Iran Sanctions
Kenneth Katzman
Specialist in Middle Eastern Affairs
March 12, 2010
Congressional Research Service
7-5700
www.crs.gov
RS20871
CRS Report for Congress
P
repared for Members and Committees of Congress
Iran Sanctions
Summary
Iran is subject to a wide range of U.S. sanctions, restricting trade with, investment, and U.S.
foreign aid to Iran, and requiring the United States to vote against international lending to Iran.
Several laws and executive orders authorize the imposition of U.S. penalties against foreign
companies that do business with Iran, as part of an effort to persuade foreign firms to choose
between the Iranian market and the much larger U.S. market. Most notable among these sanctions
is a ban, imposed in 1995, on U.S. trade with and investment in Iran. That ban has been modified
slightly to allow for some bilateral trade, mainly in luxury and humanitarian-related goods.
Foreign subsidiaries of U.S. firms remain generally exempt from the trade ban since they are
under the laws of the countries where they are incorporated. Since 1995, several U.S. laws and
regulations that seek to pressure Iran’s economy, curb Iran’s support for militant groups, and
curtail supplies to Iran of advanced technology have been enacted. Since 2006, the United
Nations Security Council has imposed some sanctions primarily attempting to curtail supply to
Iran of weapons-related technology but also sanctioning several Iranian banks.
This paper is not a comprehensive assessment of the effectiveness of U.S. and international
sanctions on Iran, in part because of the difficulty in determining how significant a factor
sanctions are in Iran’s economic and political difficulties, or in Iran’s domestic or foreign policy
decisions. U.S. officials have identified Iran’s energy sector as a key Iranian economic
vulnerability because Iran’s government revenues are approximately 80% dependent on oil
revenues and in need of substantial foreign investment. A U.S. effort to curb international energy
investment in Iran began in 1996 with the Iran Sanctions Act (ISA), but no firms have been
sanctioned under it. Still, ISA, when coupled with broader factors, may have influenced some
international firms’ decisions whether to invest in Iran. Iran has been unable to expand oil
production beyond 4.1 million barrels per day, although it does now have a gas export sector that
it did not have before Iran opened its fields to foreign investment in 1996.
In an attempt to strengthen U.S. leverage with its allies to back such international sanctions,
several major bills in the 111th Congress would add U.S. sanctions on Iran. Most notable is H.R.
2194 (which passed the House on December 15, 2009), which would add as ISA violations
selling refined gasoline to Iran; providing shipping insurance or other services to deliver gasoline
to Iran; or supplying equipment to or performing the construction of oil refineries in Iran. A
Senate version was passed on January 28, 2010 (S. 2799), which contains these sanctions as well
as a broad range of other measures against Iran. It was passed as an amendment to H.R. 2194 on
March 11, 2010, setting up conference action on the differing versions.
While the oil and gas sector has been a focus of U.S. sanctions since the 1990s, the Obama
Administration appears to be shifting - in U.S. regulations and in discussions with U.S. allies - to
targeting Iran’s Islamic Revolutionary Guard Corps for sanctions. This shift is intended to weaken
the Guard as a proliferation-supporting organization, as well as to expose its role in trying to
crush the democratic opposition in Iran. A growing trend in Congress, reflected in several bills
that are have passed or are in various stages of consideration, would sanction Iranian officials
who are human rights abusers, facilitate the democracy movement’s access to information, and
express outright U.S. support for the overthrow of the regime. For more on Iran, see CRS Report
RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
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Iran Sanctions
Contents
Overview .................................................................................................................................... 1
The Iran Sanctions Act (ISA) ................................................................................................ 1
Key Provisions/”Triggers” and Available Sanctions ......................................................... 2
Waiver and Termination Authority................................................................................... 3
Iran Freedom Support Act Amendments .......................................................................... 4
Implementation, Effectiveness, and Ongoing Challenges................................................. 4
Energy Routes and Refinery Investment .......................................................................... 5
Effectiveness of ISA ....................................................................................................... 6
Congressional Efforts to Expand ISA Application to Gas Sales........................................ 7
Legislation in the 111th Congress: Targeting Gasoline Sales ............................................. 8
Administration Review of Potential ISA Violations ....................................................... 11
Other U.S. Sanctions ................................................................................................................. 14
Ban on U.S. Trade and Investment With Iran....................................................................... 14
Treasury Department “Targeted Financial Measures” .......................................................... 17
Terrorism List Designation-Related Sanctions ..................................................................... 18
Executive Order 13224 ................................................................................................. 19
Proliferation-Related Sanctions ........................................................................................... 20
Iran-Iraq Arms Nonproliferation Act ............................................................................. 20
Iran-Syria-North Korea Nonproliferation Act ................................................................ 20
Executive Order 13382 ................................................................................................. 20
Foreign Aid Restrictions for Suppliers of Iran................................................................ 20
Implementation ............................................................................................................. 21
Relations to International Sanctions..................................................................................... 21
Efforts to Promote Divestment ............................................................................................ 22
Sanctions and Other Proposals to Support Iran’s Democratic Opposition ............................. 22
Measures to Sanction Human Rights Abuses and Promote the Opposition ..................... 23
Blocked Iranian Property and Assets ................................................................................... 24
Tables
Table 1. Post-1999 Major Investments/Major Development Projects in Iran’s Energy
Sector .................................................................................................................................... 12
Table 2. Entities Sanctioned Under U.N. Resolutions and U.S. Laws and Executive
Orders.................................................................................................................................... 24
Contacts
Author Contact Information ...................................................................................................... 30
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Iran Sanctions
Overview
Iran is subject to one of the most stringent U.S. sanctions regime of any country in the world.
Many of these sanctions overlap each other as well as the several U.N. sanctions imposed since
2006 because of Iran’s nuclear program development. A particular focus of legislation in the 110th
and 111th Congress has been to expand the provisions of the Iran Sanctions Act (ISA) to apply to
additional types of business with Iran. That law has caused differences of opinion between the
United States and its European allies ever since its adoption in 1996 because it mandates U.S.
imposition of sanctions on foreign firms.
The Obama Administration’s overall policy approach toward Iran has contrasted with the Bush
Administration by actively engaging Iran in negotiations on the nuclear issue, rather than
focusing only on increasing sanctions on Iran. That approach was not dramatically altered in the
immediate aftermath of the Iranian dispute over its June 12, 2009, elections. However, the
Administration expressed its intention to join its partners and other countries in imposing
“crippling” new U.N. sanctions if Iran did not return to multilateral nuclear talks by late
September 2009. That deadline was later amended to the end of 2009, in order to allow time to
reach an agreement with Iran to implement an October 1, 2009, framework to send out most of its
enriched uranium to France and Russia for reprocessing (for later medical use). Because Iran has
not accepted the details of this framework, the United States, the other P5+1 countries, and other
nations who believe that Iran needs to be further pressure are discussing further U.N. sanctions
against Iran.
The Administration has been increasingly less vocal about engagement with Iran since late 2009.
Instead, the Administration has taken certain administrative steps - for example by modifying
regulations to allow U.S. Internet software to reach Iran - that appear to support a congressional
trend to try to help the domestic opposition.
Even during the period when the Obama Administration was attempting to directly engage Iran, it
did not ease any U.S. sanctions on Iran. President Obama renewed for another year the U.S. trade
and investment ban on Iran (Executive Order 12959) in March 2009. Section 7043 of P.L. 111-8,
the FY09 omnibus appropriation, (signed March 8, 2009) required, 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 on Iran. That deadline was October 8,
2009. The effort might be covered by a preliminary Administration review of potential violations
of ISA, discussed below, the results of which have not been released.
The Iran Sanctions Act (ISA)
The Iran Sanctions Act (ISA) is one among many U.S. sanctions in place against Iran. It has
attracted substantial attention because it authorizes penalties against foreign firms. Several bills
pending in the 111th Congress propose amending the Act to curtail additional types of activity,
such as selling gasoline and gasoline shipping services to Iran, or selling it equipment or services
with which it could expand its own refining capacity. In the past, the parent countries of such
firms, many of which are incorporated in Europe, have tended to object to sanctions such as ISA,
even though European countries generally share the U.S. goal of ensuring that Iran does not
become a nuclear power. American firms are restricted from trading with or investing in Iran
under separate U.S. executive measures, as discussed below.
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Originally called the Iran and Libya Sanctions Act (ILSA), ISA was enacted to complement other
measures—particularly Executive Order 12959 of May 6, 1995, which banned U.S. trade with
and investment in Iran—intended to deny Iran the resources to further its nuclear program and to
support terrorist organizations such as Hizbollah, Hamas, and Palestine Islamic Jihad. Iran’s
petroleum sector generates about 20% of Iran’s GDP, but its onshore oil fields and oil industry
infrastructure are aging and need substantial investment. Its large natural gas resources (940
trillion cubic feet, exceeded only by Russia) were undeveloped when ISA was first enacted. Iran
has 136.3 billion barrels of proven oil reserves, the third largest after Saudi Arabia and Canada.
