Iran Sanctions
Kenneth Katzman
Specialist in Middle Eastern Affairs
December 4, 2013
Congressional Research Service
7-5700
www.crs.gov
RS20871
Iran Sanctions
Summary
Strict sanctions on Iran—sanctions that primarily target Iran’s key energy sector and its access to
the international financial system—harmed Iran’s economy to the point where Iran’s leaders, on
November 24, 2013, accepted international proposals to at least temporarily halt further
expansion of Iran’s nuclear program. The June 14, 2013, election of Hassan Rouhani as Iran’s
president was an indication of the growing public pressure on the regime to achieve an easing of
sanctions.
• Oil exports fund nearly half of Iran’s government expenditures, and Iran’s oil
exports have declined to about 1 million barrels per day—far below 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 oil and decisions by
other Iranian oil customers to obtain exemptions from U.S. sanctions by reducing
purchases of Iranian oil. Twenty countries that buy Iranian oil have exemptions.
• The loss of revenues from oil, coupled with the cut-off of Iran from the
international banking system, caused a sharp drop in the value of Iran’s currency,
the rial; raised inflation to over 50%; and reduced Iran’s accumulation of and
access to reserves of foreign exchange. Iran’s economy shrank by about 5% since
early 2012.
• Iran has tried, with limited success, to mitigate the effects of sanctions.
Government-linked entities reportedly created front companies, and Iranian
importers and exporters increasingly used barter trade and informal banking
exchange mechanisms. Iran also increased non-oil exports or exports of
hydrocarbon products other than crude oil, such as gas condensates. Affluent
Iranians have invested in—and driven up prices for—real estate and securities
listed on the Tehran stock exchange.
Sanctions also slowed Iran’s nuclear and missile programs somewhat by hampering Iran’s ability
to obtain needed foreign technology. But U.S. assessments indicate that sanctions have not
stopped Iran from developing new conventional weaponry indigenously. Based largely on its
provision of arms to the embattled Assad government in Syria, Iran is also judged as not
complying with U.N. requirements that it halt any weapons shipments outside its borders. And
sanctions do not appear to have altered Iran’s repression of dissent or monitoring of the Internet.
To some experts, the November 24, 2013, nuclear deal with the international community
validated the strategy of sanctioning Iran. Some in Congress believe that economic pressure on
Iran needs to increase further to shape a final nuclear deal and to ensure that the sanctions relief
of the interim nuclear deal does not lead to a general unraveling of Iran sanctions. A bill in the
113th Congress, H.R. 850, passed by the House on July 31, 2013, would, among other provisions,
accelerate the oil purchase reductions required to maintain a sanctions exemption. However, the
Administration maintains that the sanctions relief contained in the November 24 nuclear deal is
“limited, temporary, modest, and reversible”—about $6 billion in relief over the six month
interim deal period. All major sanctions will remain in place during the interim agreement period,
and applicable provisions will be waived or suspended only temporarily. The Administration
argues that new sanctions would unravel the agreement and cause U.S. partners to potentially end
the cooperation that has been key to the sanctions’ effectiveness. 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
Blocked Iranian Property and Assets ............................................................................................... 1
Sanctions Against Iran’s Support for International Terrorism and Regional Activities ................... 2
Sanctions Triggered by Terrorism List Designation: Ban on U.S. Aid, Arms Sales,
Dual-Use Exports, and Certain Programs for Iran ................................................................. 2
No Ban on U.S. Humanitarian Aid ...................................................................................... 3
Executive Order 13224: Sanctioning Terrorism Supporting Entities ........................................ 4
Sanctioning Iranian Involvement in the Region ........................................................................ 4
Ban on U.S. Trade and Investment with Iran ................................................................................... 4
Major Provisions of the Trade and Investment Ban: What Is Allowed or Prohibited ............... 5
Non-application to Refined Oil with Iranian Content ......................................................... 8
Application to Foreign Subsidiaries of U.S. Firms ............................................................. 8
Energy and Other Sector Sanctions: Iran Sanctions Act (ISA) and Related Laws and
Executive Orders .......................................................................................................................... 8
The Iran Sanctions Act, Amendments, and Related Applications ............................................. 9
Key “Triggers” .................................................................................................................... 9
Mandate and Time Frame to Investigate ISA Violations ................................................... 14
Clarification of Responsibilities: Executive Order 13574................................................. 15
Interpretations and Administration of ISA and Related Laws ................................................. 17
Application to Energy Pipelines ........................................................................................ 17
Application to Crude Oil Purchases .................................................................................. 17
Application to Natural Gas Purchases from Iran/Shah Deniz ........................................... 17
Application to Liquefied Natural Gas Development ......................................................... 18
Application to Financing but Not Official Credit Guarantee Agencies ............................. 18
Application to Iranian Energy Institutions/NIOC and NITC ............................................ 18
Sanctions Imposed Under ISA ................................................................................................ 19
Sanctions on Oil and Other Payments to Iran’s Central Bank ................................................. 20
Implementation: Exemptions Issued ................................................................................. 22
Sanctions on Paying Iran with Hard Currency .................................................................. 23
Proliferation-Related Sanctions ..................................................................................................... 23
Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act .................................................. 24
Iran-North Korea-Syria Nonproliferation Act ......................................................................... 24
Executive Order 13382 ............................................................................................................ 25
Foreign Aid Restrictions for Suppliers of Iran ........................................................................ 25
Sanctions on “Countries of Diversion Concern” ..................................................................... 25
Financial/Banking Sanctions ......................................................................................................... 27
Early Efforts: Targeted Financial Measures ............................................................................ 27
Sanctioning Foreign Banks That Conduct Transactions with Iran .......................................... 27
Implementation of Section 104: Sanctions Imposed ......................................................... 28
Iran Designated a Money-Laundering Jurisdiction ................................................................. 28
Executive Order 13599 Impounding Iranian Assets ................................................................ 29
Promoting Divestment ................................................................................................................... 29
Laws Supporting Democratic Change in Iran ................................................................................ 29
Expanding Internet and Communications Freedoms ............................................................... 30
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Sanctions on Firms that Sell Censorship Gear to the Regime ........................................... 30
Sanctions Against Iran’s Internet Censorship .................................................................... 31
Measures to Sanction Human Rights Abuses and Promote the Opposition ............................ 31
Sanctions Against Iranian Human Rights Abusers and Related Equipment ..................... 31
Iranian Broadcasting and Profiteers .................................................................................. 32
Separate Visa Ban .............................................................................................................. 32
U.N. Sanctions ............................................................................................................................... 33
International Implementation and Compliance .............................................................................. 34
Europe ..................................................................................................................................... 35
Japan and Korean Peninsula .................................................................................................... 37
North Korea ....................................................................................................................... 37
India ......................................................................................................................................... 38
Pakistan ................................................................................................................................... 39
China and Russia ..................................................................................................................... 39
Turkey/South Caucasus ........................................................................................................... 40
Caucasus: Azerbaijan, Armenia, and Georgia ................................................................... 40
Persian Gulf and Iraq ............................................................................................................... 41
Afghanistan.............................................................................................................................. 42
Latin America .......................................................................................................................... 42
Africa ....................................................................................................................................... 43
World Bank Loans ................................................................................................................... 43
Private-Sector Cooperation and Compliance........................................................................... 47
Foreign Firms Reportedly Remaining in the Iran Market ................................................. 48
Effectiveness of Sanctions on Iran ................................................................................................. 50
Effect on Iran’s Nuclear Program Decisions and Capabilities ................................................ 50
Counter-Proliferation Effects ................................................................................................... 50
Effects on Iran’s Regional Political and Military Influence .................................................... 50
General Political Effects .......................................................................................................... 51
Human Rights-Related Effects ................................................................................................ 51
Economic Effects ..................................................................................................................... 52
Iran’s Mitigation Efforts .................................................................................................... 54
Effect on Energy Sector Long-Term Development ................................................................. 54
Effect on Gasoline Availability and Importation ............................................................... 60
Humanitarian Effects/Air Safety ............................................................................................. 62
Sanctions Debate Following November 24, 2013, Nuclear Deal .................................................. 63
Possible Additional Sanctions ................................................................................................. 65
Other Possible U.S. and International Sanctions ..................................................................... 66
Tables
Table 1.ISA Sanctions Determinations .......................................................................................... 20
Table 2. Top Energy Buyers From Iran and Reductions ................................................................ 23
Table 3. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program (1737,
1747, 1803, and 1929) ................................................................................................................ 34
Table 4. Comparison Between U.S., U.N., and EU and Allied Country Sanctions ....................... 44
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Table 5. Post-1999 Major Investments/Major Development Projects
in Iran’s Energy Sector ............................................................................................................... 56
Table 6. Firms That Sold or Are Selling Gasoline to Iran .............................................................. 61
Table 7. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders ................................................................................................ 68
Contacts
Author Contact Information........................................................................................................... 77
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Iran Sanctions
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.
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. Since 2006, and particularly since 2010, the international community has
joined U.S. sanctions 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 implements 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.
The sections below are grouped according to functional theme, and presented in the chronological
order in which these themes have emerged in U.S. sanctions policy toward Iran. It should be
noted, however, that most U.S. sanctions against Iran have had multiple objectives and were
enacted to address different perceived threats from Iran at the same time. It is so indicated if a
certain sanction will require waiver or suspension as a consequence of the November 24, 2013,
interim (six month duration) nuclear deal between the six negotiating powers and Iran.
Blocked Iranian Property and Assets
Some U.S. sanctions date back to the time of the U.S.-Iran hostage crisis of 1979-1981. Most
U.S. sanctions imposed at the start of the crisis by the Carter Administration, by Executive Order,
were lifted when the crisis was resolved in early 1981 under the “Algiers Accords.” Iranian
leaders continue to assert that the United States is holding Iranian assets dating from that time,
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)
1 http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2175.
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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. In addition, 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.2
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
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
judgment, 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.
Sanctions Against Iran’s Support for International
Terrorism and Regional Activities
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.
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
2 http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf.
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• 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.
Removal From Terrorism List/Sanctions Termination
Terminating the sanctions triggered by Iran’s terrorism list designation would require Iran’s removal from the
terrorism list. The Arms Export Control Act spells out two different requirements for a President to remove a
country from the list, depending on whether the country’s regime has changed.
If the regime has changed, the President can remove a country from the list immediately by certifying that change in a
report to Congress.
