Iran Sanctions
Kenneth Katzman
Specialist in Middle Eastern Affairs
July 26, 2013
Congressional Research Service
7-5700
www.crs.gov
RS20871
CRS Report for Congress
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Iran Sanctions
Summary
Increasingly strict sanctions on Iran—sanctions that primarily target Iran’s key energy sector as
well as its ability to access the international financial system—have harmed Iran’s economy, but
not to the point where key Iran leaders have been compelled to reach a compromise with the
international community on Iran’s nuclear program. The strategic effects of sanctions might be
abating as Iran adjusts to them economically and advertises the adverse humanitarian effects.
Nevertheless, the June 14, 2013, election of Hassan Rouhani, who ran on a platform of achieving
an easing of sanctions, as Iran’s president suggests that sanctions are affecting political outcomes
in Iran.
• Oil exports fund nearly half of Iran’s government expenditures, and Iran’s oil
exports have declined to about 1.25 million barrels—a halving from the 2.5
million barrels per day Iran exported during 2011. The causes of the drop have
been a European Union embargo on purchases of Iranian crude oil and decisions
by other Iranian oil customers to obtain exemptions from U.S. sanctions by
substantially reducing purchases of Iranian oil. To date, 20 of Iran’s oil customers
maintain such exemptions.
• The loss of revenues from oil, coupled with the cut-off of Iran from the
international banking system, has caused a sharp drop in the value of Iran’s
currency, the rial, and caused inflation to increase to well over 50%. Iran’s
economy shrank slightly from 2012-2013 and will likely do so again during
2013. There have also been unintended consequences including a shortage of
some advanced Western-made medicines.
• Iran has found some ways to mitigate the economic and political effects of
sanctions. Government-linked entities are creating front companies and making
increased use of barter trade. Iranian traders are using informal banking exchange
mechanisms and, benefitting from the fall in the value of Iran’s currency,
increasing non-oil exports. Affluent Iranians are investing in—and driving up
prices for—real estate and securities listed on the Tehran stock exchange.
Sanctions have not compelled Iran to change its position on its nuclear program, but might be
slowing Iran’s nuclear and missile programs by hampering Iran’s ability to obtain needed foreign
technology. Department of Defense and other assessments indicate that sanctions have not
stopped Iran from developing new conventional weaponry indigenously. Iran is also judged not
complying with U.N. requirements that it halt any weapons shipments outside its borders,
particularly for providing arms to the embattled Assad government in Syria. And, sanctions do not
appear to have altered Iran’s repression of dissent or its efforts to monitor public use of the
Internet.
Some in Congress believe that economic pressure on Iran needs to increase. In the 112th
Congress, the Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L. 112-158) made
sanctionable the shipping of Iranian crude oil, and it enhanced human rights-related provisions of
previous Iran-related laws. A provision of the FY2013 National Defense Authorization Act (P.L.
112-239) sanctions transactions with several key sectors of Iran’s economy. A bill in the 113th
Congress, H.R. 850, reported out of the House Foreign Affairs Committee on May 22, 2013,
would expand the range of Iranian economic sectors subject to sanctions, sanction banks that
exchange Iran’s hard currency abroad, and accelerate the oil purchase reductions required to
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maintain a sanctions exemption. For a broader analysis of policy on Iran, see CRS Report
RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
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Contents
Overview and Objectives ................................................................................................................. 1
Energy And Other Sector Sanctions: Iran Sanctions Act (ISA) and Related Laws and
Executive Orders .......................................................................................................................... 1
The Iran Sanctions Act, Amendments, and Related Applications ............................................. 2
Key “Triggers” .................................................................................................................... 2
Mandate and Time Frame to Investigate ISA Violations ..................................................... 7
Available Sanctions Under ISA ........................................................................................... 8
Waivers, Exemptions, and Termination Authority .............................................................. 9
Termination Requirements ................................................................................................ 10
Sunset Provisions .............................................................................................................. 11
Clarification of Responsibilities: Executive Order 13574................................................. 11
Interpretations and Administration of ISA and Related Laws ................................................. 11
Application to Energy Pipelines ........................................................................................ 11
Application to Crude Oil Purchases .................................................................................. 11
Application to Natural Gas Purchases from Iran/Shah Deniz ........................................... 12
Application to Liquefied Natural Gas Development ......................................................... 12
Application to Financing but Not Official Credit Guarantee Agencies ............................. 12
Application to Iranian Energy Institutions/NIOC and NITC ............................................ 13
ISA and Other Sanctions Against the IRGC ...................................................................... 13
Sanctions Imposed Under ISA ................................................................................................ 14
ISA Violation Determinations and Exemptions ................................................................ 14
Related Law Sanctioning Energy Payments: Section 1245 of FY2012 National
Defense Authorization Act (P.L. 112-81) ............................................................................. 17
Implementation: Exemptions Issued ................................................................................. 18
Iran Threat Reduction Act Impedes Repatriation of Hard Currency to Iran ..................... 20
Ban on U.S. Trade and Investment with Iran ................................................................................. 20
Major Provisions of the Trade and Investment Ban: What Is Allowed or Prohibited ............. 21
Non-Application to Refined Oil with Iranian Content ...................................................... 23
Application to Humanitarian Donations and Support ....................................................... 23
Application to Foreign Subsidiaries of U.S. Firms ........................................................... 24
Financial Sanctions: CISADA and Sanctions on Dealings with Iran’s Central Bank.................... 24
Early Efforts: Targeted Financial Measures ............................................................................ 24
Banking Provisions of CISADA ............................................................................................. 25
Implementation of Section 104: Sanctions Imposed ......................................................... 25
Iran Designated a Money-Laundering Jurisdiction ................................................................. 26
Executive Order 13599 Impounding Iranian Assets ................................................................ 26
Sanctions on Iran’s Central Bank in the FY2012 NDAA ........................................................ 26
Terrorism-Related Sanctions .......................................................................................................... 26
Sanctions Triggered by Terrorism List Designation: Ban on U.S. Aid, Arms Sales,
Dual-Use Exports, and Certain Programs for Iran ............................................................... 27
No Ban on U.S. Humanitarian Aid .................................................................................... 27
Executive Order 13224: Sanctioning Terrorism Supporting Entities ...................................... 27
Proliferation-Related U.S. Sanctions ............................................................................................. 28
Iran-Iraq Arms Nonproliferation Act ....................................................................................... 28
Iran-North Korea-Syria Nonproliferation Act ......................................................................... 28
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Executive Order 13382 ............................................................................................................ 29
Foreign Aid Restrictions for Suppliers of Iran ........................................................................ 29
Promoting Divestment ................................................................................................................... 29
U.S. Sanctions Intended to Support Democratic Change in Iran or Reduce Its Regional
Influence ..................................................................................................................................... 30
Expanding Internet and Communications Freedoms ............................................................... 30
CISADA Sanctions Firms that Sell Censorship Gear to the Regime ................................ 30
Executive Order 13606 ...................................................................................................... 31
Iran Threat Reduction Act Provisions and Executive Order 13628 .................................. 31
Measures to Sanction Human Rights Abuses and Promote the Opposition ............................ 32
Section 105 of CISADA and Executive Order 13553 ....................................................... 32
FY2013 National Defense Authorization Act: Sanctioning Iranian Broadcasting
and Profiteers ................................................................................................................. 33
Separate Visa Ban .............................................................................................................. 33
Sanctioning Iranian Involvement in the Region ............................................................................ 33
Executive Order 13438 ............................................................................................................ 34
Executive Order 13572 ............................................................................................................ 34
Blocked Iranian Property and Assets ............................................................................................. 34
U.N. Sanctions ............................................................................................................................... 35
International Implementation and Compliance .............................................................................. 36
Europe ..................................................................................................................................... 36
Japan and Korean Peninsula .................................................................................................... 38
North Korea ....................................................................................................................... 39
India ......................................................................................................................................... 39
Pakistan ................................................................................................................................... 40
China and Russia ..................................................................................................................... 40
Turkey/South Caucasus ........................................................................................................... 41
Caucasus: Azerbaijan, Armenia, and Georgia ................................................................... 42
Persian Gulf and Iraq ............................................................................................................... 42
Afghanistan.............................................................................................................................. 43
Latin America .......................................................................................................................... 43
Africa ....................................................................................................................................... 44
World Bank Loans ................................................................................................................... 44
Private Sector Cooperation and Compliance ........................................................................... 48
Foreign Firms Reportedly Remaining in the Iran Market ................................................. 50
Effectiveness of Sanctions on Iran ................................................................................................. 51
Effect on Iran’s Nuclear Program Decisions and Capabilities ................................................ 51
Counter-Proliferation Effects ................................................................................................... 51
Effects on Iran’s Regional Political and Military Influence .................................................... 52
General Political Effects .......................................................................................................... 52
Human Rights-Related Effects ................................................................................................ 53
Economic Effects ..................................................................................................................... 53
Iran’s Mitigation Efforts .................................................................................................... 56
Effect on Energy Sector Long-Term Development ................................................................. 56
Effect on Gasoline Availability and Importation ............................................................... 62
Humanitarian Effects/Air Safety ............................................................................................. 64
Possible Additional Sanctions ........................................................................................................ 64
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Other Possible U.S. and International Sanctions ..................................................................... 65
Sanctions Easing/Incentives .................................................................................................... 67
Tables
Table 1. Comparison Between U.S., U.N., and EU and Allied Country Sanctions ....................... 45
Table 2. Post-1999 Major Investments/Major Development Projects
in Iran’s Energy Sector ............................................................................................................... 57
Table 3. Firms That Sold or Are Selling Gasoline to Iran .............................................................. 63
Table 4. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders ................................................................................................ 67
Contacts
Author Contact Information........................................................................................................... 77
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Overview and Objectives
U.S. sanctions have been a major feature of U.S. Iran policy since Iran’s 1979 Islamic revolution,
but U.N. and worldwide bilateral sanctions on Iran are a relatively recent (post-2006)
development. Many of the U.S. sanctions reinforce U.N. and multilateral sanctions put in place in
recent years by European and some Asian countries. Successive Administrations have sought to
ensure that U.S. sanctions do not hamper cooperation with key international partners whose
support is needed to isolate Iran. Almost all U.S. sanctions provisions provide the President with
waiver authority; those provisions that do not provide waiver authority are noted in this paper.
Some U.S. sanctions have been enacted into law, some have been imposed by executive order
(under the International Emergency Economic Powers Act, IEEPA, and other authorities), and
others based on administration determinations authorized by law (for example sanctions triggered
by Iran’s designation as a state sponsor of terrorism).
The objectives of U.S. sanctions have evolved over time. In the mid-1980s, U.S. sanctions were
intended to try to compel Iran to cease supporting acts of terrorism and to limit Iran’s strategic
power in the Middle East more generally. Since the mid-1990s, U.S. sanctions have focused
increasingly on persuading or compelling Iran to limit the scope of its nuclear program to ensure
purely civilian use. The international community has joined U.S. sanctions in recent years in
pursuit of that goal.
This report analyzes U.S. and international sanctions against Iran and, in so doing, provides
examples, based on a wide range of open source reporting, of companies and countries that
conduct business with Iran. CRS has no way to independently corroborate any of the reporting on
which these examples are based and no mandate to assess whether any entity is complying with
U.S. or international sanctions against Iran.
Implementation of some of the sanctions is subject to interpretation. On November 13, 2012, the
Administration published in the Federal Register (Volume 77, Number 219) “Policy Guidance”
explaining how it intends to implement many of the sanctions discussed below.1 The guidance
also sets out examples of specific products and chemicals that are included in the definitions of
such terms as “petroleum,” “petroleum products,” and “petrochemical products” that are used in
the laws and executive orders discussed below.
Energy And Other Sector Sanctions: Iran Sanctions
Act (ISA) and Related Laws and Executive Orders
Since 1996, Congress and successive Administrations have put in place steps to try to force
foreign firms to choose between participating in the U.S. market, or continuing to operate in or
conduct various energy-related transactions with Iran.
1 http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2175.
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The Iran Sanctions Act, Amendments, and Related Applications
The Iran Sanctions Act (ISA) is the core of U.S. sanctions against Iran’s energy and other
economic sectors. ISA took advantage of Iran’s opening of the sector to foreign investment in late
1995. To accommodate its insistence on retaining control of its national resources, Iran used a
“buy-back” investment program in which foreign firms gradually recoup their investments as oil
and gas is discovered and then produced. 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, and also applying all provisions to Libya passed the Senate.
The Iran and Libya Sanctions Act (ILSA) was signed on August 5, 1996 (H.R. 3107, P.L. 104-
172). It was later retitled the Iran Sanctions Act after it terminated with respect to Libya in 2006.
The intent of ISA was 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 (which is about $870 billion), about 80% of its foreign
exchange earnings, and about 50% of its government revenue for 2012. Iran’s oil sector is as old
as the petroleum industry itself (early 20th century), and Iran’s onshore oil fields are past peak
production and in need of substantial investment. Iran has 136.3 billion barrels of proven oil
reserves, the third largest after Saudi Arabia and Canada. With the exception of relatively small
swap and barter arrangements with neighboring countries, virtually all of Iran’s oil exports flow
through the Strait of Hormuz, which carries about one-third of all internationally traded oil.
Iran’s large natural gas resources (940 trillion cubic feet, exceeded only by Russia) were virtually
undeveloped when ISA was first enacted. Its small gas exports are mainly to Armenia and Turkey;
most of its gas is injected into its oil fields to boost their production.
ISA is an “extra-territorial sanction”—it authorizes U.S. penalties against third country firms,
many of which are incorporated in countries that are U.S. allies. ISA does not compel any foreign
government to act against one of its firms. American firms are separately restricted from trading
with or investing in Iran under separate U.S. executive orders, as discussed later in this paper.
ISA’s application has been further expanded by several laws enacted since 2010 that amend its
provisions. In addition, several executive orders have been issued and laws passed that apply ISA
sanctions to specified violators but without amending ISA itself. (An executive order cannot
amend a law passed by Congress and signed by the President.)
Key “Triggers”
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. When
triggered, ISA provides for a number of different sanctions that could harm a foreign firm’s
business opportunities in the United States.
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Original Trigger: “Investment” To Develop Iran’s Oil and Gas Fields
The original version of ISA requires the President to sanction companies (entities, persons) that
make an “investment”2 of more than $20 million3 in one year in Iran’s energy sector.4 The
definition of “investment” in ISA (§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. The Comprehensive
Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) did not alter
this trigger, but it amended the definition of investment to explicitly include pipelines to or
through Iran and contracts to lead the construction, upgrading, or expansions of energy projects.
Implementation: Several firms have been sanctioned under ISA for investing in Iran’s oil and gas
fields, as discussed below.
Trigger Added: Sales of Weapons Related Technology
The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) amended ISA—by
adding Section 5(b)(1)—to add a trigger: that ISA sanctions should be imposed on firms or
persons who sell to Iran (or to persons who the exporter knows will re-export to Iran) technology
useful for weapons of mass destruction (WMD) or “destabilizing numbers and types” of
advanced conventional weapons.
Implementation: No ISA sanctions have been imposed on any entity under Section 5(b)(1).
CISADA Trigger Added: Sales of Gasoline and Related Equipment and Services
The originally enacted version of ISA did not make sanctionable sales to Iran of gasoline or of
equipment with which Iran can itself build or expand its refineries or import gasoline.5 And it did
not clearly make sanctionable Iranian investments in oil refineries abroad. Iran’s dependency on
import for 40% of its gasoline needs caused some Members of Congress to argue for sanctions on
the sale to Iran of gasoline and refinery equipment. A bill in the 110th Congress to sanction
gasoline sales (H.R. 2880) was not enacted. In the 111th Congress, the FY2010 Energy and Water
Appropriation (P.L. 111-85) prohibited the use of U.S. funds to fill the Strategic Petroleum
Reserve with products from firms that sell over $1 million worth of gasoline to Iran. The FY2010
2 As amended by CISADA (P.L. 111-195), these definitions include pipelines to or through Iran, as well as contracts to
lead the construction, upgrading, or expansions of energy projects. CISADA also changes the definition of investment
to eliminate the exemption from sanctions for sales of energy-related equipment to Iran, if such sales are structured as
investments or ongoing profit-earning ventures.
3 Under §4(d) of the original act, for Iran, the threshold dropped to $20 million, from $40 million, one year after
enactment, when U.S. allies did not join a multilateral sanctions regime against Iran. However, P.L. 111-195 explicitly
sets the threshold investment level at $20 million. 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).
4 The original ISA definition of energy sector included oil and natural gas, and CISADA added to that definition:
liquefied natural gas (LNG), oil or LNG tankers, and products to make or transport pipelines that transport oil or LNG.
5 Taking responsibility for constructing oil refineries or petrochemical plants in Iran (for example managing or playing
a major role in the construction contracts) did constitute sanctionable projects under the original version of ISA because
ISA’s definition of investment includes “responsibility for the development of petroleum resources located in Iran.”
Table 2 provides some information on openly announced contracts to upgrade or refurbish Iranian oil refineries.
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Consolidated Appropriations Act (P.L. 111-117) denied Ex-Im Bank credits to any firm that sold
gasoline and related equipment and services to Iran. These initiatives did prompt a decision in
December 2008 by Reliance Industries Ltd. of India to at least temporarily cease new sales of
refined gasoline to Iran. (The Ex-Im Bank, in August 2008, had extended a total of $900 million
in financing guarantees to Reliance to help it expand.)
CISADA Enactment and Provisions. Later in the 111th Congress, H.R. 2194, (Iran Refined
Petroleum Sanctions Act) and S. 2799 (“Dodd-Shelby Comprehensive Iran Sanctions,
Accountability, and Divestment Act”), passed their respective chambers. The conference report
on H.R. 2194 added several provisions beyond amending ISA—provisions affecting U.S.-Iran
trade and other issues. The President signed the final version—the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (CISADA) on July 1, 2010 (P.L. 111-195), which
amended ISA by making sanctionable:
• Sales to Iran of over $1 million worth (or $5 million in a one year period) of
gasoline and related aviation and other fuels. (Fuel oil, a petroleum by-product
which is reportedly being sold to Iran by exporters in the Kurdish region of Iraq,
is not included in the definition of refined petroleum.)
• Sales to Iran of equipment or services (same dollar threshold as above) which
would help Iran make or import gasoline. Examples of such sales include
equipment and services that Iran can use to construct or maintain its oil
refineries, or provision of services such as gasoline shipping or related port
operations.
Implementation: Several firms, as discussed below, have been sanctioned under ISA for selling or
shipping gasoline to Iran.
Trigger Added by Executive Order 13590 (November 21, 2011) and Iran Threat
Reduction Act (P.L. 112-158): Sanctioning Sales of Energy Sector Equipment,
Services, and Petrochemicals
On November 21, 2011, the Administration issued Executive Order 13590, sanctioning sales to
Iran of equipment it can use in its energy sector. The executive order did not—and cannot—
amend ISA itself. The order was later codified in Section 201 of the Iran Threat Reduction and
Syria Human Rights Act of 2012 (P.L. 112-158), which added Section 5(a)(5 and 6) to ISA,
sanctioning firms that
• Provide to Iran $1 million or more (or $5 million in a one year period) worth of
goods or services that Iran could use to maintain or enhance its oil and gas sector.
This made sanctionable, for example, transactions with Iran by global oil services
firms and the sale to Iran of energy industry gear such as drills, pumps, vacuums,
oil rigs, and the like.
• Provide to Iran $250,000 (or $1 million in a one year period) worth of goods or
services that Iran could use to maintain or expand its production of petrochemical
products.6
6 A definition of chemicals and products considered “petrochemical products” is found in a Policy Guidance statement.
See, Federal Register, November 13, 2012. http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-
(continued...)
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Implementation: No firms have been sanctioned under these provisions.
Trigger Added by Executive Order 13622 (July 30, 2012): Purchasing of Iranian
Crude Oil and Petrochemical Products and Provision of Precious Metals
On July 30, 2012, President Obama issued Executive Order 13622 that applies virtually all of the
same sanctions as ISA—as well as restrictions on foreign banks (see below)—to entities that the
President determines have:
• purchased oil or other petroleum products from Iran,7
• conducted transactions with the National Iranian Oil Company (NIOC) or
Naftiran Intertrade Company (NICO), or
• purchased petrochemical products from Iran.
Sanctions do not apply if the parent country of the entity has received an exemption under Section
1245 of P.L. 112-81—an exemption earned for “significantly reducing” oil purchases from Iran.
(See below for more information on the Section 1245 sanctions and exemption process.) A law
cannot be amended by executive order and E.O. 13622 does not amend ISA.
Sanctions on Dealings with Iran in Precious Metals. Section 5 of E.O. 13622 also blocks U.S.-
based property of individuals or firms determined to have provided financial support to NIOC,
NICO, or the Central Bank of Iran, or to have helped Iran purchase U.S. bank notes or precious
metals. The section therefore affects foreign firms that transfer gold or other precious metals to
Iran in exchange for oil or any other product. A June 3, 2013, executive order (Section 16) further
expanded this latter provision to include stones or jewels, in addition to precious metals.
Implementation: Several firms were sanctioned under this order on May 31, 2013 for
petrochemical sales to Iran.
Triggers Added by the Iran Threat Reduction and Syria Act (P.L. 112-158)
Section 201 of the Iran Threat Reduction and Syria Human Rights Act (H.R. 1905, P.L. 112-158,
signed August 10, 2012) amends ISA by adding several sanctions triggers, including:
• Ownership of a vessel that is used to transport Iranian crude oil. This sanction
does not apply in cases of transporting oil to countries that have received
exemptions under P.L. 112-81, discussed below. The section also authorizes but
does not require the President, subject to regulations, to prohibit a ship from
putting to port in the United States for two years, if it is owned by a person
sanctioned under this provision. (Adds Section 5(a)(7) to ISA.)
(...continued)
2175.
7 A definition of what chemicals and products are considered “petroleum products” for the purposes of the order are in
the policy guidance issued November 13, 2012.
http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2175.
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• Participation in a joint oil and gas development venture with Iran, outside Iran, if
that venture was established after January 1, 2002. The effective date exempts
energy ventures in the Caspian Sea, such as the Shah Deniz oil field there. (Adds
Section 5(a)(4 to ISA).)
• Participation in a joint venture with Iran relating to the mining, production, or
transportation of uranium. (Adds Section 5(b)(2).)
• Selling threshold amounts of energy industry equipment, including for the
production of petrochemicals. (Adds Section 5(a)(5 and 6) to ISA). This provision
essentially places Executive Order 13590 into law.
Separate provisions of this law (Sections 212, 213, and 302) do not specifically amend ISA, but
require the application of five out of 12 ISA sanctions on any company:
• that provides insurance or re-insurance for the National Iranian Oil Company
(NIOC) or the National Iranian Tanker Company (NITC);
• that purchases or facilitates the issuance of sovereign debt of the government of
Iran, including Iranian government bonds; or
• that engages in a “significant transaction” with the Islamic Revolutionary Guard
Corps (IRGC) or any of its officials, agents, or affiliates.
Implementation. Some firms, as discussed below, have been sanctioned for providing vessels for
the shipment of crude oil from Iran to buyers not possessing exemptions under P.L. 112-81
(exemption process discussed below).
Sanctions on Other Iranian Economic Sectors Imposed by Iran Freedom and
Counter-Proliferation Act (IFCA, P.L. 112-239)
At the end of 2012, Congress passed legislation expanding authorities for U.S. sanctions against
third country firms that assist key sectors of Iran’s economy beyond energy. A Senate provision
was incorporated into the conference report on the National Defense Authorization Act for
FY2013 (H.R. 4310, P.L. 112-239, signed January 2, 2013) as Subtitle D, “The Iran Freedom and
Counter-Proliferation Act” (IFCA). The major provisions take effect July 1, 2013 (180 days after
enactment) and include waiver provisions. The provisions impose ISA sanctions but do not amend
ISA.
• Section 1244 blocks U.S.-based property and U.S.-based banking activity, and
imposes at least five ISA sanctions, on entities that provide goods or services to
the energy, shipbuilding, and shipping sectors of Iran, or to port operations
there—or which provide insurance for such transactions. The sanctions do not
apply when such transactions involve purchases of Iranian oil by countries that
have active exemptions under P.L. 112-81 or to the purchase of natural gas from
Iran (or most transactions related to such gas purchases).
• Section 1245 imposes at least five ISA sanctions (but not sanctions on imports
from the United States) on any entity that provides precious metals to Iran (such
as gold), or semi-finished metals or software for integrating industrial processes.
There is no exception to this sanction even for countries exempted under P.L.
112-81.
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• Section 1246 imposes at least five ISA sanctions (but not the ISA sanctions on
imports by the United States) on any entity that provides underwriting services,
insurance, or reinsurance for a broad range of transactions with Iran, including
those related to shipping oil, gasoline, or other goods for the energy, shipping, or
shipbuilding sectors in Iran. There is no exception to this sanction for countries
exempted under P.L. 112-81.
• Section 1248 sanctions Iran’s state broadcasting establishment (Islamic Republic
of Iran Broadcasting) as a human rights abuser, triggering sanctions under
Section 105 of CISADA.
• Section 1249 amends CISADA by imposing sanctions (U.S. visa ban, U.S.-based
property blocked) on Iranian persons government that are engaged in corruption
or “diversion of goods”—such as cornering the market for certain imports,
including advanced medicines.
June 3, 2013 Executive Order 13645: Sanctions on the Automotive Sector and Rial
Trading
On June 3, 2013, the President issued Executive Order 13645, effective July 1, 2013, that
implements the provisions of IFCA and provides for other sanctions. The Order:
• imposes any of the ISA sanctions on firms that supply goods or services to Iran’s
automotive (cars, trucks, buses, motorcycles, and related parts) sector, and blocks
foreign banks from the U.S. market if they finance transactions with Iran’s
automotive sector.
• blocks U.S.-based property and prohibits U.S. bank accounts for foreign banks
that conduct transactions in Iran’s currency, the rial, or hold rial accounts. This
provision most likely will affect banks in countries bordering or nearby Iran that
sometimes have dealt in the rial.
• blocks U.S.-based property of any person that conducts transactions with any
Iranian entity on the list of Specially Designated Nationals (SDNs) or Blocked
Persons.
• Blocks U.S.-based property for any person determined to have engaged in
corruption by diverting or profiteering from food and medicine for the Iranian
people. This sanction appears to target Iranian nationals accused of such activity.