In 1995 and 1996, U.S. allies did not join the United States in enacting trade sanctions against
Iran, and the Clinton Administration and Congress believed that it might be necessary for the
United States to try to deter their investment in Iran. The opportunity to do so came in November
1995, when Iran opened its energy sector to foreign investment. To accommodate its ideology to
retain control of its national resources, Iran used a “buy-back” investment program in which
foreign firms recoup their investments from the proceeds of oil and gas discoveries but do not
receive equity. With input from the Administration, on September 8, 1995, Senator Alfonse
D’Amato introduced the “Iran Foreign Oil Sanctions Act” to sanction foreign firms’ exports to
Iran of energy technology. A revised version instead sanctioning investment in Iran’s energy
sector passed the Senate on December 18, 1995 (voice vote). On December 20, 1995, the Senate
passed a version applying the legislation to Libya, which was refusing to yield for trial the two
intelligence agents suspected in the December 21, 1988, bombing of Pan Am 103. The House
passed H.R. 3107, on June 19, 1996 (415-0), and then concurred on a slightly different Senate
version adopted on July 16, 1996 (unanimous consent). The Iran and Libya Sanctions Act was
signed on August 5, 1996 (P.L. 104-172).
Key Provisions/”Triggers” and Available Sanctions
ISA consists of a number of “triggers”—transactions with Iran that would be considered
violations of ISA and could cause a firm or entity to be sanctioned under ISA’s provisions. ISA
provides a number of different sanctions that the President could impose that would harm a
foreign firm’s business opportunities in the United States. ISA does not, and probably could not,
legally or practically compel any foreign government to take any specific action against one of its
firms.
ISA requires the President to sanction companies (entities, persons) that make an “investment” of
more than $20 million in one year in Iran’s energy sector,1 or that sell to Iran weapons of mass
destruction (WMD) technology or “destabilizing numbers and types” of advanced conventional
weapons.2 ISA is primarily targeting foreign firms, because American firms are already prohibited
from investing in Iran under the 1995 trade and investment ban discussed earlier.
1 The definition of “investment” in ISA (Section 14 (9)) includes not only equity and royalty arrangements (including
additions to existing investment, as added by P.L. 107-24) but any contract that includes “responsibility for the
development of petroleum resources” of Iran. It is interpreted by the State Department to include pipelines to or
through Iran, as well as upgrades or expansions of such energy related projects as refineries. The definition excludes
sales of technology, goods, or services for such projects, and excludes financing of such purchases. For Libya, the
threshold was $40 million, and sanctionable activity included export to Libya of technology banned by Pan Am 103-
related Security Council Resolutions 748 (March 31, 1992) and 883 (November 11, 1993). For Iran, the threshhold
dropped to $20 million, from $40 million, one year after enactment, when U.S. allies did not join a multilateral
sanctions regime against Iran.
2 This latter “trigger” was added by P.L. 109-293.
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Once a firm is determined to be a violator, ISA requires the imposition of two of a menu of six
sanctions on that firm. The available sanctions the President can select from (Section 6) include
(1) denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the
sanctioned entity; (2) denial of licenses for the U.S. export of military or militarily useful
technology; (3) denial of U.S. bank loans exceeding $10 million in one year; (4) if the entity is a
financial institution, a prohibition on its service as a primary dealer in U.S. government bonds;
and/or a prohibition on its serving as a repository for U.S. government funds (each counts as one
sanction); (5) prohibition on U.S. government procurement from the entity; and (6) restriction on
imports from the entity, in accordance with the International Emergency Economic Powers Act
(IEEPA, 50 U.S.C. 1701).
Waiver and Termination Authority
The President has the authority under ISA to waive the sanctions on Iran if he certifies that doing
so is important to the U.S. national interest (Section 9(c)). There was also waiver authority in the
original version of ISA if the parent country of the violating firm joined a sanctions regime
against Iran, but this waiver provision was made inapplicable by subsequent legislation. ISA
application to Iran would terminate if Iran is determined by the Administration to have ceased its
efforts to acquire WMD and is removed from the U.S. list of state sponsors of terrorism, and no
longer “poses a significant threat” to U.S. national security and U.S. allies.3 Application to Libya
terminated when the President determined on April 23, 2004, that Libya had fulfilled the
requirements of all U.N. resolutions on Pan Am 103.
Traditionally reticent to impose economic sanctions, the European Union opposed ISA as an
extraterritorial application of U.S. law and filed a formal complaint before the World Trade
Organization (WTO). In April 1997, the United States and the EU agreed to avoid a trade
confrontation over ISA and a separate Cuba sanctions law, (P.L. 104-114). The agreement
involved the dropping of the WTO complaint and the May 18, 1998, decision by the Clinton
Administration to waive ISA sanctions (“national interest”—Section 9(c) waiver) on the first
project determined to be in violation. That project was a $2 billion4 contract, signed in September
1997, for Total SA of France and its partners, Gazprom of Russia and Petronas of Malaysia to
develop phases 2 and 3 of the 25-phase South Pars gas field. The EU pledged to increase
cooperation with the United States on non-proliferation and counter-terrorism, and the
Administration indicated future investments by EU firms in Iran would not be sanctioned.5
In the 110th Congress, several bills contained provisions that would have further amended ISA,
but they were not adopted. H.R. 1400, which passed the House on September 25, 2007 (397-16),
would have removed the Administration’s ability to waive ISA sanctions under Section 9(c),
national interest grounds, but it would not have imposed on the Administration a time limit to
determine whether a project is sanctionable.
3 This latter termination requirement added by P.L. 109-293
4 Dollar figures for investments in Iran represent public estimates of the amounts investing firms are expected to spend
over the life of a project, which might in some cases be several decades.
5 Text of announcement of waiver decision by then Secretary of State Madeleine Albright, containing expectation of
similar waivers in the future. http://www.parstimes.com/law/albright_southpars.html
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ISA Sunset
ISA was to sunset on August 5, 2001, in a climate of lessening tensions with Iran and Libya.
During 1999 and 2000, the Clinton Administration had eased the trade ban on Iran somewhat to
try to engage the relatively moderate Iranian President Mohammad Khatemi. In 1999, Libya
yielded for trial the Pan Am 103 suspects. However, some maintained that both countries would
view its expiration as a concession, and renewal legislation was enacted (P.L. 107-24, August 3,
2001). This law required an Administration report on ISA’s effectiveness within 24 to 30 months
of enactment; that report was submitted to Congress in January 2004 and did not recommend that
ISA be repealed. Currently, as discussed below, ISA is scheduled to sunset on December 31, 2011.
Iran Freedom Support Act Amendments
In addition to the amendments to ISA referred to above, P.L. 109-293, the “Iran Freedom and
Support Act” (signed September 30, 2006) amended ISA by (1) calling for, but not requiring, a
180-day time limit for a violation determination (there is no time limit in the original law); (2)
recommending against U.S. nuclear agreements with countries that supply nuclear technology to
Iran; (3) expanding provisions of the USA Patriot Act (P.L. 107-56) to curb money-laundering for
use to further WMD programs; (4) extending ISA until December 31, 2011 (see above); and (5)
formally dropping Libya and changing the name to the Iran Sanctions Act.
Earlier versions of the Iran Freedom and Support Act in the 109th Congress (H.R. 282, S. 333)
were viewed by the Bush Administration as too inflexible and restrictive, and potentially harmful
to U.S. relations with its allies. Among the provisions of these bills not ultimately adopted
included setting a 90-day time limit for the Administration to determine whether an investment is
a violation; cutting U.S. foreign assistance to countries whose companies violate ISA; and
applying the U.S. trade ban on Iran to foreign subsidiaries of U.S. companies.
Implementation, Effectiveness, and Ongoing Challenges
Since the Total/Petronas/Gazprom project in 1998, no projects have been determined as violations
of ISA. Some of the projects listed in Table 1, and others, are under review by the State
Department (Bureau of Economic Affairs), as discussed further below. No publication of such
deals has been placed in the Federal Register (requirement of Section 5e of ISA). State
Department reports to Congress on ISA, required every six months, have routinely stated that
U.S. diplomats raise U.S. policy concerns about Iran with investing companies and their parent
countries. However, these reports have not specifically stated which foreign companies, if any,
were being investigated for ISA violations.
As shown in Table 1 below, several foreign investment agreements have been agreed with Iran
since the 1998 Total consortium waiver, although some have been stalled, not reached final
agreement, or not have resulted in actual production. Some investors, such as major European
firms Repsol, Royal Dutch Shell, and Total, have announced pullouts, declined further
investment, or resold their investments to other companies. For example, on July 12, 2008, Total
and Petronas, the original South Pars investors, pulled out of a deal to develop a liquified natural
gas (LNG) export capability at Phase 11 of South Pars, saying that investing in Iran at a time of
growing international pressure over its nuclear program is “too risky.” Also in 2008, Japan
significantly reduced its participation in the development of Iran’s large Azadegan field. Some of
the void has been filled, at least partly, by Asian firms such as those of China and Malaysia.
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However, even if these agreements are implemented, these companies are perceived as not being
as technically capable as those that have withdrawn from Iran.
Energy Routes and Refinery Investment
ISA’s definition of sanctionable “investment”—which specifies investment in Iran’s petroleum
resources, defined as petroleum and natural gas—has been interpreted by successive
administrations to include construction of energy routes to or through Iran. The Clinton and Bush
Administrations used the threat of ISA sanctions to deter oil routes involving Iran and thereby
successfully promoted an alternate route from Azerbaijan (Baku) to Turkey (Ceyhan). The route
became operational in 2005.