If the country’s regime has not changed, the President must report to Congress 45 days in advance of the effective date
of removal. The President must certify that (1) the country has not supported international terrorism within the
preceding six months, and (2) the country has provided assurances it will not do so in the future. In this latter
circumstance, Congress has the opportunity to block the removal by enacting a joint resolution to that effect. The
President has the option of vetoing the joint resolution, in which case blocking the removal would require a
congressional veto override vote.
There is no requirement that Iran be removed from the terrorism list as a consequence of the November 24, 2013,
interim nuclear deal.
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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
order has increasingly been applied to Iranian entities. Such Iran-related entities named and
sanctioned under this order are in Table 5.
Implementation: Iran-related entities sanctioned under the order for terrorism-related activities are
listed in the table at the end of this report.
Sanctioning Iranian Involvement in the Region
Some sanctions have been imposed to try to curtail Iran’s influence in the region:
• 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. As
shown in the tables at the end of this report, 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. Issued on April 29, 2011, the order targets those
responsible for human rights abuses and repression of the Syrian people. 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.
Ban on U.S. Trade and Investment with Iran
The United States has long had a wide-ranging ban on U.S. trade with and investment in Iran.
That ban was imposed on May 6, 1995, by President Clinton, through Executive Order 12959,
under the authority primarily of the International Emergency Economic Powers Act (IEEPA, 50
U.S.C. 1701 et seq.).3 IEEPA gives the President wide powers to regulate commerce with a
foreign country when a state of emergency is declared in relations with that 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.
3 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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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).
Codification of the Trade and Investment Ban. Section 103 of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) codified the ban on U.S
trade with Iran. However, the section carves out certain exemptions—for example, the section
permits U.S. exports not only of food and medical goods, but also information technology to
support personal communications among the Iranian people, goods to allow civilian aircraft to fly
safely, and goods related to supporting democracy in Iran.
Section 101 of the Iran Freedom Support Act (P.L. 109-293) separately codified the ban on U.S.
investment in Iran. Section 101 gives the President the authority to terminate sanctions under the
Iran Freedom Support Act if he notifies Congress 15 days in advance (or 3 days in advance if
there are “exigent circumstances”).
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 have been submitted since.
• Transshipment and Brokering. The regulations that implement the trade ban
prohibit transshipment of goods across Iran. They also ban any activities by U.S.
persons to broker commercial transactions involving Iran.
• 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, in the
interests of safe operations of civilian aircraft, a sale by General Electric of
Airbus engine spare parts to be installed on several Iran Air passenger aircraft (by
European airline contractors) was licensed. The Obama Administration licensed
the sale to Iran of data to repair certain GE engines for its legacy American-made
aircraft in 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. The November 24, 2013, interim
nuclear deal provides for provision of spare civilian airline parts to Iran, so
presumably additional sales will be authorized. Some Iranian airlines, including
Iran Air, are sanctioned under Executive Orders 13382 and 13224 discussed
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below, and their designations might need to be rescinded in order to provide U.S.
airplane parts to those airlines.
• Personal Communications and Remittances. The restrictions do not 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).
• 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. Therefore, it is not clear that the November 24, 2013, interim
nuclear deal would require any further modifications to the regulations governing
such U.S. sales. Among earlier easings, on October 22, 2012, OFAC attempted to
facilitate medical sales by issuing a list of medical products, such as scalpels,
prosthetics, 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 electrocardiogram, electroencephalogram, 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.4 This definition might have been a reaction to a press account on
December 24, 2010,5 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.
• Humanitarian and Related Services. Private non-financial donations by U.S.
residents to Iranian victims of natural disasters (such as mailed packages of food,
toys, clothes, etc.) were not prohibited at any time. Financial donations to relief
4 http://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf.
5 The information in this bullet is taken from: Jo Becker, “With U.S. Leave, Companies Skirt Iran Sanctions,” New
York Times, December 24, 2010.
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organizations require a specific OFAC license, because such transfers generally
require use of the international banking system. Prior to September 2013, all
NGOs that sought to perform relief efforts in Iran required a specific license to
do so, and some NGOs said the licensing requirements made work in Iran
impractical by restricting how a U.S. NGO may expend funds in Iran. On
September 10, 2013, the Treasury Department attempted to address the
complaints by eliminating specific licensing requirements for the provision to
Iran of services for health projects, disaster relief, wildlife conservation, human
rights projects, and activities related to sports matches and events. The amended
regulation also allows importation from Iran of services related to sporting
activities, including sponsorship of players, coaching, referees, and training. 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.
• Export Financing. As far as financing of approved U.S. sales to Iran, private
letters of credit (from non-Iranian banks) can be used to finance approved
transactions. Title IX of the Trade Sanctions Reform and Export Enhancement
Act of 2000 (P.L. 106-387)6 bans 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. It is
not clear whether a waiver will be provided for such financing as a consequence
of the November 24, 2013, interim nuclear deal with Iran.
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, as noted, 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. In December 2004,
the trade ban was modified to allow Americans to engage in ordinary publishing activities with
entities in Iran (and Cuba and Sudan).
6 The title is called the “Trade Sanctions Reform and Export Enhancement Act of 2000.”
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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 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.
Trade Ban Easing and Termination
The trade ban has been codified by CISADA, as noted. Terminating the trade ban outright would require
congressional action to repeal or amend Section 103 of CISADA, as well as Administration repeal or amendment of
the executive orders that imposed the ban. Section 103(b)(vi) of CISADA allows the President to license exports to
Iran if he determines that doing so is in the national interest of the United States. This gives the President flexibility to
ease the ban on U.S. exports through executive action.
There is no similar provision in CISADA to ease the ban on U.S. imports from Iran. Easing the import ban, therefore,
would require congressional action.
There are no indications that the ban on U.S. trade with or investment in Iran is required under the November 24,
2013, interim nuclear deal, although some transactions might be authorized as a consequence, as discussed above:
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 and continuing to operate in or
conduct various energy-related transactions with Iran. The intent of energy sanctions has been to
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deny Iran the financial resources to further its nuclear program and weapons of mass destruction
programs and to support terrorist organizations such as Hezbollah, 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.
The Iran Sanctions Act, Amendments, and Related Applications
The Iran Sanctions Act (ISA) has been a key component of U.S. sanctions against Iran’s energy
sector, and it has been expanded to sanction dealings with other Iranian 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 a bill 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.
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. ISA’s application has been further expanded by several
laws enacted since 2010 that amend its provisions.
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.
“Investment” To Develop Iran’s Oil and Gas Fields
ISA requires the President to sanction companies (entities, persons) that make an “investment”7 of
more than $20 million8 in one year in Iran’s energy sector.9 The definition of “investment” in ISA
7 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.
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(§14 (9)) includes not only equity and royalty arrangements but any contract that includes
“responsibility for the development of petroleum resources” of Iran. The definition includes
additions to existing investment (added by P.L. 107-24) and pipelines to or through Iran and
contracts to lead the construction, upgrading, or expansions of energy projects (added by the
Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 [CISADA; P.L. 111-
195]).
Implementation: Several firms have been sanctioned under ISA for investing in Iran’s oil and gas
fields, as discussed below.
Sales of Weapons Related Technology and Uranium Mining Ventures
The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) amended ISA by
adding Section 5(b)(1) subjecting to ISA sanctions: firms or persons determined to have sold to
Iran (1) technology useful for weapons of mass destruction (WMD) or (2) “destabilizing numbers
and types” of advanced conventional weapons. (Sanctions apply if the exporter knew or had
cause to know that the final destination of the items sold would be Iran.)
Entities determined by the Administration to participate in a joint venture with Iran relating to the
mining, production, or transportation of uranium are sanctionable under ISA. Under Section
5(b)(2) added by the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158, signed
August 10, 2012).
Implementation: No ISA sanctions have been imposed on any entities under these provisions.
Sales of Gasoline and Related Equipment and Services
The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA,
signed on July 1, 2010, P.L. 111-195) 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.
(...continued)
8 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).
9 The original ISA definition of energy sector included oil and natural gas, and CISADA added to that definition:
liquefied natural gas (LNG), oil or LNG tankers, and products to make or transport pipelines that transport oil or LNG.
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The sanction was enacted to exploit Iran’s dependency on import for 40% of its gasoline needs. It
followed legislation such as H.R. 2880 (110th Congress, not enacted); P.L. 111-85 that prohibited
the use of U.S. funds to fill the Strategic Petroleum Reserve with products from firms that sell
gasoline to Iran; and P.L. 111-117 that denied Ex-Im Bank credits to any firm that sold gasoline
and related equipment and services to Iran. These initiatives prompted a decision in December
2008 by Reliance Industries Ltd. of India to cease new sales of gasoline to Iran. (The Ex-Im
Bank, in August 2008, had extended $900 million in financing guarantees to Relianced.)
Implementation: Several firms, as discussed below, have been sanctioned under ISA for selling or
shipping gasoline to Iran.
Sales of Energy Sector Equipment, Services, and Petrochemicals
An Executive Order, 13590 (November 21, 2011), was codified by Section 201 of the Iran Threat
Reduction and Syria Human Rights Act of 2012 (P.L. 112-158). This provision 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.10 It is possible that this provision will be waived as a consequence of
the November 24, 2013, interim nuclear deal with Iran.
Implementation: No firms have been sanctioned under these provisions.
Purchasing of Iranian Crude Oil and Petrochemical Products
Executive Order 13622 (July 30, 2012) applies virtually all of the same sanctions as ISA—as well
as restrictions on foreign banks (see below)—to entities that the Administration determines have:
• purchased oil or other petroleum products from Iran.11 The part of this provision
pertaining to petrochemical purchases will need to be waived as a consequence
of the interim nuclear deal.
• conducted transactions with the National Iranian Oil Company (NIOC) or
Naftiran Intertrade Company (NICO).
Under the Order, 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”
10 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_0001-2175.
11 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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oil purchases from Iran. (See below for more information on the exemption process.) A law
cannot be amended by executive order and E.O. 13622 does not amend ISA.
Implementation: Several firms were sanctioned under this order on May 31, 2013, for
petrochemical sales to Iran.
Sanctions on transactions related to purchasing Iranian crude oil were codified by Section 201 of
the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158, signed August 10, 2012). It
amends ISA by applying ISA sanctions to entities determined by the Administration to have:
• Owned a vessel that was 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.)
• Participated 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).)
Implementation. Some firms, as shown below, have been sanctioned for providing vessels for the
shipment of crude oil to Iran.
Insurance for Iranian Oil Entities and Purchases of Iranian Bonds
Separate provisions of the Iran Threat Reduction and Syria Human Rights Act (Sections 212, 213,
and 302) do not specifically amend ISA, but require the application of 5 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); or
• that purchases or facilitates the issuance of sovereign debt of the government of
Iran, including Iranian government bonds.