Mandate and Time Frame to Investigate ISA Violations
In the original version of ISA, there was no firm requirement, and no time limit, for the
Administration to investigate potential violations and determine that a firm has violated ISA’s
provisions. CISADA, Section 102(g)(5), altered that by mandating that the Administration begin
an investigation of potential ISA violations when there is “credible information” about a potential
violation. The same section made mandatory the 180-day time limit for a determination of
violation. Under Section 102(h)(5), the mandate to investigate gasoline related sales can be
delayed an additional 180 days if an Administration report, submitted to Congress by June 1,
2011, asserts that its policies have produced a significant result in sales of gasoline to Iran. (No
such report was submitted.) Earlier, P.L. 109-293, the “Iran Freedom Support Act” (signed
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September 30, 2006) amended ISA by calling for, but not requiring, a 180-day time limit for a
violation determination (there is no time limit in the original law).8
A subsequent law, the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158))
contains a provision to define “credible information” to begin an investigation of a violation. The
law defines credible information to include a corporate announcement or corporate filing to its
shareholders that it has undertaken transactions with Iran that are potentially sanctionable under
ISA. It also says the President may (not mandatory) use as credible information reports from the
Government Accountability and the Congressional Research Service.
Oversight Mechanisms: Reports Required
The Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) sets up several
mechanisms for Congress to oversee whether the Administration is investigating ISA violations.
Section 223 requires a Government Accountability Office report, within 120 days of enactment,
and another such report a year later, on companies that have undertaken specified activities with
Iran that might constitute violations of ISA. Section 224 amends a reporting requirement in
Section 110(b) of CISADA by requiring an Administration report every 180 days on investment
in Iran’s energy sector, joint ventures with Iran, and estimates of Iran’s imports and exports of
petroleum products. The GAO reports have been issued; there is no information available on
whether the required Administration reports have been issued as well.
Available Sanctions Under ISA
Once a firm is determined to be a violator, the original version of ISA required the imposition of
two of a menu of six sanctions on that firm. CISADA added three new possible sanctions and
required the imposition of at least three out of the nine against violators. H.R. 1905 amends ISA
by adding three available sanctions and requiring imposition on 5 out of the 12 available
sanctions. Executive Order 13590, and the July 30, 2012, executive order, discussed above,
provide for exactly the same penalties as those in ISA. The 12 available sanctions against the
sanctioned entity, from which the Secretary of State or the Treasury can select at least 5 (§6),
include the following:
1. denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports
to the sanctioned entity (original ISA);
2. denial of licenses for the U.S. export of military or militarily useful technology to
the entity (original ISA);
3. denial of U.S. bank loans exceeding $10 million in one year to the entity (original
ISA);
4. if the entity is a financial institution, a prohibition on its service as a primary
dealer in U.S. government bonds; and/or a prohibition on its serving as a
repository for U.S. government funds (each counts as one sanction) (original
ISA);
8 Other ISA amendments under that law included recommending against U.S. nuclear agreements with countries that
supply nuclear technology to Iran and expanding provisions of the USA Patriot Act (P.L. 107-56) to curb money-
laundering for use to further WMD programs.
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5. prohibition on U.S. government procurement from the entity (original ISA);
6. prohibitions in transactions in foreign exchange by the entity (added by
CISADA);
7. prohibition on any credit or payments between the entity and any U.S. financial
institution (added by CISADA);
8. prohibition of the sanctioned entity from acquiring, holding, using, or trading any
U.S.-based property which the sanctioned entity has a (financial) interest in
(added by CISADA);
9. restriction on imports from the sanctioned entity, in accordance with the
International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701)
(original ISA);
10. a ban on a U.S. person from investing in or purchasing significant amounts of
equity or debt instruments of a sanctioned person (added by Iran Threat
Reduction and Syria Human Rights Act, P.L. 112-158);
11. exclusion from the United States of corporate officers or controlling shareholders
of a sanctioned firm (added by P.L. 112-158); and
12. imposition of any of the ISA sanctions on principal offices of a sanctioned firm
(added by P.L. 112-158).
Mandatory ISA Sanction: Prohibition on Contracts with the U.S. Government
There is an additional mandatory sanction under ISA. CISADA (§102(b)) added a requirement in
ISA that companies, as a condition of obtaining a U.S. government contract, certify to the
relevant U.S. government agency, that the firm—and any companies it owns or controls—are not
violating ISA. Regulations to implement this requirement were issued on September 29, 2010.
A provision added by Section 311 of the Iran Threat Reduction Act also requires a certification by
the contractor that it is not knowingly engaging in a significant transaction with Iran’s Islamic
Revolutionary Guard Corps (IRGC), or any of its agents or affiliates that have been sanctioned
under several executive orders discussed below. A contract may be terminated if it is determined
that the company’s certification of compliance was false.
Implementation. A GAO report to Congress of February 25, 2013, found that one foreign firm that
is active in Iran’s energy sector, Daelim of South Korea, had received a U.S. government contract
($1.5 million to build housing at a military base in South Korea) during June 2011-December
2012.9 Daelim has not been sanctioned under ISA or barred from receiving U.S. contracts. Further
revisions of the Federal Acquisition Regulation were made to accommodate the certification
provision required by Section 311.
Waivers, Exemptions, and Termination Authority
The President had the authority under the original version of ISA to waive sanctions if he certifies
that doing so is important to the U.S. national interest (§9(c)). CISADA (§102(c)) changed the
9 GAO-13-344R Iran.
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9(c) ISA waiver standard to “necessary” to the national interest, and the Iran Threat Reduction
Act modified the standard further to “essential to the national security interests” of the United
States. For sanctionable transactions involving WMD equipment, the waiver standard, as
modified by the Iran Threat Reduction Act, is “‘vital to the national security interests of the
United States.”
Under the original version of ISA, there was also waiver authority (§4(c)) if the parent country of
the violating firm joined a sanctions regime against Iran. This waiver provision was changed by
the Iran Freedom Support Act (P.L. 109-293) to allow for a waiver determination based on U.S.
vital national security interests. The Section 4(c) waiver was altered again, by CISADA, to
provide for a six month (renewable) waiver if doing so is “vital to the national interest,” and if
the parent country of the violating entity is “closely cooperating” with U.S. efforts against Iran’s
WMD and advanced conventional weapons program. The criteria of “closely cooperating” is
defined in the conference report as implementing all U.N. sanctions against Iran. It could be
argued that using a Section 4 waiver, rather than a Section 9 waiver, would support U.S.
diplomacy with the parent country of the offending entity.
ISA (§5(f)) also contains several exceptions such that the President is not required to impose
sanctions that prevent procurement of defense articles and services under existing contracts, in
cases where a firm is the sole source supplier of a particular defense article or service. The
President also is not required to prevent procurement of essential spare parts or component parts.
“Special Rule” Exempting Firms That End Their Business with Iran
Under a provision added by CISADA (§102(g)(5)), ISA provides a means—a so-called “special
rule”—for firms to avoid ISA sanctions by pledging to verifiably end their business with Iran and
to forgo any sanctionable business with Iran in the future. Under the special rule, the
Administration is not required to make a determination of sanctionability against a firm that
makes such pledges. The special rule has been invoked on several occasions, as discussed below.
However, there is some imprecision in the time frame under which countries can wind down their
Iran business, and some firms could yet be working in Iran for several more years under their
pledges. Energy firms insist they needed time to wind down their investments in Iran because,
under the buy-back program used by Iran, the energy firms are paid back their investment over
time, making it highly costly for them to suddenly end operations in Iran.
Termination Requirements
In its entirety, ISA application to Iran would terminate if the Administration determines that Iran
has ceased its efforts to acquire WMD; 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.10
The amendments to ISA made by CISADA (sanctions for selling gasoline and related equipment)
would terminate if the first two criteria are met. This termination provision, and the sunset
provisions discussed below, do not apply to those laws that apply ISA sanctions without
specifically amending ISA.
10 This latter termination requirement added by P.L. 109-293. This law also removed Libya from the act, although
application to Libya effectively terminated when the President determined on April 23, 2004, that Libya had fulfilled
the requirements of all U.N. resolutions on Pan Am 103.
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Sunset Provisions
Without such determinations, ISA was to sunset on August 5, 2001, in a climate of lessening
tensions with Iran (and Libya) during the presidency in Iran of moderate Mohammad Khatemi.
However, some maintained that Iran 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. The ISA sunset was
subsequently extended to December 31, 2011 (by P.L. 109-293). The current sunset—December
31, 2016—was established by CISADA.
Clarification of Responsibilities: Executive Order 13574.
On May 23, 2011, President Obama issued Executive Order 13574 clarifying that it is the
responsibility of the Treasury Department to implement those ISA sanctions that involve the
financial sector, including bans on loans, credits, and foreign exchange for, or imports from the
sanctioned entity, as well as blockage of property of the sanctioned entity (if these sanctions are
selected by the Secretary of State, who makes the decision which penalties to impose on
sanctioned entities).
Interpretations and Administration of ISA and Related Laws
The sections below analyze how ISA, as amended by related laws, have been interpreted and
implemented through real-world cases and examples.
Application to Energy Pipelines
ISA’s definition of sanctionable “investment” has been consistently interpreted by successive
administrations to include construction of energy pipelines to or through Iran. Such pipelines are
deemed to help Iran develop its petroleum (oil and natural gas) sector. This interpretation was
reinforced by amendments to ISA in CISADA, which specifically included in the definition of
petroleum resources “products used to construct or maintain pipelines used to transport oil or
liquefied natural gas.” In March 2012, then Secretary of State Clinton made clear that the Obama
Administration interprets the provision to be applicable from the beginning of pipeline
construction, and not from the start of oil or gas flow through a finished project.11
Implementation. No gas pipelines built linking Iran to neighboring countries have been
sanctioned under ISA. The specific projects, such as those linking Iran and Turkey, Iran and
Armenia, and two that are under construction (linking Iran and Pakistan and Iran and Iraq) are
discussed in the international compliance section below.
Application to Crude Oil Purchases
The original version of ISA did not make sanctionable purchases of oil from Iran. Executive
Order 13622 and P.L. 112-158 essentially render purchasing Iranian oil sanctionable—if the
11 http://dawn.com/2012/03/01/tough-us-warning-on-iran-gas-pipeline/.
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parent country of the energy buyer or shipper has not received a sanctions exemption under P.L.
112-81, which is discussed below. New customers for Iranian oil are automatically sanctionable
under the order and P.L. 112-81; only customers that were buying Iranian oil prior to the effective
date of the order or of P.L. 112-81 are eligible for the exemption.
Application to Natural Gas Purchases from Iran/Shah Deniz
The FY2013 National Defense Authorization Act (P.L. 112-239) bars dealings with Iran’s energy
sector broadly—but specifically excludes from sanctionability purchases of natural gas from Iran.
Still, payments for the natural gas might be subject to sanctions as discussed above and elsewhere
in this paper. Purchases of Iranian gas are distinguishable from the construction of natural gas
pipelines involving Iran which, as discussed above, does constitute potentially sanctionable
activity.
The effective dates of U.S. sanctions laws also excludes longstanding joint natural gas projects
that involve some Iranian firms—particularly the Shah Deniz gas project, a natural gas project in
the Caspian Sea. The project is run by a consortium in which Iran’s Naftiran Intertrade Copmany
(NICO) holds a passive 10% share. The other partners in the venture are BP, Azerbaijan’s natural
gas firm SOCAR, Russia’s Lukoil, and other firms. NICO has been sanctioned under ISA, as
discussed below. However, an OFAC factsheet updated on November 28, 2012 states that the
Shah Deniz consortium, as a whole, is not determined to be “a person owned or controlled by”
the government of Iran, as defined in Executive Order 13599. According to the factsheet,
transactions with the consortium would not violate U.S. trade regulations on Iran nor require a
license from OFAC.
Application to Liquefied Natural Gas Development
The original version of ISA did not apply to the development by Iran of a liquefied natural gas
(LNG) export capability. Iran has no LNG export terminals, in part because the technology for
such terminals is patented by U.S. firms and unavailable for sale to Iran. However, CISADA
specifically includes LNG in the definition of petroleum resources and therefore made LNG
investment in Iran—or supply of LNG tankers or pipelines to Iran—sanctionable.
Application to Financing but Not Official Credit Guarantee Agencies
The definitions of investment and other provisions of ISA make clear that financing for
investment in Iran’s energy sector, or for sales of gasoline and refinery-related equipment and
services, constitute sanctionable activity. Therefore, banks and other financial institutions that
assist energy investment and refining and gasoline procurement activities could be sanctioned
under ISA.
However, these definitions—including those in Executive Order 13622 and in P.L. 112-158—are
not interpreted to apply to official credit guarantee agencies—such as France’s COFACE and
Germany’s Hermes. These credit guarantee agencies are arms of their parent governments, and
ISA does not provide for sanctioning governments or their agencies. Early versions of CISADA
would have made these entities sanctionable but this was not included in the final law, out of
concern for alienating U.S. allies.
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Application to Iranian Energy Institutions/NIOC and NITC
As noted above, provisions of P.L. 112-158 and Executive Order 13622—although they do not
amend ISA—apply ISA sanctions to dealings with the National Iranian Oil Company (NIOC),
which is supervised by the Oil Ministry, the National Iranian Tanker Company (NITC), and a
previously sanctioned firm, Naftiran Intertrade Company (NICO), which is a subsidiary of NIOC.
Under Section 302 of the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158), any
person who engages in a significant transaction with NIOC and NITC is subject to the imposition
of 5 out of 12 ISA sanctions. Section 312 of that law required an Administration determination,
within 45 days of enactment (by September 24, 2012) whether NIOC and NITC are IRGC agents
or affiliates. If such a determination is made, financial transactions with NIOC and NITC would
be sanctionable under CISADA (prohibition on opening U.S.-based accounts).
Implementation. On September 24, 2012, the Department of the Treasury informed Congress that
it had determined that NIOC and NITC are agents or affiliates of the IRGC. As noted below, on
November 8, 2012, the Treasury Department named NIOC as a proliferation entity under
Executive Order 13382. In accordance with Section 104 of CISADA, that designation bars any
foreign bank determined to have dealt directly with NIOC (including with a NIOC bank account
in a foreign country) from opening a U.S.-based account.
Some major components of NIOC have not been sanctioned, including
• the Iranian Offshore Oil Company;
• the National Iranian Gas Export Co.; and
• Petroleum Engineering and Development Co.
There are also independent Iranian energy firms, such as Pasargad Oil Co, Zagros Petrochem. Co,
Sazeh Consultants, Qeshm Energy, and Sadid Industrial Group. Their relations with NIOC or the
Revolutionary Guard (see below), are unclear, and none of these independent firms has been
sanctioned under any U.S. law or executive order.
ISA and Other Sanctions Against the IRGC
Much of the work on Iran’s oil and gas fields is done through a series of contractors. Some of
them, such as Khatam ol-Anbia and Oriental Kish, have been identified by the U.S. government
as controlled by the IRGC and have been sanctioned under various executive orders, discussed
below. The August 2011 confirmation of Khatam ol-Anbia’s chief, Rostam Ghasemi, as oil
minister, caused the U.S. government and many experts to assess that the IRGC role in Iran’s
energy sector as large and growing.
Several provisions of law have been enacted to deter foreign firms from partnering with any of
the IRGC-affiliated energy companies. As noted above, Section 311 of the Iran Threat Reduction
Act amended ISA to mandate a ban on government contracts for companies that fail to certify that
they are not transacting business with the IRGC or any of its sanctioned affiliates. Section 302 of
that Act requires application of five out 12 ISA sanctions to persons that materially assist, with
financing or technology, the IRGC, or assist or engage in “significant” transactions with any of its
affiliates that are sanctioned under Executive Order 13382, 13224, or similar executive orders
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discussed below—or which are determined to be affiliates of the IRGC. Section 302 did not
amend ISA.
Section 301 of the Iran Threat Reduction Act requires the President, within 90 days of enactment
(by November 9, 2012), to identify “officials, agents, or affiliates” of the IRGC and to impose
sanctions in accordance with Executive Order 13382 or 13224 (which are discussed later in this
paper), including blocking any such designee’s U.S.-based assets or property. Some of these
designations, including of NIOC, were made by Treasury Department on November 8, 2012.
Section 303 of the Iran Threat Reduction Act requires the imposition of sanctions on agencies of
foreign governments that provide technical or financial support, or goods and services to
sanctioned (under U.S. executive orders or U.N. resolutions) members or affiliates of the IRGC.
Sanctions include a ban on U.S. assistance or credits for that foreign government agency, a ban on
defense sales to it, a ban on U.S. arms sales to it, and a ban on exports to it of controlled U.S.
technology.
Sanctions Imposed Under ISA
The European Union opposed ISA as an extraterritorial application of U.S. law. 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 promise by the EU not to file any
complaint with the World Trade Organization (WTO) over this issue, in exchange for the eventual
May 18, 1998, announcement by the Clinton Administration to waive ISA sanctions (“national
interest”—§9c—waiver) on the first project determined to be in violation. That project was a $2
billion12 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, for its part, pledged to increase cooperation with the United States on nonproliferation
and counterterrorism. Then-Secretary of State Albright, in the May 18, 1998, waiver
announcement, indicated that similar future such projects by EU firms in Iran would not be
sanctioned, provided overall EU cooperation against Iranian terrorism and proliferation
continued.13 However, the EU sanctions against Iran imposed since 2010 have largely rendered
this understanding moot because the EU countries have adopted sanctions against Iran nearly as
strict as are U.S. sanctions.
ISA Violation Determinations and Exemptions
The Obama Administration has used ISA authorities to discourage companies from continuing
their business with Iran. This is a contrast from the first 14 years after ISA’s passage, in which
successive Administrations hesitated to confront companies of partner countries. Despite
investments made in Iran’s energy sector, as shown in Table 2, no Administration made any
determinations of ISA violations from 1998 until September 2010, causing several Members of
Congress to questioned whether ISA was being implemented. State Department reports to
Congress on ISA, required every six months, did not specifically state which foreign companies,
12 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.
13 Text of announcement of waiver decision by then Secretary of State Madeleine Albright, containing expectation of
similar waivers in the future, at http://www.parstimes.com/law/albright_southpars.html.
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if any, were being investigated for ISA violations. No publication of such deals has been placed in
the Federal Register, as required by Section 5e of ISA. In an effort to address the congressional
criticism, then-Under Secretary of State for Political Affairs William Burns testified before the
House Foreign Affairs Committee on July 9, 2008, that the Statoil project (listed in Table 2) was
under review for ISA sanctions. Statoil is incorporated in Norway, which is not an EU member,
and did not fall under the 1998 U.S.-EU agreement discussed above.
Possibly in response to an October 2009 letter signed by 50 Members of Congress referencing
Table 2, then 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
complete a preliminary review of investments in Iran for violations of ISA by December 11, 2009
and that some announced projects did not result in actual investment. On February 25, 2010, then
Secretary of State Clinton testified before that same committee that the preliminary review was
completed and that some of the cases were undergoing additional evaluation involving the
intelligence community. State Department officials said in November 2009 that they intended to
determine violations by early August 2010. (180-days from the completion of the preliminary
review; a time frame consistent with the 180 non-binding deadline set by the Iran Freedom
Support Act amendments to ISA. That 180-day time frame later became mandatory). On June 22,
2010, then Assistant Secretary of State William Burns testified before the Senate Foreign
Relations Committee that there were “less than 10” cases of possible ISA violations.
September 30, 2010 Sanctions and Special Rule Exemptions14
• A Swiss-based Iranian-owned oil trading company—Naftiran Intertrade
Company (NICO)—became the first firm to be sanctioned under ISA. The three
penalties selected were: a ban on Ex-Im Bank credits; a denial of dual use export
licensing to the firm; and a denial of bank loans exceeding $10 million. The
mandatory ban on receiving U.S. government contracts applies as well.
That same day, four major energy companies avoided sanctions under the ISA “special rule” for
pledging to end their business in Iran:
• Total of France,
• Statoil of Norway,
• ENI of Italy, and
• Royal Dutch Shell of Britain and the Netherlands.
November 17, 2010, Special Rule for Inpex
• Inpex of Japan was exempted from sanctions under the special rule on November
17, 2010, according to a State Department announcement. The firm announced
on October 15, 2010, that it is shedding its stake in the Azadegan development
project shown in the table.
14 State Department statement. September 30, 2010.
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March 29, 2011, Sanctions Determination Against Belarusneft
Several foreign investment agreements with Iran were not covered in the September 2010
determination but remained under Administration scrutiny. The Administration stated that
determinations would be made within 180 days (by April 1, 2011).
• On March 29, 2011, the State Department announced that one additional firm
would be sanctioned under ISA—Belarusneft, a subsidiary of the Belarus
government owned Belneftekhim—for a $500 million contract with Naftiran (the
company sanctioned in September 2010) to develop the Jofeir oil field discussed
in Table 2. The three sanctions imposed were denial of Ex-Im Bank financing,
denial of U.S. export licenses, and denial of U.S. loans above $10 million. Other
subsidiaries of Belneftekhim were sanctioned in 2007 under Executive Order
13405 related to U.S. policy on Belarus.
May 24, 2011, Sanctions Imposed on Gasoline-Related Shippers and April 12,
2013, Sanctions Lifted
On May 24, 2011, the Administration issued its first ISA sanctions determinations under Section
5(a)(3) of ISA (CISADA-amended “trigger”) for sales to Iran of gasoline and related equipment
and services.15 The seven firms sanctioned were16
• Petrochemical Commercial Company International (PCCI) of Bailiwick of
Jersey and Iran
• Royal Oyster Group (UAE)
• Tanker Pacific (Singapore)
• Allvale Maritime
• Societie Anonyme Monegasque Et Aerienne (SAMAMA, Monaco)
• Speedy Ship (UAE/Iran)
• Associated Shipbroking (Monaco)
• Petroleos de Venezuela (PDVSA) of Venezuela
On April 12, 2013, the State Department announced it was lifting ISA sanctions on three of the
sanctioned firms above: Tanker Pacific, SAMAMA, and Allvale Maritime.17 The State
Department essentially applied the “special rule” to the three, announcing that sanctions were
15 The reasons for the sanctions, including size of gasoline shipments to Iran, as well as the ISA-related sanctions
selected, can be found at http://www.state.gov/r/pa/prs/ps/2011/05/164132.htm.
16 The determinations of sanctionability of Allvale Maritime and SAMAMA were issued on September 13, 2011, as a
“clarification” of the May 24 determinations, which named Ofer Brothers Group as sanctioned entities. Those two
entities, as well as Tanker Pacific, are, according to an author conversation with an attorney for the Ofer Brothers
Group, affiliated with a Europe-based trust linked to deceased Ofer brother Sami Ofer, and not Ofer Brothers Group
based in Israel. The firms named were subjected primarily to the financial-related sanctions provided in ISA. The
Administration stated that U.S.-based subsidiaries of PDVSA, such as Citgo, were not included in the determination
and that U.S. purchases of Venezuelan oil would not be affected.
17 Department of State. “Delisting Companies Sanctioned Under the Iran Sanctions Act.” April 12, 2013.
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being lifted because the firms had provided “reliable assurances that they will not knowingly
engage in such sanctionable activity in the future.”
January 12, 2012, Determinations on Gasoline Sellers
On January 12, 2012, the Administration imposed ISA sanctions (ban on U.S. export licenses for
sales to the firms; a ban on Export Import Bank financing for them; and denial of loans of over
$10 million to them) on three additional gasoline sellers to Iran:
• Zhuhai Zhenrong Company (China), for brokering sales of $500 million worth of
gasoline to Iran between July 2010 and January 2011
• Kuo Oil Pte. Ltd. (Singapore), an energy trading firm that sold $25 million worth
of gasoline to Iran between late 2010 and early 2011
• FAL Oil Company Ltd. (UAE), an independent energy trader that sold Iran over
$70 million worth of gasoline in late 2010
August 10, 2012, Sanctions on Syrian Energy Firm
• The State Department sanctioned Sytrol, a Syrian government-run oil company,
for selling Iran over $36 million worth of gasoline in April 2012.
March 14, 2013, Determination Against Dimitris Cambis and Impire Shipping
• Acting under Section 5(a)(8) of ISA, a provision added by the Iran Threat
Reduction Act (P.L. 112-158), which sanctions owners of a vessels that conceal
the Iranian origin of crude oil or petroleum productions, ISA sanctions (and
Treasury Dept. sanctions under Executive Order 13599, which blocks property of
the government of Iran) were imposed on Dr. Dimitris Cambis and his firm
Impire Shipping. Also sanctioned were Kish Protection and Indemnity and
Bimeh Markazi-Central Insurance of Iran (CII), and senior officials of these
companies, for providing insurance to NITC. The Treasury sanctions were
imposed on Cambis, Impire, and eight UAE-based front companies used to
conceal the oil transactions, as well as eight named oil tankers these companies.
May 31, 2013 Determination Against Ferland Company Ltd.
• After investigations related to the determination against Dimitris Cambis, above,
the State Department sanctioned Ferland Company Ltd. of Cyprus and Ukraine
for cooperating with NITC to sell Iranian crude oil deceptively. Sanctions were
also imposed on Ferland by Treasury under Executive Order 13608.
Related Law Sanctioning Energy Payments: Section 1245 of FY2012
National Defense Authorization Act (P.L. 112-81)
In late 2011, some in Congress believed that action was needed to cut off the mechanisms oil
importers use to pay Iran hard currency for oil. Proposals to cut Iran’s Central Bank from the
international financial system were based on that objective, as well as the view that the Central
Bank helps other Iranian banks circumvent the U.S. and U.N. banking pressure. Some argued the
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Treasury Department should designate the Central Bank as a proliferation entity under Executive
Order 13382 or a terrorism supporting entity under Executive Order 13224, but the
Administration did not do so.
In November 2011, provisions to sanction foreign banks that deal with Iran’s Central Bank were
incorporated a FY2012 national defense authorization bill (H.R. 1540). The provision was
modified slightly in conference action on the latter bill, enacted and signed on December 31, 2011
(P.L. 112-81). Section 1245 of P.L. 112-81, provides for the following:
• Requires the President to prevent a foreign bank from opening an account in the
United States—or impose strict limitations on existing U.S. accounts—if that
bank processes payments through Iran’s Central Bank.
• The provision applies to non-oil related transactions with the Central Bank of
Iran 60 days after enactment (by February 29, 2012).
• The provision applies to a foreign central bank only if the transaction with Iran’s
Central Bank is for oil purchases.
• Provides for a renewable waiver of 120 days duration if the President determines
that doing so is in the national security interest.