No determination of sanctionability was issued on a 1997 project viewed as necessary to U.S. ally
Turkey—an Iran-Turkey natural gas pipeline in which each constructed the pipeline on its side of
their border. State Department testimony stated that Turkey would be importing gas originating in
Turkmenistan, not Iran, under a swap arrangement. However, direct Iranian gas exports to Turkey
began in 2001, and, as shown in Table 1, in July 2007, a preliminary agreement was reached to
build a second Iran-Turkey pipeline, through which Iranian gas would also flow to Europe. That
agreement was not finalized during Iranian President Mahmoud Ahmadinejad’s visit to Turkey in
August 2008 because of Turkish commercial concerns but the deal remains under active
discussion. On February 23, 2009, Iranian newspapers said Iran had formed a joint venture with a
Turkish firm to export 35 billion cubic meters of gas per year to Europe; 50% of the venture
would be owned by the National Iranian Gas Export Company (NIGEC).
Iran-India Pipeline
Another pending deal is the construction of a gas pipeline from Iran to India, through Pakistan
(IPI pipeline). The three governments have stated they are committed to the $7 billion project,
which would take about three years to complete, but India did not sign a deal “finalization” that
was signed by Iran and Pakistan on November 11, 2007. India had re-entered discussions on the
project following Iranian President Mahmoud Ahmadinejad’s visit to India in April 2008, which
also resulted in Indian firms’ winning preliminary Iranian approval to take equity stakes in the
Azadegan oil field project and South Pars gas field Phase 12. India did not attend further talks on
the project in September 2008, raising continued concerns on security of the pipeline, the location
at which the gas would be officially transferred to India, pricing of the gas, tariffs, and the source
in Iran of the gas to be sold. Perhaps to address some of those concerns, but also perhaps to move
forward whether or not India joins the project, in January 2009 Iran and Pakistan amended the
proposed pricing formula for the exported gas to reflect new energy market conditions. However,
there has been no evident movement on the project since that time. During the Bush
Administration, Secretary of State Rice, on several occasions “expressed U.S. concern” about the
pipeline deal or have called it “unacceptable,” but no U.S. official has stated outright that it would
be sanctioned.
European Gas Pipeline Routes
Iran might also be exploring other export routes for its gas. A potential project involving Iran is
the Nabucco pipeline project, which would transport Iranian gas to western Europe. Iran, Turkey,
and Austria reportedly are negotiating on that project. The Bush Administration did not support
Iran’s participation in the project and the Obama Administration apparently takes the same view,
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even though the project might make Europe less dependent on Russian gas supplies. Iran’s
Energy Minister Gholam-Hossein Nozari said on April 2, 2009, that Iran is considering
negotiating a gas export route—the “Persian Pipeline”—that would send gas to Europe via Iraq,
Syria, and the Mediterranean Sea.
Iranian Refinery Construction
Iran has plans to build or expand, possibly with foreign investment, at least eight refineries in an
effort to ease gasoline imports that supply about 30%-40% of Iran’s needs. Construction of oil
refineries or petrochemical plants in Iran appear to constitute potentially sanctionable projects
under ISA because such projects appear to meet ISA’s definition of investment, which includes
“responsibility for the development of petroleum resources located in Iran.” Table 1 provides
some information on openly announced contracts to upgrade or refurbish Iranian oil refineries.
It is not clear whether or not Iranian investments in energy projects in other countries, such as
Iranian investment to help build five oil refineries in Asia (China, Indonesia, Malaysia, and
Singapore) and in Syria, reported in June 2007, would constitute “investment” under ISA.
Significant Iranian Energy Purchase and Sale Agreements
Major energy deals with Iran that involve purchases of oil or natural gas from Iran would not
appear to constitute violations of ISA, because ISA sanctions investment in Iran, not trade with
Iran. Many of the deals listed in the chart later in this paper involve combinations of investment
and purchase. In March 2008, Switzerland’s EGL utility agreed to buy 194 trillion cubic feet per
year of Iranian gas for 25 years, through a Trans-Adriatic Pipeline (TAP) to be built by 2010, a
deal valued at least $15 billion. The United States criticized the deal as sending the “wrong
message” to Iran. However, as testified by Under Secretary of State Burns on July 9, 2008, the
deal appears to involve only purchase of Iranian gas, not exploration. In August 2008, Germany’s
Steiner-Prematechnik-Gastec Co. agreed to apply its method of turning gas into liquid fuel at
three Iranian plants. In early October 2008, Iran agreed to export 1 billion cu.ft./day of gas to
Oman, via a pipeline to be built that would end at Oman’s LNG export terminal facilities.
Effectiveness of ISA
U.S. administrations have maintained that, even without actually imposing ISA sanctions, the
threat of imposing sanctions—coupled with Iran’s reputedly difficult negotiating behavior, and
compounded by Iran’s growing isolation because of its nuclear program—have combined to slow
the development of Iran’s energy sector. Some Members of Congress believe that ISA would have
been even more effective if successive administrations had imposed sanctions, and have
expressed frustration that the executive branch has not imposed ISA sanctions.
Some observers maintain that, over and above the threat of ISA sanctions and the international
pressure on Iran, it is Iran’s negotiating behavior that has slowed international investment in
Iran’s energy sector. Some international executives that have negotiated with Iran say Iran insists
on deals that leave little profit, and that Iran frequently seeks to renegotiate provisions of a
contract after it is ratified.
These trends have constrained Iran’s energy sector significantly; Iran’s deputy Oil Minister said
in November 2008 that Iran needs about $145 billion in new investment over the next 10 years in
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order to build a thriving energy sector. As a result of sanctions and the overall climate of
international isolation of Iran, its oil production has not grown—it remains at about 4.1 million
barrels per day (mbd)—although it has not fallen either.
Some analyses, including by the National Academy of Sciences, say that, partly because of
growing domestic consumption, Iranian oil exports are declining to the point where Iran might
have negligible exports of oil by 2015.6 Others maintain that Iran’s gas sector can more than
compensate for declining oil exports, although it needs gas to re-inject into its oil fields and
remains a relatively minor gas exporter. It exports about 3.6 trillion cubic feet of gas, primarily to
Turkey. A GAO study of December 2007, (GAO-08-58), contains a chart of post-2003
investments in Iran’s energy sector, totaling over $20 billion in investment, although the chart
includes petrochemical and refinery projects, as well as projects that do not exceed the $20
million in one year threshold for ISA sanctionability.
In the 110th Congress, several bills —including S. 970, S. 3227, S. 3445, H.R. 957 (passed the
House on July 31, 2007), and H.R. 7112 (which passed the House on September 26, 2008)—
would have (1) expanded the definition of sanctionable entities to official credit guarantee
agencies, such as France’s COFACE and Germany’s Hermes, and to financial institutions and
insurers generally; and (2) made investment to develop a liquified natural gas (LNG) sector in
Iran a sanctionable violation. Iran has no LNG export terminals, in part because the technology
for such terminals is patented by U.S. firms and unavailable for sale to Iran.
Congressional Efforts to Expand ISA Application to Gas Sales
Iran, as noted, is dependent on gasoline imports. Such sales to Iran are not currently banned by
any U.N. Security Council resolutions, although such sales have become subject to some U.S.
sanctions, as discussed below. Legislation awaiting conference action is intended to impose even
stiffer potential penalties on firms that sell gasoline to Iran.
There appears to be a relatively limited group of major gasoline suppliers to Iran. In March 2010,
several of them announced that they have stopped or would stop supplying gasoline to Iran.7 As
noted in a New York Times report of March 7, 2010,8 some firms that have supplied Iran have
received U.S. credit guarantees or contracts. The main suppliers to Iran are, according to a variety
of sources:
• Vitol of Switzerland (which said in March 2010 it has stopped sales of gasoline
to Iran).
• Trafigura of Switzerland (which also says it has stopped sales)
• Glencore of Switzerland
• Total of France
• Reliance Industries of India
6 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.
7 Information in this section derived from, Blas, Javier. “Traders Cut Iran Petrol Line.” Financial Times, March 8,
2010.
8 Becker, Jo and Ron Nixon. “U.S. Enriches Companies Defying Its Policy on Iran.” New York Times, March 7, 2010.
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• Petronas of Malaysia
• Lukoil of Russia
• Royal Dutch Shell of the Netherlands (which says it stopped sales to Iran in
2009).
• British Petroleum of United Kingdom (told CRS in e-mail conversation in late
2009 that it is not selling gasoline to Iran).
• ZhenHua Oil of China (China’s firms reportedly supply one-third of Iran’s
gasoline imports).9
• Petroleos de Venezuela (reportedly reached a September 2009 deal to supply Iran
with gasoline).
The cessation of supplies to Iran by the three large suppliers Vitol, Glencore, and Trafigura, could
affect Iran because they jointly supplied half of Iran’s imports of about 130,000 barrels per day
worth of gasoline. Some accounts say refineries in Bahrain, Kuwait, and UAE may have picked
up some of the shortfall, in addition to the other suppliers listed above.
Legislation in the 111th Congress: Targeting Gasoline Sales
A number of ideas to expand ISA’s application, similar to those that surfaced in the 110th
Congress, have been introduced in the 111th Congress. In the 110th Congress, H.R. 2880 would
have made sales to Iran of refined petroleum resources a violation of ISA, although some believe
that a sanction such as this would only be effective if it applied to all countries under a U.N.