Dealings with Iran’s Energy, Shipbuilding, and Shipping Sector
The National Defense Authorization Act for FY2013 (H.R. 4310, P.L. 112-239, signed January 2,
2013) Subtitle D, “The Iran Freedom and Counter-Proliferation Act” (IFCA), does not amend ISA
but imposes at least 5 out the 12 ISA sanctions (as of July 1, 2013, 180 days after enactment) on
entities determine to have:
• provided goods or services to the energy, shipbuilding, and shipping sectors of
Iran, or to port operations there—or which provide insurance for such
transactions. This is under Section 1244 of IFCA, which also blocks U.S.-based
property and U.S.-based banking activity on violators. 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).
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• provided 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. This is under
Section 1246 of IFCA. There is no exception to this sanction for countries
exempted under P.L. 112-81.
• Section 1248 of IFCA sanctions Iran’s state broadcasting establishment (Islamic
Republic of Iran Broadcasting) as a human rights abuser, triggering sanctions
under Section 105 of CISADA.
• Dealings in Precious Metals. Section 1245 of IFCA imposes at least 5 out of 12
ISA sanctions on entities that provide precious metals to Iran (including gold) or
semi-finished metals or software for integrating industrial processes. The section
therefore affects foreign firms that transfer gold or other precious metals to Iran
in exchange for oil or any other product. There is no exception to this sanction
for countries exempted under P.L. 112-81. The provision does not amend ISA.
This essentially codifies Section 5 of Executive Order 13622 that blocks U.S.-
based property of individuals or firms determined to have helped Iran purchase
U.S. bank notes or precious metals or to have provided financial support to
NIOC, NICO, or the Central Bank of Iran. Executive Order 13645 of June 3,
2013 (Section 16), applies the restriction to transfers of stones or jewels.
IFCA Waiver Authority
Sections 1244 and 1245 provide for a waiver of the sanctions for 180 days, renewable for 180 day periods, if such a
waiver is determined to be vital to U.S. national security.
It appears that several provisions of IFCA will need to be waived in order to implement the November 24, 2013,
interim nuclear deal.
The Automotive Sector and Rial Trading
Executive Order 13645 of June 3, 2013 (effective July 1, 2013):
• imposes 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. (An executive order cannot amend a law, so the order does not
amend ISA.) This provision apparently will need to be suspended to implement
the November 24, 2013, interim nuclear deal with Iran.
• 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.
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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
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).12
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 Office 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.
12 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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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. CISADA amended 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, are:
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)
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)
12. imposition of any of the ISA sanctions on principal offices of a sanctioned firm (added by P.L. 112-158).
Mandatory 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.
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).
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ISA Waiver, Exemptions, and Sunset Provisions
Waiver Provisions
The President has the authority to waive sanctions on firms determined to have violated ISA provisions. 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(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 al ow 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 criterion 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-cal ed “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 Process and Requirements
In its entirety, ISA application to Iran would terminate if the Administration certifies that three requirements are met:
(1) that Iran has ceased its efforts to acquire WMD; (2) that Iran has been removed from the U.S. list of state
sponsors of terrorism; and (3) that Iran no longer “poses a significant threat” to U.S. national security and U.S. allies.13
This termination provision, and the sunset provision discussed below, do not apply to those laws that apply ISA sanctions
without specifically amending ISA. The Executive orders and laws that apply ISA sanctions to specified violators but
without amending ISA itself can be revoked by a superseding Executive Order or congressional action that amends or
repeals the provisions involved.
Sunset Provisions
ISA is currently scheduled to sunset on December 31, 2016, as provided for by CISADA. This fol owed prior sunset
extensions to December 31, 2011 (by P.L. 109-293), and to December 31, 2006 (P.L. 107-24, August 3, 2001). The
original law provided for a sunset date of August 5, 2001. P.L. 107-24 also 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.
13 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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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.14
Implementation. No gas pipelines built linking Iran to neighboring countries have been
sanctioned under ISA. Specific pipeline 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
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 report. Purchases of Iranian gas are distinguishable from the construction of natural gas
pipelines involving Iran which, as discussed, does constitute potentially sanctionable activity.
The effective dates of U.S. sanctions laws also excludes long-standing 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”
14 http://dawn.com/2012/03/01/tough-us-warning-on-iran-gas-pipeline/.
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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. That appears to apply to the second phase of the project that is now under
way, which involves NICO at the same level of ownership and will carry gas to Europe.
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.
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.
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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.
Sanctions Imposed Under ISA
The European Union (EU) 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—a $2 billion15 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.16 The EU sanctions
against Iran imposed since 2010 have largely rendered this understanding moot because EU firms
are barred from investing in Iran’s energy sector.
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. State
Department reports to Congress on ISA, required every six months, do not specifically state
which foreign companies, if any, are still being investigated for ISA violations. No publication of
such deals has been placed in the Federal Register, as required by Section 5e of ISA.
The companies for which ISA determinations have been announced are listed in the table below.
15 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.
16 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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Table 1.ISA Sanctions Determinations
Date Companies/Country
Status/Comment
May 18,
Total SA (France); Gazprom (Russia);
Waived. ISA Violation determined but sanctions waived in
1998
and Petronas (Malaysia)
line with U.S.-EU agreement discussed in text above.
Sept. 30,
Naftiran Intertrade Co. (NICO)
Sanctioned. For activities to develop Iran’s energy sector
2010
Switzerland, Iran
Sept. 30,
Total (France); Statoil (Norway); ENI
Exempted. Under from sanctions under ISA “special rule”
2010
(Italy); and Royal Dutch Shell (Britain,
for pledging to wind down work on Iran energy fields.
Netherlands)
Nov. 17,
Inpex (Japan)
Exempted. Special rule applied for announcement one month
2010
earlier that it divested its remaining 10% stake in Azadegan
oil field development.
March
Belarusneft (Belarus, subsidiary of
Sanctioned. For $500 million contract with NICO (see
29, 2011
Belneftekhim)
above) to develop Jofeir oil field. Other subsidiaries of
Belneftekhim were sanctioned in 2007 under E.O. 13405
related to policy on Belarus.
May 24,
Petrochemical Commercial Company
Sanctioned. Under CISADA amendment to ISA imposing
2011
International (PCCI) of Bailiwick of
sanctions for selling gasoline to Iran or helping Iran import
Jersey and Iran; Royal Oyster Group
gasoline. Allvale Maritime and SAMAMA determinations
(UAE); Tanker Pacific (Singapore);
were issued on September 13, 2011, to “clarify” the May 24
Allvale Maritime (Liberia); Societie
determinations that had named Ofer Brothers Group. The
Anonyme Monegasque Et Aerienne
two, as well as Tanker Pacific, are affiliated with a Europe-
(SAMAMA, Monaco); Speedy Ship
based trust linked to deceased Ofer brother Sami Ofer, and
(UAE/Iran); Associated Shipbroking
not Ofer Brothers Group based in Israel. The firms named
(Monaco); and Petroleos de Venezuela
were subjected primarily to the financial-related sanctions
(PDVSA, Venezuela).
provided in ISA. U.S.-based subsidiaries of PDVSA, such as
Citgo, were not sanctioned and U.S. purchases of
Venezuelan oil were not affected.
Jan. 12,
Zhuhai Zhenrong Co. (China); Kuo Oil
Sanctioned. For brokering sales or making sales to Iran of
2012
Pte Ltd. (Singapore); FAL Oil Co. (UAE)
gasoline.
Aug. 12,
Sytrol (Syria)
Sanctioned. For sales of gasoline to Iran.
2012
Mar. 14,
Dr. Dimitris Cambis; Impire Shipping;
Sanctioned. Under amendments to ISA by Iran Threat
2013
Kish Protection and Indemnity (Iran);
Reduction Act sanctioning owning vessels that transport
and Bimeh Markasi-Central Insurance of
Iranian oil or providing insurance for the shipments.
Iran (CII, Iran)
Treasury sanctions also imposed on these and eight UAE-
based oil graders that concealed the transactions.
April 12,
Tanker Pacific; SAMAMA; and Allvale
Sanctions lifted. Special rule applied after firms provided to
2013
Maritime
the U.S. “reliable assurances” they will not engage in
sanctionable activities in the future.
May 31,
Ferland Co. Ltd. (Cyprus and Ukraine)
Sanctioned. For cooperating with National Iranian Tanker
2013
Co. to il icitly sel Iranian crude oil. Sanctions also imposed
by Treasury under E.O. 13608.
Source: State Department announcements.
Sanctions on Oil and Other Payments to Iran’s Central Bank
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 on the view that the Central
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Bank helps other Iranian banks circumvent the U.S. and U.N. banking pressure. Some argued the
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 into a FY2012 national defense authorization bill (H.R. 1540, 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.
• Exemption Provision. 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,
therefore countries must continue to reduce their oil buys from Iran—relative to
the previous 180-day period—to retain the exemption. For countries whose banks
receive an exemption, the 180-day time frame begins from the time that parent
country last received an exemption.
• Effective Dates. The provision applied to non-oil related transactions with the
Central Bank of Iran 60 days after enactment (by February 29, 2012). The
provision applied to transactions with the Central Bank for oil purchases only
after 180 days (as of June 28, 2012).
• The provision applies to a foreign central bank only if the transaction with Iran’s
Central Bank is for oil purchases.
• 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.
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.
Waiver and Termination Provisions
The law provides for the President to waive the sanctions for 120 days, renewable for successive 120 day periods, if
the President determines that doing so is in the national security interest.
The Administration has the authority to grant exceptions, as stipulated, but outright repeal or amendment of this law
would require congressional action.
This provision will need to be waived in order to implement the nuclear deal with Iran, because the agreement
stipulates that countries will not be required to further reduce oil purchases from Iran during the interim period.
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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.
The lack of precise definition of “significant reduction” in oil purchases gives the Administration
flexibility in applying the exemption provision. 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).17 Administration officials said they largely adopted that standard. Retaining the
exemption has become crucial to continuing oil-related commerce with Iran, because Executive
Order 13622 and P.L. 112-158 sanctions a broad range of 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 Issued18
• 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. The exemptions for these 11
countries were all renewed (for 180 days) on September 14, 2012, on March 13,
2013, and again on September 6, 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), again on June 5,
2013, and again on November 29, 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, again on June 5, 2013, and again on November 29, 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
17 Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner, January 19, 2012.