• The provision applied to transactions with the Central Bank for oil purchases
only after 180 days (as of June 28, 2012).
• Sanctions on transactions for oil apply only if the President certifies to
Congress—90 days after enactment (by March 30, 2012), based on a report by
the Energy Information Administration to be completed 60 days after enactment
(by February 29, 2012)—that the oil market is adequately supplied. The EIA
report and Administration certification are required every 90 days thereafter.
• Foreign banks can be granted an exemption from sanctions (for any transactions
with the Central Bank, not just for oil) if the President certifies that the parent
country of the bank has significantly reduced its purchases of oil from Iran. That
determination is to be reviewed every 180 days. For countries whose banks
receive an exemption, the 180 day time frame begins from the time that parent
country last received an exemption.
Although Treasury Under Secretary David Cohen told the Senate Foreign Relations Committee
on December 2, 2011 that the provision could lead to a rise in oil prices that would benefit Iran,
the Administration later saw value in using the provision to pressure Iran. In the signing statement
on the overall bill, President Obama indicated he would implement the provision so as not to
damage U.S. relations with partner countries.
Implementation: Exemptions Issued
On February 27, 2012, the Department of the Treasury announced regulations to implement
Section 1245. The first required EIA report was issued on February 29, 2012, and, on March 30,
2012, President Obama determined that there was a sufficient supply of oil worldwide to permit
countries to reduce oil purchases from Iran. An EIA report of April 27, 2012, and Administration
determination of June 11, 2012, made similar findings and certifications, triggering potential
sanctions as of June 28, 2012. Subsequent EIA reports and Administration determinations of the
state of the oil market have kept the sanctions triggers in place.
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The lack of precise definition of “significant reduction” in oil purchases gave the Administration
substantial flexibility in dealing with foreign governments. On January 19, 2012, several Senators
wrote to Treasury Secretary Geithner agreeing with outside experts that the Treasury Department
should define “significant reduction” as an 18% purchase reduction based on total price paid (not
just volumes).18 Administration officials said they adopted that standard in considering
exemptions. Countries must continue to reduce their oil buys from Iran—relative to the previous
180-day period—to retain the exemption. Retaining the exemption has become crucial to
continuing oil-related commerce with Iran, because Executive Order 13622 and P.L. 112-158
sanctions oil dealings with Iran unless a parent country has a current exemption. P.L. 112-158
also amended Section 1245 such that any country that has received an exemption would retain
that exemption if it completely ceases purchasing oil from Iran. The EU embargo on purchases of
Iranian oil, announced January 23, 2012, and which took full effect by July 1, 2012, implied that
virtually all EU oil customers of Iran would obtain exemptions. The table below on major Iranian
oil customers indicates cuts made by major customers compared to 2011.
Exemptions Issued19
• On March 20, 2012, the Secretary of State announced the first group of 11
countries that had achieved an exemption for significantly reducing oil purchases
from Iran: Belgium, the Czech Republic, France, Germany, Greece, Italy, Japan,
the Netherlands, Poland, Spain, and Britain. These exemptions were all renewed
(for 180 days) on September 14, 2012,20 and again on March 13, 2013.
• On June 11, 2012, the Administration granted seven more exemptions based on
reductions of oil purchases from Iran of about 20% in each case: India, Korea,
Turkey, Malaysia, South Africa, Sri Lanka, and Taiwan. All seven exemptions
were renewed on December 7, 2012 (for another 180 days) and again on June 5,
2013.
• On June 28, 2012, the Administration granted exemptions to China and
Singapore, two remaining major Iran oil customers, with China the single largest
buyer (about 550,000 barrels per day in 2011). Both exemptions were renewed
on December 7, 2012 and again on June 5, 2013.
Seventeen EU countries have not been granted exemptions. Some of them were not customers for
Iran’s oil and cannot therefore “significantly reduce” their buys from Iran any further. Some of
these countries say that the provision amounts to a de facto U.S. effort to enforce a total ban on
EU trade with Iran. Earlier EU opposition to sanctioning Iran’s Central Bank was based on
humanitarian grounds. One of the Central Bank’s roles is to keep Iran’s currency, the rial, stable.
It does so by using hard currency to buy rials to raise the currency value, or to sell rials to bring
the value down. An unstable currency could harm Iran’s ability to import some needed foodstuffs
and medical products, according to those opposing that sanction.
18 Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner. January 19, 2012.
19 Announcements by the Department of State. March 20, 2012, June 11, 2012, and June 28, 2012.
20 “Statement on Iran” by Secretary of State Clinton. September 14, 2012.
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Table 1. Top Energy Buyers From Iran and Reductions
(amounts in barrels per day, bpd)
Country/Bloc
2011 Average
Current Average
European Union (particularly Italy,
600,000
Negligible
Spain, and Greece)
China 550,000
435,000
Japan 325,000
230,000
India 320,000
225,000
South Korea
230,000
150,000
Turkey 200,000
140,000
South Africa
80,000
0
Malaysia 55,000
10,000
Sri Lanka
35,000
10,000
Taiwan 35,000
10,000
Singapore 20,000
10,000
Other 55,000
20,000
Total 2.5 mbd
1.25 mbd
Source: International Energy Agency and rough estimates based on CRS conversations with foreign diplomats
and press reports. Actual volumes might differ and import volumes may fluctuate dramatically over short periods
of time as actual tanker deliveries occur.
Iran Threat Reduction Act Impedes Repatriation of Hard Currency to Iran
The ability of Iran to acquire hard currency has been further impeded by a provision of the Iran
Threat Reduction Act (P.L. 112-158), which went into effect on February 6, 2013 - 180 days after
enactment. Section 504 of the Iran Threat Reduction Act amended P.L. 112-81 to require that any
funds owed to Iran as a result of permitted or exempted transactions (for oil sales, for example) be
credited to an account located in the country with primary jurisdiction over the foreign bank
making the transaction. This has the net effect of preventing Iran from bringing earned hard
currency back to Iran and compelling it to buy the products of the oil customer countries.
Ban on U.S. Trade and Investment with Iran
Recent U.S. sanctions seek to compel foreign firms to exit various segments of the Iran market.
The United States has long had a wide-ranging ban on U.S. trade with and investment in Iran:
such a ban was imposed on May 6, 1995, by President Clinton, through Executive Order 12959.
The order was issued under the authority primarily of the International Emergency Economic
Powers Act (IEEPA, 50 U.S.C. 1701 et seq.).21 IEEPA gives the President wide powers to regulate
commerce with a foreign country when a state of emergency is declared in relations with that
21 The executive order was issued not only under the authority of IEEPA but also: the National Emergencies Act (50
U.S.C. 1601 et seq.; §505 of the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-
9) and §301 of Title 3, United States Code.
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country. Executive Order 12959 followed an earlier March 1995 executive order barring U.S.
investment in Iran’s energy sector, which was imposed when President Clinton that month
declared that a state of emergency exists with respect to Iran. A subsequent executive order,
13059 (August 19, 1997) prevented U.S. companies from knowingly exporting goods to a third
country for incorporation into products destined for Iran.
Each March since 1995, the U.S. Administration has renewed a declaration of a state of
emergency that triggers the President’s trade regulation authority under IEEPA. The operation of
the trade regulations is stipulated in Section 560 of the Code of Federal Regulations (Iranian
Transactions Regulations, ITRs).
Major Provisions of the Trade and Investment Ban:
What Is Allowed or Prohibited
The following conditions, as administered by the Office of Foreign Assets Control (OFAC) of the
Treasury Department, apply to the U.S. trade ban on Iran (“Iran Transaction Regulations,” ITRs):
• Oil Dealings. The 1995 trade ban greatly expanded a 1987 ban on imports from
Iran under Executive Order 12613 (October 29, 1987). That 1987 ban was
imposed under authorities provided in Section 505 of the International Security
and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9). The import ban
barred U.S. oil companies from importing Iranian oil but did not ban them from
buying Iranian oil and trading it overseas. The 1995 ban prohibits such trading of
Iranian oil overseas. The 1995 trade ban does allow U.S. companies to apply for
licenses to conduct “swaps” of Caspian Sea oil with Iran. However, these swaps
have been prohibited in practice; a Mobil Corporation application to do so was
denied in April 1999, and no known applications were submitted since.
• Civilian Airline Parts. Goods related to the safe operation of civilian aircraft may
be licensed for export to Iran (§560.528 of Title 31, C.F.R.). In 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). An
Obama Administration intent to sell Iran data to repair certain GE engines for its
legacy American-made aircraft, in order to ensure safe operation, was notified to
Congress on March 16, 2011. On June 23, 2011, the Administration sanctioned
Iran Air as a proliferation entity under Executive Order 13382, rendering any
future licensing of parts or repairs for Iran Air unclear.
• Personal Communications and Remittances. The ban did not, at any time, apply
to personal communications (phone calls, e-mails) or to personal remittances. In
February 2012, OFAC clarified guidance for personal remittances to relatives in
Iran as allowing U.S. banks to process remittances to family members resident in
Iran as long as the remittance is routed through a third country bank and the
receiving Iranian bank is not under U.S. sanction. On May 30, 2013, OFAC
issued a general license for the exportation to Iran of goods (such as cellphones)
and services, on a fee basis, that enhance the ability of the Iranian people to
access communication technology (see below under sanctions relating to
promoting democracy and free expression in Iran).
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• Food and Medical Exports. 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. On October 22, 2012, OFAC attempted to facilitate medical
sales by issuing a list of medical products, such as scapels, prosethetics, canes,
burn dressings, and other products that could be sold to Iran under “general
license”—no export license requirement. That list was updated on July 25, 2013
to include electrocardiagram, electro-encephalogram, and dialysis machines and
other medical products. According to OFAC, licenses for exports of medical
products not on the list are routinely expedited for sale to Iran, and the U.S.
government has been informing foreign banks that financing such transactions is
not sanctionable.
OFAC regulations now have a specific definition of “food” that can be licensed
for sale to Iran, and that definition excludes alcohol, cigarettes, gum, or
fertilizer.22 This definition might have been a reaction to a press account on
December 24, 2010,23 that said that OFAC had approved exports to Iran of such
condiments as ice cream sprinkles, chewing gum, food additives, hot sauces,
body-building supplements, and other goods that appear to have uses other than
those that are purely humanitarian or nutritive. U.S. exporters widely mentioned
include Mars Co. (candy manufacturer); Kraft Foods; Wrigley’s (gum); and
McCormick and Co. (spices). Some previously licensed U.S. goods have been
sold through a Revolutionary Guard-owned chain of stores in Iran called Qods;
as well as a government-owned Shahrvand store and a chain called Refah. OFAC
officials indicated in the press accounts that such licenses were not in
contradiction with U.S. law or policy, although there might have been less than
full scrutiny of some Iranian end users and that such scrutiny would be increased
in future licensing decisions.
• Export Financing. As far as financing of approved U.S. sales to 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. Title IX of the FY2001 agriculture
appropriations law (P.L. 106-387)24 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. No U.S. Administration has authorized
credit guarantees, to date. In December 2004, the trade ban was further modified
to allow Americans to engage in ordinary publishing activities with entities in
Iran (and Cuba and Sudan).
• Specific Exceptions. Based on a provision of CISADA, the Iran trade regulations
allow for licensing of export on an emergency basis if the President considers
such exports in the national interest. Examples could include equipment to help
Iran contain an oil spill or a disaster at its Bushehr nuclear plant, or to rescue
earthquake victims.
22 http://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf.
23 The information in this bullet is taken from: Becker, Jo. “With U.S. Leave, Companies Skirt Iran Sanctions.” New
York Times, December 24, 2010.
24 The title is called the “Trade Sanctions Reform and Export Enhancement Act of 2000.
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Some relaxations to the trade ban during 1999-2010 account for the fact that U.S. trade with Iran
expanded during that period. In April 2000, the regulations were eased to allow U.S. importation
of Iranian nuts, fruit products (such as pomegranate juice), carpets, and caviar. Trade financing
was permitted for U.S. importers of these goods. CISADA (see above) restored the import ban as
of September 29, 2010, explaining why U.S. imports from Iran since that time have been
negligible (a total of about $2 million for all of 2012). The U.S. imports from Iran consist
primarily of artwork for exhibitions around the United States (and count as imports even though
the works return to Iran after the exhibitions conclude). For all of 2012, U.S. exporters sold about
$250 million in goods to Iran, mostly grain sales. That is up about 10% from 2011.
Non-Application to Refined Oil with Iranian Content
The ban on trade with Iran targets items produced in and originating from Iran itself. Existing
regulations do not ban the importation, from foreign refiners, of gasoline or other energy products
in which Iranian oil is contained and mixed with oil from other producers. The product of a
refinery is considered a product of the country where that refinery is located, and not a product of
Iran, even if the refined product has some Iran-origin crude oil. Much of the Iranian oil that is
mixed and imported into the United States was imported from EU countries, such as the
Netherlands, which has major refineries in Rotterdam, in particular. However, the EU ban on
purchases of Iranian oil has largely mooted this issue, since no EU refineries are importing any
Iranian oil as of July 1, 2012. Only a few other refineries worldwide both continue to receive
Iranian oil and export gasoline to the United States—and U.S. gasoline imports from those
refineries are minor. Some experts say that it would be feasible to exclude Iranian content from
any refinery, if there were a decision to ban U.S. imports of products with any Iranian content.
Application to Humanitarian Donations and Support
Earthquakes and other disasters in Iran sometimes raise questions about how the U.S. trade
regulations on Iran apply to humanitarian relief and donations. Private donations by U.S.
residents to Iranian victims of natural disasters (such as mailed packages of food, toys, clothes,
etc.) are not prohibited. However, financial donations to relief organizations, because such
transfers generally require use of the international banking system, does require a specific OFAC
license. Similarly, NGOs that want to perform relief efforts in Iran require a specific license to do
so. According to OFAC guidance, U.S. non-governmental organizations (NGOs) require a
specific license to operate in Iran, but some of these NGOs say the licensing requirements are too
onerous to make work in Iran practical. For example, there are restrictions on how a U.S. NGO
may expend funds in Iran, for example to hire Iranian nationals.
In some cases, such as the earthquake in Bam in 2003 and the earthquake in northwestern Iran in
August 2012, OFAC has issued blanket temporary general licensing for relief organizations to
perform relief efforts in Iran. The latest temporary license that responded to the August 2012
earthquake in Iran was issued on August 21, 2012, for a period of 45 days (until October 5), and
then extended until November 19, 2012. Under this temporary general license, an NGO can
transfer up to $300,000 for efforts in Iran under general license (no license application needed).
Transferring larger amounts is possible, but would require specific license. In the Bam case, the
blanket licensing was extended several times but expired in March 2004.
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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—or control by—the parent company. For legal and
policy purposes, foreign subsidiaries are considered foreign persons, not U.S. persons, and are
subject to the laws of the country in which the subsidiaries are incorporated. Section 218 of the
Iran Threat Reduction and Syrian Human Rights Act (P.L. 112-158) applies the U.S. trade ban to
foreign subsidiaries if (1) the subsidiary is more than 50% owned by the U.S. parent; (2) the
parent firm holds a majority on the Board of Directors; or (3) the parent firm directs the
operations of the subsidiary. However, many subsidiaries operate entirely autonomously and
might not meet the criteria for sanctionability stipulated in that law.
Financial Sanctions: CISADA and Sanctions on
Dealings with Iran’s Central Bank
U.S. efforts to shut Iran out of the international banking system have gained strength as other
countries have joined the effort. These efforts have been implemented by the Treasury
Department through progressively strong actions discussed below, particularly with legislation in
late 2011 to cut off Iran’s Central Bank from the international financial system.
Early Efforts: Targeted Financial Measures
Since 2006, the Treasury Department has used its own authorities to persuade foreign banks to
cease dealing with Iran by attempting to convince the banks that Iran is using the international
financial system to fund terrorist groups and acquire weapons-related technology. According to a
GAO report of February 2013, the Treasury Department made overtures to 145 banks in 60
countries, including several visits to banks and officials in the UAE, where Iran seeks to route
much of its banking. The program convinced at least 80 foreign banks to cease handling financial
transactions with Iranian banks. Levey left office in April 2011 and was replaced by David
Cohen. As of November 6, 2008, the Treasury Department has 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 all Iranian banks. 25
The Treasury Department also used punishments against banks that have helped Iran violate U.S.
financial restrictions. 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. In June 2012, Dutch bank IMG
agreed to pay a $619 million penalty for moving billions of dollars through the U.S. financial
system, using falsified records, on behalf of Iranian and Cuban clients. Standard Chartered agreed
25 Kessler, Glenn. “U.S. Moves to Isolate Iranian Banks.” Washington Post, September 9, 2006.
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in August 2012 to a $340 million settlement with New York State regulators for allegedly
processing transactions with Iran in contravention of U.S. regulations.26
In late 2009, the U.S. Attorney for the Southern District of New York seized the assets of the Assa
Company, a UK-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.
Banking Provisions of CISADA
The Treasury Department efforts were enhanced substantially by the authorities of Section 104 of
CISADA and U.N. and EU sanctions. The intent of Section 104 is to weaken Iran’s economy by
preventing Iranian traders from obtaining letters of credit to buy or sell goods. The binding
provisions of Section 104 of CISADA require the Secretary of the Treasury to prescribe several
sets of regulations to forbid U.S. banks from opening new “correspondent accounts” or “payable-
through accounts”(or force the cancellation of existing such accounts) for foreign banks that
process “significant transactions” with:
• Any foreign entity that is sanctioned by Executive Order 13224 (terrorism
activities) or 13382 (proliferation activities). These orders are discussed later in
this report. To date, several hundred entities (including individuals), many of
them Iran-based or of Iranian origin, have been sanctioned under 13224 or
13382. A full list of sanctioned entities is at the end of this report.
• The IRGC or any of its agents or affiliates that are sanctioned under any U.S.
executive order.
• Any entity designated under the various U.N. Security Council resolutions
adopted to impose sanctions on Iran.
• Any entity that assists Iran’s Central Bank in efforts to help the IRGC acquire
weapons of mass destruction or support international terrorism.
• Iran’s energy, shipping, and shipbuilding sectors, including with NIOC, NITC,
and IRISL. This provision was added by Section 1244(d) of the FY2013 National
Defense Authorization Act (P.L. 112-239) but it does not specifically amend
CISADA.
Foreign banks that do not have operations in the United States typically establish correspondent
accounts or payable-through accounts with U.S. banks as a means of accessing the U.S. financial
system and financial industry. The provision enables the Treasury Department to determine what
constitutes a “significant” financial transaction.
Implementation of Section 104: Sanctions Imposed
On July 31, 2012, the Administration announced the first sanctions under Section 104 of
CISADA. Sanctioned were: the Bank of Kunlun in China and the Elaf Islamic Bank in Iraq.
However, on May 17, 2013, the Treasury Department lifted sanctions on Elaf Islamic Bank in
26 Jessica Silver-Greenberg. “Regulator Says Bank Helped Iran Hide Deals” New York Times, August 7, 2012.
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Iraq, asserting that the bank had reduced its exposure to the Iranian financial sector and stopped
providing services to an Iranian bank sanctioned by the EU (Export Development Bank of Iran).
Iran Designated a Money-Laundering Jurisdiction
On November 21, 2011, the Administration took further steps to isolate Iran’s banking system by
identifying Iran as a “jurisdiction of primary money laundering concern”27under Section 311 of
the USA Patriot Act (31 U.S.C. 5318A). The Treasury Department determined that Iran’s
financial system, including the Central Bank, constitutes a threat to governments or financial
institutions that do business with these banks. The designation carried no immediate penalty, but
it imposed additional requirements on U.S. banks to ensure against improper Iranian access to the
U.S. financial system.
Executive Order 13599 Impounding Iranian Assets
In part to address congressional sentiment for extensive sanctions on the Central Bank, on
February 5, 2012, the President issued Executive Order 13599, imposing sanctions on the Central
Bank and on other entities determined to be owned or controlled by the Iranian government
(“government of Iran”). The order requires that any U.S.-based assets of the Central Bank of Iran,
or of any Iranian government-controlled entity, be impounded by U.S. financial institutions. U.S.
persons are prohibited from any dealings with such entities. U.S. financial institutions previously
were required to merely refuse such transactions with the Central Bank, or return funds to it.
Several designations have been made under order, as shown in Table 4; on June 21, 2013, OFAC
published the names of 38 entities, mostly including oil, petrochemical, and investment
companies, determined to meet the definition of “government of Iran.”28
Sanctions on Iran’s Central Bank in the FY2012 NDAA
Sanctions against financial transactions with Iran’s Central Bank, enacted in the FY2012 National
Defense Authorization Act (P.L. 112-81), are discussed above under energy-related sanctions.
Terrorism-Related Sanctions
Iran was designated a “state sponsor of terrorism” on January 23, 1984, following the October
1983 bombing of the U.S. Marine barracks in Lebanon perpetrated by elements that later became
Hezbollah. This designation triggers substantial sanctions on any nation so designated.
27 http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx.
28 http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication
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Sanctions Triggered by Terrorism List Designation: Ban on U.S.
Aid, Arms Sales, Dual-Use Exports, and Certain Programs for Iran
The U.S. naming of Iran as a “state sponsor of terrorism,” commonly referred to as Iran’s
placement on the U.S. “terrorism list,” triggers several sanctions. Terrorism list designations are
made under the authority of Section 6(j) of the Export Administration Act of 1979 (P.L. 96-72, as
amended), sanctioning countries determined to have provided repeated support for acts of
international terrorism. The sanctions triggered by Iran’s continued listing are:
• Restrictions on 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). Under other
laws, the designation bans direct U.S. financial assistance to Iran (§620A of the
Foreign Assistance Act, FAA, P.L. 87-195) and arms sales to Iran (§40 of the
Arms Export Control Act, P.L. 95-92, as amended), and requires the United
States to vote to oppose multilateral lending to the designated countries (§327 of
the Anti-Terrorism and Effective Death Penalty Act of 1996, P.L. 104-132).
Waivers are provided under these laws. In addition, successive foreign aid
appropriations laws since the late 1980s have banned direct assistance to Iran
(loans, credits, insurance, Ex-Im Bank credits) without providing for a waiver.
• Under the Anti-Terrorism and Effective Death Penalty Act (§§325 and 326 of
P.L. 104-132), a requirement that the President withhold U.S. foreign assistance
to any country that provides to a terrorism list country foreign assistance or arms.
Waivers are provided. Section 321 of that act also makes it a criminal offense for
U.S. persons to conduct financial transactions with terrorism list governments.
Aside from the terrorism list designation, 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. For example, if an international organization spends 3% of
its budget for programs in Iran, then the United States is required to withhold 3% of its
contribution to that international organization. No waiver is provided for.
No Ban on U.S. Humanitarian Aid
The terrorism list designation, and other U.S. sanctions laws, do not bar disaster aid. The United
States donated $125,000, through relief agencies, to help victims of two earthquakes in Iran
(February and May 1997); $350,000 worth of aid to the victims of a June 22, 2002, earthquake;
and $5.7 million in assistance (out of total governmental pledges of about $32 million) for the
victims of the December 2003 earthquake in Bam, Iran, which killed as many as 40,000 people.
The U.S. military flew in 68,000 kilograms of supplies to Bam.
Executive Order 13224: Sanctioning Terrorism Supporting Entities
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
was issued two weeks after the September 11, 2001 attacks on the United States, under the
authority of the IEEPA, the National Emergencies Act, the U.N. Participation Act of 1945, and
Section 301 of the U.S. Code, and initially targeted Al Qaeda-related entities. In recent years, the
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order has increasingly been applied to Iranian entities. Such Iran-related entities named and
sanctioned under this order are in Table 4.
Implementation: Iran-related entities sanctioned under the order for terrorism-related activities are
listed in the table at the end of this paper. As an example, the Qods Force of the IRGC is
sanctioned.
Proliferation-Related U.S. Sanctions
The state sponsor of terrorism designation, discussed above, bars Iran from U.S. exports of
technology that can be used for weapons of mass destruction programs (WMD). Iran-specific
anti-proliferation laws discussed below,29 and Executive Order 13382 (June 28, 2005), also seek
to prevent Iran from receiving advanced technology from the United States. Some of these laws
and executive measures seek to penalize foreign firms and countries that provide equipment to
Iran’s WMD programs.
Iran-Iraq Arms Nonproliferation Act
The Iran-Iraq Arms Nonproliferation Act (P.L. 102-484) imposes a number of sanctions on
foreign entities that supply Iran with WMD technology or “destabilizing numbers and types of
conventional weapons.” Sanctions imposed on violating entities include a ban, for two years, on
U.S. government procurement from that entity, and a two-year ban on licensing U.S. exports to
that entity. A sanction to ban imports to the United States from the entity is authorized.
If the violator is determined to be a foreign country, sanctions to be imposed are a one-year ban
on U.S. assistance to that country; a one-year requirement that the United States vote against
international lending to it; a one-year suspension of U.S. co-production agreements with the
country; a one-year suspension of technical exchanges with the country in military or dual use
technology; and a one-year ban on sales of U.S. arms to the country. The President is also
authorized to deny the country most-favored-nation trade status; and to impose a ban on U.S.
trade with the country. The 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-North Korea-Syria Nonproliferation Act
The Iran Nonproliferation Act (P.L. 106-178), now called the Iran-North Korea-Syria Non-
Proliferation Act (INKSNA), 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. Sanctions imposed include (1) a prohibition on U.S. exportation
of arms and dual use items to the sanctioned entity; and, under Executive Order 12938 (of
November 14, 1994), a ban on U.S. government procurement and of imports to the United States
from the sanctioned entity. The law also bans U.S. extraordinary payments to the Russian
Aviation and Space Agency in connection with the international space station unless the President
29 Such laws include the Atomic Energy Act of 1954 and the Energy Policy Act of 2005 (P.L. 109-58).
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can certify that the agency or entities under its control had not transferred any WMD or missile
technology to Iran within the year prior.30 (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.)
Implementation: Entities sanctioned under this law are listed in the tables at the end of the paper.
Executive Order 13382
Executive Order 13382 (June 28, 2005) allows the President to block the assets of proliferators of
weapons of mass destruction (WMD) and their supporters under the authority granted by the
International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701 et seq.), the National
Emergencies Act (50 U.S.C. 1601 et seq.), and Section 301 of Title 3, United States Code.
Implementation. The numerous entities sanctioned under the order for dealings with Iran are
listed in the tables at the end of this paper. For example, the IRGC is sanctioned under the order.
