed mass kidnapings and planned assassination attempts against Iraqi Sunni
politicians
Mishan al-Jabburi. Financier of Sunni insurgents, owner of pro-insurgent Al-Zawra television,
January 9, 2008
now banned
Al Zawra Television Station
January 9, 2008
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
Congressional Research Service
61