18 Announcements by the Department of State, March 20, 2012, June 11, 2012, and June 28, 2012.
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these countries say that the provision amounts to a de facto U.S. effort to enforce a total ban on
EU trade with Iran.
Sanctions on Paying Iran with Hard Currency
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 (adding “clause ii”
to Paragraph D(1)) by requiring that any funds owed to Iran as a result of exempted transactions
(oil purchases, for example) be credited to an account located in the country with primary
jurisdiction over the foreign bank making the transaction. This 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.
Waiver Provision
The waiver provision that applies to the sanctions to be imposed under P.L. 112-81 applies to this hard currency
“lock-up” provision.
This waiver provision apparently will need to be exercised to implement the nuclear deal with Iran.
Table 2. 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
420,000
Japan 325,000
200,000
India 320,000
200,000
South Korea
230,000
130,000
Turkey 200,000
120,000
South Africa
80,000
0
Malaysia 55,000
Negligible
Sri Lanka
35,000
Negligible
Taiwan 35,000
Negligible
Singapore 20,000
Negligible
Other 55,000
Negligible
Total 2.5 mbd
1.07 mbd
Source: International Energy Agency and rough estimates based on CRS conversations with foreign diplomats
and press reports.
Note: Actual volumes might differ, and import volumes may fluctuate dramatically over short periods of time as
actual tanker deliveries occur.
Proliferation-Related 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
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anti-proliferation laws, discussed below,19 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 and Iraq Sanctions 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.
Section 1603 of the act amends an earlier law, the Iraq Sanctions Act of 1990 (Section 586G(a) of
P.L. 101-513) also provides for a “presumption of denial” for all dual use exports to Iran (which
would include computer software).
Waiver and Termination
Section 1606 of the act authorizes a presidential waiver for the provisions of the act, and for those imposed pursuant
to the Iraq Sanctions Act of 1990, if the President determines a waiver is “essential to the national interest.”
There are no specific provisions in the act for its termination. Doing so would require congressional action.
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 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
can certify that the agency or entities under its control had not transferred any WMD or missile
technology to Iran within the year prior.20 (A continuing resolution for FY2009, which funded the
19 Such laws include the Atomic Energy Act of 1954 and the Energy Policy Act of 2005 (P.L. 109-58).
20 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
(continued...)
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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 report.
Waiver and Termination
Section 4 gives the President the authority to not impose sanctions if he justifies that decision to Congress. Section 5
provides for exemptions from sanctions if certain conditions are met, primarily related to the government with
jurisdiction over the entity cooperating to stop future such transfers to Iran.
There are no specific provisions providing for termination of this law. Termination is subject to congressional action.
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 report.
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.
Sanctions on “Countries of Diversion Concern”
Title III of CISADA established authorities to sanction countries that allow U.S. technology that
Iran could use in its nuclear and WMD programs to be re-exported or diverted to Iran. Section
303 of CISADA authorizes the President to designate a country as a “Destination of Diversion
Concern” if that country allows substantial diversion of goods, services, or technologies
characterized in Section 302 of that law to Iranian end-users or Iranian intermediaries. The
technologies specified include any goods that could contribute to Iran’s nuclear or WMD
programs, as well as goods listed on various U.S. controlled-technology lists such as the Comerce
Control List or Munitions List. For any country designated as a country of diversion concern,
there would be prohibition of denial for licenses of U.S. exports to that country of the goods that
were being re-exported or diverted to Iran.
Implementation: No country has, to date, been designated a “Country of Diversion Concern.”
(...continued)
transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision
in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria.
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Waiver and Termination
Waiver: The President may waive sanctions on countries designated as of Diversion Concern for 12 months, and
additional 12 month periods, pursuant to certification that the country is taking steps to prevent such diversions and
re-exports.
Termination: The designation terminates on the date the President certifies to Congress that the country has
adequately strengthened its export controls to prevent such diversion and re-exports to Iran in the future.
Sanctions on the Islamic Revolutionary Guard Corps (IRGC)
Numerous sanctions discussed in this report target Iran’s Islamic Revolutionary Guard Corps (IRGC), which plays a
role in repressing domestic dissent, developing Iran’s energy sector, developing Iran’s WMD programs particularly by
procuring technology abroad, and supporting pro-Iranian militant movements and governments in the Middle East
region. 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 control ed 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 was large and growing. He has been replaced by President Hassan Rouhani with a former
Oil Minister and oil industry professional, but the IRGC involvement in Iran’s energy sector might not necessarily be
reduced in the short term. Sanctions targeting the IRGC are discussed below:
•
Section 311 of the Iran Threat Reduction Act requires a certification by a contractor to the U.S. government
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.
•
Section 302 of the Iran Threat Reduction Act imposes at least 5 out of 12 ISA sanctions on 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 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, including blocking any such designee’s U.S.-based assets or property. Some of
these designations, including of National Iranian Oil Company (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.
•
Section 104 of CISADA sanctions foreign banks that conduct significant transactions with the IRGC or any of its
agents or affiliates that are sanctioned under any Executive Order. It also sanctions any entity that assists Iran’s
Central Bank efforts to help the IRGC acquire WMD or support international terrorism.
•
The IRGC is named as a proliferation supporting entity under Executive Order 13382, and the Qods Force, the
unit of the IRGC that assists pro-Iranian movements and countries abroad, is named as a terrorism supporting
entity under Executive Order 13324. Several Iranian firms linked to the IRGC are sanctioned, as noted in the
tables at the end of this report. Several IRGC commanders are named under other Executive Orders, discussed
below, sanctioning Iranian human rights abusers, abusers of Syrian human rights, and entities undermining
stability in Iraq.
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Financial/Banking Sanctions
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. In 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.21
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
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.22
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.
Sanctioning Foreign Banks That Conduct Transactions with Iran
The Treasury Department efforts were enhanced substantially by the authorities of Section 104 of
CISADA (P.L. 111-195) 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
21 Glenn Kessler, “U.S. Moves to Isolate Iranian Banks,” Washington Post, September 9, 2006.
22 Jessica Silver-Greenberg, “Regulator Says Bank Helped Iran Hide Deals,” New York Times, August 7, 2012.
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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.
• Any entity designated under the various U.N. Security Council resolutions
adopted to impose sanctions on Iran.
• 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
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).
Waiver and Termination
The Secretary of the Treasury may waive sanctions under Section 104, with the waiver taking effect 30 days after the
Secretary determines that a waiver is necessary to the national interest and submits a report to Congress describing
the reason for that determination.
Under Section 401(a) of CISADA, the financial sanctions provisions of CISADA would terminate 30 days after the
President certifies to Congress that Iran (1) has met the requirements for removal from the terrorism list, AND (2)
has ceased pursuit, acquisition or development of, and verifiably dismantled its nuclear weapons and other WMD
programs.
Available waivers might be needed to implement the interim nuclear agreement, with respect to the transferring of
Iranian accounts abroad back to 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”23 under Section 311 of
the USA Patriot Act (31 U.S.C. 5318A). The Treasury Department determined that Iran’s
23 http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx.
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Iran Sanctions
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 5; 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.”24
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.25
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, 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.
Laws Supporting Democratic Change in Iran
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.”
24 http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication.
25 For information on the steps taken by individual states, see National Conference of State Legislatures, “State
Divestment Legislation.”
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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.
Sanctions on 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 2008.26 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.
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.27 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 (e.g., cellphones, laptops, satellite Internet, website hosting, and
related products and services) that Iranians can use to communicate.
26 Christopher Rhoads, “Iran’s Web Spying Aided by Western Technology,” Wall Street Journal, June 22, 2009.
27 Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran,
March 20, 2012.
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Sanctions Against Iran’s Internet Censorship
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.
Section 403 of the Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) sanctions
(visa ban, U.S.-based property blocked) 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, reinforces Section 403 by blocking the property of persons/firms determined to have
committed the censorship, limited free expression, or assisted in jamming communications. The
order also specifies the authorities of the Department of State and the Department of the Treasury
to impose sanctions.
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.28 Various entities have been
designated under Executive Order 13628 on November 8, 2012,29 and since, as shown in the
tables at the end of the report.
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. The following sections discuss
sanctions against Iran’s human rights abuses.
Sanctions Against Iranian Human Rights Abusers and Related Equipment
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
28 Department of Treasury Documents, Fact Sheet: New Executive Order Targeting Human Rights Abuses Via
Information Technology, April 23, 2012.
29 http://www.state.gov/r/pa/prs/ps/2012/11/200338.htm.
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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.
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 5. 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.30 Similar sanctions against many of these
same officials—as well as several others—have been imposed by the European Union.
Iranian Broadcasting and Profiteers
IFCA (Subtitle D of P.L. 112-239), Section 1248, mandates inclusion of the Islamic Republic of
Iran Broadcasting (IRIB), the state broadcasting umbrella group, as a human rights abuser,
thereby imposing CISADA Section 105 sanctions (travel ban, asset freeze) on that entity.
Section 1249 amends CISADA by making sanctionable under Section 105 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. This
essentially codifies a similar provision of Executive Order 13645.
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
30 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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officials and other individuals who participated in human rights abuses related to political
repression in Iran.31
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.
U.N. Sanctions
U.N. sanctions apply to all U.N. member states. 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 5.) A summary of the major provisions of the all
four of these resolutions is contained in the table below. It is not clear that U.N. Security Council
action is needed to implement the November 24, 2013, interim nuclear deal with Iran.
31 http://www.state.gov/r/pa/prs/ps/2013/05/210102.htm.
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Table 3. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program
(1737, 1747, 1803, and 1929)
Requires Iran to suspend uranium enrichment, to suspend construction of the heavy-water reactor at Arak, ratify the
“Additional Protocol” to Iran’s IAEA Safeguards Agreement. (1737)
Freezes the assets of Iranian persons and entities named in annexes to the Resolutions, and require that countries ban
the travel of named Iranians. (1737, 1747, 1803, and 1929 )
Prohibit transfer to Iran of nuclear, missile, and dual use items to Iran, except for use in light-water reactors. (1737,
and 1747)
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)
Requires Iran 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.
(1929)
Cal s 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.
International Implementation and Compliance32
Since 2010, converging international views on Iran have produced an unprecedented degree of
global cooperation in pressuring Iran with sanctions. Some countries apparently have joined the
sanctions regime primarily as a means of heading off unwanted military action against Iran by the
United States or by Israel. That same degree of cooperation is expected with respect to countries’
modifying their Iran sanctions regime in order to implement the November 24, 2013, interim
nuclear deal. Increasingly, Iran’s neighbors—always reluctant to antagonize Iran—are joining the
effort.