Foreign Aid Restrictions for Suppliers of Iran
Successive foreign aid appropriations withheld 60% of any U.S. assistance to the Russian
Federation unless it terminates technical assistance to Iran’s nuclear and ballistic missiles
programs. Because U.S. aid to Russia generally goes directly to programs in Russia and not to the
Russian government, little or no funding has been withheld as a result of the provision.
Promoting Divestment
A recent trend in Congress and in several states has been to require or call for divestment of
shares of firms that have invested in Iran’s energy sector at the levels sanctionable under ISA.31
The intent of doing so is to express the view of Western and other democracies that Iran is an
outcast internationally. A divestment provision was contained in CISADA (P.L. 111-195)—in
particular providing a “safe harbor” for investment managers who sell shares of firms that invest
in Iran’s energy sector.
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 requires
companies, in their reports to the Securities and Exchange Commission, to disclose whether it or
any corporate affiliate has engaged in any sanctionable transactions with Iran under ISA,
CISADA, and other applicable laws.
30 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.
31 For information on the steps taken by individual states, see National Conference of State Legislatures. State
Divestment Legislation.
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Iran Sanctions
U.S. Sanctions Intended to Support Democratic
Change in Iran or Reduce Its Regional Influence
A trend in U.S. policy and legislation since the June 12, 2009 election-related uprising in Iran has
been to support the ability of the domestic opposition in Iran to communicate, to reduce the
regime’s ability to monitor or censor Internet communications, and to sanction Iranian officials
that commit human rights abuses. Proposals to sanction the IRGC represent one facet of that trend
because the IRGC is not only involved in Iran’s WMD programs but it is also the key instrument
through which the regime has suppressed the pro-democracy movement. Earlier, the Iran
Freedom Support Act (IFSA, P.L. 109-293), authorized “sums as may be necessary” to assist
Iranians who are “dedicated” to “democratic values … and the adoption of a democratic form of
government in Iran”; and “advocates the adherence by Iran to nonproliferation regimes.”
Expanding Internet and Communications Freedoms
Some laws and Administration action focus on expanding Internet freedom in Iran or preventing
the Iranian government from using the Internet to identify opponents. Subtitle D of the FY2010
Defense Authorization Act (P.L. 111-84), called the “VOICE” (Victims of Iranian Censorship) Act
contained several provisions to increase U.S. broadcasting to Iran and to identify (in a report to be
submitted 180 days after enactment) companies that are selling Iran technology equipment that it
can use to suppress or monitor the Internet usage of Iranians. The Act authorized funds to
document Iranian human rights abuses since the June 2009 presidential election. Section 1241 of
the Act also required an Administration report by January 31, 2010 on U.S. enforcement of
sanctions against Iran, and the effect of those sanctions on Iran.
CISADA Sanctions Firms that Sell Censorship Gear to the Regime
In the 111th Congress, the “Reduce Iranian Cyber-Suppression Act,” (S. 1475 and H.R. 3284)
was incorporated into CISADA as Section 106. The section prohibits U.S. government contracts
with foreign companies that sell technology that Iran could use to monitor or control Iranian
usage of the Internet. The provisions were directed, in part, against firms, including a joint
venture between Nokia (Finland) and Siemens (Germany), reportedly sold Internet monitoring
and censorship technology to Iran in 2008.32 Section 103(b)(2) of CISADA exempts from the
U.S. export ban on Iran equipment to help Iranians communicate and use the Internet.
Implementation
On March 8, 2010, even before CISADA was enacted, OFAC amended the Iran Transactions
Regulations that implement the U.S.-Iran trade ban to provide for a general license for providing
to Iranians free mass market software in order to facilitate Internet communications. The ruling
incorporated major features of a bill in the 111th Congress, the “Iran Digital Empowerment Act”
(H.R. 4301). The OFAC determination required a waiver of the provision of the Iran-Iraq Arms
Nonproliferation Act (Section 1606 waiver provision) discussed above.
32 Rhoads, Christopher. “Iran’s Web Spying Aided by Western Technology.” Wall Street Journal, June 22, 2009.
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Iran Sanctions
After CISADA was enacted, on March 20, 2012 the Administration announced a licensing policy
to promote Internet freedom in Iran. The Treasury Department announced that several additional
types of software and information technology products would be able to be exported to Iran under
general license, including personal communications, personal data storage, browsers, plug-ins,
document readers, and free mobile applications related to personal communications. The exports
could proceed provided the products were available at no cost to the user.33 On May 30, 2013, the
Treasury Department further amended its policies to allow for the sale, on a cash basis (no U.S.
financing), to Iran of equipment (ex. cellphones, laptops, satellite Internet, website hosting, and
related products and services) that Iranians can use to communicate.
Executive Order 13606
On April 23, 2012, President Obama issued an executive order (13606) directly addressing the
issue by sanctioning persons who commit “Grave Human Rights Abuses by the Governments of
Iran and Syria Via Information Technology (GHRAVITY).” The order blocks the U.S.-based
property and essentially bars U.S. entry and bans any U.S. trade with persons and entities listed in
an Annex and persons or entities subsequently determined to be:
• Operating any technology that allows the Iranian (or Syrian) government to
disrupt, monitor, or track computer usage by citizens of those countries or
assisting the two governments in such disruptions or monitoring.
• Selling to Iran or Syria any technology that enables those governments to carry
out such disruptions or monitoring.
Implementation
The order named as violators and imposed sanctions on Iran’s Ministry of Intelligence and
Security (MOIS); the Islamic Revolutionary Guard Corps (IRGC); the Law Enforcement Forces
(LEF); and Iranian Internet service provider Datak Telecom.34 Several of these entities had
previously been sanctioned under other executive orders discussed above.
Iran Threat Reduction Act Provisions and Executive Order 13628
Section 403 of the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) codifies
Executive Order 13606 by imposing those same sanctions (visa ban, U.S.-based property
blocked) on persons/firms determined to have engaged in censorship in Iran, limited access to
media, or—for example a foreign satellite service provider—supported Iranian government
jamming or frequency manipulation.
Executive Order 13628 of October 9, 2012, implements the P.L. 112-158 provision by blocking
the property of persons/firms determined to have committed the censorship, limitation of free
expression, or assistance in jamming stipulated by P.L. 112-158. The order also specifies the
authorities of the Department of State and the Department of the Treasury to impose sanctions.
33 Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran,.
March 20, 2012.
34 Department of Treasury Documents. Fact Sheet: New Executive Order Targeting Human Rights Abuses Via
Information Technology. April 23, 2012.
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Implementation
Various entities have been designated under Executive Order 13628 on November 8, 2012,35 and
since, as shown in the tables at the end of the paper.
Measures to Sanction Human Rights Abuses and
Promote the Opposition
Another part of the effort to help Iran’s opposition has been legislation to sanction regime
officials involved in suppressing the domestic opposition in Iran.
Section 105 of CISADA and Executive Order 13553
A Senate bill, S. 3022, the Iran Human Rights Sanctions Act, was incorporated into CISADA as
Section 105. The section bans travel and freezing assets of those Iranians determined to be human
rights abusers. On September 29, 2010, pursuant to Section 105, President Obama signed an
Executive Order (13553) providing for the CISADA sanctions against Iranians determined to be
responsible for or complicit in post-2009 Iran election human rights abuses.
Provisions Added by P.L. 112-158: Sanctioning Sales of Anti-Riot Equipment
Section 402 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L. 112-158)
amended Section 105 by adding provisions that sanctions (visa ban, U.S. property blocked) for
any person or company that sells the Iranian government goods or technologies that it can use to
commit human rights abuses against its people. Such goods include firearms, rubber bullets,
police batons, chemical or pepper sprays, stun grenades, tear gas, water cannons, and like goods.
Under that section, ISA sanctions are additionally to be imposed on any person determined to be
selling such equipment to the IRGC.
Implementation
When Executive Order 13553 was issued, an initial group of eight Iranian officials was penalized,
including Mohammad Ali Jafari, the commander-in-chief of the IRGC and other officials who
were in key security or judicial positions at the time of the June 2009 election. Additional
officials and security force entities have been sanctioned since, as shown in Table 4. Under State
Department interpretations of the Executive Order, if an entity is designated, all members of that
entity are ineligible for visas to enter the United States.36 Similar sanctions against many of these
same officials—as well as several others—have been imposed by the European Union.
35 http://www.state.gov/r/pa/prs/ps/2012/11/200338.htm.
36 U.S. Department of the Treasury, Office of Public Affairs. Treasury Sanctions Iranian Security Forces for Human
Rights Abuses, June 9, 2011.
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Iran Sanctions
FY2013 National Defense Authorization Act: Sanctioning Iranian Broadcasting
and Profiteers
P.L. 112-239, the FY2013 National Defense Authorization Act, has several human rights
provisions. Section 1248 mandates inclusion of the Islamic Republic of Iran Broadcasting (IRIB),
the state broadcasting umbrella group, as a human rights abuser, subjecting IRIB to sanctions
under Section 105 of CISADA.
Section 1249 amends CISADA by making sanctionable under Section 105 of that law any person
determined to have engaged in corruption or to have diverted or misappropriated humanitarian
goods or funds for such goods for the Iranian people. The measure is intended to sanction Iranian
profiteers who are, for example, using official connections to corner the market for vital
medicines.
Separate Visa Ban
On July 8, 2011, in conjunction with Britain, the United States imposed visa restrictions on more
than 50 Iranian officials for participating in political repression in Iran. The State Department
announcement stated that the names of those subject to the ban would not be released because
visa records are confidential. The action was taken under the authorities of Section 212(a)(3)(C)
of the Immigration and Nationality Act, which renders inadmissible to the United States a foreign
person whose activities could have serious consequences for the United States. On May 30, 2013,
the State Department announced it had imposed visa restrictions on an additional 60 Iranian
officials and other individuals who participated in human rights abuses related to political
repression in Iran.37
There are certain exemptions in the case of high level Iranian visits to attend the United Nations.
Under the U.N. Participation Act (P.L. 79-264) that provides for U.S. participation in the United
Nations and as host nation of U.N. headquarters in New York, visas are routinely issued to heads
of state and members of their entourage attending these meetings. In September 2012, however,
the State Department refused visas for 20 members of Iranian President Ahmadinejad’s traveling
party on the grounds of past involvement in terrorism or human rights abuses. Still, in line with
U.S. obligations under the act, Ahmadinejad was allowed to fly to the United States on Iran Air,
even though Iran Air is a U.S.-sanctioned entity, and his plane reportedly was allowed to stay at
Andrews Air Force base for the duration of his visit.
Sanctioning Iranian Involvement in the Region
Some sanctions have been imposed to try to curtail Iran’s influence in the region.
37 http://www.state.gov/r/pa/prs/ps/2013/05/210102.htm
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Executive Order 13438
On July 7, 2007, President Bush issued Executive Order 13438. The order sanctions Iranian
persons who are posing a threat to Iraqi stability, presumably by providing arms or funds to Shiite
militias there.
Implementation. As shown in the tables at the end of this paper, some persons sanctioned under
the order have been Qods Force officers, some have been Iraqi Shiite militia-linked figures, and
some entities have been sanctioned as well.
Executive Order 13572
Executive Order 13572, issued on April 29, 2011, targets those responsible for human rights
abuses and repression of the Syrian people.
Implementation. The Qods Force and a number of Iranian Qods Force officers, including its
overall commander Qasem Soleimani, have been sanctioned under this order and related
executive orders for allegedly helped Syria commit abuses against protesters and repress its
domestic opposition. In September 2011, the EU sanctioned the Qods Force for its purported
assistance to Syria’s repression.
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. A
reported $400 million in proceeds from the resale of that equipment was placed in a DOD FMS
account and may remain in this escrow account, although DoD has not provided CRS with a
precise balance. Additionally, according to the Treasury Department “Terrorist Assets report” for
2010, about $48 million in Iranian diplomatic property and accounts remains blocked—this
amount includes proceeds from rents received on the former Iranian embassy in Washington, DC,
and 10 other properties in several states, along with 6 related bank accounts.38
Other past disputes include the mistaken U.S. shoot-down on July 3, 1988, of an Iranian Airbus
passenger jet (Iran Air flight 655), for which the United States paid Iran $61.8 million in
compensation ($300,000 per wage earning victim, $150,000 per nonwage earner) for the 248
Iranians killed. The United States did not compensate Iran for the airplane itself, although
officials involved in the negotiations told CRS in November 2012 that the United States later
provided a substitute, used aircraft to Iran.
In another case, there are reportedly about $2 billion in securities-related assets held by Citigroup,
deposited there by Luxembourg-based Clearstream Banking SA, a payments-clearing
organization. The assets reputedly belong to Iran and have been frozen and held against terrorism
38 http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf.
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Iran Sanctions
judgments against Iran, although it is not clear whether such assets fall under existing authorities
to impound Iranian assets to pay terrorism or other judgments against Iran. Iran’s Central Bank
reportedly plans to file a motion in U.S. court to unfreeze the assets. Pending legislation in the
112th Congress, discussed below, would consider those assets to be Iranian assets subject to
seizure and use to pay judgments against Iran in various terrorism-related cases. In a recent
judgement, on July 6, 2012, a U.S. federal judge ordered Iran to pay $813 million to the families
of the 241 U.S. soldiers killed in the October 23, 1983, bombing of the U.S. Marine barracks in
Beirut. That brings to $8.8 billion the total amount awarded, in eight judgments against Iran, for
that bombing, which was perpetrated by Islamist elements that formed Lebanese Hezbollah.
U.N. Sanctions
U.N. sanctions apply to all U.N. member states, and therefore have tended, in other cases, to be
more effective than unilateral sanctions. There is increasing convergence among all these varying
sets of sanctions. 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. Resolution 1929 was adopted on June 9, 2010, by a vote of
12-2 (Turkey and Brazil), with one abstention (Lebanon). (Iranian entities and persons under U.N.
sanctions are in Table 4.) A summary of the major provisions of the all four of these resolutions is
contained in the table below.
Table 2. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program
(1737, 1747, 1803, and 1929)
Freeze the assets of Iranian persons and entities named in annexes to the Resolutions, and require that countries ban
the travel of named Iranians. (all four resolutions collectively)
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 (1747)
Prohibit Iran from investing abroad in uranium mining, related nuclear technologies or nuclear capable ballistic missile
technology, and prohibits Iran from launching ballistic missiles (including on its territory). (1929)
Require Iran to suspend uranium enrichment, and to refrain from any development of ballistic missiles that are
nuclear capable (1929)
Mandates that countries not export major combat systems to Iran, but does not bar sales of missiles that are not on
the U.N. Registry of Conventional Arms. (1929)
Calls for “vigilance” (voluntary restraint) with respect to all Iranian banks, particularly Bank Melli and Bank Saderat.
Calls for vigilance on international lending to Iran and providing trade credits and other financing (1929).
Cal s on countries to inspect cargoes carried by Iran Air Cargo and Islamic Republic of Iran Shipping Lines—or by any
ships in national or international waters—if there are indications they carry cargo banned for carriage to Iran.
Searches in international waters would require concurrence of the country where the ship is registered. (1929)
A Sanctions Committee, composed of the 15 members of the Security Council, monitors implementation of all Iran
sanctions and collects and disseminates information on Iranian violations and other entities involved in banned
activities. A “panel of experts” is empowered by 1929 to assist the U.N. sanctions committee in implementing the
Resolution and previous Iran resolutions, and to suggest ways of more effective implementation.
Source: Text of U.N. Security Council resolutions 1737, 1747, 1803, and 1929. http://www.un.org. More
information on specific provisions of each of these resolutions and the nuclear negotiations with Iran is in CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
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International Implementation and Compliance39
Since 2010, converging international views on Iran have produced an unprecedented degree of
global cooperation in pressuring Iran with sanctions. Increasingly, Iran’s neighbors—always
reluctant to antagonize Iran—are joining the effort. Some countries have joined the sanctions
regime not necessarily out of belief in sanctions’ efficacy but rather as a means of perhaps
heading off unwanted military action by the United States or Israel against Iran’s nuclear
facilities. A comparison between U.S., U.N., and EU sanctions against Iran is contained in Table
1 below. To increase international compliance with all applicable sanctions, on May 1, 2012,
President Obama issued Executive Order 13608, giving the Treasury Department the ability to
identify and sanction (cutting them off from the U.S. market) foreign persons who help Iran or
Syria evade U.S. and multilateral sanctions.
The United States and its partners have also sought to stop Iran from using traditional trading
patterns common to its neighborhood to evade sanctions. On January 10, 2013, the Treasury
Department’s Office of Foreign Assets Control issued an Advisory to highlight Iran’s use of
hawalas (traditional informal banking and money exchanges) in the Middle East and South Asia
region to circumvent the sanctions against financial transactions with Iran. U.S. and other banks
sometimes process transactions with the hawalas that involve Iranian entities because the
hawalas are able to conceal the Iranian involvement. Press reports indicate that Iran has also
attempted to set up front companies in Europe, UAE, and elsewhere to try to buy banned
technology or sell more oil. Iran’s use of these and other evasion methods are discussed further in
the sections below.
Europe
U.S. and European approaches have converged on Iran since 2002, when the nuclear issue came
to the fore. Previously, European and other countries had appeared less concerned than is the
United States about Iran’s support for militant movements in the Middle East or Iran’s strategic
power in the Persian Gulf and were reluctant to sanction Iran. Since the passage of Resolution
1929 in June 2010, European Union (EU) sanctions on Iran have become nearly as extensive as
those of the United States. On November 21, 2011, Britain and Canada announced they would no
longer do business with Iran’s financial institutions, including Iran’s Central Bank. Eight days
later, apparently in response, pro-government students backed by regime security forces overran
the British Embassy in Tehran. That attack prompted Britain to give all Iranian diplomats 48
hours to leave Britain. Canada closed its embassy in Tehran in September 2012. Still, some EU
countries criticize the seemingly constant imposition of new U.S. sanctions against Iran as a U.S.
attempt to impose a ban on all civilian trade with Iran that has not been agreed formally between
U.S. and European officials.
Oil Embargo. On January 23, 2012, the EU decided to:
39 Note: CRS has no mandate or capability to “judge” compliance of any country with U.S., multilateral, or
international sanctions against Iran. This section is intended to analyze some major trends in third country cooperation
with U.S. policy toward Iran. These assessments bear in mind that there are many other issues and considerations in
U.S. relations with the countries discussed here.
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• Refrain from new contracts to purchase Iranian oil and to wind down existing
contracts by July 1, 2012, after which all EU purchases of Iranian oil were to
cease. Collectively, the EU bought about 600,000 barrels per day of Iranian oil in
2011, about a quarter of Iran’s total oil exports. The embargo was imposed
despite the fact that the most vulnerable EU economies Spain, Italy, and Greece
were each buying more than 10% of their oil from Iran. Britain and Germany
only got about 1% of their oil from Iran, and France about 4%.
• Ban insurance for shipping oil or petrochemicals from Iran. Even before this took
full effect on July 1, 2012, some EU-based insurers closed their offices in Iran.
• Stop all trade with Iran in gold, precious metals, diamonds, and petrochemical
products.
• Freeze the assets of Iran’s Central Bank, although transactions would still be
permitted for approved legitimate trade.
• Freeze the assets of several Iranian firms involved in shipping arms to Syria or
which support shipping by IRISL, and cease doing business with port operator
Tidewater (see above).
As a consequence of the EU decision, as noted above, ten EU countries were granted and have
maintained exemptions from sanctions under (P.L. 112-81) discussed above.
SWIFT Cutoff. Section 220 of P.L. 112-158 requires reports on electronic payments systems such
as the Brussels-based SWIFT (Society of Worldwide Interbank Financial Telecommunications)
that might be doing business with Iran, but does not mandate sanctions against such systems. The
EU reacted to that legislation by requesting that SWIFT cut off sanctioned Iranian banks from the
network. SWIFT acceded to that request on March 17, 2012. As of July 2013, there are 14 Iranian
banks blacklisted by the EU and these banks cannot conduct transactions over the SWIFT system.
The United States has sanctioned about 50 Iranian banks, but those not sanctioned by the EU
apparently are still able to access the SWIFT system.40 And, some experts report that Iranian
banks are still able to conduct electronic transactions with the European Central Bank via an
electronic payments system called “Target II.”
Additional EU Sanctions Adopted October 15, 2012. In response to a lack of progress in nuclear
negotiations with Iran, the EU adopted the following additional measures:
• A ban on transactions between European and all Iranian banks, unless
specifically authorized.
• A ban on provision of short-term export credits, guarantees, and insurance.
• A ban on imports of natural gas from Iran. Although Iran gas export volumes
went mainly to Bulgaria and Greece, via Turkey, this sanction was intended to
stall Iran’s attempt to expand gas exports to Europe.
• A ban on exports of graphite, semi-finished metals such as aluminum and steel,
and industrial software.
40 Avi Jorish. “Despite Sanctions, Iran’s Money Flow Continues.” Wall Street Journal, June 25, 2013.
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• A ban on providing shipbuilding technology, oil storage capabilities, and flagging
or classification services for Iranian tankers and cargo vessels.
In late April 2013, the British government denied permission to Royal Dutch Shell to settle a $2.3
billion payment to Iran for past oil purchases by funding shipments to Iran of an equivalent value
of foodstuffs and medicines. It was not clear on what basis the British government denied the
exchange, because the oil was purchased well before the EU oil import ban was imposed, and
food and medical sales to Iran are permissible under U.N. and EU sanctions provisions.
Despite the implementation of sanctions, Europe offers some opportunity for illicit Iranian
commerce. The Islamic Republic of Iran Shipping Lines (IRISL) has reportedly sought to use the
port facilities of Malta and Hamburg, Germany in support of proliferation activities. The U.N.
panel of experts reportedly has determined that sales of alumina to Iran by Swiss commodities
firms Glencore Xstrata and Tafigura could have violated U.N. sanctions on Iran. The panel of
experts report also purportedly listed other ongoing potential sanctions violations including
export of machine tools to Iran by Spain and satellite equipment sales to Iran by Germany.41
The harmonization of U.S. and European sanctions on Iran differs from early periods. During
2002-2005, there were active negotiations between the European Union and Iran on a “Trade and
Cooperation Agreement” (TCA). Such an agreement would have lowered the tariffs or increased
quotas for Iranian exports to the EU countries.42 However, negotiations were discontinued after
the Iran, in late 2005, abrogated an agreement to suspend uranium enrichment. Similarly, there is
insufficient international support to grant Iran membership in the World Trade Organization
(WTO) until there is major progress on the nuclear issue. Iran first attempted to apply to join the
WTO in July 1996, but U.S. Administrations blocked Iran from applying until May 2005, when
the United States dropped its objections and Iran began accession talks.
During the 1990s, EU countries maintained a policy of “critical dialogue” with Iran, and the EU
and Japan refused to join the 1995 U.S. trade and investment ban on Iran. The European dialogue
with Iran was suspended in April 1997 in response to the German terrorism trial (“Mykonos
trial”) that found high-level Iranian involvement in killing Iranian dissidents in Germany, but
resumed in May 1998 during Mohammad Khatemi’s presidency of Iran. In the 1990s, European
and Japanese creditors—over U.S. objections—rescheduled about $16 billion in Iranian debt.
These countries (governments and private creditors) rescheduled the debt bilaterally, in spite of
Paris Club rules that call for multilateral rescheduling. In July 2002, Iran tapped international
capital markets for the first time since the Islamic revolution, selling $500 million in bonds to
European banks.
Japan and Korean Peninsula
Japan and South Korea have joined the international coalition that is pressuring Iran, at least in
part to avoid friction with their close ally, the United States. In September 2010, Japan and South
Korea announced trade, banking, and energy Iran sanctions similar to those of the EU. On
41 Louis Charbonneau and Michelle Nichols. “Exclusive: Glencore, Trafigura Deals with Iran May Have Skirted
Sanctions—U.N.” Reuters, May 22, 2013.
42 During the active period of talks, which began in December 2002, there were working groups focused not only on the
TCA terms and proliferation issues but also on Iran’s human rights record, Iran’s efforts to derail the Middle East peace
process, Iranian-sponsored terrorism, counter-narcotics, refugees, migration issues, and the Iranian opposition PMOI.
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December 16, 2011, South Korea banned sales to Iran of energy sector equipment. Both countries
were concerned about the effects of the EU ban on insuring ships carrying Iranian oil, but they
worked around that by setting up new insurance mechanisms. As a result, both continue to import
Iranian oil. However, their oil imports from Iran are at levels far below those of 2011 and, as a
result, both have obtained and maintained sanctions exemptions under P.L. 112-81. In late June
2013, it was reported that it will cut imports from Iran a further 15% over the coming six months
in order to maintain that exemption, which could bring South Korea’s imports to about 125,000
bpd. The main South Korean refiners that import Iranian crude are SK Energy and Hyundai
Oilbank.
The requirement that oil buyers pay Iran in local accounts to avoid U.S. sanctions—a requirement
that took effect on February 6, 2013—is not likely to affect Japan and South Korea’s trading
patterns with Iran significantly. South Korea pays Iran’s Central Bank through local currency
accounts at its Industrial Bank of Korea and Woori Bank, and its main exports to Iran have been
iron and steel, as well as consumer electronics and appliances made by companies such as
Samsung and LG. Japan exports to Iran significant amounts of chemical and rubber products, as
well as consumer electronics. These exports are likely to continue at or close to prior levels using
local currency accounts.
North Korea
South Korea is an ally of the United States. North Korea is an ally of Iran and, like Iran, is a
subject of international sanctions. North Korea generally does not comply with international
sanctions against Iran, and reportedly cooperates with Iran on a wide range of WMD-related
ventures. Press reports in April 2013 said that Iran may begin supplying oil to North Korea,
although financial terms are not known. Nor is it known if deliveries have begun.
India
India is implementing U.N. sanctions against Iran but its cultural, economic, and historic ties—as
well as its strategic need for access to Afghanistan—have made the Indian government hesitant to
adopt all aspects of U.S. and EU sanctions on Iran. However, India’s private sector increasingly
views Iran as a “controversial market”—a term used by Japan and South Korea to describe
markets that entail significant reputational and financial risks and should be avoided.