Security Council resolution rather than a unilateral U.S. sanction.
The major bills in the 111th Congress, in general, seek to take advantage of Iran’s dependence on
imported gasoline. As noted, such sales to Iran are not currently sanctionable under ISA,
according to widely accepted definitions of ISA violations. However, using U.S. funds to fill the
Strategic Petroleum Reserve with products from firms that sell over $1 million worth of gasoline
to Iran is prevented by the FY2010 Energy and Water Appropriation (H.R. 3183, P.L. 111-85,
signed October 28, 2009).
In the aftermath of Iran’s crackdown on post-June 12, 2009, presidential election protests, the
House Appropriations Committee marked up a version of a FY2010 foreign aid appropriation
(H.R. 3081) that would deny Eximbank credits to any firm that sells gasoline to Iran, provides
equipment to Iran that it can use to expand its oil refinery capabilities, or performs gasoline
production projects in Iran. This provision was incorporated into the FY2010 consolidated
appropriation (P.L. 111-117).
In the past, some threats to cut off U.S. credits have deterred sales to Iran. In early 2009,
apparently concerned by growing congressional sentiment for such provisions, Reliance
Industries Ltd. of India said it would cease new sales of refined gasoline to Iran after completing
existing contracts that expired December 31, 2008. The Reliance decision came after several
Members of Congress urged the Exim Bank of the United States to suspend assistance to
9 Blas, Javier, Carola Hoyas, and Daniel Dombey. “Chinese Companies Supply Iran With Petrol.” Financial Times,
September 23, 2009.
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Iran Sanctions
Reliance, on the grounds that it was assisting Iran’s economy with the gas sales. The Exim Bank,
in August 2008, had extended a total of $900 million in financing guarantees to Reliance to help it
expand. However, some observers say Reliance may continue to make such sales to Iran,
although at a lower level than previously.
Iran Refined Petroleum Sanctions Act (IRPSA) and Related Legislation
In April 2009, several bills were introduced—H.R. 2194, S. 908, H.R. 1208, and H.R. 1985—that
would amend ISA to make sanctionable efforts by foreign firms to supply refined gasoline to Iran
or to supply equipment to Iran that could be used by Iran to expand or construction oil refineries.
Such sales are not violations of the existing provisions of ISA. H.R. 2194 and S. 908 were both
titled the Iran Refined Petroleum Sanctions Act of 2009 (IRPSA). Of these, H.R. 2194 has passed
the House (December 15, 2009 by a vote of 412-12, with four others voting “present” and six
others not voting. The opposing and “present” votes included several Members who have
opposed several post-September 11 U.S. military operations in the Middle East/South Asia
region.) Its main provisions are the following:
• Requiring imposition of three new sanctions (other than those in the existing ISA
menu) on firms that sell the threshold amount of gasoline to Iran (over $200,000
in value or $500,000 combined in one year), or, provide services related to such
sales. These related services include providing the ships or vehicles to transport
the gasoline, providing insurance or re-insurance for this transportation, or
providing financing for the shipments.
• New mandatory sanctions include (1) prohibiting transactions in foreign
exchange by the sanctioned firm; (2) prohibiting any financial transactions on
behalf of the sanctioned firm; and (3) prohibiting any acquisitions or ownership
of U.S. property by the sanctioned entity.
• Requiring that no executive agency of the U.S. government contract with firms
that cannot certify that they are not supplying gasoline or refinery equipment to
Iran (over $200,000 in value).
H.R. 1208 contained numerous other provisions that were in several of the bills mentioned above
in the 110th Congress, including eliminating the exemption in the trade ban that allows
importation of Iranian luxury goods, and applying the trade ban to subsidiaries of U.S. firms (if
those subsidiaries were used by the parent specifically to conduct trade with Iran).
Senate Comprehensive Sanctions Bill (S. 2799)
A bill that included IRPSA provisions but went much further, the “Dodd-Shelby Comprehensive
Iran Sanctions, Accountability, and Divestment Act,” (S. 2799), was reported to the full Senate by
the Senate Banking Committee on November 19, 2009. It passed the Senate, by voice vote, on
January 28, 2010. It was adopted by the Senate under unanimous consent as a substitute
amendment to H.R. 2194 on March 11, 2010, setting up conference action on the two versions of
H.R. 2194. Its main differences with the House version of H.R. 2194 are:
• It sets an aggregate sales total trigger of $1 million, double the House’s version.
• It would restore the restrictions on imports from Iran that were lifted in 2000 (a
provision introduced several times in other legislation in the past few years).
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• It would require the U.S. freezing of assets of any Iranians (including
Revolutionary Guard Corps officers) who are involved in proliferation activity or
furthering of acts of international terrorism.
• It would apply the U.S. trade ban to foreign subsidiaries of U.S. firms (see below
for information on foreign subsidiaries. This is another provision introduced
several times in the past few years).
• Building on a trend in Congress to support the Iranian opposition’s ability to
avoid censorship, it would ban U.S. government contracts with firms which sell
Iran equipment that can be used to censor or monitor internet usage in Iran.
• It would protect investment managers who divest from firms that are violating
the other provisions of the bill.
• It would authorize a new licensing requirement for exports to countries
designated, under the bill, as “Destinations of Possible Diversion Concern” and
which fail to cooperate to strengthen their export control systems thereafter. Such
a provision is targeted at such countries as UAE, Malaysia, and others that have
been widely cited in press reports as failing to block exports or re-exports of
sensitive technologies to Iran and other countries.
Some U.S. officials were said to be concerned by the passage of S. 2799 on the grounds that the
legislation might weaken allied unity on Iran at a crucial time in considering new international
sanctions on Iran. To assuage U.S. allies, the Administration reportedly wants any unified bill to
automatically exempt from sanctions firms of countries that are cooperating against the Iranian
nuclear program. This would include firms of China, which is a key player in negotiations on a
new U.N. sanctions resolution on Iran. The outcome of House-Senate efforts to reconcile the two
versions is difficult to predict, but congressional sentiment to sanction Iran appears to be
substantial and conference action is believed by many observers as likely to achieve a consensus
on a final bill.
Likely Effects of the Iran Refined Petroleum Sanctions Act
Those supporting the House or Senate bills discussed above have said that although such
legislation might appear to conflict with President Obama’s diplomatic outreach to Iran, such bills
might strengthen that approach by demonstrating to Iran that there are substantial downsides to
rebuffing the U.S. overtures. Iran’s dependence on gasoline imports could, at the very least, cause
Iran’s government to have to spend more for such imports. Others, however, believe the
government would not import more gasoline, but rather ration it or reduce subsidies for it in an
effort to reduce gasoline consumption. Many believe that Iran has many willing gasoline
suppliers who might ignore a U.S. law along these lines. Still others believe that a gasoline ban
would cause Iranians to blame the United States and United Nations for its plight and cause
Iranians to rally around President Ahmadinejad and rebuild his popularity.10
10 Askari, Hossein and Trita Parsi. “Throwing Ahmadinejad a Lifeline.” New York Times op-ed. August 15, 2009.
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Administration Review of Potential ISA Violations11
Several Members of Congress have, in recent years, questioned why there have been no penalties
imposed for violations of ISA. In 2008, possibly sensing some congressional unrest over this fact,
Under Secretary of State for Political Affairs William Burns testified on July 9, 2008 (House
Foreign Affairs Committee), that the Statoil project (listed in Table 1) is under review for ISA
sanctions. Statoil is incorporated in Norway, which is not an EU member and which would
therefore not fall under the 1998 U.S.-EU agreement discussed above. Burns did not mention any
of the other projects, and no other specific projects have been named since. Nor was there a
formal State Department determination on Statoil subsequently.
Possibly in response to the new legislative initiatives in the 111th Congress, and to an October
2009 letter signed by 50 Members of Congress referencing the CRS table below, Assistant
Secretary of State for Near Eastern Affairs Jeffrey Feltman testified before the House Foreign
Affairs Committee on October 28, 2009, that the Obama Administration would review
investments in Iran for violations of ISA. Feltman testified that the preliminary review would be
completed within 45 days (by December 11) to determine which projects, if any, require further
investigation. Feltman testified that some announced projects were for political purposes and did
not result in actual investment. State Department officials told CRS in November 2009 that
projects involving Iran and Venezuela appeared to fall into the category of symbolic
announcement rather than actual implemented projects.
On February 25, 2010, Secretary of State Clinton testified before the House Foreign Affairs
Committee that the State Department’s preliminary review was completed in early February and
that some of the cases reviewed “deserve[] more consideration” and were undergoing additional
scrutiny. The preliminary review, according to the testimony, was conducted, in part, through
State Department officials’ contacts with their counterpart officials abroad and corporation
officials. The additional investigations of problematic investments will involve the intelligence
community, according to Secretary Clinton. State Department officials told CRS in November
2009 that any projects that the State Department plan is to complete the additional investigation
and determine violations within 180 days of the completion of the preliminary review. (The 180
day time frame is, according to the Department officials, consistent with the Iran Freedom
Support Act amendments to ISA discussed above).