A comparison between U.S., U.N., and EU sanctions against Iran is contained in Table 4 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
32 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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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. 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.
Oil Embargo. On January 23, 2012, the EU decided to
• 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%. As a consequence
of the EU decision, as noted above, 10 EU countries were granted and have
maintained exemptions from sanctions under (P.L. 112-81) discussed above. No
change is expected in connection with the interim nuclear deal.
• 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.
Modifications would be required to implement the interim nuclear deal.
• Stop all trade with Iran in gold, precious metals, diamonds, and petrochemical
products. Modification would be required to implement the interim nuclear deal.
• 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).
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
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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, denying access to 14 Iranian banks
blacklisted by the EU. The United States has sanctioned about 50 Iranian banks, but those not
sanctioned by the EU apparently can still access the SWIFT system.33 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.” It is possible that the SWIFT sanctions will
be suspended to implement the interim nuclear deal.
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. This sanction might be eased in connection with the
interim nuclear agreement.
• 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.
• A ban on providing shipbuilding technology, oil storage capabilities, and flagging
or classification services for Iranian tankers and cargo vessels.
Among major tests of European implementation, in 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 reported (June 5, 2013, report) that some sales of alumina by a few Swiss firms
were to an Iranian firm involved in Iran’s nuclear program, and that the Swiss firms assert that
they have halted those transactions. 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.34 On September 6, 2013, the EU’s second-highest
court, the General Court in Brussels, appeared to set back EU efforts to close front company
outlets by lifting EU sanctions on seven Iranian companies, including four banks. The court
rejected arguments that they were acting as front companies. The companies whose accounts
were unfrozen included the Export Development Bank of Iran and Post Bank.35
33 Avi Jorish, “Despite Sanctions, Iran’s Money Flow Continues,” Wall Street Journal, June 25, 2013.
34 Louis Charbonneau and Michelle Nichols, “Exclusive: Glencore, Trafigura Deals with Iran May Have Skirted
Sanctions—U.N.,” Reuters, May 22, 2013.
35 James Kanter, “Iran Ruling in Europe Draws Anger from U.S.,” New York Times, September 7, 2013.
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The harmonization of U.S. and European sanctions on Iran differs from early periods. 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.
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.36 Negotiations were discontinued after
Iran, in late 2005, abrogated an agreement to suspend uranium enrichment. Similarly, there has
been insufficient international support to grant Iran membership in the World Trade Organization
(WTO), even though U.S. Administrations ceased blocking Iran from applying in May 2005.
Japan and Korean Peninsula
Japan and South Korea have adopted significant Iran sanctions, at least in part to avoid U.S.
sanctions on their firms or 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 European Union. On December 16, 2011, South Korea banned sales to Iran of energy sector
equipment, as both countries have set up new insurance mechanisms to be able to continue
buying Iranian oil despite the effects of the EU ban on insuring ships carrying Iranian oil. Japan
and South Korea’s oil imports from Iran are at levels far below those of 2011. In late June 2013, it
was reported that South Korea will cut imports from Iran a further 15% over the coming six
months in order to maintain its Section 1245 (P.L. 112-81) exemption discussed above—a
decrease that would 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—has not affected 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 continuing at 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
36 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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ventures. Press reports in April 2013 said that Iran might begin supplying oil to North Korea,
although financial terms are not known. It has not been reported that deliveries had begun.
India
India is implementing international 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. India’s private sector increasingly
views Iran as a “controversial market”—a term used by many international firms to describe
markets that entail significant reputational and financial risks. On the other hand, the weakening
of India’s economy in 2013 could affect its implementation of Iran sanctions.
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
Iran to agree to accept India’s local currency, the rupee, to settle 45% of its sales to India. Rupee
accounts facilitate the settlement of payments for oil as sales to Iran of Indian products, including
wheat, pharmaceuticals, rice, sugar, soybeans, auto parts, 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, and in cooperation with U.S. policy, India also has
reduced its dependence on and imports of Iranian oil substantially. Since 2008, India has 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 declined further to about 6% by 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. 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. 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 has received and maintained an
exemption from Section 1245 (P.L. 112-81) sanctions, as discussed.
Yet, India’s weakening economy could cause U.S.-India differences on sanctions. In mid-August
2013, India’s finance minister said that India wants to increase oil imports from Iran.37 Because
Indian firms can pay for Iranian oil partly with rupees, buying Iranian oil helps India conserve its
supply of dollars at a time when the value of the rupee has been weakening. Some Indian officials
say that, based on cuts in Iranian oil purchases already made, India could buy as much as 260,000
barrels per day and still argue that it is complying with U.S. sanctions.38
37 Prasanta Sahu and Biman Mukherji, “New Delhi Looks to Buy More Iran Oil, Risks U.S. Ire,” Wall Street Journal,
August 13, 2013. p. 8.
38 “India Should Import More Iran Oil- Ministry Before Barack Obama Meeting,” Reuters, September 24, 2013.
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In 2009, India dissociated itself from an Iran-Pakistan gas pipeline project, discussed below, 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.
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 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 reiterated comments during the Bush and
Obama Administrations that the project might be sanctioned under ISA.
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 required by U.N. Security Council resolutions. Russia is an
oil exporter and a need to preserve oil imports from Iran is 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 (Under Secretary of State Wendy Sherman and Under Secretary of the Treasury
David Cohen before the House Foreign Affairs Committee and Senate Foreign Relations
Committee) on May 15, 2013, that China had cut its buys of oil from Iran by 21% from 2011 to
2012 (to about 435,000 barrels per day). Iran’s overall oil exports have fallen slightly further
since. 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. On that basis, according to the Administration,
China has received and maintained a Section 1245 exemption. 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, “lock-up” requirement has caused Iran to purchase even more of its
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imports from China. Some reports in late August 2013 indicated that China was settling some of
its Iran oil bill by providing 315 subway cars for the Tehran metro.39
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; U.S. officials testified on May 15, 2013, that Turkey is not paying for
its gas imports from Iran with gold, but that the gold going from Turkey to Iran consists mainly of
Iranian private citizens’ purchases of Turkish gold 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
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.40
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
39 Author conversation with journalists in China, September 1, 2013.
40 Information provided to the author by the New York State government, July 2012.
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Executive Order 13622 exempts from sanctions under Section 5 of the Order any pipelines that
bring gas from Azerbaijan to Europe and Turkey.
In part because Iran and Azerbaijan are often at odds, Iran and Armenia—Azerbaijan’s
adversary—enjoy extensive economic relations. Armenia is Iran’s other main gas customer, aside
from Turkey. In May 2009, Iran and Armenia inaugurated a natural gas pipeline between the two,
built by Gazprom of Russia. 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.41 However, Azerbaijani officials assert that Iran is using Armenian
banks operating in the disputed Nagorno-Karabakh territory to circumvent international financial
sanctions. These institutions could include Artsakhbank and Ameriabank.42
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.43 On the other hand, observers
assert that since extensive Iran-Georgia economic ties were highly publicized in mid-2013,
Georgia has successfully instructed local businessmen to reduce their transactions with Iran.
Persian Gulf and Iraq
The Persian Gulf countries are oil exporters and close allies of the United States. Those Gulf
states with spare oil production capacity, particularly Saudi Arabia, have been willing to fully
supply the global oil 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,44 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, and the apparent ability of Iranian firms to operate there to try to
circumvent U.S. sanctions. Several UAE-based firms owned by Iranians have been sanctioned for
efforts to evade sanctions, as noted in the tables at the end of the report. U.S. officials offered
substantial praise for the decision announced 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. Some Iranian gas condensate (120,000 barrels
per day) reportedly has been imported by Emirates National Oil Company (ENOC) and refined
41 Louis Charbonneau, “Iran Looks to Armenia to Skirt Banking Sanctions,” Reuters, August 21, 2012.
42 Information provided to the author by Azerbaijan officials. October 2013.
43 “As Sanctions Bite, Iran Invests Big in Georgia,” Wall Street Journal, June 20, 2013.
44 Mark Wallace, “Closing U.S. Ports to Iran-Tainted Shipping. Op-ed,” Wall Street Journal, March 15, 2013.
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into jet fuel, gasoline, and other petroleum products. However, because such purchases could be
subject to U.S. sanctions, ENOC reportedly has begun to purchase condensates from a Qatari
supplier, while still buying 100,000 barrels per day from Iran.
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.45
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. 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, and it reportedly is close to completion on both sides of the border; its construction costs
are estimated at about $365 million.46
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 U.S. 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 have used some of U.S. aid funds to purchase fuel from Iran. In September
2013, it was reported that Anham FZCO, a U.S. contractor building food storage shelters for U.S.
troops in Afghanistan, might have violated U.S. sanctions by transshipping building materials
through Iran.47
Latin America
Iran, during the term of President Ahmadinejad, 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 of Venezuelan President Hugo Chavez. As noted earlier
45 http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?
nn=8901181055.
46 Ben Lando, “Iraq Inks Gas Supply Deal with Iran,” Iraq Oil Report, July 23, 2013.
47 “Pentagon Contractor Used Iran for Project,” Wall Street Journal, September 26, 2013.
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and in the tables at the end of the report, several Venezuelan firms have been sanctioned for
dealings with Iran.
Africa
During the term of Ahmadinejad, Iran 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.48 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.
48 “Tanzania Must Stop Re-Flagging Iran Tankers: U.S. Lawmaker,” Reuters, June 29, 2012.
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Table 4. 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
report, mandate sanctions on
wording is interpreted by most
measures ban new energy projects
virtually any type of transaction
observers as providing U.N. support
in Iran and call for restraint on
with/in Iran’s energy sector. Some
for countries who want to ban their
ongoing projects. South Korea in
exemptions are permitted for firms
companies from investing in Iran’s
December 2011 cautioned its firms
of countries that have “significantly
energy sector.
not to sel energy or petrochemical
reduced” purchases of Iranian oil
equipment to Iran. Both have cut oil
each 180 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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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 and S. Korea have announced
applications to sell Iran goods that
full adherence to strict export
could have military applications.
control regimes when evaluating
sales to Iran.
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 Hezbol 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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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 5 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) prevents U.S. accounts with
same 40,000 Euro authorization
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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Private-Sector Cooperation and Compliance
The multiplicity of sanctions have caused Iran to be viewed by third country corporations as a
“controversial market”—a market that carries political and reputational risks even if some
business in that market is not sanctionable. 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:
• 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.
• 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.