India began reducing economic ties to Iran in 2010 when its central bank ceased using a Tehran-
based regional body, the Asian Clearing Union, to handle transactions with Iran. India and Iran
agreed to the alternative use of an Iranian bank, Europaisch-Iranische Handelsbank (EIH), to
clear the payments, but the two countries turned to Turkey’s Halkbank instead in May 2011 when
the EU blacklisted EIH. The U.S. law sanctioning dealings with Iran’s Central Bank (Section
1245 of P.L. 112-81) led Halkbank in January 2012 to withdraw from the arrangement, and for
the two countries to begin settling about half of their financial transactions in rupees, India’s local
currency, which is not convertible. Rupee accounts facilitate the settlement of payments for oil in
the form of barter trade, such as sales to Iran by Indian companies of wheat, pharmaceuticals,
rice, sugar, soybeans, and other products. Still, there is a large trade imbalance, because the oil
Iran exports to India is worth far more than the value of the exports that India sells to Iran.
In part because of the trade imbalance, but also in an effort to cooperate with U.S. policy, India
also has reduced its dependence on and imports of Iranian oil substantially. Since 2008, India has
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reduced its imports of Iranian oil by volume and as a percentage of India’s total oil imports, to the
point where, by the end of 2012, Iran was only supplying about 10% of India’s oil imports, down
from over 16% in 2008. That percentage has declined further to about 6% as of mid-2013, despite
the requirement of significant investment to switch over refineries that handle Iranian crude.
India’s cut of Iranian imports of about 27% over a one year period was at least as steep as the cuts
pledged by Indian officials. India has received and maintained an exemption from P.L. 112-81 in
June 11, 2012 and December 7, 2012. Based on these reductions, Under Secretary of State for
Political Affairs Wendy Sherman said on May 24, 3013, during a visit to India, that India had
made “tremendous progress” reducing imports of oil from Iran.” India’s P.L. 112-81 exemption
was renewed on June 5, 2013. During a visit to India on June 24, 2013, Secretary of State John
Kerry praised India’s Iranian oil import cuts as an “important step” in bringing pressure on Iran
over its nuclear program.
India also has dissociated itself from an Iran-Pakistan gas pipeline project discussed below. India
pulled out of the project in 2009 over concerns about the security of the pipeline, the location at
which the gas would be transferred to India, pricing of the gas, and tariffs. During economic talks
in early July 2010, Iranian and Indian officials reportedly raised the issue of constructing an
underwater natural gas pipeline, which would avoid going through Pakistani territory. However,
such a route would be much more expensive to construct than would be an overland route. Indian
officials add that some of their major companies, including the Tata conglomerate, have ended or
reduced their business with Iran.
Pakistan
A test of Pakistan’s compliance with sanctions is a pipeline project intended to carry Iranian gas
to Pakistan. Agreement on the $7 billion project was finalized on June 12, 2010 and construction
was formally inaugurated formally in a ceremony attended by the presidents of both countries on
March 11, 2013. With an intended completion date of mid-2014, Iran reportedly has already
completed the pipeline on its side of the border. Potentially complicating the construction on the
Pakistani side of the border is that Pakistan has had difficulty arranging about $1 billion in
financing for the project. The day of the ceremony, the State Department expressed serious
concerns about the project, building on prior comments during the Bush and Obama
Administrations that the project might be sanctioned under the Iran Sanctions Act.
China and Russia
The position of Russia and China, two permanent members of the U.N. Security Council, is that
they will impose only those sanctions specifically required by U.N. Security Council resolutions.
Russia is an oil exporter itself and a need to preserve oil imports from Iran is therefore not a
factor in its Iran policy calculations. However, Russia has earned hard currency from large
projects in Iran, such as the Bushehr nuclear reactor, and it also seeks not to provoke Iran into
supporting Islamist movements in the Muslim regions of Russia and the Central Asian states.
China has been of concern to U.S. officials because it is Iran’s largest oil customer, and therefore
its cooperation is pivotal to U.S. strategy of reducing Iran’s revenue from oil sales. U.S.-China
negotiations in mid-2012 led to an agreement for China to cut Iranian oil purchases by about 18%
from its 2011 average of about 550,000 barrels per day to about 450,000 barrels per day. U.S.
officials testified (Undersecretary of State Wendy Sherman and Undersecretary of the Treasury
David Cohen before the House Foreign Affairs Committee and Senate Foreign Relations
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Iran Sanctions
Committee) on May 15, 2013, that China had cut its buys of oil from Iran by 21% from 2011
2012 (to about 435,000 barrels per day). They added, because China is the largest buyer of
Iranian oil, percentage cuts by China have a large impact in reducing Iran’s oil sales by volume.
China received a P.L. 112-81 sanctions exemption on June 28, 2012, which was renewed on
December 7, 2012 and again on June 5, 2013. Administration officials have said they also do not
see a large move by Chinese firms to “backfill” Iran energy projects that Western majors have
abandoned; China has put most of its investments in Iran’s energy sector “on hold.”
Well before the February 6, 2013, U.S. requirement that Iran be paid in local accounts, China had
begun to settle its trade balance with Iran with additional Chinese exports of goods. As an
example, two Chinese companies, Geelran and Chery, reportedly are increasing their production
of cars in Iran, although Iranian buyers consider them inferior to European or other Asian brands.
The February 6, 2013, requirement could mean that Iran will need to purchase even more of its
imports from China.
A more significant concern is that China may be refusing or failing to prevent Iran from acquiring
weapons and WMD technology. Then Secretary of State Clinton singled out China on January 19,
2011, as not enforcing all aspects of international sanctions that bar sales of most nuclear-related
equipment to Iran. A press report of February 14, 2013, (Washington Post), stated that Iran had
attempted to order sophisticated material for centrifuges from China, although it is not clear that
the attempted buy was completed.
Turkey/South Caucasus
Turkey is a significant buyer of Iranian oil; in 2011, it averaged nearly 200,000 bpd. In March
2012, Turkey said it would cut its buys from Iran by 10%-20% and Turkey received a P.L. 112-81
sanctions exemption on June 11, 2012, renewed on December 7, 2012 and again on June 5, 2013.
Some press reports have accused Turkey’s Halkbank of settling much of Turkey’s payments to
Iran for oil or natural gas with shipments to Iran of gold. That form of payment by Turkey is
sanctionable under Executive Order 13622 (see above) and will also be sanctionable as of July 1,
2013, under P.L. 112-239. No U.S. sanctions have been imposed on any Turkish firms under
Executive Order 135622 and U.S. officials testified on May 15, 2013, that Turkey is not paying
for its gas imports from Iran with gold. Undersecretary of the Treasury Cohen testified that there
is gold going from Turkey to Iran but it is mostly accounted for by Iranian private citizens’
purchases of gold in Turkey to insulate themselves from the declining value of the rial.
Turkey buys natural gas from Iran via a pipeline built in 1997. Turkey is Iran’s main gas customer
because Iran has not developed a liquefied natural gas (LNG) export capability. During the
pipeline’s construction, the State Department testified that Turkey would be importing gas
originating in Turkmenistan, not Iran, under a swap arrangement, and the State Department did
not determine that the project was a violation of ISA. In 2001, direct Iranian gas exports to
Turkey through the line began, but still no ISA sanctions were imposed. Many experts assert that
the State Department views the line as crucial to the energy security of Turkey, a key U.S. ally.
Prior to the EU decision on October 15, 2012, to bar sales of Iranian gas to Europe, Turkey was
also the main conduit for Iranian gas exports to Europe (primarily Bulgaria and Greece). Turkey
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Iran Sanctions
said in December 2012 that it is constructing a second Iran-Turkey gas pipeline (the work is being
performed by Som Petrol). No determination of sanctions violation has been announced.43
Turkey has, on several occasions, blocked or impounded Iranian arms and other contraband
shipments bound for Syria or Lebanese Hezbollah. This was discussed in the June 12, 2012,
report on sanctions implementation by the U.N. panel of experts chartered by Resolution 1929.
Caucasus: Azerbaijan, Armenia, and Georgia
The Clinton and George W. Bush Administrations used the threat of ISA sanctions to deter oil
pipeline routes involving Iran and thereby successfully promoted an alternate route from
Azerbaijan (Baku) to Turkey (Ceyhan). The route became operational in 2005. Section 6 of
Executive Order 13622 exempts from sanctions under Section 5 of the order any pipelines that
bring gas from Azerbaijan to Europe and Turkey.
In May 2009, Iran and Armenia inaugurated a natural gas pipeline between the two, built by
Gazprom of Russia. Armenia is Iran’s other main gas customer, aside from Turkey. No
determination of sanctionability has been announced. Armenia has said its banking controls are
strong and that Iran is unable to process transactions illicitly through Armenia’s banks.44
Some press reports say that Iran might be using another Caucasian state, Georgia, to circumvent
international sanctions. IRGC companies reportedly have established 150 front companies in
Georgia for the purpose of importing dual-use items, but also to boost Iran’s non-oil exports with
sales to Georgia of Iranian products such as roofing materials and jams. Iranian firms reportedly
are investing in Georgian companies and buying Georgian land.45
Persian Gulf and Iraq
The Persian Gulf countries are oil exporters and close allies of the United States. Their
cooperation with Iran sanctions is judged largely by the degree to which they are compensating
for reductions in other countries’ purchases of oil from Iran. Those Gulf states with spare
capacity, particularly Saudi Arabia, have been willing to fully supply the market, which has
helped keep world prices steady despite the drop in Iranian oil exports. The Gulf states also have
generally sought to prevent the re-exportation to Iran of U.S. technology, and curtailed banking
relationships with Iran. On the other hand, in order not to antagonize Iran, some oil refiners in the
Gulf are selling Iran gasoline, Gulf-based shipping companies such as United Arab Shipping
Company are paying port loading fees to such IRGC-controlled port operators as Tidewater,46 and
the Gulf countries generally allow sanctioned Iranian banks to continue operating in the Gulf
states. CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman,
discusses the relations between Iran and other Middle Eastern states.
The UAE is particularly closely watched by U.S. officials because of its historic extensive
business dealings with Iran. U.S. officials offered substantial praise for the decision announced
43 Information provided to the author by the New York State government. July 2012.
44 Louis Charbonneau. “Iran Looks to Armenia to Skirt Banking Sanctions.” Reuters, August 21, 2012.
45 “As Sanctions Bite, Iran Invests Big in Georgia.” Wall Street Journal, June 20, 2013.
46 Mark Wallace. “Closing U.S. Ports to Iran-Tainted Shipping. Op-ed. Wall Street Journal, March 15, 2013.
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March 1, 2012, by Dubai-based Noor Islamic Bank to end transactions with Iran. Iran reportedly
used the bank to process a substantial portion of its oil payments. UAE representatives say that
Iranian banks still operating in UAE conduct transactions only in cash, rendering them inactive.
On the other hand, some Iranian oil reportedly is imported by Emirates National Oil Company
and refined into jet fuel for use at UAE’s expanding airports. The UAE does not have an
exemption from U.S. sanctions, under P.L. 112-81, to purchase Iranian crude oil.
Iran and Kuwait have held talks on the construction of a 350-mile pipeline that would bring
Iranian gas to Kuwait. The two sides have apparently reached agreement on volumes (8.5 million
cubic meters of gas would go to Kuwait each day) but not on price.47 There are also discussions
reported between Iran and Iraq on constructing pipelines to facilitate oil and gas swaps between
the two. No firm movement on any of these projects is evident.
Iran has sought to use its close relations with Iraq to evade banking and energy sanctions. As
noted above, the United States has sanctioned an Iraqi bank that has cooperated with Iran’s
efforts, and then lifted those sanctions when the bank reduced that business with Iran. The United
States has pressed Iraq, with limited success, to inspect flights from Iran to Syria to enforce
cooperation with U.N. sanctions that ban Iran from exporting arms. Iraq presented the United
States with a more significant Iran sanctions-related dilemma on July 23, 2013 when it signed an
agreement with Iran to buy 850 million cubic feet per day of natural gas through a joint pipeline
that reportedly is nearing construction. Pipeline projects, as discussed above, are considered
sanctionable investments in Iran’s energy sector. The pipeline will enter Iraq at Diyala province
and feed several power plants. The two countries signed a contract for the pipeline construction in
July 2011; its construction costs are estimated at about $365 million.48
Afghanistan
Some reports say that Iranian currency traders are using Afghanistan to acquire dollars that are in
short supply in Iran. In Afghanistan, where donor spending is high, the dollar operates as a second
national currency. Iranian traders—acting on behalf of wealthy Iranians seeking to preserve the
value of their savings—are said to be carrying local currency to Afghanistan to buy up some of
the dollars available there. There are also allegations that Iran is using an Iran-owned bank in
Afghanistan, Arian Bank, to move funds in and out of Afghanistan. The Treasury Department has
warned Afghan traders not to process dollar transactions for Iran. The Special Inspector General
for Afghanistan Reconstruction reported in late January 2013 that Afghan security forces might
be using some of the U.S. funding for them to purchase fuel from Iran.
Latin America
Iran has looked to several Latin American countries, particularly Venezuela, to try to avoid or
reduce the effects of international sanctions. For the most part, however, Iran’s trade and other
business dealings with Latin America remain modest and likely to reduce the effect of sanctions
on Iran only marginally. And, Iran has lost a key Latin American ally with the March 2013 death
47 http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?
nn=8901181055.
48 Ben Lando. “Iraq Inks Gas Supply Deal with Iran.” Iraq Oil Report, July 23, 2013.
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of Venezuelan President Hugo Chavez. As noted earlier and in the tables at the end of the paper,
several Venezuelan firms have been sanctioned for dealings with Iran.
Africa
Iran has sought to cultivate relations with some African countries to try to circumvent sanctions.
However, African countries have tended to avoid dealings with Iran in order to avoid pressure
from the United States. South Africa has ended its buys of Iranian oil. In June 2012, Kenya
contracted to buy about 30 million barrels of Iranian oil, but cancelled the contract the following
month after the United States warned that going ahead with the purchase could hurt U.S.-Kenya
relations. In June 2012, then Representative Howard Berman sent a letter to Tanzania’s president
warning that Tanzania could face aid cuts or other punishments if it continued to “re-flag” Iranian
oil tankers.49 Tanzania has re-flagged about 6-10 Iranian tankers. Perhaps fearing similar
criticism, in September 2012 Sierra Leone removed nine vessels from its shipping register after
determining they belonged to IRISL.
World Bank Loans
The July 27, 2010, EU measures narrowed substantially the prior differences between the EU and
the United States over international lending to Iran. As noted above, the United States
representative to international financial institutions is required to vote against international
lending, but that vote, although weighted, is not sufficient to block international lending. In 1993
the United States voted its 16.5% share of the World Bank against loans to Iran of $460 million
for electricity, health, and irrigation projects, but the loans were approved. To block that lending,
the FY1994-FY1996 foreign aid appropriations (P.L. 103-87, P.L. 103-306, and P.L. 104-107) cut
the amount appropriated for the U.S. contribution to the bank by the amount of those loans. The
legislation contributed to a temporary halt in new bank lending to Iran. (In the 111th Congress, a
provision of H.R. 6296—Title VII—cut off U.S. contributions to the World Bank, International
Finance Corp., and the Multilateral Investment Guarantee Corp. if the World Bank approves a
new Country Assistance Strategy for Iran or makes a loan to Iran.)
During 1999-2005, Iran’s moderating image had led the World Bank to consider new loans over
U.S. opposition. In May 2000, the United States’ allies outvoted the United States to approve
$232 million in loans for health and sewage projects. During April 2003-May 2005, a total of
$725 million in loans were approved for environmental management, housing reform, water and
sanitation projects, and land management projects, in addition to $400 million in loans for
earthquake relief.
49 “Tanzania Must Stop Re-Flagging Iran Tankers: U.S. Lawmaker.” Reuters, June 29, 2012.
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Table 1. Comparison Between U.S., U.N., and EU and Allied Country Sanctions
Implementation by EU and
U.S. Sanctions
U.N. Sanctions
Some Allied Countries
General Observation: Most
Increasingly sweeping, but still
EU abides by al U.N. sanctions on
sweeping sanctions on Iran of
intended to primarily target Iran’s
Iran, and new sanctions imposed by
virtually any country in the world
nuclear and other WMD programs.
EU countries since July 27, 2010,
No mandatory sanctions on Iran’s
closely aligns EU sanctions with
energy sector.
those of the U.S.
Japan and South Korean sanctions
also increasingly extensive.
Ban on U.S. Trade with and
U.N. sanctions do not ban civilian
No general EU ban on trade in
Investment in Iran:
trade with Iran or general civilian
civilian goods with Iran but, as a
sector investment in Iran. Nor do
consequence of EU oil embargo
Executive Order 12959 bans (with
U.N. sanctions mandate restrictions
from Iran and other decisions, EU
limited exceptions) U.S. firms from
on provision of trade financing or
sanctions are now nearly as
exporting to Iran, importing from
financing guarantees by national
extensive as the United States. All
Iran, or investing in Iran.
export credit guarantee agencies.
trade credits and credit guarantees
There is an exemption for sales to
now banned as result of October
Iran of food and medical products,
15, 2012, EU announcement.
but no trade financing or financing
Japan and South Korea have banned
guarantees are permitted.
medium- and long-term trade
financing and financing guarantees.
Short-term credit still al owed.
Sanctions on Foreign Firms that
No U.N. equivalent exists. However,
EU now bans almost al dealings
Do Business with Iran’s Energy
preambular language in Resolution
with Iran’s energy sector, including
Sector:
1929 “not[es] the potential
purchases of Iranian oil and gas,
connection between Iran’s revenues
shipping insurance, and sales of
The Iran Sanctions Act, P.L. 104-172,
derived from its energy sector and
energy sector equipment.
and subsequent laws and executive
the funding of Iran’s proliferation-
orders, discussed throughout the
sensitive nuclear activities.” This
Japanese and South Korean
paper, mandate sanctions on virtual y
wording is interpreted by most
measures ban new energy projects
any type of transaction with/in Iran’s
observers as providing U.N. support
in Iran and call for restraint on
energy sector. Some exemptions are
for countries who want to ban their
ongoing projects. South Korea in
permitted for firms of countries that
companies from investing in Iran’s
December 2011 cautioned its firms
have “significantly reduced”
energy sector.
not to sel energy or petrochemical
purchases of Iranian oil each 180
equipment to Iran. Both have cut oil
days.
purchases from Iran sharply.
Ban on Foreign Assistance:
No U.N. equivalent
EU measures of July 27, 2010, ban
grants, aid, and concessional loans
U.S. foreign assistance to Iran—
to Iran. Also prohibit financing of
other than purely humanitarian aid—
enterprises involved in Iran’s energy
is banned under §620A of the
sector.
Foreign Assistance Act, which bans
U.S. assistance to countries on the
Japan and South Korea measures do
U.S. list of “state sponsors of
not specifically ban aid or lending to
terrorism.” Iran is also routinely
Iran, but no such lending by these
denied direct U.S. foreign aid under
countries is under way.
the annual foreign operations
appropriations acts (most recently in
§7007 of division H of P.L. 111-8).
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Iran Sanctions
Implementation by EU and
U.S. Sanctions
U.N. Sanctions
Some Allied Countries
Ban on Arms Exports to Iran:
Resolution 1929 (operative paragraph EU sanctions include a
8) bans all U.N. member states from
comprehensive ban on sale to Iran
Iran is ineligible for U.S. arms
selling or supplying to Iran major
of all types of military equipment,
exports under several laws, as
weapons systems, including tanks,
not just major combat systems.
discussed in the report.
armored vehicles, combat aircraft,
warships, and most missile systems,
No similar Japan and South Korean
or related spare parts or advisory
measures announced, but neither
services for such weapons systems.
has exported arms to Iran.
Restriction on Exports to Iran of The U.N. Resolutions on Iran,
EU bans the sales of dual use items
“Dual Use Items”:
cumulatively, ban the export of
to Iran, in line with U.N.
almost all dual-use items to Iran.
resolutions. Oct. 2012 measures
Primarily under §6(j) of the Export
ban graphite and finished metal sales
Administration Act (P.L. 96-72) and
to Iran.
§38 of the Arms Export Control Act,
there is a denial of license
Japan announced ful adherence to
applications to sell Iran goods that
strict export control regimes when
could have military applications.
evaluating sales to Iran. South Korea
has adopted similar policies.
Sanctions Against International
Resolution 1747 (oper. paragraph 7)
The July 27, 2010, measures
Lending to Iran:
requests, but does not mandate, that
prohibit EU members from
countries and international financial
providing grants, aid, and
Under §1621 of the International
institutions refrain from making
concessional loans to Iran, including
Financial Institutions Act (P.L. 95-
grants or loans to Iran, except for
through international financial
118), U.S. representatives to
development and humanitarian
institutions.
international financial institutions,
purposes.
such as the World Bank, are
No specific similar Japan or South
required to vote against loans to Iran
Korea measures announced.
by those institutions.
Sanctions Against Foreign Firms Resolution 1737 (oper. paragraph 12) The EU measures imposed July 27,
that Sell Weapons of Mass
imposes a worldwide freeze on the
2010, commit the EU to freezing
Destruction-Related Technology assets and property of Iranian entities the assets of entities named in the
to Iran:
named in an Annex to the
U.N. resolutions, as well as
Resolution. Each subsequent
numerous other named Iranian
As discussed in this report, several
Resolution has expanded the list of
entities.
laws and regulations provide for
Iranian entities subject to these
sanctions against entities, Iranian or
sanctions.
Japan and South Korea froze assets
otherwise, that are determined to be
of U.N.-sanctioned entities.
involved in or supplying Iran’s WMD
programs (asset freezing, ban on
transaction with the entity).
Ban on Transactions with
No direct equivalent, but Resolution
No direct equivalent, but many of
Terrorism Supporting Entities:
1747 (oper. paragraph 5) bans Iran
the Iranian entities named as
from exporting any arms—a
blocked by the EU, Japan, and South
Executive Order 13224 bans
provision widely interpreted as trying
Korea overlap or complement
transactions with entities determined to reduce Iran’s material support to
Iranian entities named as terrorism
by the Administration to be
groups such as Lebanese Hizbol ah,
supporting by the United States.
supporting international terrorism.
Hamas, Shiite militias in Iraq, and
Numerous entities, including some of insurgents in Afghanistan.
Iranian origin, have been so
designated.
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Iran Sanctions
Implementation by EU and
U.S. Sanctions
U.N. Sanctions
Some Allied Countries
Travel Ban on Named Iranians:
Resolution 1803 imposed a binding
The EU sanctions announced July
ban on international travel by several
27, 2010, contains an Annex of
CISADA and H.R. 1905 provide for a Iranians named in an Annex to the
named Iranians subject to a ban on
prohibition on travel to the U.S.,
Resolution. Resolution 1929
travel to the EU countries. An
blocking of U.S.-based property, and
extended that ban to additional
additional 60+ Iranians involved in
ban on transactions with Iranians
Iranians, and forty Iranians are now
human rights abuses were subjected
determined to be involved in serious
subject to the ban. However, the
to EU sanctions since.
human rights abuses against Iranians
Iranians subject to the travel ban are
since the June 12, 2009, presidential
so subjected because of their
Japan and South Korea have
election there, or with persons
involvement in Iran’s WMD
announced bans on named Iranians.
selling Iran equipment to commit
programs, not because of
such abuses.
involvement in human rights abuses.
Restrictions on Iranian Shipping: Resolution 1803 and 1929 authorize
The EU measures announced July
countries to inspect cargoes carried
27, 2010, bans Iran Air Cargo from
Under Executive Order 13382, the
by Iran Air and Islamic Republic of
access to EU airports. The
U.S. Treasury Department has
Iran Shipping Lines (IRISL)—or any
measures also freeze the EU-based
named Islamic Republic of Iran
ships in national or international
assets of IRISL and its affiliates.
Shipping Lines and several affiliated
waters—if there is an indication that
Insurance and re-insurance for
entities as entities whose U.S.-based
the shipments include goods whose
Iranian firms is banned.
property is to be frozen.
export to Iran is banned.
Japan and South Korean measures
took similar actions against IRISL
and Iran Air.
Banking Sanctions:
No direct equivalent
The EU froze Iran Central Bank
assets January 23, 2012, and banned
During 2006-2011, several Iranian
However, two Iranian banks are
al transactions with Iranian banks
banks have been named as
named as sanctioned entities under
unless authorized on October 15,
proliferation or terrorism supporting
the U.N. Security Council
2012.
entities under Executive Orders
resolutions.
13382 and 13224, respectively (see
November 21, 2011: Britain and
Table 4 at end of report).
Canada bar their banks from any
transactions with Iran Central Bank.
CISADA prohibits banking
relationships with U.S. banks for any
March 2012: Brussels-based SWIFT
foreign bank that conducts
says expelled sanctioned Iranian
transactions with Iran’s
banks from the electronic payment
Revolutionary Guard or with Iranian
transfer system.
entities sanctioned under the various
U.N. resolutions.
Japan and South Korea measures
similar to the 2010 EU sanctions,
FY2012 Defense Authorization (P.L.
with South Korea adhering to the
112-81) preventing U.S. accounts
same 40,000 Euro authorization
with foreign banks that process
requirement. Japan and S. Korea
transactions with Iran’s Central Bank
froze the assets of 15 Iranian banks;
(with specified exemptions).
South Korea targeted Bank Mel at
for freeze.
No direct equivalent, although, as
Resolution 1929 (oper. paragraph 7)
EU measures on July 27, 2010,
discussed above, U.S. proliferations
prohibits Iran from acquiring an
require adherence to this provision
laws provide for sanctions against
interest in any country involving
of Resolution 1929.
foreign entities that help Iran with its
uranium mining, production, or use
nuclear and ballistic missile programs. of nuclear materials, or technology
related to nuclear-capable ballistic
missiles. Paragraph 9 prohibits Iran
from undertaking “any activity”
related to ballistic missiles capable of
delivering a nuclear weapon.
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Iran Sanctions
Private Sector Cooperation and Compliance
The multiplicity of sanctions have caused Iran to be viewed by corporations as a “controversial
market”; many firms no longer want to do business there even when doing so is permitted under
international sanctions. Many experts believe that, over time, the efficiency and output of Iran’s
economy will decline further as foreign expertise departs and Iran attracts alternative investment
from less capable foreign companies. On the other hand, travelers to Iran say many foreign
products, including U.S. products, are readily available in Iran, suggesting that such products are
being re-exported to Iran from neighboring countries. Examples of major non-U.S. companies
discontinuing business with Iran include the following:
• Several major industrial firms have exited Iran. ABB of Switzerland said in
January 2010 it would cease doing business with Iran. Siemens of Germany
followed suit in February 2010. Finemeccanica, a defense and transportation
conglomerate of Italy, and Thyssen-Krupp, a German steelmaker, subsequently
left the Iran market as well. Indian conglomerate Tata is ending its Iran business.