In part because the preliminary review was not completed by mid-December 2009, as was
expected, Representative Mark Kirk and Representative Ron Klein circulated a “Dear Colleague”
letter requesting support for “The Iran Sanctions Enhancement Act” providing for a monthly
GAO report on potential ISA violators, and completion of an investigation of potential violations
within 45 days of any GAO identification of possible violations.
11 Much of this section is derived from a meeting between the CRS author and officials of the State Department’s
Economics Bureau, which is tasked with the referenced review of investment projects. November 24, 2009.
Congressional Research Service
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Table 1. Post-1999 Major Investments/Major Development Projects in Iran’s Energy
Sector
Date Field/Project
Company(ies)/Status
(If Known)
Value Output/Goal
Feb.
Doroud (oil)
Totalfina Elf
$1
1999
(Energy Information Agency, Department of Energy, August 2006.)
(France)/ENI (Italy)
billion
205,000 bpd
Balal (oil)
Apr.
Totalfina Elf/ Bow
$300
1999
(“Balal Field Development in Iran Completed,” World Market Research Centre, May
Valley (Canada)/ENI
million
40,000 bpd
17, 2004.)
Nov.
Soroush and Nowruz (oil)
Royal Dutch Shell
$800
1999
(Netherlands)/Japex
(“News in Brief: Iran.” Middle East Economic Digest, (MEED) January 24, 2003.)
(Japan)
million
190,000 bpd
Apr.
Anaran (oil)
Norsk Hydro
$100
100,000 (by
2000
(Norway)/Lukoil
(MEED Special Report, December 16, 2005, pp. 48-50.)
(Russia)
million
2010)
ENI
July
Phase 4 and 5, South Pars (gas)
$1.9
2 billion
2000
(Petroleum Economist, December 1, 2004.)
Gas onstream as of
billion
cu.ft./day (cfd)
Dec. 2004
Caspian Sea oil exploration – construction of submersible drilling rig for Iranian
Mar.
partner
GVA Consultants
$225
2001
(Sweden)
million
NA
(IPR Strategic Business Information Database, March 11, 2001.)
June
Darkhovin (oil)
ENI
$1
2001
(“Darkhovin Production Doubles.” Gulf Daily News, May 1, 2008.)
Field in production
billion
100,000 bpd
Sheer Energy
(Canada)/China
May
Masjid-e-Soleyman (oil)
National Petroleum
$80
2002
(“CNPC Gains Upstream Foothold.” MEED, September 3, 2004.)
Company (CNPC).
million
25,000 bpd
Local partner is
Naftgaran Engineering
Phase 9 + 10, South Pars (gas)
LG (South Korea)
Sep.
$1.6
2002
(“OIEC Surpasses South Korean Company in South Pars.” IPR Strategic Business
On stream as of early
billion
2 billion cfd
Information Database, November 15, 2004.)
2009
Statoil (Norway)
Oct.
Phase 6, 7, 8, South Pars (gas)
$2.65
2002
(Petroleum Economist, March 1, 2006.)
began producing late
billion
3 billion cfd
2008
$200
million
Azadegan (oil)
Inpex (Japan) 10%
Jan.
stake. CNPC. agreed to (Inpex
2004
(“Japan Mulls Azadegan Options.” APS Review Oil Market Trends, November 27,
develop “north
stake);
260,000 bpd
2006.)
Azadegan” in Jan. 2009
China
$1.76
billion
Petrobras (Brazil)
Tusan Block
Aug.
Oil found in block in
(“Iran-Petrobras Operations.” APS Review Gas Market Trends, April 6, 2009; “Brazil’s
$100
2004
Feb. 2009, but not in
Petrobras Sees Few Prospects for Iran Oil.”
million
?
commercial quantity,
http://www.reuters.com/article/idUSN0317110720090703
according to the firm
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Company(ies)/Status
Date Field/Project
(If Known)
Value Output/Goal
Yadavaran (oil)
Oct.
Sinopec (China), deal
$2
2004
(“Iran, China’s Sinopec Ink Yadavaran Oilfield Development Contract.” Payvand’s Iran
finalized December 9,
billion
300,000 bpd
News, December 9, 2009.)
2007
Garmsar block (oil)
June
Deal finalized in June 2009
2006
Sinopec (China)
$20
million
?
("China's Sinopec signs a deal to develop oil block in Iran - report", Forbes, 20 June
2009, http://www.forbes.com/feeds/afx/2006/06/20/afx2829188.html.)
Arak Refinery expansion
July
2006 (Fimco FZE Machinery Website;
Sinopec (China)
$959
million
http://www.fimco.org/index.php?option=com_content&task=view&id=70&Itemid=78.)
Sept.
Khorramabad block (oil)
2006
Norsk Hydro (Norway) $49
(PR Strategic Business Information Database, September 18, 2006)
million
?
Esfahan refinery upgrade
Mar.
07
(“Daelim, Others to Upgrade Iran’s Esfahan Refinery.” Chemical News and Intelligence,
Daelim (S. Korea)
NA
March 19, 2007.)
Golshan and Ferdows onshore and offshore gas fields and LNG plant
Dec.
contract modified but reaffirmed December 2008
2007
SKS Ventures (Malaysia) $16
billion
3.4 billion cfd
(Oil Daily, January 14, 2008.)
“North Azadegan”
Jan.
2009
(Chinadaily.com. “CNPC to Develop Azadegan Oilfield”
CNPC (China)
$1.75
billion
75,000 bpd
http://www.chinadaily.com.cn/bizchina/2009-01/16/content_7403699.htm)
$4
South Pars: Phase 12 – Part 2 and Part 3
Nov.
Daelim (S. Korea) –
billion
2009
(“Italy, South Korea To Develop South Pars Phase 12.” Press TV (Iran). November 3,
Part 2; Tecnimont
($2 bn
2009. http://www.presstv.com/pop/Print/?id=110308.)
(Italy) – Part 3
each
part)
South Pars: Phase 11
Feb.
Drilling to Begin in March 2010
2010
CNPC (China)
$4.7
billion
(“CNPC in Gas Deal, Beefs Up Tehran Team – Source.” Reuters India, February 10,
2010. http://in.reuters.com.articlePrint?articleId=INTOE61909U20100210.)
Totals:
$41 billion investment
Other Pending/Preliminary Deals
North Pars Gas Field (offshore gas). Includes gas purchases (Dec. 2006)
China National
$16
Offshore Oil Co.
billion
3.6 billion cfd
Phase 13, 14 - South Pars (gas); (Feb. 2007). Deal cancel ed in May 2008
Royal Dutch Shell,
$4.3
Repsol (Spain)
billion
?
Phase 22, 23, 24 - South Pars (gas), incl. transport Iranian gas to Europe and building three
Turkish Petroleum
$12.
power plants in Iran. Initialed July 2007; not finalized to date.
Company (TPAO)
billion
2 billion cfd
Iran’s Kish gas field (April 2008)
Oman
$7
billion
1 billion cfd
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Company(ies)/Status
Date Field/Project
(If Known)
Value Output/Goal
China-led consortium;
20 million
Phase 12 South Pars (gas) – part 1. Incl. LNG terminal construction (March 2009)
project originally
$3.2
tonnes of
subscribed in May 2007 billion
LNG annual y
by OMV (Austria)
by 2012
Petroleos de Venezuela
South Pars gas field (September 2009)
S.A.; 10% stake in
$760
venture
million
$up to
6
Abadan refinery upgrade and expansion; building a new refinery at Hormuz on the Persian Gulf
billion
coast (August 2009)
Sinopec
if new
refinery
is built
Sources: As noted in table, a wide variety of other press announcements and sources, CRS conversations with
officials of the State Department Bureau of Economics (November 2009), CRS conversations with officials of
embassies of the parent government of some of the listed companies (2005-2009).
Note: CRS has neither the authority nor the means to determine which of these projects, if any, might
constitute a violation of the Iran Sanctions Act. CRS has no way to confirm the precise status of any of the
announced investments, and some investments may have been resold to other firms or terms altered since
agreement. In virtual y al cases, such investments and contracts represent private agreements between Iran and
its instruments and the investing firms, and firms are not necessarily required to confirm or publicly release the
terms of their arrangements with Iran. $20 million+ investments in oil and gas fields, refinery upgrades, and
major project leadership are included in this table. Responsibility for a project to develop Iran’s energy sector is
part of ISA investment definition.
Other U.S. Sanctions
ISA is one of many mechanisms the United States and its European partners are using to try to
pressure Iran. The following sections discuss other U.S. sanctions and measures to pressure Iran’s
economy.
Ban on U.S. Trade and Investment With Iran
On May 6, 1995, President Clinton issued Executive Order 12959 banning U.S. trade and
investment in Iran.12 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
12 The Executive Order was issued under the authority of: 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.; Section 505 of the International Security
and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9) and Section 301 of Title 3, United States Code. 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.
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of a state of emergency that triggered the investment ban. Some modifications to the trade ban
since 1999 account for the trade between the United States and Iran. As noted, in the 111th
Congress, H.R. 1208 would reimpose many of the trade restrictions.
The following conditions and modifications, as administered by the Office of Foreign Assets
Control (OFAC) of the Treasury Department, apply:
• Some goods related to the safe operation of civilian aircraft may be licensed for
export to Iran, and as recently as September 2006, the George W. 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).