• Well before Executive Order 13590 was issued (see above), one large oil services
firm, Schlumberger, which is incorporated in the Netherlands Antilles, said it
would wind down its business with Iran.49
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.
49 Farah Stockman, “Oil Firm Says It Will Withdraw From Iran,” Boston Globe, November 12, 2010.
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• Chemical manufacturer Huntsman announced in January 2010 its subsidiaries
would halt sales to Iran.
• 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),50 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) 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. However, GE subsidiary sales of medical diagnostic products such as
MRI machines, sold through Italian, Canadian, and French subsidiaries, are not
generally sanctionable and are believed to be continuing.
• 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.51 Ingersoll Rand, maker of air compressors and
cooling systems, followed suit.52
• 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.53
• 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
subsidiaries have voluntarily ceased new business with Iran as of 2006.54 FMC
Technologies took similar action in 2009, as did Weatherford55 in 2008. However,
in November 2013, Weatherford was fined by the Treasury Department for
violating sanctions against Iran and other countries.
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
50 “Iran Says Halliburton Won Drilling Contract,” Washington Times, January 11, 2005.
51 “Caterpillar Says Tightens ‘No-Iran’ Business Policy,” Reuters, March 1, 2010.
52 Ron Nixon, “2 Corporations Say Business With Tehran Will Be Curbed,” New York Times, March 11, 2010.
53 Peter Baker, “U.S. and Foreign Companies Feeling Pressure to Sever Ties With Iran,” New York Times, April 24,
2010.
54 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.
55 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.
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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. Internet and communications-related
foreign firms remaining in or having departed the Iranian market are discussed in the section
below on human rights effects of sanctions.
Foreign Subsidiaries of U.S. Firms Still in the Iran Market
Some foreign subsidiaries of U.S. firms reportedly still trade with Iran, and some of them also
received U.S. government contracts, grants, loans, or loan guarantees. 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.
• Via a Swiss-based subsidiary, Transammonia Corp. 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.56
• Some subsidiaries of U.S. energy equipment and energy-related shipping firms
were in the Iranian market as late as 2010, including Natco Group,57 Overseas
Shipholding Group,58 UOP (United Oil Products, a Honeywell subsidiary based
in Britain),59 Itron,60 Fluor,61 Parker Drilling, Vantage Energy Services,62 PMFG,
Ceradyne, Colfax, Fuel Systems Solutions, General Maritime Company, Ameron
International Corporation, and World Fuel Services Corp. UOP reportedly sold
refinery gear to Iran. However, as of mid-2010 almost all energy sector-related
sales to Iran are sanctionable and these companies have most likely exited the
Iranian market.
56 Asjylyn Loder and David Evans, “Koch Brothers Flout Law Getting Richer With Iran Sales,” Bloomberg News,
October 3, 2011.
57 Form 10-K Filed for fiscal year ended December 31, 2008.
58 Paulo Prada and Betsy McKay, “Trading Outcry Intensifies,” Wall Street Journal, March 27, 2007; Michael Brush,
“Are You Investing in Terrorism?,” MSN Money, July 9, 2007.
59 New York Times, March 7, 2010, cited previously.
60 “Subsidiaries of the Registrant at December 31, 2009,” http://www.sec.gov/Archives/edgar/data/780571/
000078057110000007/ex_21-1.htm.
61 “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.
62 Form 10-K for Fiscal year ended December 31, 2007.
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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
During the term of former President Mahmoud Ahmadinejad, there was a consensus that U.S. and
U.N. sanctions had not 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 was
not compliant with the applicable provisions of the U.N. Security Council resolutions requiring
that outcome. Five rounds of P5+1—Iran talks during 2012 and 2013 produced no breakthroughs.
Experts have taken the November 24, 2013, interim nuclear deal as evidence that sanctions did
produce a shift in Iran’s nuclear policies in the direction sought by the United States. The deal
came after the June 14, 2013, presidential election in Iran in which 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 was likely only in the event there is a nuclear compromise.
Still, Iran’s ultimate nuclear intentions remain unclear, as do the prospects to reach a permanent
nuclear settlement. 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.63 However, International Atomic Energy Agency (IAEA) reports have said
that Iran continues to develop the capability to enrich uranium rapidly and to expand its stockpile
of 20% enriched uranium. Director of National Intelligence James Clapper testified on March 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 ability to arms militant movements in
the Middle East and the Syrian regime. Iran’s arms exports contravene Resolution 1747, which
bans Iran’s exportation of arms.64 Extensive Iranian support to Syrian President Bashar Al Assad
is continuing, by all accounts. Some press reports, quoting the U.N. panel of experts, say Iran has
been exporting arms to factions in Yemen and Somalia. These issues are discussed further in CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
63 Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011.
64 Louis Charbonneau, “U.N. Monitors See Arms Reaching Somalia From Yemen, Iran,” Reuters, February 10, 2013.
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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.65 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. During 2011-2013, there was a split
between then 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 sanctions. Most of the candidates permitted by the regime to run
for president in June 2014 were conservative allies of Khamene’i, but the support of Iranians who
want significant change powered the most moderate candidate in the race, Rouhani, to a first
round victory. The Supreme Leader welcomed Rouhani’s election and has publicly backed the
interim nuclear deal reached by Rouhani’s team. However, it is possible that differences between
Rouhani and the Supreme Leader will emerge over potential compromises with the P5+1 on a
permanent nuclear settlement.
At the popular level, since 2012, 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 been sporadic and do not appear to threaten the regime.
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. 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-2010.66 A Chinese Internet infrastructure
firm, Huawei, 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
65 Department of Defense, Annual Report of Military Power of Iran, April 2012.
66 Aurelia End, “Siemens Quits Iran Amid Mounting Diplomatic Tensions,” Agence France Press, January 27, 2010.
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government shut down some social network services during times of protest in Iran.67 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 to December 15, 2012.68
Some major telecommunications firms have remained in the Iran market, although it is not clear
whether their products help either the regime or the opposition. They include 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
Many experts attribute Rouhani’s attempts to settle the nuclear issue to the dramatic toll sanctions
have taken on Iran’s economy. Before taking office, President Rouhani received briefings on the
Iranian economy from the outgoing Ahmadinejad economic team, and said that the economy was
in worse shape than that portrayed by the outgoing administration. 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 2,
sanctions have driven Iran’s oil sales down about 60% from the 2.5 mbd of sales
in 2011. This drop is expected to reduce Iran’s revenue from crude oil to about
$35 billion in 2013, down from over $100 billion in 2011. The interim nuclear
deal specifies that Iran’s oil sales will remain roughly constant for the six month
duration of the deal.
• 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. Iran stores oil to attempt to
keep up oil production; shutting 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 2011.69
• Hard Currency Depletion. Not only have Iran’s oil exports fallen by volume, but
it is no longer receiving easily usable and transferrable hard currency for its oil.
As of February 2013, as noted, oil customers must pay Iran in local currency—a
sanction that is reportedly causing about $1.5 billion per month to pile up in
foreign accounts (out of about $3.4 billion in the value of oil sales).70 Iran is
67 http://www.examiner.com/article/obama-adviser-plouffe-received-100-000-from-iranian-associated-firm.
68 GAO-13-344R Iran, February 25, 2013.
69 Rick Gladstone, “Data on Iran Dims Outlook for Economy,” New York Times, October 13, 2012.
70 Marjorie Olster, “Report: U.S. Sanctions Make Half Iran’s Oil Income Out of its Reach,” Associated Press, August
30, 2013.
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unable to repatriate those funds, and it reportedly is having trouble identifying a
sufficient amount of goods in those countries to import to make use of that
balance. The IMF estimated Iran’s hard currency reserves to be about $101
billion as of the end of 2011, and, of those reserves, as much as $60 billion might
be locked up in foreign accounts—unable to be repatriated due to banking
restrictions. Iran will continue to add to the balance of funds locked up abroad for
the duration of the interim nuclear deal, as discussed below.
• GDP Decline. Sanctions have caused Iran to suffer its first gross domestic
product contraction in two decades. Many businesses are failing and there are a
large number of non-performing loans. An IMF global report issued in April 2013
said that Iran’s economy shrank 1.9% from March 2012 to March 2013, and will
likely shrink another 1.3% in the subsequent one-year period. U.S. officials
testified on May 15, 2013, that GDP 2012-2013 would drop even more for that
period—about 5%-8%. As a consequence of the downturn, the unemployment
rate has risen to about 20%, although the Iranian government reports that the rate
is 13%. It is not know specifically how the Iranian economy might improve, if at
all, from the sanctions easing of the interim nuclear deal.
• Currency Decline. The regime has been working to contain the effects of a
currency drop, which took the value of the rial on unofficial markets from about
28,000 to one U.S. dollar to about 40,000 during September-October 2012. Prior
to that, the rial’s value had fallen from 13,000 to the dollar in September 2011 to
28,000 to the dollar in mid-September 2012. The unofficial rate was about 37,000
to the dollar in May 2013, but optimism over Rouhani’s presidency has caused
the rial to appreciate to about 30,000 to the dollar. The rial has further
appreciated to about 28,000 to the dollar since the November 24, 2013, interim
nuclear deal was reached.
• Inflation. The drop in value of the currency has caused inflation to accelerate.
The Iranian Central Bank acknowledged an inflation rate of 45% rate in late July
2013. Many economists assert that these official figures understate the actual
inflation rate substantially, and that it is between 50% and 70%. Some assert that
inflation was 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 decline and financing restrictions have made it difficult for Iranian
manufacturing to operate. Iranian manufacturers are largely unable to obtain
credit and must pre-pay, often through time consuming and circuitous
mechanisms, to obtain the parts from abroad. This difficulty is particularly acute
in the automotive sector; Iran’s production of automobiles has fallen by about
40% from 2011 levels. However, the interim nuclear deal is expected to benefit
the auto sector because of the sanctions easing that are part of the agreement.
• Domestic Payments Difficulties/Subsidy Reductions. 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 then President 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
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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.
Iran’s Mitigation Efforts
Iran has had limited success mitigating the economic effect of sanctions. 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
exports of natural gas condensates, such as is used to refine into jet fuel, have doubled in 2013
from previous years, although the $1.2 billion increase in the value of those exports does not
nearly compensate for the loss of crude oil revenues. 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 Iran’s non-oil exports reportedly are countries in the immediate neighborhood,
including Iraq, Afghanistan, and Armenia.
However, some economists argue that Iran might benefit from sanctions over the long term by
being compelled to diversify its economy and reduce dependence on oil revenues and imported
goods. Iranian manufacturers have increased production of some goods that Iranians are buying
as they cut back on purchases of imported goods. 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.