• Several firms have ceased selling automotive products to Iran. Germany’s
Daimler (Mercedes-Benz maker) and Porsche have ceased exports to Iran of cars
and trucks to Iran. In August-September 2010, Japanese and South Korean
automakers Toyota, Hyundai, and Kia Motors ceased selling cars to Iran.
• Manufacturing operations in Iran—or sales of equipment to Iran’s automotive
sector - are sanctionable under Executive Order 13645. French carmaker
Peugeot, which produces cars locally in partnership with Iran’s Khodro Group,
suspended operations in Iran as of July 1, 2012. Peugeot is 7% owned by General
Motors, but GM is not known to have any involvement in or to supply any GM
content to the Peugeot Iran activities. Italian carmaker Fiat reportedly has pulled
out of the Iran market as well. In July 2013, United Against Nuclear Iran
reportedly wrote to Renault Motors of France to warn it that its manufacturing
activities in Iran could be sanctioned.
• Attorneys for BNP Paribas of France told the author in July 2011 that, as of 2007,
the firm was pursuing no new business in Iran, although it was fulfilling existing
obligations in that market.
• Several firms ended work shipping general goods to or from Iran. The State
Department reported on September 30, 2010, that Hong Kong company NYK
Line Ltd. had ended shipping business with Iran on any goods. On June 30, 2011,
according to press reports, the Danish shipping giant Maersk told Iran that it
would no longer operate out of Iran’s three largest ports. The firm’s decision
reportedly was based on the U.S. announcement on June 23, 2011, that it was
sanctioning the operator of those ports, Tidewater Middle East Co., as a
proliferation entity under Executive Order 13382. The pullout of Maersk has
further raised Iran’s shipping costs.
• Well before Executive Order 13590 was issued (see above), one large oil services
firm, Schlumberger, which in incorporated in the Netherlands Antilles, said it
would wind down its business with Iran. However, press reports citing company
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Iran Sanctions
documents say all contracts with Iran might not be terminated until at least
2013.50
• Finnish mobile phone maker Nokia reportedly has stopped selling phones in Iran.
Foreign Subsidiaries of U.S. Firms That Have Exited the Iran Market
Even before their activities became sanctionable as a consequence of post-2010 legislation and
executive orders, many foreign subsidiaries of U.S. firms had exited the Iran market voluntarily.
• Chemical manufacturer Huntsman announced in January 2010 its subsidiaries
would halt sales to Iran.
• 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),51 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
were no longer operating in Iran, as promised in January 2005.
• General Electric (GE). The firm announced in February 2005 that it would seek
no new business in Iran, and it reportedly wound down preexisting 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.
• 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.52 Ingersoll Rand, maker of air compressors and
cooling systems, followed suit.53
• In April 2010, it was reported that foreign partners of several U.S. or other
multinational accounting firms had cut their ties with Iran, including KPMG of
the Netherlands, and local affiliates of U.S. firms PricewaterhouseCoopers and
Ernst and Young.54
• Oilfield services firm Smith International said on March 1, 2010, it would stop
sales to Iran by its subsidiaries. Another oil services firm, Flowserve, said its
50 Stockman, Farah. “Oil Firm Says It Will Withdraw From Iran.” Boston Globe, November 12, 2010.
51 “Iran Says Halliburton Won Drilling Contract.” Washington Times, January 11, 2005.
52 “Caterpillar Says Tightens ‘No-Iran’ Business Policy.” Reuters, March 1, 2010.
53 Nixon, Ron. “2 Corporations Say Business With Tehran Will Be Curbed.” New York Times, March 11, 2010.
54 Baker, Peter. “U.S. and Foreign Companies Feeling Pressure to Sever Ties With Iran.” New York Times, April 24,
2010.
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subsidiaries have voluntarily ceased new business with Iran as of 2006.55 FMC
Technologies took similar action in 2009, as did Weatherford56 in 2008.
Foreign Firms Reportedly Remaining in the Iran Market
Still, many major firms continue to run the financial risk of doing business with Iran. They
include most of the major consumer products companies of Europe and Asia. Some of the foreign
firms that trade with Iran, such as Mitsui and Co. of Japan, Alstom of France, and Schneider
Electric of France, are discussed in a March 7, 2010, New York Times article on foreign firms that
do business with Iran and also receive U.S. contracts or financing. The Times article does not
claim that these firms have violated any U.S. sanctions laws.
Foreign Subsidiaries of U.S. Firms Still in the Iran Market
Some foreign subsidiaries of U.S. firms reportedly still trade with Iran. Some of them also
received U.S. government contracts, grants, loans, or loan guarantees, according to a March 7,
2010, New York Times article. The subsidiaries believed still involved in Iran include
• An Irish subsidiary of the Coca Cola Company, which 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.
• Transammonia Corp. which, via a Swiss-based subsidiary, conducts business
with Iran to help it export ammonia, a growth export for Iran.
• Press reports in early October 2011 indicated that subsidiaries of Kansas-based
Koch Industries may have sold equipment to Iran to be used in petrochemical
plants (making methanol) and possibly oil refineries, among other equipment.
However, the reports say the sales ended as of 2007, a time at which foreign sales
of refinery equipment to Iran were not sanctionable under ISA.57
• Some subsidiaries of U.S. energy equipment and energy-related shipping firms
were in the Iranian market as late as 2010, according to their “10-K” filings with
the Securities and Exchange Commission. However, most such energy sector-
related sales to Iran are now sanctionable and these companies have most likely
exited the Iranian market. Those still in the Iran market as of 2010 included
Natco Group,58 Overseas Shipholding Group,59 UOP (United Oil Products, a
Honeywell subsidiary based in Britain),60 Itron,61 Fluor,62 Parker Drilling,
55 In September 2011, the Commerce Department fined Flowserve $2.5 million to settle 288 charges of unlicensed
exports and reexports of oil industry equipment to Iran, Syria, and other countries.
56 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.
57 Asjylyn Loder and David Evans. “Koch Brothers Flout Law Getting Richer With Iran Sales.” Bloomberg News,
October 3, 2011.
58 Form 10-K Filed for fiscal year ended December 31, 2008.
59 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.
60 New York Times, March 7, 2010, cited previously.
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Vantage Energy Services,63 PMFG, Ceradyne, Colfax, Fuel Systems Solutions,
General Maritime Company, Ameron International Corporation, and World Fuel
Services Corp. UOP reportedly has sold refinery gear to Iran.
Effectiveness of Sanctions on Iran
There may not be one single answer to the question “Are sanctions working?” on Iran. The
following sections examine the effectiveness of sanctions on a variety of criteria and goals.
Effect on Iran’s Nuclear Program Decisions and Capabilities
There is a consensus that U.S. and U.N. sanctions have not, to date, accomplished their core
strategic objective of compelling Iran to verifiably limit its nuclear development to purely
peaceful purposes. By all accounts—the United States, the P5+1, the United Nations, the
International Atomic Energy Agency (IAEA)—Iran has not complied with the applicable
provisions of the U.N. Security Council resolutions requiring that outcome. Five rounds of
P5+1—Iran talks during 2012 and thus far in 2013, the latest of which took place in Almaty,
Kazakhstan during April 5-6, 2013, produced no breakthroughs.
However, on June 14, 2013, Iranians elected the relatively moderate mid-ranking cleric Hassan
Rouhani as President; he ran on a platform of achieving an easing of sanctions. That outcome is
likely only in the even there is a nuclear compromise. Rouhani was chief nuclear negotiator
during 2003-5—a time when Iran did reach agreements with three European countries and
temporarily suspended uranium enrichment. The P5+1 countries met on July 16, 2013 and
expressed hope to resume negotiations with Iran “as soon as possible” after Rouhani’s August 4,
2013 inauguration. The nuclear talks are discussed in greater detail in CRS Report RL32048,
Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
Counter-Proliferation Effects
A related issue is whether the cumulative sanctions have directly set back Iran’s nuclear efforts by
making it difficult for Iran to import needed materials or skills. Some U.S. officials have asserted
that, coupled with mistakes and difficulties in Iran, sanctions have slowed Iran’s nuclear efforts
by making it more difficult and costly for Iran to acquire key materials and equipment for its
enrichment program.64 However, International Atomic Energy Agency (IAEA) reports have said
that Iran’s capacity to enrich uranium more rapidly continues to expand, as does its stockpile of
20% enriched uranium. And, Director of National Intelligence James Clapper testified on March
(...continued)
61 Subsidiaries of the Registrant at December 31, 2009. http://www.sec.gov/Archives/edgar/data/780571/
000078057110000007/ex_21-1.htm.
62 “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.
63 Form 10-K for Fiscal year ended December 31, 2007.
64 Speech by National Security Adviser Tom Donilon at the Brookings Institution. November 22, 2011.
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12, 2013, that Iran “is expanding the scale, reach, and sophistication of its ballistic missile
arsenal.”
Effects on Iran’s Regional Political and Military Influence
Sanctions do not appear to have materially reduced Iran’s capability to finance and provide arms
to militant movements in the Middle East and to Syria. Iranian support to Syrian President Bashar
Al Assad appears to have escalated since early 2013, according to U.S. officials. Some press
reports, quoting the U.N. panel of experts, say Iran has been exporting arms to factions in Yemen
and Somalia. Iran’s arms exports contravene Resolution 1747, which bans Iran’s exportation of
arms.65 These issues are discussed in greater detail in CRS Report RL32048, Iran: U.S. Concerns
and Policy Responses.
A congressionally-mandated Defense Department report of April 2012 called into question
whether sanctions would erode Iran’s conventional military capabilities. The report discusses
Iran’s increasing capabilities in short range ballistic missiles and other weaponry, as well as
acquisition of new ships and submarines.66 It is not clear if any country violated Resolution 1929
by selling Iran major combat systems, whether such shipments were made before the Resolution
took effect in June 2010, or whether Iran made these systems itself. The report also assessed that
Iran’s continues to develop medium-range ballistic missiles, although Iran’s development of such
systems might not require as much foreign help as do Iran’s longer range missile programs. On
the other hand, there have been no reported sales of major combat systems in recent years, and
military experts argue that Iran’s conventional military capability relative to its neighbors or
potential adversaries will erode if it is not modernized.
General Political Effects
Some experts assert that sanctions could accomplish their core goals if they spark dissension
within the senior Iranian leadership or major public unrest—either of which could cause Iran to
assess as too high the costs of rejecting a nuclear agreement with the P5+1. There has been a split
since early 2011 between President Ahmadinejad and Supreme Leader Ali Khamene’i, but the rift
was driven primarily by institutional competition and differences over the relative weight to
attach to Islam or to Iranian nationalism—not primarily about international sanctions.
These tensions escalated as Iran entered its June 14, 2013, presidential election period, and most
of the candidates permitted by the regime to run for president are considered close allies of
Khamene’i. However, with the apparent support of many of the Iranians who demonstrated
against the regime in 2009, the most moderate candidate in the race, Hassan Rouhani, was elected
with about 51% of the vote. The Supreme Leader has welcomed Rouhani’s election, but it is
possible that differences will emerge over potential compromises with the P5+1 that would
produce an easing of sanctions; Rouhani reportedly is inclined to make concessions in the
interests of sanctions relief.
At the popular level, there has been labor and public unrest over escalating food prices and the
dramatic fall of the value of Iran’s currency. However, public strikes and demonstrations have
65 Louis Charbonneau. “U.N. Monitors See Arms Reaching Somalia From Yemen, Iran.” Reuters, February 10, 2013.
66 Department of Defense. Annual Report of Military Power of Iran. April 2012.
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been sporadic and do not appear to threaten the regime. Without an uprising or the major threat of
one, the Iranian leadership is unlikely to feel significant pressure to curb its nuclear program.
Human Rights-Related Effects
U.S. and international sanctions have not, to date, had a measurable effect on human rights
practices in Iran. Executions increased significantly in 2012, according to the State Department
(human rights report for 2012, released April 19, 2013), but that is likely a result of a continued
crackdown against opposition activity stimulated by the 2009 uprising in Iran.
Nor has the regime’s ability to monitor and censor use of the Internet and other media been
evidently affected to date, even though sanctions have caused several major firms to stop selling
Iran equipment that it could use to for those purposes. German telecommunications firm Siemens,
accused by Iranian and outside activists in 2009 of selling technology that Iran used to monitor
the Internet, announced on January 27, 2010, that it would stop signing new business deals in Iran
as of mid-2010.67 A large Chinese firm, Huawei, also so accused, announced in December 2011
that it was no longer seeking new business in Iran and was withdrawing its sales staff. A South
African firm, MTN Group, owns 49% of a private cellular phone network, Irancell, and was
accused by some groups of helping the Iranian government shut down some social network
services during times of protest in Iran.68 On August 8, 2012, MTN announced it plans to move
its assets out of Iran. On October 11, 2012, Eutelsat, a significant provider of satellite service to
Iran’s state broadcasting establishment, ended that relationship following EU sanctioning in
March 2012 of the head of the Islamic Republic of Iran Broadcasting (IRIB) Ezzatollah
Zarghami. A GAO report to Congress of February 25, 2013, did not identify any foreign firms
that exported technology to Iran for monitoring, filtering, or disrupting information and
communications flow from June 2011-December 15, 2012.69
Still, several major telecommunications firms are said to still be active in Iran, including
Deutsche Telekom, Ericsson, Emirates Telecom, LG Group, NEC Corporation, and Asiasat. In
mid-October 2012, Israeli news sources asserted that Sweden opposed additional sanctions
against Iran in order to preserve a pending deal for Ericsson to help build a network for Irancell.
Economic Effects
The accumulation of sanctions has taken a dramatic toll on Iran’s economy—a trend increasingly
admitted by Iranian leaders. On February 24, 2013, Ahmadinejad presented his proposed 2013-
2014 budget and said that “This was a very difficult year for our economy.”70 President-elect
Rouhani has received briefings on the Iranian economy from the outgoing Ahmadinejad
economic team, and has said that the economy is in worse shape than that portrayed by the
outgoing Ahmadinejad administration. However, analysis by some U.S. experts, and assertions by
some Iranian officials, suggest that Iran may be adjusting to the sanctions and mitigating their
67 End, Aurelia. “Siemens Quits Iran Amid Mounting Diplomatic Tensions.” Agence France Press, January 27, 2010.
68 http://www.examiner.com/article/obama-adviser-plouffe-received-100-000-from-iranian-associated-firm.
69 GAO-13-344R Iran, February 25, 2013.
70 http://www.israelnationalnews.com/news/news.aspx/165555.
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economic effects more successfully than has been thought by experts.71 Indicators of the effect of
sanctions and mismanagement on Iran’s economy include:
• Oil Export Declines. Oil sales have accounted for about 80% of Iran’s hard
currency earnings and about 50% of government revenues. As noted in Table 1,
sanctions have halved Iran’s oil sales from the 2.5 mbd of sales in 2011. This
drop is expected to deprive the Iranian government of over $50 billion in revenue
for all of 2013.
• Falling Oil Production. To try to adjust to lost oil sales, Iran has been storing
unsold oil on tankers in the Persian Gulf and it is building additional storage
tanks on shore. Industry reports in June 2013 indicated Iran might have as much
as 30 million barrels of crude oil in floating storage. The storage represents an
attempt to keep up oil production because shutting down wells risks harming
them and it is costly to resume production at a shut well. However, Iran’s oil
production has fallen to about 2.6 - 2.8 mbd from the level of nearly 4.0 mbd at
the end of 2011.72
• GDP Decline. Sanctions have caused Iran to suffer its first gross domestic
product contraction in two decades. An IMF global report issued in late April
2013 said that Iran’s economy shrank 1.9% from March 2012-March 2013, and
will likely shrink another 1.3% in the subsequent one year period. U.S. officials
testified on May 15, 2013, to a larger GDP drop for 2012-2013—on the order of
about 5% - 8%. The IMF report predicted the economy would return to growth,
at about 1%, for the one year after that (March 2014-March 2015). The recession
has elevated the unemployment rate to about 20%, although the Iranian
government reports that the rate is 13%. Economists assess that there is a
burgeoning number of non-performing loans.
• Currency Collapse. The regime has been working to contain the effects of a
currency collapse. The value of the rial fell on unofficial markets from about
28,000 to one U.S. dollar to nearly 40,000 to one dollar in early October 2012.
Prior to that, the rial’s value had fallen from about 13,000 to the dollar in
September 2011 to about 28,000 to the dollar as of mid-September 2012.
Observers said the unofficial rate is about 37,000 to the dollar in May 2013.
However, optimism over Rouhani’s election has caused the rial’s value to
appreciate substantially since, and stands at about 30,000 to the dollar as of late
July 2013.
• Hard Currency Depletion. The currency collapse has fed analysis that Iran might
deplete its hard currency reserves—hard currency is needed to support the value
of the rial. The IMF estimated Iran’s hard currency reserves to be about $101
billion as of the end of 2011. Experts estimated the reserves probably fell below
$90 billion at the end of 2012,73 but Iran’s economics minister told journalists in
late April 2013 that the reserves were still approximately $100 billion. If the
71 Clawson, Patrick. “Iran Beyond Oil.” Washington Institute for Near East Policy Policywatch 2062, April 3, 2013;
Solomon, Jay; “Iran Curbs Spark Trade Shift.” Wall Street Journal, April 21, 2013; Thomas Erdbink and Rick
Gladstone. “Fearing Price Increases, Iranians Hoard Goods.” New York Times, April 24, 2013.
72 Rick Gladstone. “Data on Iran Dims Outlook for Economy.” New York Times, October 13, 2012.
73 GAO study of February 2013, op.cit. p. 35-6.
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minister’s statements are accurate, that could call into question analysis by some
outside experts that Iran’s hard currency reserves might be exhausted by July
2014 at current rates of depletion.74 To try to stretch its hard currency reserve, as
of October 2012, Iran has been restricting the supply of hard currency for
purchases of luxury goods such as cars or cellphones (the last two of the
government’s 10 categories of imports, ranked by importance)—conserving its
supply for the purchase of essential imports. Iranian importers of essential goods
were able to obtain dollars at the official “reference” rate of 12,260 to the dollar,
although the regime reportedly raised that rate to about 28,000 to the dollar in
late June 2013 - closer to the free market rate.
• Inflation. The drop in value of the currency has caused inflation to accelerate.
collapse. An April 22, 2013 government attempt to unify the exchange rate set off
a wave of hoarding of key foodstuffs by Iranians who are expecting the prices of
those goods to rise sharply. The Iranian Central Bank acknowledged an inflation
rate of 31% rate in April 2013, and a 45% rate in late July 2013. Many
economists assert that these official figures understate the actual inflation rate
substantially, and that is between 50% and 70%. Some assert that inflation has
been fed by the policies of Ahmadinejad, particularly the substitution of subsidies
with cash payments.
• Industrial Production. Almost all Iranian factories depend on imports and the
currency collapse has made it difficult for Iranian manufacturing to operate.
Iran’s production of automobiles has fallen by about 40% from 2011 levels, and
will likely fall further as a consequence of Executive Order 13645 of June 3,
2013, discussed earlier. Iran produces cars for the domestic market, such as the
Khodro, based on licenses from European auto makers such as Renault and
Peugeot.
• Shipping Difficulties. Beyond the issue of the cost of imported goods, the
Treasury Department’s designations of affiliates and ships belong to Islamic
Republic of Iran Shipping Lines (IRISL) reportedly are harming Iran’s ability to
ship goods. Some ships have been impounded by various countries for
nonpayment of debts due on them.
• Domestic Payments Difficulties. Some reports say the government is in arrears in
salary payments to military personnel and other government workers. In order to
conserve funds, in late 2012, Iran’s parliament—against Ahmadinejad’s
urgings—postponed phase two of an effort to wean the population off subsidies.
That effort provides for cash payments to about 60 million Iranians of about $40
per month to 60 million Iranians to compensate them for ending subsidies for
commodities such as gasoline. Gasoline prices now run on a tiered system in
which a small increment is available at the subsidized price of about $1.60 per
gallon, but amounts above that threshold are available only at a price of about
$2.60 per gallon. Before the subsidy phase-out, gasoline was sold for about 40
cents per gallon.
• Flights Curtailed. Because of the decline in Iran’s trade with European countries,
KLM and Austria Airlines announced in January 2013 that they would be ending
74 Foundation for the Defense of Democracies conversation with the author. November 16, 2012.
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flights to Iran later in 2013. Lufthansa, some other European airlines, and most
airlines in the Persian Gulf, Middle East, and South Asia region still fly to Iran
regularly.
Iran’s Mitigation Efforts
There is a growing body of opinion and Iranian assertions, cited above, that indicates that Iran,
through actions of the government and the private sector, is mitigating the economic effect of
sanctions. Some argue that Iran might even benefit from sanctions over the long term by being
compelled to diversify its economy and reduce dependence on oil revenues. Iran’s 2013-2014
budget relies far less on oil exports than have previous budgets, and its exports of minerals,
cement, urea fertilizer, and other agricultural and basic industrial goods are increasing
substantially. Iran’s economy minister, in April 2013 interviews, said non-oil exports grew 20% in
2012 from the prior year. Iran’s goods are relatively less expensive than previously because of the
decline in value of its currency. The main customers for these non-oil exports reportedly are
countries in the immediate neighborhood, including Iraq, Afghanistan, Azerbaijan, Armenia, and
others. Iranian manufacturers have increased production of some goods that Iranians are buying
as they cut back on purchases of imported goods. Some Iranian importers of foreign goods have
shifted to exporting goods from Iran—benefitting from the fall of the value of Iran’s currency.
Some private funds are going into the Tehran stock exchange and hard assets, such as property.
However, many of these trends generally benefit the urban elite.
Effect on Energy Sector Long-Term Development
The United States and its partners are focused on sanctioning Iran’s energy sector because it is
still a pillar of Iran’s economy. Even before U.N. and multilateral sanctions began to be imposed
on Iran in 2006, Iran was having trouble maintaining production at a level of 4 mbd. Without
foreign help, Iranian energy firms are unable to derive maximum yield from existing fields or
efficiently and effectively develop new fields.
U.S. officials estimated in 2011 said that Iran has lost $60 billion in investment in the sector as
numerous major firms have either announced pullouts from some of their Iran projects, declined
to make further investments, or resold their investments to other companies. It is therefore highly
unlikely that Iran will attract the $130 billion - $145 billion in new investment by 2020 that Iran
is estimated to need to keep oil production capacity from falling.75 Observers at key energy fields
in Iran say there is little evidence of foreign investment activity and little new development
activity sighted, as discussed in Table 2. However, the table also shows that some international
firms remain invested in Iran’s energy sector. Some of them have not been determined to have
violated ISA and may still be under investigation by the State Department. As discussed above,
some firms have been sanctioned, and others have avoided sanctions either through
Administration waivers or invocation of the “special rule.”
Others maintain that Iran’s gas sector can compensate for declining oil exports, although Iran has
used its gas development primarily to reinject into its oil fields rather than to export. Iran exports
about 3.6 trillion cubic feet of gas, primarily to Turkey and Armenia. On the other hand, sanctions
have rendered Iran unable to develop a liquefied natural gas (LNG) export business. EU sanctions
75 Khajehpour presentation at CSIS. Op. cit.
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have also derailed several gas ventures, including BP-NIOC joint venture in the Rhum gas field,
200 miles off the coast of Scotland, and inclusion of Iran in planned gas pipeline projects to
Europe.
There has been a concern that some of the investment void might be “backfilled,” at least partly,
by Asian firms such as those from China, Malaysia, Vietnam, and countries in Eastern Europe.
However, as shown in Table 2, many such “backfilled” deals remain in preliminary stages or
themselves stalled as investors reconsidered whether to risk U.S. sanctions. Much of the backfill
that has proceeded has been conducted by domestic companies, particularly those controlled or
linked to the Revolutionary Guard (IRGC), but foreign firms are reluctant to partner with IRGC
firms as international sanctions have increasingly targeted the IRGC. In July 2010, in an effort to
attract some foreign investment, the IRGC’s main construction affiliate, Khatem ol-Anbiya,
announced it had withdrawn from developing Phases 15 and 16 of South Pars—a project worth
$2 billion.76 Khatem ol-Anbiya took over that project in 2006 when Norway’s Kvaerner pulled
out of it. The energy companies still active in Iran, particularly the Iranian firms, are not as
technically capable as the international firms that have withdrawn from Iran.
Table 2. Post-1999 Major Investments/Major Development Projects
in Iran’s Energy Sector
Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
Feb.
Doroud (oil)
Total (France)/ENI
$1 billion
205,000 bpd
1999
(Italy)
(Energy Information Agency, Department of
Energy, August 2006.)
Total and ENI exempted from sanctions on
September 30 because of pledge to exit Iran
market
April
Balal (oil)
Total/ Bow Valley
$300 million
40,000 bpd
1999
(Canada)/ENI
(“Balal Field Development in Iran
Completed,” World Market Research Centre,
May 17, 2004.)
Nov.
Soroush and Nowruz (oil)
Royal Dutch Shell
$800 million
190,000 bpd
1999
(Netherlands)/Japex
(“News in Brief: Iran.” Middle East Economic
(Japan)
Digest, (MEED) January 24, 2003.)
Royal Dutch exempted from sanctions on
9/30 because of pledge to exit Iran market
April
Norsk Hydro and
$105 million
65,000
2000
Anaran bloc (oil)
Statoil (Norway) and
Gazprom and Lukoil
(MEED Special Report, December 16, 2005,
(Russia) No production
pp. 48-50.)
to date; Statoil and
Norsk have left project.
July
Phase 4 and 5, South Pars (gas)
ENI
$1.9 billion
2 billion cu.
2000
ft./day (cfd)
(Petroleum Economist, December 1, 2004.)
Gas onstream as of
Dec. 2004
76 “Iran Revolutionary Guards Pull Out of Gas Deal Over Sanctions.” Platts, July 19, 2010.
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Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
ENI exempted 9/30 based on pledge to exit
Iran market
Marc
Caspian Sea oil exploration—
GVA Consultants
$225 million
NA
h
construction of submersible drilling rig for
(Sweden)
2001
Iranian partner
(IPR Strategic Business Information
Database, March 11, 2001.)
June
Darkhovin (oil)
ENI
$1 billion
100,000 bpd
2001
(“Darkhovin Production Doubles.” Gulf
Field in production
Daily News, May 1, 2008.) ENI told CRS in
April 2010 it would close out all Iran
operations by 2013.