• U.S. firms may not negotiate with Iran or to trade Iranian oil overseas. The trade
ban permits U.S. companies to apply for licenses to conduct “swaps” of Caspian
Sea oil with Iran. However, a Mobil Corporation application to do so was denied
in April 1999.
• 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 George W. 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 full import ban.
Application to Foreign Subsidiaries of U.S. Firms
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. The March 7, 2010 New York
Times article, cited above, discusses some subsidiaries of U.S. firms that have been active in Iran
and which have received U.S. government contracts, grants, loans, or loan guarantees. The U.S.
ban on trade and investment does not apply to foreign firms. Neither is foreign trade with Iran in
purely civilian goods banned by any U.N. resolution. Some of those foreign firms, such as Mitsui
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and Co. of Japan; Mitsui of Japan, ABB Ltd of Switzerland, Alstom of France, and Schneider
Electric of France, are discussed in the March 7, 2010 New York Times article cited earlier. The
Times article does not claim that these firms have violated any U.S. sanctions laws, although the
Times article reports that these firms have received U.S. government contracts or financing.
Among major foreign subsidiaries of U.S. firms that have traded with Iran are the following:
• Halliburton. 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)13—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, no longer operating in Iran.
• General Electric (GE). The firm announced in February 2005 that it would seek
no new business in Iran, and it reportedly wound down pre-existing 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.
• Foreign subsidiaries of several other U.S. energy equipment firms have been and
may still be in the Iranian market, according to their “10-K” filings with the
Securities and Exchange Commission. These include Natco Group,14 Overseas
Shipholding Group, 15 UOP (a Honeywell subsidiary),16 Itron17, Fluor, 18
Flowserve,19 Parker Drilling, Vantage Energy Services,20 Weatherford, 21and a
few others. However, in March 2010, a Ingersoll Rand, maker of air compressors
and cooling systems, said it would no longer allow its subsidiaries to do business
in Iran.22 On March 1, 2010, Caterpillar Corp. said it had altered its policies to
prevent foreign subsidiaries from selling equipment to independent dealers that
have been reselling the equipment to Iran.23
13 “Iran Says Halliburton Won Drilling Contract.” Washington Times, January 11, 2005.
14 Form 10-K Filed for fiscal year ended December 31, 2008.
15 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.
16 New York Times, March 7, 2010, cited previously.
17 Subsidiaries of the Registrant at December 31, 2009.
http://www.sec.gov/Archives/edgar/data/780571/000078057110000007/ex_21-1.htm
18 “Exhibit to 10-K Filed February 25, 2009.” Officials of Fluor claim that their only dealings with Iran involve
property in Iran owned by a Fluor subsidiary, which the subsidiary has been unable to dispose of. CRS conversation
with Fluor, December 2009.
19 Form 10-K for Fiscal year ended December 31, 2009.
20 Form 10-K for Fiscal year ended December 31, 2007.
21 Form 10-K for Fiscal year ended December 31, 2008, claims firm directed its subsidiaries to cease new business in
Iran and Cuba, Syria, and Sudan as of September 2007.
22 Nixon, Ron. “2 Corporations Say Business With Tehran Will Be Curbed.” New York Times, March 11, 2010.
23 “Caterpillar Says Tightens ‘No-Iran’ Business Policy.” Reuters, March 1, 2010.
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• 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.
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 have applied sanctions to the parent companies of U.S. subsidiaries
if those subsidiaries are directed or formed to trade with Iran. In the 111th Congress, H.R. 1208
and the Senate-passed “Dodd Shelby Comprehensive Iran Sanctions, Accountability, and
Divestment Act,” (S. 2799) contain a similar provision.
Treasury Department “Targeted Financial Measures”
Various “targeted financial measures” have been undertaken by the Treasury Department,
particularly the office of Under Secretary of the Treasury Stuart Levey (who has remained in the
Obama Administration). Since 2006, strengthened by leverage provided in five U.N. Security
Council Resolutions, Levey and other officials have been able to convince numerous foreign
banks that dealing with Iran entails financial risk and furthers terrorism and proliferation.
Treasury Secretary Timothy Geithner has described Levey as having “led the design of a
remarkably successful program”24with regard to targeting Iran’s proliferation networks. The
actions have, according to the International Monetary Fund, partly dried up financing for energy
industry and other projects in Iran.
In the first major summation of the effort, 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 (Switzerland), HSBC (Britain),
Germany’s Commerzbank A.G. and Deutsche Bank AG. U.S. financial diplomacy has reportedly
convinced Kuwaiti banks to stop transactions with Iranian accounts,25 and some banks in Asia
(primarily South Korea and Japan) and the rest of the Middle East have done 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 for importers/exporters to conduct
trade in expensive items.
Some of these results have come about through 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 the biggest such instance, on
December 16, 2009, the Treasury Department announced that Credit Suisse would pay a $536
million settlement to the United States for illicitly processing Iranian transactions with U.S.
banks. Credit Suisse, according to the Treasury Department, saw business opportunity by picking
up the transactions business from a competitor who had, in accordance with U.S. regulations
24 Hearing of the Financial Services and General Government Subcommittee of the House Appropriations Committee,
Federal News Service, May 21, 2009.
25 Mufson, Steven and Robin Wright. “Iran Adapts to Economic Pressure.” Washington Post, October 29, 2007.
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discussed below, ceased processing dollar transactions for Iranian banks. Credit Suisse also
pledged to cease doing business with Iran.
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.26 Bank Sepah is subject to asset freezes and transactions
limitations as a result of Resolution 1737 and 1747. The Treasury Department extended that U-
Turn restriction to all Iranian banks on November 6, 2008.
Thus far, the Treasury Department has not designated any bank as a “money laundering entity”
for Iran-related transactions (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. Several 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), called for this sanction. S. 2799, the “Dodd-Shelby” bill, referenced above, in the 111th
Congress has a similar provision. FY2010 National Defense Authorization Act (H.R. 2647), as
passed by the Senate, expresses the Sense of the Senate that the Administration sanction Iran’s
Central Bank if Iran does not negotiate in good faith to curb its nuclear program.
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, allegedly is an investor in the building.
However, Treasury Department officials say that some of these efforts have gone as far as
possible and, in concert with statements by Secretary of State Clinton and other officials in early
2010, Treasury officials are attempting to target the Revolutionary Guard and its corporate arms
and suppliers. Four Guard-related Iranian firms, and one Guard official affiliated with the Guard’s
corporate activities, were designated by the Treasury Dept. as proliferation entities (see that
sections later) under Executive Order 13382.
Terrorism List Designation-Related Sanctions
Several U.S. sanctions are in effect as a result of Iran’s presence on the U.S. “terrorism list.” The
list was 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. Iran
was added to the list in January 1984, following the October 1983 bombing of the U.S. Marine
barracks in Lebanon (believed perpetrated by Hezbollah). Sanctions imposed as a consequence
include a ban on U.S. foreign aid to Iran; restrictions on U.S. exports to Iran of dual use items;
and requires the United States to vote against international loans to Iran.
26 Kessler, Glenn. “U.S. Moves to Isolate Iranian Banks.” Washington Post, September 9, 2006.
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• The terrorism list designation restricts sales of U.S. dual use items (Export
Administration Act, as continued through presidential authorities under the
International Emergency Economic Powers Act, IEEPA, as implemented by
executive orders), and, under other laws, bans direct U.S. financial assistance
(Section 620A of the Foreign Assistance Act, FAA) and arms sales (Section 40 of
the Arms Export Control Act), and requires the United States to vote to oppose
multilateral lending to the designated countries (Section 327 of the 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.
• The Anti-Terrorism and Effective Death Penalty Act (Sections 325 and 326)
requires the President 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 military flew in 68,000
kilograms of supplies to Bam.
In the Bam case, there was also a temporary exemption made in the regulations to allow for
donations to Iran of humanitarian goods by American citizens and organizations. Those
exemptions were extended several times but expired in March 2004.
Executive Order 13224
The separate, but related, Executive Order 13324 (September 23, 2001) authorizes the President
to freeze the assets of and bar U.S. transactions with entities determined to be supporting
international terrorism. This order, issued two weeks after the September 11 attacks, was intended
to primarily target Al Qaeda-related entities. However, it has increasingly been applied to Iranian
entities. Such Iran-related entities named and sanctioned under this order are in Table 2 at the end
of this report. Table 2 includes the names of Iranian entities sanctioned under other orders and
under United Nations resolutions pertaining to Iran’s nuclear program.
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Iran Sanctions
Proliferation-Related Sanctions
Iran is prevented from receiving advanced technology from the United States under relevant and
Iran-specific anti-proliferation laws27 and by Executive Order 13382 (June 28, 2005).
Iran-Iraq Arms Nonproliferation Act
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-Iraq Act (Section 1603) also provides for a “presumption of denial” for all dual use exports
to Iran (which would include computer software). A waiver to permit such exports, on a case-by-
case basis, is provided for.
Iran-Syria-North Korea Nonproliferation Act
The Iran Nonproliferation Act (P.L. 106-178), now called the Iran-Syria-North Korea Non-
Proliferation Act) authorizes sanctions on foreign persons (individuals or corporations, not
countries or governments) that are determined by the Administration to have assisted 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 control had not transferred any WMD or missile technology to Iran within the
year prior.28 (A Continuing Resolution for FY2009, which funded the U.S. government through
March 2009, waived this law to allow NASA to continue to use Russian vehicles to access the
International Space Station.)