To conserve hard currency, Iran has reduced the supply of hard currency to importers 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.
Others believe that Iran’s mitigation efforts will bear fruit if there is a nuclear deal with the
United States and its partners. Reports suggest that some international oil firms anticipate that
sanctions will be eased and are visiting Tehran to explore options to resume business interactions
with Iran.
Effect on Energy Sector Long-Term Development
Before the 2010 efforts to reduce Iran’s existing oil exports and production, sanctions were
intended to reduce Iran’s production capacity over the longer term. This concept took advantage
of the fact that Iran’s oil fields are aging and in need of outside technology and investment to
maintain, let alone boost, production.
U.S. officials estimated in 2011 said that Iran had 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. Iran almost certainly
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will not attract the $130 billion-$145 billion in new investment by 2020 that Iran is estimated to
need to keep oil production capacity from falling.71 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 5. 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
avoided sanctions either through Administration waivers or invocation of the “special rule.” No
easing of sanctions on investing in Iran’s energy sector is promised in the interim nuclear deal,
but there are reports that some international firms have been talking with Iranian energy officials
to plan for the possibility that this sanction will be lifted eventually.
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
have also derailed several gas ventures, including BP-NIOC joint venture in the Rhum gas field,
200 miles off the Scotland coast, 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 5, many such “backfilled” deals remain in preliminary stages or
themselves stalled as investors reconsidered whether to risk U.S. sanctions. Some of the backfill
that has occurred has been conducted by domestic companies, particularly those controlled or
linked to the Revolutionary Guard (IRGC). Foreign firms are reluctant to partner with IRGC
firms as international sanctions have increasingly targeted the IRGC. 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.
71 Khajehpour presentation at CSIS. Op. cit.
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Table 5. Post-1999 Major Investments/Major Development Projects
in Iran’s Energy Sector
Company(ies)/Status
Date Field/Project
(If Known)
Value Output/Goal
Feb.
Doroud (oil)
Total (France)/ENI (Italy)
$1 billion
205,000 bpd
1999
(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 (Japan)
(“News in Brief: Iran.” Middle East Economic
Digest, (MEED) January 24, 2003.)
Royal Dutch exempted from sanctions on 9/30
because of pledge to exit Iran market
April
Norsk Hydro and Statoil
$105 million
65,000
2000
Anaran bloc (oil)
(Norway) and Gazprom and
Lukoil (Russia)
(MEED Special Report, December 16, 2005, pp.
No production to date;
48-50.)
Statoil and Norsk have left
project.
July 2000
Phase 4 and 5, South Pars (gas)
ENI
$1.9 billion
2 billion cu.
ft./day (cfd)
(Petroleum Economist, December 1, 2004.)
Gas onstream as of Dec.
2004
ENI exempted 9/30 based on pledge to exit Iran
market
March
Caspian Sea oil exploration—construction
GVA Consultants (Sweden)
$225 million
NA
2001
of submersible drilling rig for Iranian partner
(IPR Strategic Business Information Database,
March 11, 2001.)
June
Darkhovin (oil)
ENI
$1 billion
100,000 bpd
2001
(“Darkhovin Production Doubles.” Gulf Daily
Field in production
News, May 1, 2008.) ENI told CRS in April 2010
it would close out al Iran operations by 2013.
ENI exempted from sanctions on 9/30, as
discussed above
May
Sheer Energy (Canada)/China $80 million
25,000 bpd
2002
Masjid-e-Soleyman (oil)
National Petroleum
(“CNPC Gains Upstream Foothold.” MEED,
Company (CNPC). Local
September 3, 2004.)
partner is Naftgaran
Engineering
Sept.
Phase 9 + 10, South Pars (gas)
LG Engineering and
$1.6 billion
2 billion cfd
2002
Construction Corp. (now
(“OIEC Surpasses South Korean Company in
known as GS Engineering and
South Pars.” IPR Strategic Business Information
Construction Corp., South
Database, November 15, 2004.)
Korea)
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Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
On stream as of early 2009
October
Phase 6, 7, 8, South Pars (gas)
Statoil (Norway)
$750 million
3 billion cfd
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.
January
Azadegan (oil)
Inpex (Japan) 10% stake.
$200 million
260,000 bpd
2004
CNPC agreed to develop
(Inpex stake);
(“Japan Mul s Azadegan Options.” APS Review
“north Azadegan” in Jan.
China $1.76
Oil Market Trends, November 27, 2006.)
2009
billion
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.
August
Tusan Block
Petrobras (Brazil)
$178 million
No 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,”
(http://www.reuters.com/article/
idUSN0317110720090703.)
October
Yadavaran (oil)
Sinopec (China), deal
$2 billion
300,000 bpd
2004
finalized Dec. 9, 2007
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 2006
Sinopec (China); JGC (Japan). $959 million
Expansion to
Arak Refinery expansion
Work may have been taken
(major initial
produce
(GAO reports; Fimco FZE Machinery website;
over or continued by
expansion;
250,000 bpd
http://www.fimco.org/index.php?option=
Hyundai Heavy Industries (S.
extent of
com_content&task=view&id=70&Itemid=78.)
Korea)
Hyundai work
unknown)
Sept.
Khorramabad block (oil)
Norsk Hydro and Statoil
$49 million
?
2006
(Norway).
Seismic data gathered, but no production is
planned. (Statoil factsheet, May 2011)
Dec.
North Pars Gas Field (offshore gas). Includes
China National Offshore
$16 billion
3.6 billion cfd
2006
gas purchases
Oil Co.
Work crews reportedly pul ed from the project in
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Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
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, Repsol
$4.3 billion
?
2007
(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 pursue
this project any further
March
Esfahan refinery upgrade
Daelim (S. Korea)
NA
2007
(“Daelim, Others to Upgrade Iran’s Esfahan
Refinery.” Chemical News and Intelligence, March
19, 2007.)
July 2007
Phase 22, 23, 24—South Pars (gas)
Turkish Petroleum Company $12. billion
2 billion cfd
(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 SKS
$15 billion
3.4 billion cfd
2007
offshore gas and oil fields and LNG plant
Ventures (Malaysia)
of gas/250,000
bpd of oil
contract modified but reaffirmed December
2008
(GAO report; Oil Daily, January 14, 2008.)
2007
Jofeir Field (oil)
Belarusneft (Belarus) under
$500 million
40,000 bpd
(unspec.)
contract to Naftiran.
GAO report cited below. Belarusneft, a
subsidiary of Belneftekhim, sanctioned under ISA No production to date
on March 29, 2011. Naftiran sanctioned on
September 29, 2010, for this and other activities.
2008
Dayyer Bloc (Persian Gulf, offshore, oil)
Edison (Italy)
$44 million
?
GAO report cited below
Feb.
Lavan field (offshore natural gas)
PGNiG (Polish Oil and Gas
$2 billion
2008
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)
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
March
Danan Field (on-shore oil)
Petro Vietnam Exploration
? ?
2008
and Production Co.
“PVEP Wins Bid to Develop Danan Field.” Iran
(Vietnam)
Press TV, March 11, 2008
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 metric
construction)
tons/yr
GAO report cited below
June
Resalat Oilfield
Amona (Malaysia). Joined in
$1.5 billion
47,000 bpd
2008
June 2009 by CNOOC and
(Fars News Agency, June 16, 2008)
another China firm, COSL.
Status of work unclear
January
“North Azadegan”
CNPC (China)
$1.75 billion
75,000 bpd
2009
(Chinadaily.com. “CNPC to Develop Azadegan
Oilfield,” http://www.chinadaily.com.cn/bizchina/
2009-01/16/content_7403699.htm.)
January
Bushehr Polymer Plants
Sasol (South Africa)
?
Capacity is
2009
one million
Production of polyethelene at two polymer
tons per year.
plants in Bushehr Province.
Products are
Sasol reported by GAO in December 2012 to be
exported from
divesting the venture.
Iran.
March
Phase 12 South Pars (gas)—Incl. LNG terminal Taken over by Indian firms
$8 billion
20 million
2009
construction and Farsi Block gas field/Farzad-B
(ONGC Videsh, Oil India
from Indian
tonnes of LNG
bloc.
Ltd., India Oil Corp. Ltd. in
firms/$1.5
annual y by
2007); may also include
billion
2012
Project stalled due to sanctions; Indian firms have
minor stakes by Sonanagol
Sonangol/$780
told GAO that no agreements were reached and
(Angola) and PDVSA
million
no work is being pursued.
(Venezuela)..
PDVSA
(“Noose Tightens Around Iran Oil.” Washington
Post, March 6, 2012; GAO-13-173R Iran Energy
Sector.)
August
Abadan refinery
Sinopec
up to $6
2009
billion if new
Upgrade and expansion; building a new refinery at
refinery is
Hormuz on the Persian Gulf coast
built
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
Oct.
South Pars Gas Field—Phases 6-8, Gas
G and S Engineering and
$1.4 billion
2009
Sweetening Plant
Construction (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 3
Daelim (S. Korea)—Part 2;
$4 billion ($2
2009
Tecnimont (Italy)—Part 3
bn each part)
(“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 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,
five years
2011(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; 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, several suppliers, anticipating this
legislation, announced that they had stopped or would stop selling gasoline to Iran.72 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, although importation later increased to about 50,000 barrels per day. 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
72 Information in this section derived from Javier Blas, “Traders Cut Iran Petrol Line,” Financial Times, March 8, 2010.
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Iran Sanctions
was enacted. The phaseout of gasoline subsidies discussed above has further reduced demand for
gasoline. Iran has also increased domestic production by converting some 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. 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, 2010,73 and a Government Accountability Office
study released September 3, 2010,74 some firms that have supplied Iran have received U.S. credit
guarantees or contracts.
Table 6. 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)75
Lukoil of Russia (reported to have ended sales to Iran in April 2010,76 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)77
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 Iran78
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.
73 Jo Becker and Ron Nixon, “U.S. Enriches Companies Defying Its Policy on Iran,” New York Times, March 7, 2010.
74 GAO-10-967R, Exporters of Refined Petroleum Products to Iran, September 3, 2010.
75 http://www.ft.com/cms/s/0/009370f0-486e-11df-9a5d-00144feab49a.html.
76 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
77 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
78 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
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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.
Humanitarian Effects/Air Safety
Humanitarian-related effects of sanctions have been noted in several sectors, and some of the
sanctions easing in the interim nuclear deal are intended to mitigate these effects. 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.