ENI exempted from sanctions on 9/30, as
discussed above
May
Sheer Energy
$80 million
25,000 bpd
2002
Masjid-e-Soleyman (oil)
(Canada)/China
National Petroleum
(“CNPC Gains Upstream Foothold.” MEED,
Company (CNPC).
September 3, 2004.)
Local partner is
Naftgaran Engineering
Sept.
LG Engineering and
$1.6 billion
2 billion cfd
2002
Construction Corp.
Phase 9 + 10, South Pars (gas)
(now known as GS
Engineering and
(“OIEC Surpasses South Korean Company in Construction Corp.,
South Pars.” IPR Strategic Business
South Korea)
Information Database, November 15, 2004.)
On stream as of early
2009
Octo
Phase 6, 7, 8, South Pars (gas)
Statoil (Norway)
$750 million
3 billion cfd
ber
2002
(Source: Statoil, May 2011)
Field began producing late 2008; operational
control handed to NIOC in 2009. Statoil
exempted from sanctions on 9/30/2010 after
pledge to exit Iran market.
Janua
Azadegan (oil)
Inpex (Japan) 10%
$200 million
260,000 bpd
ry
stake. CNPC agreed to
(Inpex stake);
2004
(“Japan Mul s Azadegan Options.” APS
develop “north
China $1.76
Review Oil Market Trends, November 27,
Azadegan” in Jan. 2009
billion
2006.)
October 15, 2010: Inpex announced it would
exit the project by selling its stake; “special
rule” exempting it from ISA investigation
invoked November 17, 2010.
Augu
Tusan Block
Petrobras (Brazil)
$178 million
No
st
production
2004
Oil found in block in Feb. 2009, but not in
commercial quantity, according to the firm.
(“Iran-Petrobras Operations.” APS Review
Gas Market Trends, April 6, 2009; “Brazil’s
Petrobras Sees Few Prospects for Iran Oil,”
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Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
(http://www.reuters.com/article/
idUSN0317110720090703.)
Octo
Yadavaran (oil)
Sinopec (China), deal
$2 billion
300,000 bpd
ber
finalized Dec. 9, 2007
2004
Formal start of development of the field
delayed. (“China Curbs Iran Energy Work,”
Reuters, September 2, 2011)
2005
Saveh bloc (oil)
PTT (Thailand)
?
?
GAO report, cited below
June
Garmsar bloc (oil)
Sinopec (China)
$20 million
?
2006
Deal finalized in June 2009
(“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.)
July
Arak Refinery expansion
Sinopec (China); JGC
$959 million
Expansion to
2006
(Japan). Work may have (major initial
produce
(GAO reports; Fimco FZE Machinery
been taken over or
expansion;
250,000 bpd
website; http://www.fimco.org/index.php?
continued by Hyundai
extent of
option=com_content&task=view&id=70&
Heavy Industries (S.
Hyundai work
Itemid=78.)
Korea)
unknown)
Sept.
Khorramabad block (oil)
Norsk Hydro and
$49 million
?
2006
Statoil (Norway).
Seismic data gathered, but no production is
planned. (Statoil factsheet, May 2011)
Dec.
North Pars Gas Field (offshore gas).
China National
$16 billion
3.6 billion cfd
2006
Includes gas purchases
Offshore Oil Co.
Work crews reportedly pulled from the
project in early-mid 2011. (“China Curbs Iran
Energy Work” Reuters, September 2, 2011)
Feb.
LNG Tanks at Tombak Port
Daelim (S. Korea)
$320 million
200,000 ton
2007
capacity
Contract to build three LNG tanks at
Tombak, 30 miles north of Assaluyeh Port.
(May not constitute “investment” as defined
in pre-2010 version of ISA, because that
definition did not specify LNG as “petroleum
resource” of Iran.)
“Central Bank Approves $900 Million for
Iran LNG Project.” Tehran Times, June 13,
2009.
Feb.
Phase 13, 14—South Pars (gas)
Royal Dutch Shell,
$4.3 billion
?
2007
Repsol (Spain)
Deadline to finalize as May 20, 2009,
apparently not met; firms submitted revised
proposals to Iran in June 2009.
(http://www.rigzone.com/news/article.asp?
a_id=77040&hmpn=1.)
State Department said on September 30, 2010,
that Royal Dutch Shel and Repsol will not
Congressional Research Service
59
Iran Sanctions
Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
pursue this project any further
Marc
Esfahan refinery upgrade
Daelim (S. Korea)
NA
h
2007
(“Daelim, Others to Upgrade Iran’s Esfahan
Refinery.” Chemical News and Intelligence,
March 19, 2007.)
July
Phase 22, 23, 24—South Pars (gas)
Turkish Petroleum
$12. billion
2 billion cfd
2007
Company (TPAO)
Pipeline to transport Iranian gas to Turkey,
and on to Europe and building three power
plants in Iran. Contract not finalized to date.
Dec.
Golshan and Ferdowsi onshore and
Petrofield Subsidiary of
$15 billion
3.4 billion cfd
2007
offshore gas and oil fields and LNG
SKS Ventures (Malaysia)
of gas/250,000
plant
bpd of oil
contract modified but reaffirmed December
2008
(GAO report; Oil Daily, January 14, 2008.)
2007
Jofeir Field (oil)
Belarusneft (Belarus)
$500 million
40,000 bpd
(unsp
under contract to
ec.)
GAO report cited below. Belarusneft, a
Naftiran.
subsidiary of Belneftekhim, sanctioned under
ISA on March 29, 2011. Naftiran sanctioned
No production to date
on September 29, 2010, for this and other
activities.
2008
Dayyer Bloc (Persian Gulf, offshore,
Edison (Italy)
$44 million
?
oil)
GAO report cited below
Feb.
Lavan field (offshore natural gas)
PGNiG (Polish Oil and
$2 billion
2008
Gas Company, Poland)
GAO report cited below invested. PGNiG
invested, but delays caused Iran to void
PGNiG contract in December 2011. Project
to be implemented by Iranian firms. (Fars
News, December 20, 2011)
Marc
Danan Field (on-shore oil)
Petro Vietnam
? ?
h
Exploration and
2008
“PVEP Wins Bid to Develop Danan Field.”
Production Co.
Iran Press TV, March 11, 2008
(Vietnam)
April
Iran’s Kish gas field
Oman (co-financing of
$7 billion
1 billion cfd
2008
project)
Includes pipeline from Iran to Oman
(http://www.presstv.ir/detail.aspx?id=112062&
sectionid=351020103.)
April
Moghan 2 (onshore oil and gas, Ardebil INA (Croatia)
$40-$140
?
2008
province)
million
(dispute over
GAO report cited below
size)
-
Kermanshah petrochemical plant (new Uhde (Germany)
300,000
construction)
metric tons/yr
GAO report cited below
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Iran Sanctions
Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
June
Resalat Oilfield
Amona (Malaysia).
$1.5 billion
47,000 bpd
2008
Joined in June 2009 by
(Fars News Agency, June 16, 2008)
CNOOC and another
Status of work unclear
China firm, COSL.
Janua
“North Azadegan”
CNPC (China)
$1.75 billion
75,000 bpd
ry
2009
(Chinadaily.com. “CNPC to Develop
Azadegan Oilfield,”
http://www.chinadaily.com.cn/bizchina/2009-
01/16/content_7403699.htm.)
Janua
Bushehr Polymer Plants
Sasol (South Africa)
?
Capacity is 1
ry
million tons
2009
Production of polyethelene at two polymer
per year.
plants in Bushehr Province.
Products are
Sasol reported by GAO in December 2012
exported
to be divesting the venture.
from Iran.
Marc
Phase 12 South Pars (gas)—Incl. LNG
Taken over by Indian
$8 billion
20 million
h
terminal construction and Farsi Block gas
firms (ONGC Videsh,
from Indian
tonnes of
2009
field/Farzad-B bloc.
Oil India Ltd., India Oil
firms/$1.5
LNG annually
Corp. Ltd. in 2007);
billion
by 2012
Project stalled due to sanctions; Indian firms
may also include minor
Sonangol/$780
have told GAO that no agreements were
stakes by Sonanagol
million
reached and no work is being pursued.
(Angola) and PDVSA
PDVSA
(“Noose Tightens Around Iran Oil.”
(Venezuela)..
Washington Post, March 6, 2012; GAO-13-
173R Iran Energy Sector.)
Augu
Abadan refinery
Sinopec
up to $6
st
billion if new
2009
Upgrade and expansion; building a new
refinery is
refinery at Hormuz on the Persian Gulf coast
built
Octo
South Pars Gas Field—Phases 6-8, Gas
G and S Engineering
$1.4 billion
ber
Sweetening Plant
and Construction
2009
(South Korea)
CRS conversation with Embassy of S. Korea
in Washington, D.C, July 2010
Contract signed but then abrogated by S.
Korean firm
Nov.
South Pars: Phase 12—Part 2 and Part
Daelim (S. Korea)—
$4 billion ($2
2009
3
Part 2; Tecnimont
bn each part)
(Italy)—Part 3
(“Italy, South Korea To Develop South Pars
Phase 12.” Press TV (Iran), November 3,
2009, http://www.presstv.com/pop/Print/?id=
110308.)
Feb.
South Pars: Phase 11
CNPC (China)
$4.7 billion
2010
Drilling was to begin in March 2010, but
CNPC pulled out in October 2012.
(Economist Intelligence Unit “Oil Sanctions
on Iran: Cracking Under Pressure.” 2012)
2011
Azar Gas Field
Gazprom (Russia)
Gazprom contract voided in late 2011 by Iran
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Iran Sanctions
Company(ies)/Status
Output/Goa
Date Field/Project
(If Known)
Value
l
due to Gazprom’s unspecified failure to fulfill
its commitments.
Dec.
Zagheh Oil Field
Tatneft (Russia)
$1 billion
55,000 barrels
2011
per day within
Preliminary deal signed December 18, 2011
five years
(Associated Press, December 18, 2011)
Sources: As noted in table, as wel as CRS conversations with officials of the State Department Bureau of
Economics, and officials of embassies of the parent government of some of the listed companies (2005-2009).
Some information comes from various GAO reports, the latest of which was updated on December 7, 2012, in
GAO-13-173R. “Iran Energy Sector”
Note: CRS has neither the mandate, 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 all 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. Reported $20 million+ investments in oil and gas fields, refinery upgrades,
and major project leadership are included in this table. Responsibility for a project to develop Iran’s energy
sector is part of ISA investment definition.
Effect on Gasoline Availability and Importation
In March 2010, well before the enactment of CISADA on July 1, 2010, several gas suppliers to
Iran, anticipating this legislation, announced that they had stopped or would stop supplying
gasoline to Iran.77 Others have ceased since the enactment of CISADA. Some observers say that
gasoline deliveries to Iran fell from about 120,000 barrels per day before CISADA to about
30,000 barrels per day immediately thereafter,78 although importation recovered to about 80,000
barrels per day by September 2011 and has remained roughly around that level since. Some
gasoline sellers who were already sanctioned for this activity (see above), as well as others,
appear to be selling to Iran. There have been no significant gasoline shortages, either before or
after CISADA was enacted. The phaseout of gasoline subsidies discussed above has further
reduced demand for gasoline. Iran has also increased domestic production by converting at least
two petrochemical plants to gasoline production, and it is accelerating renovations and other
improvements to existing gasoline refineries.
The main suppliers to Iran prior to the CISADA sanctions, according to the GAO, are listed
below, and most have stopped such sales, although some reports say that partners or affiliates of
these firms may still sell to Iran in cases where the corporate headquarters have announced a halt.
As noted in a New York Times report of March 7, 2010,79 and a Government Accountability Office
study released September 3, 2010,80 some firms that have supplied Iran have received U.S. credit
guarantees or contracts.
77 Information in this section derived from, Blas, Javier. “Traders Cut Iran Petrol Line.” Financial Times, March 8,
2010.
78 Information provided at Foundation for Defense of Democracies conference on Iran. December 9, 2010.
79 Becker, Jo and Ron Nixon. “U.S. Enriches Companies Defying Its Policy on Iran.” New York Times, March 7, 2010.
80 GAO-10-967R. Exporters of Refined Petroleum Products to Iran. September 3, 2010.
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Table 3. Firms That Sold or Are Selling Gasoline to Iran
Vitol of Switzerland (notified GAO it stopped selling to Iran in early 2010)
Trafigura of Switzerland (notified GAO it stopped selling to Iran in November 2009)
Glencore of Switzerland (notified GAO it stopped selling in September 2009)
Total of France (notified GAO it stopped sales to Iran in May 2010)
Reliance Industries of India (notified GAO it stopped sales to Iran in May 2009)
Petronas of Malaysia (said on April 15, 2010, it had stopped sales to Iran)81
Lukoil of Russia (reported to have ended sales to Iran in April 2010,82 although some reports continue that Lukoil
affiliates are supplying Iran)
Royal Dutch Shell of the Netherlands (notified GAO it stopped sales in October 2009)
Kuwait’s Independent Petroleum Group (told U.S. officials it stopped selling gasoline to Iran as of September 2010)83
Tupras of Turkey (stopped selling to Iran as of May 2011, according to the State Department)
British Petroleum of United Kingdom, Shel , Q8, Total, and OMV are no longer selling aviation fuel to Iran Air,
according to U.S. State Department officials on May 24, 2011
A UAE firm, Golden Crown Petroleum FZE, told the author in April 2011 that, as of June 29, 2010, it no longer leases
vessels for the purpose of shipping petroleum products from or through Iran
Munich Re, Allianz, Hannover Re (Germany) were providing insurance and re-insurance for gasoline shipments to
Iran. However, they reportedly have exited the market for insuring gasoline shipments for Iran84
Lloyd’s (Britain). The major insurer had been the main company insuring Iranian gas (and other) shipping, but
reportedly ended that business in July 2010. According to the State Department, key shipping associations have
created clauses in their contracts that enable ship owners to refuse to deliver gasoline to Iran.
According to the State Department on May 24, 2011, Linde of Germany said it had stopped supplying gas liquefaction
technology to Iran, contributing to Iran’s decision to suspend its LNG program.
Some of the firms sanctioned by the Administration on May 24, 2011 (discussed above), may still be providing service
to Iran, including: PCCI (Jersey/Iran); Associated Shipbroking (Monaco); and Petroleos de Venezuela (Venezuela).
Tanker Pacific representatives told the author in January 2013 that the firm had stopped dealing with Iran in April
2010 but may have been deceived by IRISL into a transaction with Iran after that time.
Zhuhai Zhenrong, Unipec, and China Oil of China. Zhuhai Zhenrong may still be selling gasoline to Iran despite being
sanctioned, according to the GAO report of December 7, 2012. (GAO-13-173R Iran Energy Sector/
Emirates National Oil Company of UAE has been reported by GAO to still be selling to Iran. Three other UAE
energy traders, FAL, Royal Oyster Group, and Speedy Ship (UAE/Iran) may still be selling even though they were
sanctioned as discussed above.
Hin Leong Trading of Singapore may still be selling gasoline to Iran, as might Kuo Oil of Singapore even though it was
sanctioned as discussed earlier.
Some refiners in Bahrain reportedly may still be selling gasoline to Iran.
Source: CRS conversations with various firms, GAO reports, various press reports.
81 http://www.ft.com/cms/s/0/009370f0-486e-11df-9a5d-00144feab49a.html.
82 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
83 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
84 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
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Iran Sanctions
Humanitarian Effects/Air Safety
The effects of sanctions on the population’s living standards was discussed above. Some Iranian
pilots have begun to complain publicly and stridently that U.S. sanctions are causing Iran’s
passenger airline fleet to deteriorate to the point of jeopardizing safety. Since the U.S. trade ban
was imposed in 1995, 1,700 passengers and crew of Iranian aircraft have been killed in air
accidents, although it is not clear how many of the crashes, if any, were due specifically to the
difficultly in providing U.S. spare parts to Iran’s fleet.85 Some reports in early January 2013
indicate that Iran’s domestic airlines were compelled to cancel flights because fuel suppliers
began demanding cash rather than credit—although this development is not necessarily a threat to
air safety. Other reports say that pollution in Tehran and other big cities has worsened because
Iran is making gasoline itself with methods that cause more impurities than imported gasoline.
Press reports have mounted since mid-2012 that sanctions are hurting the population’s ability to
obtain Western-made medicines, such as expensive chemo-therapy medicines, and other critical
goods. Some of the scarcity is caused by banks’ refusal to finance such sales, even though doing
so is technically allowed under all applicable sanctions. Some believe that a proliferation of press
reports about such deprivations is changing the focus about Iran sanctions from Iran’s non-
compliance to the suffering of the Iranian public, and thereby causing growing opposition in
Europe and elsewhere to increasing sanctions on Iran. Iran’s only female minister, Minister of
Health Marzieh Vahid Dastjerdi, was dismissed in December 2012 for openly criticizing the
government for failing to provide her ministry with sufficient hard currency to buy needed
medicines abroad.
Some observers say the Iranian government is exaggerating reports of medicine shortages to
generate opposition to the sanctions. Other accounts say that Iranians, particularly those with
connections to the government, are taking advantage of medicine shortages by cornering the
market for importing key medicines. Some human rights and other groups are attempting to
formulate potential solutions that would ease the medicine import situation.
Possible Additional Sanctions
Even though international sanctions are now comprehensive, some experts believe that additional
pressure is needed to convince Iranian leaders that they must negotiate curbs on Iran’s nuclear
enrichment program. The Iran sanctions legislation and executive orders during the 112th
Congress were discussed above.
On February 27, 2013, H.R. 850, the “Nuclear Iran Prevention Act of 2013” was introduced by
the chairman and ranking Member of the House Foreign Affairs Committee. An amended version
was marked up by the Committee on May 22, 2013 and some observers report that it might be
voted on in the House before the August recess begins. Its major provisions are the following:
• It expands the proportion of the Iranian economy for which transactions are
sanctionable (under IFCA, P.L. 112-239) to include the automotive and mining
sectors.
85 Thomas Erdbink. “Iran’s Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions.” July 14, 2012.
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Iran Sanctions
• It would require those countries that have exemptions allowing them to pay Iran’s
Central Bank for oil to accelerate their Iran oil import reductions to an aggregate
cut of an additional 1 million barrels per day within one year of enactment.
Countries that do not “dramatically reduce” their Iran oil buys would lose their
exemptions.
• It authorizes, but does not a mandate, sanctions for conducting financial
transaction with Iran’s Central Bank or other sanctioned Iranian banks for trade
with Iran in any goods.
• It would sanction foreign banks that help Iran exchange its foreign currency
abroad—a provision virtually identical to S. 892 (introduced in the Senate on
May 8, 2013)
• It would require the Administration to determine whether the Revolutionary
Guard should be named a Foreign Terrorist Organization.
Another bill, H.R. 893, the Iran, North Korea, and Syria Non-Proliferation Act, has been
introduced in the 113th Congress; it is primarily an update of an earlier law, discussed above, of
virtually the same name. It contains a new provision that would mandate barring ships from
porting in the United States if they had ported in Iran recently. During testimony before the
Senate Foreign Relations Committee on April 18, 2013, Secretary of State John Kerry appealed
for maximum flexibility from Congress to allow the Administration to pursue a nuclear deal with
Iran—a statement that appeared to signal concerns about new Iran sanctions legislation.
Other Possible U.S. and International Sanctions
There are a number of other possible sanctions that might possibly receive consideration—either
in a global or multilateral framework—or by the 113th Congress.
• Sanctioning All Trade with Iran. Some organizations, such as United Against
Nuclear Iran, advocate sanctions against virtually all trade with Iran, with
exceptions for food and medical products. The concept of a global trade ban on
Iran has virtually no support in the United Nations Security Council, and U.S.
allies strongly oppose U.S. measures that would compel allied firms to end
commerce with Iran in purely civilian, non-strategic goods.
• Comprehensive Ban on Energy Transactions with Iran. Many experts believe that
a highly effective sanction would be a U.N.-mandated, worldwide embargo on
the purchase of any Iranian crude oil. There are no indications that such a concept
has enough support in the U.N. Security Council to achieve adoption. U.S. laws
and executive orders discussed above come close to constituting a U.S. unilateral
move to compel a ban on Iranian oil buys, but they allow exceptions, as noted.
Some advocate a U.N. Security Council ban on all investment in and equipment
sales to Iran’s energy sector so that countries such as China would be compelled
to end all dealings with that Iranian sector. During the 1990s, U.N. sanctions
against Libya for the Pan Am 103 bombing banned the sale of energy equipment
to Libya.
• Iran Oil Free Zone. Prior to the EU oil embargo on Iran, there was discussion of
forcing a similar result by closing the loophole in the U.S. trade ban under which
Iranian crude oil, when mixed with other countries’ oils at foreign refineries in
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Iran Sanctions
Europe and elsewhere, can be imported as refined product. Some argue this
concept has been mooted by the EU oil embargo, while others say the step still
has value in making sure the EU oil embargo on Iran is not lifted or modified.
• Mandating Reductions in Diplomatic Exchanges with Iran or Prohibiting Travel
by Iranian Officials. Some have suggested that the United States organize a
worldwide ban on travel by senior Iranian civilian officials, a pullout of all
diplomatic missions in Tehran, and explusion of Iranian diplomats worldwide.
The EU came one close to adopting this option after the November 29, 2011
attack on the British Embassy in Tehran. Canada closed its embassy in Tehran in
September 2012.
• Barring Iran from International Sporting Events. A further option is to limit
sports or cultural exchanges with Iran, such as Iran’s participation in the World
Cup soccer tournament. However, many experts oppose using sporting events to
accomplish political goals.
• Sanctioning Iranian Profiteers and Corruption. Some experts believe that,
despite the provision of P.L. 112-239 discussed earlier, the United States and
international community has not effectively targeted for sanctions Iranians who
are exercising special rights, monopolies, or political contacts for personal gain,
and depriving average Iranians of economic opportunity and of goods at
reasonable prices. Others believe that human rights sanctions should be extended
to Iranian officials who are responsible for depriving Iranian women and other
groups of internationally-accepted rights.
• Banning Passenger Flights to and from Iran. Bans on flights to and from Libya
were imposed on that country in response to the finding that its agents were
responsible for the December 21, 1988, bombing of Pan Am 103 (now lifted).
There are no indications that a passenger aircraft flight ban is under consideration
among the P5+1. A variation of this idea could be the imposition of sanctions
against airlines that are in joint ventures or codeshare arrangements with Iranian
airlines.
• Limiting Lending to Iran by International Financial Institutions. Resolution 1747
calls for restraint on but does not outright ban international lending to Iran. An
option is to make a ban on such lending mandatory. Some U.S. groups have
called for the International Monetary Fund (IMF) to withdraw all its holdings in
Iran’s Central Bank and suspend Iran’s membership in the body.
• Banning Trade Financing or Official Insurance for Trade Financing. Another
option is to mandate a worldwide ban on official trade credit guarantees. This
was not mandated by Resolution 1929, but several countries imposed this
sanction subsequently. A ban on investment in Iranian bonds reportedly was
considered but deleted to attract China and Russia’s support.
• Restricting Operations of and Insurance for Iranian Shipping. One option,
reportedly long under consideration, has been a worldwide ban on provision of
insurance or reinsurance for any shipping to or from Iran. A call for restraint is in
Resolution 1929, but is not mandatory. As of July 1, 2012, the EU has banned
such insurance, and many of the world’s major insurers are in Europe.
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Sanctions Easing/Incentives
Some believe that the United States and its international partners need to prepare for possibly
easing sanctions as an overture to the election of the relatively moderate Rouhani, or as part of a
nuclear agreement with Iran. During the rounds of talks with Iran in 2012 the P5+1 have offered,
in exchange for proposed curbs on Iranian uranium enrichment, relatively modest steps, well
short of Iranian demands to lift the EU oil embargo. Many assert that there will be no agreement
with Iran unless that demand is met. Some observers believe Congress, in legislation, should spell
out specific sanctions laws that would be altered if Iran were to meet international nuclear
demands. Other observers believe that the international community should offer incentives—such
as promises of aid, investment, trade preferences, and other benefits—if Iran were to completely
abandon uranium enrichment in Iran or were there to be a new regime formed in Iran. Still others
believe that the United States should take steps to identify sources of funds for humanitarian
shipments to Iran of needed medicines that reportedly are in short supply.
Table 4. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders
(Persons listed are identified by the positions they held when designated; some have since changed.)
Entities Named for Sanctions Under Resolution 1737
Atomic Energy Organization of Iran (AEIO) Mesbah Energy Company (Arak supplier); Kalaye Electric (Natanz
supplier); Pars Trash Company (centrifuge program); Farayand Technique (centrifuge program); Defense Industries
Organization (DIO); 7th of Tir (DIO subordinate); Shahid Hemmat Industrial Group (SHIG)—missile program; Shahid
Bagheri Industrial Group (SBIG)—missile program; Fajr Industrial Group (missile program); Mohammad Qanadi, AEIO
Vice President; Behman Asgarpour (Arak manager); Ehsan Monajemi (Natanz construction manager); Jafar
Mohammadi (Adviser to AEIO); Gen. Hosein Salimi (Commander, IRGC Air Force); Dawood Agha Jani (Natanz
official); Ali Hajinia Leilabadi (director of Mesbah Energy) ; Lt. Gen. Mohammad Mehdi Nejad Nouri (Malak Ashtar
University of Defence Technology rector); Bahmanyar Morteza Bahmanyar (AIO official); Reza Gholi Esmaeli (AIO
official); Ahmad Vahid Dastjerdi (head of Aerospace Industries Org., AIO); Maj. Gen. Yahya Rahim Safavi (Commander
in Chief, IRGC)
Entities/Persons Added by Resolution 1747
Ammunition and Metallurgy Industries Group (controls 7th of Tir); Parchin Chemical Industries (branch of DIO); Karaj
Nuclear Research Center; Novin Energy Company; Cruise Missile Industry Group; Sanam Industrial Group
(subordinate to AIO); Ya Mahdi Industries Group; Kavoshyar Company (subsidiary of AEIO); Sho’a Aviation
(produces IRGC light aircraft for asymmetric warfare); Bank Sepah (funds AIO and subordinate entities); Esfahan
Nuclear Fuel Research and Production Center and Esfahan Nuclear Technology Center; Qods Aeronautics Industries
(produces UAV’s, para-gliders for IRGC asymmetric warfare); Pars Aviation Services Company (maintains IRGC Air
Force equipment); Gen. Mohammad Baqr Zolqadr (IRGC officer serving as deputy Interior Minister; Brig. Gen.