Executive Order 13382
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.
Foreign Aid Restrictions for Suppliers of Iran
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.
27 Such laws include the Atomic Energy Act of 1954 and the Energy Policy Act of 2005 (P.L. 109-58).
28 The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit
U.S. access to the international space station after April 2006, when Russia started charging the United States for
transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision
in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria.
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Implementation
The George W. Bush Administration decided to impose sanctions for violations of the executive
orders and laws discussed above, and it sanctioned numerous entities as discussed below. The
Obama Administration has continued to sanction entities under these provisions. Iranian entities
designated under these laws and orders are listed in Table 2 at the end of this report, including the
four Revolutionary Guard-affiliated firms designated under E.O. 13382 in February 2010.
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.29
Relations to International Sanctions
The U.S. sanctions discussed in this paper are more extensive than those imposed, to date, by the
United Nations Security Council. However, some of the U.N. sanctions are similar to some
unilateral U.S. sanctions and sanctions that have been imposed separately by U.S. allies. As part
of a multilateral process of attempting to convince Iran to choose the path of negotiations or face
further penalty, during 2006-2008, three U.N. Security Council resolutions—1737, 1747, and
1803—imposed sanctions primarily on Iran’s weapons of mass destruction (WMD) infrastructure.
While pressing for sanctions, the multilateral group negotiation with Iran (“P5+1:” the Security
Council permanent members, plus Germany) at the same time offered Iran incentives to suspend
uranium enrichment; the last meeting between Iran and the P5+1 to discuss these issues was in
July 2008. The negotiations made little progress, and then entered a hiatus for the U.S.
presidential election, the establishment of the Obama Administration, and then the Iranian
presidential election. Iranian entities and persons sanctioned by the United Nations are included
in Table 2 at the end of this paper.
As noted above, talks resumed on October 1, 2009, and were viewed as productive. However,
Iran’s refusal to agree to implementing terms by the end of 2009 has prompted renew discussions
between the United States and its partners about new international sanctions. Some P5+1 ideas
reportedly under discussion include: adding many more Revolutionary Guard officials and
affiliated firms to those under sanction; adding banks, possibly including Iran’s Central Bank, to
the list of those recommended to be cut off from the international banking system; banning
insurance or reinsurance to carry gasoline products to Iran; and banning arms sales to Iran. These
sanctions would continue a trend in the United States, in which the Administration is focusing on
sanctioning the Revolutionary Guard and other security organs that are suppressing the Iranian
protesters. Still, China has expressed opposition to new sanctions against Iran because diplomacy
with Iran is ongoing, although there are reports that U.S. officials might be satisfied if China
abstained and did not exercise a veto of a Council resolution.
The main provisions of the current U.N. sanctions are below.
29 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.
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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 on states not to export arms to Iran or support new business with Iran
Call 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.
Efforts to Promote 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).30 The concept of these sanctions is to
express the view of Western and other democracies that Iran is an outcast internationally.
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.
In the 111th Congress, H.R. 1327 (Iran Sanctions Enabling Act), a bill similar to H.R. 2347 of the
110th Congress, was reported by the Financial Services Committee on April 28, 2009. It passed
the House on October 14, 2009, by a vote of 414-6. A similar bill. S. 1065, has been introduced in
the Senate. Some provisions along these lines are contained in the Senate version of H.R. 2194
(S. 2799).
Sanctions and Other Proposals to Support Iran’s Democratic
Opposition
A major trend in the 111th Congress, after the Iran election dispute, has been efforts to promote
the prospects for the domestic opposition in Iran. Proposals to target the Revolutionary Guard for
sanctions represent the trend toward measures that undermine the legitimacy of Iran’s regime and
express support for the growing domestic opposition in Iran. The Revolutionary Guard is
30 For information on the steps taken by individual states, see National Conference of State Legislatures. State
Divestment Legislation.
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Iran Sanctions
involved in Iran’s WMD programs but it is also the key instrument through which the regime is
trying to suppress the pro-democracy protest.
Some Members have focused on expanding Internet freedom in Iran or preventing the Iranian
government from using the Internet to identify opponents. Subtitle D of the FY2010 Defense
Authorization (P.L. 111-84), called the “Voice Act,” contains several provisions to increase U.S.
broadcasting to Iran and to identify (in a report to be submitted 180 days after enactment, or April
25, 2009) companies that are selling Iran technology equipment that it can use to suppress or
monitor the internet usage of Iranians. S. 1475 and H.R. 3284, the “Reduce Iranian Cyber-
Suppression Act,” would authorize the President to ban U.S. government contracts with foreign
companies that sell technology that Iran could use to monitor or control Iranian usage of the
internet. Firms, including a joint venture between Nokia (Finland) and Siemens (Germany),
reportedly sold such technology to Iran in 2008.31 Perhaps to avoid further embarrassment,
Siemens announced on January 27, 2010, that it would stop signing new business deals in Iran as
of mid-2010.32 Some question whether such a sanction might reduce allied cooperation with the
United States if allied companies are so sanctioned. Some provisions along these lines are
contained in the Senate version of H.R. 2194 (S. 2799).
Also in line with this trend, on March 8, 2010, OFAC amended the Iran Transactions Regulations
to ered U.S. regulations of the trade ban to provide for a general license for providing to Iranians
free mass market software in order to facilitate internet communications. The ruling appears to
incorporate the major features of a legislative proposal, H.R. 4301, the “Iran Digital
Empowerment Act.” The OFAC determination required a waiver of the provision of the Iran-Iraq
Arms Nonproliferation Act (Section 1606 waiver provision) discussed above.
A subtitle of the FY2010 National Defense Authorization Act (Section 1241 of P.L. 111-84),
called the “VOICE Act” (Victims of Iranian Censorship Act) authorizes expanded U.S.
broadcasting into Iran and requires an Administration report (within 180 days, or March 27, 2010)
on foreign companies from selling technology that Iran can use to censor or monitor the Internet.
It also authorizes funds to document Iranian human rights abuses since the June 12, 2009
presidential election. Another provision of P.L. 111-84 (Section 1241) requires an Administration
report, not later than January 31, 2010, on U.S. enforcement of sanctions against Iran, and the
effect of those sanctions on Iran.
Measures to Sanction Human Rights Abuses and Promote the Opposition
Another reflection of this trend have been efforts to sanction regime officials involved in
suppressing the domestic opposition in Iran. Senator John McCain proposed to offer amendments
to S. 2799 during Senate consideration of the bill. These amendments would have focused on
Iran’s human rights abuses and suppression of protests. Due to procedural issues, the amendments
were not offered and S. 2799 was passed by voice vote. However, he subsequently introduced S.
3022, the “Iran Human Rights Sanctions Act,” which would authorize financial sanctions and a
ban on U.S. visas for Iranian officials determined to have committed human rights abuses against
Iranian citizens. A companion measure in the House is H.R. 4649.
31 Rhoads, Christopher. “Iran’s Web Spying Aided by Western Technology.” Wall Street Journal, June 22, 2009.
32 End, Aurelia. “Siemens Quits Iran Amid Mounting Diplomatic Tensions.” Agence France Press, January 27, 2010.
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Iran Sanctions
Another bill, introduced by Senator Cornyn and Senator Brownback, (S. 3008) the “Iran
Democratic Transition Act,” calls for a forthright declaration that it is the policy of the United
States to support efforts by the Iranian people to remove the regime from power. It calls for the
use of U.S. broadcasting and humanitarian funds to help democratic organizations in Iran.
Blocked Iranian Property and Assets
Iranian leaders continue to assert that the United States is holding Iranian assets, and that this is
an impediment to improved relations. 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 Bush
Administration opposed a terrorism lawsuit against Iran by victims of the U.S. Embassy Tehran
seizure on the grounds of diplomatic obligation.33
Table 2. 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
Gen. Hosein Salimi (Commander, IRGC Air Force)
Company (Arak supplier)
Dawood Agha Jani (Natanz official)
Kalaye Electric (Natanz supplier))
Ali Hajinia Leilabadi (director of Mesbah Energy)
Pars Trash Company (centrifuge program) Farayand Technique
(centrifuge program)
Lt. Gen. Mohammad Mehdi Nejad Nouri
(Malak Ashtar University of Defence Technology
Defense Industries Organization (DIO)
rector)
7th of Tir (DIO subordinate)
Bahmanyar Morteza Bahmanyar
(AIO official)
Shahid Hemmat Industrial Group (SHIG)—missile program
Reza Gholi Esmaeli (AIO official)
Shahid Bagheri Industrial Group (SBIG) - missile program
Ahmad Vahid Dastjerdi
Fajr Industrial Group (missile program)
(head of Aerospace Industries Org., AIO)
Mohammad Qanadi, AEIO Vice President
Maj. Gen. Yahya Rahim Safavi (Commander in
Behman Asgarpour (Arak manager)
Chief, IRGC)
Ehsan Monajemi (Natanz construction manager)
Jafar Mohammadi (Adviser to AEIO)