In the aviation sector, 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.79 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.
79 Thomas Erdbink, “Iran’s Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions,” July 14, 2012.
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Sanctions Debate Following November 24, 2013,
Nuclear Deal
U.S. officials have said publicly that the interim nuclear deal with Iran reached on November 24,
2013, involves “limited, temporary, targeted, and reversible” easing of international sanctions.
According to the Administration, the sanctions relief offered maintains “the vast bulk of [U.S.]
sanctions, including the oil, finance, and banking sanctions architecture.” According to the
Administration, “If Iran fails to meet its commitments, [the United States and its partners] will
revoke the relief.”80 The interim agreement does not require an easing of any U.S. sanctions that
were imposed in the 1980s and 1990s based on Iran’s support for acts of international terrorism.
The sanctions relief does not, for example, permit foreign firms to resume investment in Iran’s
energy sector. Treasury Department officials say the interim deal will have a small positive
impact on Iran’s economy.81
Administration officials note that sanctions relief during the six-month period amounts to
between $6 billion and $7 billion. During that same six months, the oil sanctions that remain in
place (Section 1245 of P.L. 112-81) will reduce Iran’s oil export earnings by about $30 billion.82
According to the Administration argument, the hard currency balances in Iran’s accounts abroad
will actually increase during the six-month period, even though $4.7 billion will be allowed to be
drawn down.
Critics of the interim deal assert that although the formal sanctions relief might appear modest,
the act of easing sanctions even slightly may ignite a process of sanctions unraveling. According
to this view, foreign firms anticipate that Iran will be welcomed back into the international
community, and that penalties for doing business in Iran will either end or not be strictly
enforced.83 Others argue that the sanctions relief offered is already having a psychological effect
on Iran’s economy. Crowds welcomed the negotiating team upon their return from the Geneva
meetings, apparently hopeful that the sanctions relief offered will improve the economy.
The agreement provides for the following:
• Iran will be able to repatriate about $4.2 billion in oil sales proceeds that is
locked up in foreign accounts, and to access an additional $400 million, paid
directly to educational institutions, for tuition for Iranian students abroad.
Enabling Iran to access these assets appears to require use of the waiver
provisions of Section 1245 of the FY2012 National Defense Authorization Act
(P.L. 112-81) or Section 104(c) of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act (P.L. 111-195). Those laws sanction foreign
banks that deal with Iranian commercial banks and the Central Bank. Such
waivers could potentially be applied to specific foreign banks that hold specific
80 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program.” November 23, 2013.
81 Elad Benari. “Zarif: We Only Spoke with the U.S. About the Nuclear Program.” Arutz Sheva, November 27, 2013.
82 Ibid.
83 David Sanger and Jod Rudoren. “A Gamble in Iran Talks: Easing of the Sanctions.” New York Times, November 23,
2013.
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targeted amounts of Iranian hard currency, or with respect to all banks in a
specified country or countries.
• During the interim agreement period, Iran’s oil exports are to remain at their
current level of about 1 million barrels per day—a 60% drop from 2011 levels of
about 2.5 million barrels per day. This implies that Iran’s current oil customers
will not reduce their oil purchases from Iran “significantly” during the interim
period—such reduction is a requirement to avoid sanctions on the banks of those
countries under Section 1245 of P.L. 112-81. To avoid penalizing these oil
buyers, the Administration would appear to need to exercise the waiver
provisions of Section 1245. The European Union countries have committed to
easing sanctions against shipping insurance that have deterred some Iranian oil
purchases.84
• Iran will be permitted to resume sales of petrochemicals and trading in gold and
other precious metals, and to resume transactions with foreign firms involved in
Iran’s auto sector. The Administration estimates the value of the revenue Iran will
accrue from these changes during the six months of the interim arrangement is
$1.5 billion. Enabling Iran to sell petrochemicals appears to require the
Administration to suspend applicable provisions of Executive Order 13622 (July
30, 2012) sanctioning foreign firms that buy Iranian petrochemicals. It is not
clear whether there will also be a requirement to suspend provisions of Executive
Order 13590 sanctioning sales of equipment that Iran can use to expand
petrochemical production. Permitting Iran to deal in precious metals appears to
require a waiver of Section 1245 of the Iran Freedom and Counter-Proliferation
Act of 2012 (Title XII, subtitle D, of the FY2013 National Defense Authorization
Act, P.L. 112-239), which sanctions entities that supply precious metals (gold and
others) to Iran. Easing sanctions on foreign participation in Iran’s automotive
sector appears to require an Administration modification of Executive Order
13645 of June 3, 2013, which imposes sanctions required by the Iran Sanctions
Act (P.L. 104-172) on firms that supply goods or services to Iran’s automotive
sector.
• The United States will facilitate humanitarian transactions that are already
allowed by U.S. law, such as sales of medicine to Iran, but which many banks
refuse to finance. The United States also commits to license safety-related repairs
and inspections inside Iran for certain Iranian airlines. Such licensing is
specifically permitted under U.S. trade regulations written pursuant to Executive
Order 12959 (May 6, 1995) and Executive Order 13059 (August 19, 1997) that
impose a ban on U.S. trade with and investment in Iran. However, several Iranian
airlines, including Iran Air, have been designated for sanctions under Executive
Order 13382 or 13224 and it is possible that these designations might need to be
rescinded in order to approve repairs to planes operated by sanctioned airlines.
• The P5+1 and Iran agreed to set up a Joint Commission that will evaluate P5+1
compliance with its commitments for sanctions relief. The commission
apparently will be empowered to consider Iranian complaints about foreign firms
that Tehran believes have been sanctioned inappropriately for their commercial
interactions with Iran.
84 Daniel Fineren. “Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales.” Reuters, November 24, 2013.
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• The interim agreement requires that the P5+1 impose no new sanctions on Iran
during the interim period.
As noted throughout this report, almost all U.S. sanctions provisions provide the President with
waiver authority. Some laws have specific termination criteria, but most do not. Those sanctions
that have been imposed by executive order (under the International Emergency Economic Powers
Act, IEEPA, and other authorities) could be eased by a superseding order. As noted, most
sanctions laws give the Administration flexibility to determine sanctions violations.
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.
Possible Additional Sanctions
The November 24, 2013, interim nuclear agreement contains a P5+1 commitment to “not impose
new nuclear-related sanctions for six months, if Iran abides by its commitments under this deal, to
the extent permissible within their political systems.”85 This pledge has direct implications for
congressional reaction to the interim agreement. Some Members have cited an overall mistrust of
Iranian intentions, perhaps partly based on past examples of Iranian behavior regarding the
nuclear issue, as reasons to question whether Iran will fully implement the deal. Some Members
say they doubt that the negotiating process will produce a result that ensures that Iran’s nuclear
program can only be used for peaceful purposes. Proponents of additional sanctions maintain that
new sanctions could be useful in the next round of negotiations by reinforcing to Iran that it
would face consequences for failing to comply with the interim agreement or to accept a
comprehensive agreement within the next six months. On that basis, some Senators reportedly
plan to move forward with legislation that would strengthen sanctions, perhaps adding a
qualification that sanctions would take effect if the President does not certify to Congress that
Iran is fully implementing the agreement and has not been involved in any anti-U.S. terrorism.86
The possible legislation reportedly is similar to H.R. 850, a House bill that was passed 400-20 in
July 2013. Before the interim deal was reached, Senate action was reportedly imminent on a
version of that bill. The legislation could be considered separately or as part of a FY2014
National Defense Authorization Act (S. 1197).
The Administration argues that the consideration or enactment of any new sanctions legislation
by Congress could complicate the ongoing negotiating process and potentially split the
international coalition that successfully negotiated the interim agreement. The Administration
argues that some countries could end their cooperation with international sanctions if they
perceive that the United States is not upholding its end of the agreement, including the pledge not
to increase sanctions.87 After the interim deal was reached, Iran’s Foreign Minister Mohammad
85 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program.” November 23, 2013.
86 Bradley Klapper. “Obama, Senate Spar Over New Iran Sanctions Threats.” Associated Press, November 27, 2013.
87 Ibid.
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Javad Zarif said in an NBC interview that any U.S. imposition of new sanctions during the
interim period would void the deal.
The major provisions of H.R. 850 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.
• 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 identical to S. 892 (introduced 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.
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.
• 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. 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.
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• 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
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 expulsion of Iranian diplomats worldwide.
The EU came close to adopting this option after the November 29, 2011, attack
on the British Embassy in Tehran.
• Barring Iran from International Sporting Events. An 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 Other Abusers. Some experts believe that,
despite the provision of P.L. 112-239 discussed earlier, the United States and
international community should more aggressively target for sanctions Iranians
who are exploiting special rights, monopolies, or political contacts for economic
gain at the expense of average Iranians. 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). 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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Table 7. 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)
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
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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
Individuals: 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
March 12, 2008
Future Bank (Bahrain-based but allegedly control ed by Bank Melli)
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
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Computer Services; Iran o Misr Shipping; Iran o Hind; IRISL Marine Services; Iriatal Shipping; South Shipping; IRISL
Multimodal; Oasis; IRISL Europe; IRISL Benelux; IRISL China; Asia Marine Network; CISCO Shipping; and IRISL Malta
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
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Haji Pajand.
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)
May 17, 2011
Bank of Industry and Mine (BIM)
June 23, 2011
- Tidewater Middle East Company; 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
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
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Iran Sanctions
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
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
Hezbollah
Imam Khomeini Relief Committee Lebanon branch, and its director Ali Zuraik, for providing support to Hezbol ah
Razi Musavi, a Syrian based Iranian official allegedly providing support to Hezbollah
Liner Transport Kish (for providing shipping services to transport weapons to
December 21, 2010
Lebanese Hezbol 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
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Iran Sanctions
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.
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
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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
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
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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 (GHRAVITY)
- Ministry of Intelligence and Security (MOIS); IRGC (Guard Cyber Defense Command); Law Enforcement Forces;
Datak Telecom
Entities Sanctioned Under Executive Order 13608 Targeting Sanctions Evaders
- 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); 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.
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.
Designations on September 6, 2013:
- Six individuals including Seyed Nasser Mohammad Seyyedi, director of Sima General Trading who is also associated
with NIOC and NICO. The other 5 persons sanctioned manage firms associated with NIOC and NICO.
- Four businesses used by Seyyedi to assist NIOC and NICO front companies. Three are based in UAE: AA Energy
FZCO; Petro Royal FZE; and KASB International LLC. The other firm is Swiss Management Services Sari.
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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.
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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