Qasem Soleimani (Qods Force commander); Fereidoun Abbasi-Davani (senior defense scientist); Mohasen
Fakrizadeh-Mahabai (defense scientist); Seyed Jaber Safdari (Natanz manager); Mohsen Hojati (head of Fajr Industrial
Group); Ahmad Derakshandeh (head of Bank Sepah); Brig. Gen. Mohammad Reza Zahedi (IRGC ground forces
commander); Amir Rahimi (head of Esfahan nuclear facilities); Mehrdada Akhlaghi Ketabachi (head of SBIG); Naser
Maleki (head of SHIG); Brig. Gen. Morteza Reza’i (Deputy commander-in-chief, IRGC); Vice Admiral Ali Akbar
Ahmadiyan (chief of IRGC Joint Staff); Brig. Gen. Mohammad Hejazi (Basij commander)
Entities Added by Resolution 1803
Thirteen Iranians named in Annex 1 to Resolution 1803; al reputedly involved in various aspects of nuclear program.
Bans travel for five named Iranians.
Electro Sanam Co.; Abzar Boresh Kaveh Co. (centrifuge production) ; Barzaganin Tejaral Tavanmad Saccal; Jabber Ibn
Hayan; Khorasan Metallurgy Industries; Niru Battery Manufacturing Co. (Makes batteries for Iranian military and
missile systems); Ettehad Technical Group (AIO front co.); Industrial Factories of Precision; Joza Industrial Co.;
Pshgam (Pioneer) Energy Industries; Tamas Co. (involved in uranium enrichment); Safety Equipment Procurement
(AIO front, involved in missiles)
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Entities Added by Resolution 1929
Over 40 entities added; makes mandatory a previously nonbinding travel ban on most named Iranians of previous
resolutions. Adds one individual banned for travel—AEIO head Javad Rahiqi
Amin Industrial Complex; Armament Industries Group; Defense Technology and Science Research Center (owned or
control ed by Ministry of Defense); Doostan International Company; Farasakht Industries; First East Export Bank, PLC
(only bank added by Resolution 1929); Kaveh Cutting Tools Company; M. Babaie Industries; Malek Ashtar University
(subordinate of Defense Technology and Science Research Center, above); Ministry of Defense Logistics Export (sel s
Iranian made arms to customers worldwide); Mizan Machinery Manufacturing; Modern Industries Technique
Company; Nuclear Research Center for Agriculture and Medicine (research component of the AEIO); Pejman
Industrial Services Corp.; Sabalan Company; Sahand Aluminum Parts Industrial Company; Shahid Karrazi Industries;
Shahid Sattari Industries; Shahid Sayyade Shirazi Industries (acts on behalf of the DIO); Special Industries Group
(another subordinate of DIO); Tiz Pars (cover name for SHIG); Yazd Metallurgy Industries
The following Revolutionary Guard affiliated firms (several are subsidiaries of Khatam ol-Anbiya, the main Guard
construction affiliate): Fater Institute; Garaghe Sazendegi Ghaem; Gorb Karbala; Gorb Nooh ; Hara Company;
Imensazan Consultant Engineers Institute; Khatam ol-Anbiya; Makin; Omran Sahel; Oriental Oil Kish; Rah Sahel; Rahab
Engineering Institute; Sahel Consultant Engineers; Sepanir; Sepasad Engineering Company
The fol owing entities owned or control ed by Islamic Republic of Iran Shipping Lines (IRISL): Irano Hind Shipping
Company; IRISL Benelux; and South Shipping Line Iran
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) and Mesbah Energy Company (Iran)
January 2006
Four Chinese entities: Beijing Alite Technologies, LIMMT Economic and Trading
June 2006
Company, China Great Wall Industry Corp, and China National Precision
Machinery Import/Export Corp.
Sanam Industrial Group (Iran) and Ya Mahdi Industries Group (Iran)
July 2006
Bank Sepah (Iran)
January 2007
Defense Industries Organization (Iran)
March 2007
June 2007
Pars Trash (Iran, nuclear program); Farayand Technique (Iran, nuclear program); Fajr Industries Group (Iran, missile
program); Mizan Machine Manufacturing Group (Iran, missile prog.)
Aerospace Industries Organization (AIO) (Iran)
September 2007
Korea Mining and Development Corp. (N. Korea)
September 2007
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October 21, 2007
Islamic Revolutionary Guard Corps (IRGC)
Ministry of Defense and Armed Forces Logistics
Bank Melli (Iran’s largest bank, widely used by Guard); Bank Melli Iran Zao (Moscow); Melli Bank PC (U.K.)
Bank Kargoshaee
Arian Bank (joint venture between Melli and Bank Saderat). Based in Afghanistan
Bank Mellat (provides banking services to Iran’s nuclear sector); Mellat Bank SB CJSC (Armenia). Reportedly has $1.4
billion in assets in UAE
Persia International Bank PLC (U.K.)
Khatam ol Anbiya Gharargah Sazendegi Nooh (main IRGC construction and contracting arm, with $7 billion in oil, gas
deals)
Oriental Oil Kish (Iranian oil exploration firm)
Ghorb Karbala; Ghorb Nooh (synonymous with Khatam ol Anbiya)
Sepasad Engineering Company (Guard construction affiliate)
Omran Sahel (Guard construction affiliate)
Sahel Consultant Engineering (Guard construction affiliate)
Hara Company
Gharargahe Sazandegi Ghaem
Bahmanyar Morteza Bahmanyar (AIO, Iran missile official, see above under Resolution 1737)
Ahmad Vahid Dastjerdi (AIO head, Iran missile program)
Reza Gholi Esmaeli (AIO, see under Resolution 1737)
Morteza Reza’i (deputy commander, IRGC) See also Resolution 1747
Mohammad Hejazi (Basij commander). Also, Resolution 1747
Ali Akbar Ahmadian (Chief of IRGC Joint Staff). Resolution 1747
Hosein Salimi (IRGC Air Force commander). Resolution 1737
Qasem Soleimani (Qods Force commander). Resolution 1747
Future Bank (Bahrain-based but allegedly control ed by Bank Melli)
March 12, 2008
July 8, 2008
Yahya Rahim Safavi (former IRGC Commander in Chief); Mohsen Fakrizadeh-Mahabadi (senior Defense Ministry
scientist); Dawood Agha-Jani (head of Natanz enrichment site); Mohsen Hojati (head of Fajr Industries, involved in
missile program); Mehrdada Akhlaghi Ketabachi (heads Shahid Bakeri Industrial Group); Naser Maliki (heads Shahid
Hemmat Industrial Group); Tamas Company (involved in uranium enrichment); Shahid Sattari Industries (makes
equipment for Shahid Bakeri); 7th of Tir (involved in developing centrifuge technology); Ammunition and Metal urgy
Industries Group (partner of 7th of Tir); Parchin Chemical Industries (deals in chemicals used in ballistic missile
programs)
August 12, 2008
Karaj Nuclear Research Center; Esfahan Nuclear Fuel Research and Production Center (NFRPC) ; Jabber Ibn Hayyan
(reports to Atomic Energy Org. of Iran, AEIO); Safety Equipment Procurement Company; Joza Industrial Company
(front company for Shahid Hemmat Industrial Group, SHIG)
September 10, 2008
Islamic Republic of Iran Shipping Lines (IRISL) and 18 affiliates, including Val Fajr 8; Kazar; Irinvestship; Shipping
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
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September 17, 2008
Firms affiliated to the Ministry of Defense, including Armament Industries Group; Farasakht Industries; Iran Aircraft
Manufacturing Industrial Co.; Iran Communications Industries; Iran Electronics Industries; and Shiraz Electronics
Industries
October 22, 2008
Export Development Bank of Iran (EDBI). Provides financial services to Iran’s Ministry of Defense and Armed Forces
Logistics
Banco Internacional de Desarollo, C.A., Venezuelan-based Iranian bank, sanctioned as an affiliate of the Export
Development Bank.
Assa Corporation (alleged front for Bank Melli involved in managing property in
December 17, 2008
New York City on behalf of Iran)
March 3, 2009
11 Entities Tied to Bank Melli: Bank Melli Iran Investment (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
February 10, 2010:
IRGC General Rostam Qasemi, head of Khatem ol-Anbiya Construction Headquarters (main IRGC corporate arm)
and several entities linked to Khatem ol-Anbiya, including: Fater Engineering Institute, Imensazen Consultant Engineers
Institute, Makin Institute, and Rahab Institute
June 16, 2010
- Post Bank of Iran
- IRGC Air Force
- IRGC Missile Command
- Rah Sahel and Sepanir Oil and Gas Engineering (for ties to Khatem ol-Anibya IRGC construction affiliate)
- Mohammad Ali Jafari—IRGC Commander-in-Chief since September 2007
- Mohammad Reza Naqdi—Head of the IRGC’s Basij militia force that suppresses dissent (since October 2009)
- Ahmad Vahedi—Defense Minister
- Javedan Mehr Toos, Javad Karimi Sabet (procurement brokers or atomic energy managers)
- Naval Defense Missile Industry Group (controlled by the Aircraft Industries Org that manages Iran’s missile
programs)
- Five front companies for IRISL: Hafiz Darya Shipping Co.; Soroush Sarzamin Asatir Ship Management Co.; Safiran
Payam Darya; and Hong Kong-based Seibow Limited and Seibow Logistics.
Also identified on June 16 were 27 vessels linked to IRISKL and 71 new names of already designated IRISL ships.
Several Iranian entities were also designated as owned or control ed by Iran for purposes of the ban on U.S. trade
with Iran.
November 30, 2010
- Pearl Energy Company (formed by First East Export Bank, a subsidiary of Bank Mel at
- Pearl Energy Services, SA
- Ali Afzali (high official of First East Export Bank)
- IRISL front companies: Ashtead Shipping, Byfleet Shipping, Cobham Shipping, Dorking Shipping, Effingham Shipping,
Farnham Shipping, Gomshal Shipping, and Horsham Shipping (al located in the Isle of Man).
- IRISL and affiliate officials: Mohammad Hosein Dajmar, Gholamhossein Golpavar, Hassan Jalil Zadeh, and Mohammad
Haji Pajand.
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December 21, 2010
- Bonyad (foundation) Taavon Sepah, for providing services to the IRGC
- Ansar Bank (for providing financial services to the IRGC)
- Mehr Bank (same justification as above)
- Moallem Insurance Company (for providing marine insurance to IRISL, Islamic Republic of Iran Shipping Lines)
- Bank of Industry and Mine (BIM)
May 17, 2011
- Tidewater Middle East Company
June 23, 2011
- Iran Air
- Mehr-e Eqtesad Iranian Investment Co.
March 28, 2012
Iran Maritime Industrial Company SADRA (owned by IRGC engineering firm Khatem-ol-Anbiya, has offices in
Venezuela)
Deep Offshore Technology PJS (subsidiary of the above)
Malship Shipping Agency and Modality Ltd (both Malta-based affiliates of IRISL)
Seyed Alaeddin Sadat Rasool (IRISL legal adviser)
Ali Ezati (IRISL strategic planning and public affairs manager)
July 12, 2012
- Electronic Components Industries Co. (ECI) and Information Systems Iran (ISIRAN)
- Advanced Information and Communication Technology Center (AICTC) and Hamid Reza Rabiee (software engineer
for AICTC)
- Digital Medial Lab (DML) and Value Laboratory (owned or control ed by Rabiee or AICTC)
- Ministry of Defense Logistics Export (MODLEX)
Daniel Frosh (Austria) and International General Resourcing FZE)—person and his UAE-based firm al egedly supply
Iran’s missile industry.
November 8, 2012
- National Iranian Oil Company
-Tehran Gostaresh, company owned by Bonyad Taavon Sepah
- Imam Hossein University, owned by IRGC
-Baghyatollah Medical Sciences University, owned by IRGC or providing services to it.
December 13, 2012
Atomic Energy Organization of Iran (AEOI) chief Fereidoun Abbasi Davain
Seyed Jaber Safdari of Novin Energy, a designated affiliate of AEOI
Morteza Ahmadi Behazad, provider of services to AEOI (centrifuges)
Pouya Control—provides goods and services for uranium enrichment
Iran Pooya—provides materials for manufacture of IR-1 and IR-2 centrifuges
Aria Nikan Marine Industry—source of goods for Iranian nuclear program
Amir Hossein Rahimyar—procurer for Iran nuclear program
Mohammad Reza Rezvanianzadeh—involved in various aspects of nuclear program
Faratech—involved in Iran heavy water reactor project
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Neda Industrial Group—manufacturer of equipment for Natanz enrichment facility
Tarh O Palayesh—designer of elements of heavy water research reator
Towlid Abzar Boreshi Iran—manufacturer for entities affiliated with the nuclear program.
December 21, 2012
SAD Import Export Company (also designated by U.N. Sanctions Committee a few days earlier for violating
Resolution 1747 ban on Iran arms exports, along with Yas Air) for shipping arms and other goods to Syria’s armed
forces
Marine Industries Organization—designated for affiliation with Iran Ministry of Defense and Armed Forces Logistics
Mustafa Esbati—acts on behalf of Marine Industries
Chemical Industries and Development of Materials Group—designated as affiliate of Defense Industries Org.
Doostan International Company—designated for providing services to Iran Aerospace Industries Org, which oversees
Iran missile industries.
April 11, 2013
Babak Morteza Zanjani—chairmen of Sorinet Group that Iran uses to finance oil sales abroad.
International Safe Oil—provides support to NIOC and NICO
Sorinet Commercial Trust Bankers (Dubai) and First Islamic Investment Bank (Malaysia)—finance NIOC and NICO
Kont Kosmetik and Kont Investment Bank—control ed by Babak Zanjani
Naftiran Intertrade Company Ltd.—owned by NIOC
May 9, 2013
Iranian-Venezuelan Bi-National Bank (IVBB), for activities on behalf of the Export Development Bank of Iran that was
sanctioned on October 22, 2008, (see above). EDBI was sanctioned for providing financial services to Iran’s Ministry
of Defense.
May 31, 2013
Bukovnya AE (Ukraine) for leasing aircraft to Iran Air.
Iran-Related Entities Sanctioned Under Executive Order 13224 (Terrorism Entities)
July 25, 2007
Martyr’s Foundation (Bonyad Shahid), a major Iranian foundation (bonyad)—for providing financial support to
Hezbollah and PIJ
Goodwil Charitable Organization, a Martyr’s Foundation office in Dearborn, Michigan
Al Qard Al Hassan—part of Hezbol ah’s financial infrastructure (and associated with previously designated Hezbol ah
entities Husayn al-Shami, Bayt al-Mal, and Yousser Company for Finance and Investment.
Qasem Aliq—Hezbol ah official, director of Martyr’s Foundation Lebanon branch, and head of Jihad al-Bina, a
previously designated Lebanese construction company run by Hezbol ah.
Ahmad al-Shami—financial liaison between Hezbol ah in Lebanon and Martyf’s Foundation chapter in Michigan
Qods Force and Bank Saderat (allegedly used to funnel Iranian money to
October 21, 2007
Hezbol ah, Hamas, PIJ, and other Iranian supported terrorist groups)
Al Qaeda Operatives in Iran: Saad bin Laden; Mustafa Hamid; Muhammad Rab’a al-
January 16, 2009
Bahtiyti; Alis Saleh Husain
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August 3, 2010
Qods Force senior officers: Hushang Allahdad, Hossein Musavi,Hasan Mortezavi, and Mohammad Reza Zahedi
Iranian Committee for the Reconstruction of Lebanon, and its director Hesam Khoshnevis, for supporting Lebanese
Hizballah
Imam Khomeini Relief Committee Lebanon branch, and its director Ali Zuraik, for providing support to Hizbal ah
Razi Musavi, a Syrian based Iranian official allegedly providing support to Hizballah
Liner Transport Kish (for providing shipping services to transport weapons to
December 21, 2010
Lebanese Hizbal ah)
For alleged plot against Saudi Ambassador to the U.S.:
October 11, 2011
Qasem Soleimani (Qods Force commander); Hamid Abdollahi (Qods force); Abdul
Reza Shahlai (Qods Force); Ali Gholam Shakuri (Qods Force); Manssor Arbabsiar
(alleged plotter)
Mahan Air (for transportation services to Qods Force)
October 12, 2011
Ministry of Intelligence and Security of Iran (MOIS)
February 16, 2012
Yas Air (successor to Pars Air); Behineh Air (Iranian trading company); Ali Abbas
March 27, 2012
Usman Jega (Nigerian shipping agent); Qods Force officers: Esmail Ghani, Sayyid Ali
Tabatabaei, and Hosein Aghajani
These entities and persons were sanctioned for weapons shipments to Syria and
an October 2011 shipment bound for Gambia, intercepted in Nigeria.
Ukraine-Mediterranean Airlines (Um Air, Ukraine) for helping Mahan Air and Iran
May 31, 2013
Air conduct illicit activities
Rodrigue Elias Merhej (owner of Um Air)
Kyrgyz Trans Avia (KTA, Kyrgyzstan) for leasing aircraft to Mahan Air
Lidia Kim, director of KTA
Sirjanco (UAE) for serving as a front for Mahan Air acquisition of aircraft
Hamid Arabnejad, managing director of Mahan Air.
Entities Sanctioned Under the Iran North Korea Syria Non-Proliferation Act or
Executive Order 12938
The designations are under the Iran, North Korea, Syria Non-Proliferation Act (INKSNA) unless specified. These
designations expire after two years, unless re-designated
Baltic State Technical University and Glavkosmos, both of Russia
July 30, 1998 (E.O. 12938).
Both removed in 2010—Baltic
on January 29, 2010, and
Glavkosmos on March 4, 2010
D. Mendeleyev University of Chemical Technology of Russia and Moscow Aviation
January 8, 1999 (E.O. 12938).
Institute
Both removed on May 21, 2010
Norinco (China). For alleged missile technology sale to Iran.
May 2003
Taiwan Foreign Trade General Corporation (Taiwan)
July 4, 2003
Tula Instrument Design Bureau (Russia). For alleged sales of laser-guided artillery
September 17, 2003 (also
shells to Iran.
designated under Executive
Order 12938), removed May
21, 2010
13 entities sanctioned including companies from Russia, China, Belarus, Macedonia, April 7, 2004
North Korea, UAE, and Taiwan.
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Iran Sanctions
14 entities from China, North Korea, Belarus, India (two nuclear scientists, Dr.
September 29, 2004
Surendar and Dr. Y.S.R. Prasad), Russia, Spain, and Ukraine.
14 entities, mostly from China, for al eged supplying of Iran’s missile program.
December 2004 and January
Many, such as North Korea’s Changgwang Sinyong and China’s Norinco and Great 2005
Wall Industry Corp, have been sanctioned several times previously. Newly
sanctioned entities included North Korea’s Paeksan Associated Corporation, and
Taiwan’s Ecoma Enterprise Co.
9 entities, including those from China (Norinco yet again), India (two chemical
December 26, 2005
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 and Prachi Poly
August 4, 2006 (see below for
Products); two Russian firms (Rosobornexport and aircraft manufacturer Sukhoi);
Rosobornexport removal)
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. Rosobornexport, Tula Design, and Komna Design Office of Machine
January 2007 (see below for
Building, and Alexei Safonov (Russia); Zibo Chemical, China National
Tula and Rosoboronexport
Aerotechnology, and China National Electrical (China). Korean Mining and
removal)
Industrial Development (North Korea) for WMD or advanced weapons sales to
Iran (and Syria).
14 entities, including Lebanese Hezbol ah. Some were penalized for transactions
April 23, 2007
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 Offshore International
October 23, 2008.
Corp.; Huazhong CNC (China); IRGC; Korea Mining Development Corp. (North
Rosoboronexport removed
Korea); Korea Taesong Trading Co. (NK); Yolin/Yullin Tech, Inc. (South Korea);
May 21, 2010.
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);
16 entities: Belarus: Belarusian Optical Mechanical Association; Beltech Export;
May 23, 2011
China: Karl Lee; Dalian Sunny Industries; Dalian Zhongbang Chemical Industries
Co.; Xian Junyun Electronic; Iran: Milad Jafari; DIO; IRISL; Qods Force; SAD
Import-Export; SBIG; North Korea: Tangun Trading; Syria: Industrial Establishment
of Defense; Scientific Studies and Research Center; Venezuela: CAVIM.
Mohammad Minai, senior Qods Force member involved in Iraq; Karim Muhsin al-
November 8, 2012
Ghanimi, leader of Kata’ib Hezbollah (KH) militia in Iraq; Sayiid Salah Hantush al-
Maksusi, senior KH member; and Riyad Jasim al-Hamidawi, Iran based KH member
Entities Designated as Threats to Iraqi Stability under Executive Order 13438
Ahmad Forouzandeh. Commander of the Qods Force Ramazan Headquarters,
January 9, 2008
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 funnels Iranian arms to
January 9, 2008
Shiite militias in Iraq.
Isma’il al-Lami (Abu Dura). Shiite militia leader, breakaway from Sadr Mahdi Army,
January 9, 2008
alleged to have committed mass kidnapings and planned assassination attempts
against Iraqi Sunni politicians
Mishan al-Jabburi. Financier of Sunni insurgents, owner of pro-insurgent Al-Zawra
January 9, 2008
television, now banned
Al Zawra Television Station
January 9, 2008
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Khata’ib Hezbollah (pro-Iranian Mahdi splinter group)
July 2, 2009
Abu Mahdi al-Muhandis
July 2, 2009
Iranians Sanctioned Under September 29, 2010, Executive Order 13553 on Human Rights Abusers
1. IRGC Commander Mohammad Ali Jafari
September 29, 2010
2. Minister of Interior at time of June 2009 elections Sadeq Mahsouli
3. Minister of Intelligence at time of elections Qolam Hossein Mohseni-Ejei
4. Tehran Prosecutor General at time of elections Saeed Mortazavi
5. Minister of Intelligence Heydar Moslehi
6. Former Defense Minister Mostafa Mohammad Naj ar
7. Deputy National Police Chief Ahmad Reza Radan
8. Basij (security militia) Commander at time of elections Hossein Taeb
9. Tehran Prosecutor General Abbas Dowlatabadi (appointed August 2009). Has
February 23, 2011
indicted large numbers of Green movement protesters.
10. Basij forces commander (since October 2009) Mohammad Reza Naqdi (was
head of Basij intel igence during post 2009 election crackdown)
11. Islamic Revolutionary Guard Corps (IRGC)
June 9, 2011.
12. Basij Resistance Force
13. Law Enforcement Forces (LEF)
14. LEF Commander Ismail Ahmad Moghadam
15. Ministry of Intelligence and Security of Iran (MOIS)
February 16, 2012
16. Ashgar Mir-Hejazi for human rights abuses on/after June 12, 2009 and for
May 30, 2013
providing material support to the IRGC and MOIS.
Iranians Sanctioned Under Executive Order 13572 (April 29, 2011) for Repression of the Syrian People
Revolutionary Guard—Qods Force
April 29, 2011
Qasem Soleimani (Qods Force Commander)
May 18, 2011
Mohsen Chizari (Commander of Qods Force operations and training)
Same as above
Iranian Entities Sanctioned Under Executive Order 13606 Targeting Human Rights Abuses Via
Information Technology (April 23, 2012)
- Ministry of Intelligence and Security (MOIS)
- The IRGC (Guard Cyber Defense Command)
- Law Enforcement Forces
- Datak Telecom
Entities Sanctioned Under Executive Order 13608 Targeting Sanctions Evaders
May 31, 2013
- Ferland Company Ltd. for helping NITC deceptively sell Iranian crude oil
Entities Names as Iranian Government Entities Under Executive Order 13599
Designations made July 12, 2012:
- Petro Suisse Intertrade Company (Switzerland)
-Hong Kong Intertrade Company (Hong Kong)
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- Noor Energy (Malaysia)
- Petro Energy Intertrade (Dubai, UAE)
(al four named as front companies for NIOV, Naftiran Intertrade Company, Ltd (NICO), or NICO Sarl)
- 20 Iranian financial institutions (names not released but available from Treasury Dept.)
- 58 vessels of National Iranian Tanker Company (NITC)
Designations on March 14, 2013:
- Dimitris Cambis and several affiliated firms named in Treasury Dept. press release (these entities were
simultaneously sanctioned under the Iran Sanctions Act as amended by the Iran Threat Reduction Act, see above.
Designation on May 9, 2013:
- Sambouk Shipping FZC, which is tied to Dr. Dimitris Cambis and his network of front companies.
Designations on May 31, 2013:
- Eight petrochemicals companies were designated as Iranian government entities, including Bandar Imam; Bou Ali
Sina; Mobin; Nouri; Pars; Shahid Tondgooyan; Shazand; and Tabriz.
Entities Sanctioned Under Executive Order 13622 (For Oil and Petrochemical Purchases from Iran
and Precious Metal Transactions with Iran)
May 31, 2013:
- Jam Petrochemical Company for purchasing petrochemical products from Iran.
- Niksima Food and Beverage JLT for receiving payments on behalf of Jam Petrochemical
Entities Designated as Human Rights Abusers or Limiting Free Expression Under Executive Order
13628 (Exec. order pursuant to Iran Threat Reduction and Syria Human Rights Act)
Designations made on November 8, 2012:
- Ali Fazli, deputy commander of the Basij
- Reza Taghipour, Minister of Communications and Information Technology
- LEF Commander Moghaddam (see above)
- Center to Investigate Organized Crime (established by the IRGC to protect the government from cyber attacks
- Press Supervisory Board, established in 1986 to issue licenses to publications and oversee news agencies
- Ministry of Culture and Islamic Guidance
- Rasool Jalili, active in assisting the government’s Internet censorship activities.
- Anm Afzar Goster-e-Sharif, company owned by Jalili, above, to provide web monitoring and censorship gear.
- PekyAsa, another company owned by Jalili, to develop telecom software.
Designations made on February 6, 2013:
- Islamic Republic of Iran Broadcasting (IRIB) and Ezzatol ah Zarghami (director and head of IRIB)
- Iranian Cyber Police (filters websites and hacks email accounts of political activists)
- Communications Regulatory Authority (filters Internet content)
- Iran Electronics Industries (producer of electronic systems and products including those for jamming, eavesdropping
Designations on May 30, 2013:
- Committee to Determine Instances of Criminal Content for engaging in censorship activities on/after June 12, 2009.
- Ofogh Saberin Engineering Development Company for providing services to the IRGC and Ministry of
Communications to override Western satellite communications.
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Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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