33 See CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by Jennifer K. Elsea.
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Entities/Persons Added by Resolution 1747
Ammunition and Metal urgy Industries Group
Fereidoun Abbasi-Davani
(controls 7th of Tir)
(senior defense scientist)
Parchin Chemical Industries (branch of DIO)
Mohasen Fakrizadeh-Mahabai
(defense scientist)
Karaj Nuclear Research Center
Seyed Jaber Safdari
Novin Energy Company
(Natanz manager)
Cruise Missile Industry Group
Mohsen Hojati
Sanam Industrial Group (subordinate to AIO)
(head of Fajr Industrial Group)
Ya Mahdi Industries Group
Ahmad Derakshandeh
(head of Bank Sepah)
Kavoshyar Company (subsidiary of AEIO)
Brig. Gen. Mohammad Reza Zahedi (IRGC ground
Sho’a Aviation (produces IRGC light aircraft for asymmetric
forces commander)
warfare)
Amir Rahimi
Bank Sepah
(head of Esfahan nuclear facilities)
(funds AIO and subordinate entities)
Mehrdada Akhlaghi Ketabachi (head of SBIG)
Esfahan Nuclear Fuel Research and Production Center and
Esfahan Nuclear Technology Center
Naser Maleki (head of SHIG)
Qods Aeronautics Industries
Brig. Gen. Morteza Reza’i
(produces UAV’s, para-gliders for IRGC asymmetric
(Deputy commander-in-chief, IRGC)
warfare)
Vice Admiral Ali Akbar Ahmadiyan
Pars Aviation Services Company
(chief of IRGC Joint Staff)
(maintains IRGC Air Force equipment)
Brig. Gen. Mohammad Hejazi
Gen. Mohammad Baqr Zolqadr
(Basij commander)
(IRGC officer serving as deputy Interior Minister
Brig. Gen. Qasem Soleimani (Qods Force commander)
Entities Added by Resolution 1803
Thirteen Iranians named in Annex 1 to Resolution 1803; al
Ettehad Technical Group
reputedly involved in various aspects of nuclear program
(AIO front co.)
Electro Sanam Co.
Industrial Factories of Precision
Abzar Boresh Kaveh Co.
Joza Industrial Co.
(centrifuge production)
Pshgam (Pioneer) Energy Industries
Barzaganin Tejaral Tavanmad Saccal
Tamas Co.
Jabber Ibn Hayan
(involved in uranium enrichment)
Khorasan Metal urgy Industries
Niru Battery Manufacturing Co.
(Makes batteries for Iranian military and missile systems)
Safety Equipment Procurement
(AIO front, involved in missiles)
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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, September 2007
Shahid Bakeri Industrial Group (Iran)
June 2005, February 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
June 2006
Economic and Trading Company, China Great Wall Industry
Corp, and China National Precision Machinery
Import/Export Corp.
Sanam Industrial Group (Iran)
July 2006
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)
September 2007
Korea Mining and Development Corp. (N. Korea)
September 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 Guard); Bank
October 21, 2007
Melli Iran Zao (Moscow); Melli Bank PC (U.K.)
Bank Kargoshaee
October 21, 2007
Arian Bank (joint venture between Melli and Bank Saderat).
October 21, 2007
Based in Afghanistan
Bank Mellat (provides banking services to Iran’s nuclear
October 21, 2007
sector); Mellat Bank SB CJSC (Armenia). Reportedly has
$1.4 billion in assets in UAE
Persia International Bank PLC (U.K.)
October 21, 2007
Khatam ol Anbiya Gharargah Sazendegi Nooh (main IRGC
October 21, 2007
construction and contracting 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
October 21, 2007
Anbiya)
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
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Hara Company
October 21, 2007
Gharargahe Sazandegi Ghaem
October 21, 2007
Bahmanyar Morteza Bahmanyar (AIO, Iran missile official,
October 21, 2007
see above under Resolution 1737)
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
October 21, 2007
Resolution 1747
Mohammad Hejazi (Basij commander). Also, Resolution
October 21, 2007
1747
Ali Akbar Ahmadian (Chief of IRGC Joint Staff). Resolution
October 21, 2007
1747
Hosein Salimi (IRGC Air Force commander). Resolution
October 21, 2007
1737
Qasem Soleimani (Qods Force commander). Resolution
October 21, 2007
1747
Future Bank (Bahrain-based but al egedly control ed by Bank
March 12, 2008
Melli)
Yahya Rahim Safavi (former IRGC Commander in Chief
July 8, 2008
Mohsen Fakrizadeh-Mahabadi (senior Defense Ministry
July 8, 2008
scientist)
Dawood Agha-Jani (head of Natanz enrichment site)
July 8, 2008
Mohsen Hojati (head of Fajr Industries, involved in missile
July 8, 2008
program)
Mehrdada Akhlaghi Ketabachi (heads Shahid Bakeri Industrial July 8, 2008
Group)
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
July 8, 2008
Bakeri)
7th of Tir (involved in developing centrifuge technology)
July 8, 2008
Ammunition and Metal urgy Industries Group (partner of 7th July 8, 2008
of Tir)
Parchin Chemical Industries (deals in chemicals used in
July 8, 2008
ballistic missile programs)
Karaj Nuclear Research Center
August 12, 2008
Esfahan Nuclear Fuel Research and Production Center
August 12, 2008
(NFRPC)
Jabber Ibn Hayyan (reports to Atomic Energy Org. of Iran,
August 12, 2008
AEIO)
Safety Equipment Procurement Company
August 12, 2008
Joza Industrial Company (front company for Shahid Hemmat August 12, 2008
Industrial Group, SHIG)
Islamic Republic of Iran Shipping Lines (IRISL) and 18
September 10, 2008
affiliates, including Val Fajr 8; Kazar; Irinvestship; Shipping
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Computer Services; Iran o Misr Shipping; Iran o Hind; IRISL
Marine 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
September 17, 2008
Armament Industries Group; Farasakht Industries; Iran
Aircraft Manufacturing Industrial Co.; Iran Communications
Industries; Iran Electronics Industries; and Shiraz Electronics
Industries
Export Development Bank of Iran. Provides financial services October 22, 2008
to Iran’s Ministry of Defense and Armed Forces Logistics
Assa Corporation (alleged front for Bank Melli involved in
December 17, 2008
managing property in New York City on behalf of Iran)
11 Entities Tied to Bank Melli: Bank Melli Iran Investment
March 3, 2009
(BMIIC); Bank Melli Printing and 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
IRGC General Rostam Qasemi, head of Khatem ol-Anbiya
February 10, 2010 (see also October 21, 2007)
Construction Headquarters (key corporate arm of the
IRGC)
Fater Engineering Institute (linked to Khatem ol-Anbiya)
February 10, 2010
Imensazen Consultant Engineers Institute (linked to Khatem
February 10, 2010
ol-Anbiya
Makin Institute (linked to Khatem ol-Anbiya)
February 10, 2010
Rahab Institute (linked to Khatem on-Anbiya)
February 10, 2010
Entities Sanctioned Under Executive Order 13224 (Terrorism Entities)
Qods Force
October 21, 2007
Bank Saderat (al egedly used to funnel Iranian money to
October 21, 2007
Hezbollah, Hamas, PIJ, and other Iranian supported terrorist
groups)
Al Qaeda Operatives in Iran: Saad bin Laden; Mustafa Hamid; January 16, 2009
Muhammad Rab’a al-Bahtiyti; Alis 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
September 17, 2003
laser-guided artillery shells to Iran.
13 entities sanctioned including companies from Russia,
April 7, 2004
China, Belarus, Macedonia, North Korea, UAE, and Taiwan.
14 entities from China, North Korea, Belarus, India (two
September 29, 2004
nuclear scientists, Dr. Surendar and Dr. Y.S.R. Prasad),
Russia, Spain, and Ukraine.
14 entities, mostly from China, for al eged supplying of Iran’s December 2004 and January 2005
missile program. Many, such as North Korea’s Changgwang
Sinyong and China’s Norinco and Great Wall Industry Corp,
have been sanctioned several times previously. Newly
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Iran Sanctions
sanctioned entities included North Korea’s Paeksan
Associated Corporation, and Taiwan’s Ecoma Enterprise Co.
9 entities, including those from China (Norinco yet again),
December 26, 2005
India (two chemical companies), and Austria. Sanctions
against Dr. Surendar of India (see September 29, 2004) were
ended, presumably because of information exonerating him.
7 entities. Two Indian chemical companies (Balaji Amines
August 4, 2006
and Prachi Poly Products); two Russian 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
January 2007
Design Office of Machine Building, and 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
April 23, 2007
penalized for transactions with Syria. 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
October 23, 2008
Offshore International Corp.; Huazhong 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
January 9, 2008
Ramazan Headquarters, accused of 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
January 9, 2008
funnels Iranian arms to Shiite militias in Iraq.
Isma’il al-Lami (Abu Dura). Shiite militia leader, breakaway
January 9, 2008
from Sadr Mahdi Army, alleged to have committed mass
kidnapings and planned assassination attempts against Iraqi
Sunni politicians
Mishan al-Jabburi. Financier of Sunni insurgents, owner of
January 9, 2008
pro-insurgent Al-Zawra television, now banned
Al Zawra Television Station
January 9, 2008
Khata’ib Hezbollah (pro-Iranian Mahdi splinter group)
July 2, 2009
Abu Mahdi al-Muhandis
July 2, 2009
Congressional Research Service
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Iran Sanctions
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
Congressional Research Service
30