Iran Sanctions
Kenneth Katzman
Specialist in Middle Eastern Affairs
May 7, 2014
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 an interim agreement (“Joint Plan of Action,” JPA). The agreement
halts expansion of Iran’s nuclear program in exchange for temporary and modest sanctions relief.
The June 14, 2013, election of the relatively moderate 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, by late 2013,
sanctions had reduced Iran’s oil exports to about 1 million barrels per day—far
below the 2.5 million barrels per day Iran exported during 2011. The drop was
caused by a European Union embargo on purchases of Iranian oil and decisions
by other Iranian oil customers to obtain exemptions from U.S. sanctions.
• During 2012-2013, 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% in 2013 and many Iranian firms shut down or reduced operations.
Sanctions also attempted to directly slow Iran’s nuclear and missile programs and reduce its
military power by hampering its acquisition of foreign technology and weaponry. U.S.
assessments indicate mixed success in these efforts. Sanctions on Iran have not halted Iran’s
provision of arms to the Assad government in Syria or to pro-Iranian factions in the Middle East,
nor have sanctions 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 increasing sanctions on Iran. The agreement, including the
approximately $7 billion in sanctions relief during the interim period, began implementation on
January 20, 2014, and provisions of several laws and executive orders were waived or suspended
that day. Citing initial improvements in Iran’s economy and renewed international business
contacts with Iran, some in Congress believe that economic pressure on Iran needs to increase to
shape a final nuclear deal and ensure that the Iran sanctions architecture does not collapse.
A comprehensive agreement, under negotiation, would undoubtedly require significant easing of
U.S. and third country sanctions on Iran—particularly those sanctions imposed since 2010 and
intended primarily to compel Iran to reach a nuclear agreement. The Administration has said that
sanctions relief under a comprehensive deal would be implemented stepwise as Iran fulfills the
terms of an agreement. The Administration has said it would work with Congress on sanctions
relief, in cases where congressional action might be needed to ease sanctions. See also CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman, and CRS
Report R43492, Achievements of and Outlook for Sanctions on Iran, by Kenneth Katzman.
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Contents
Overview and Objectives ................................................................................................................. 1
Blocked Iranian Property and Assets ............................................................................................... 1
Executive Order 13599 .............................................................................................................. 2
Sanctions Against Iran’s Support for International Terrorism and Regional Activities ................... 3
Sanctions Triggered by Terrorism List Designation: Ban on U.S. Aid, Arms Sales,
Dual-Use Exports, and Certain Programs for Iran ................................................................. 3
No Ban on U.S. Humanitarian Aid ...................................................................................... 4
Executive Order 13224: Sanctioning Terrorism Supporting Entities ........................................ 4
Sanctioning Iranian Involvement in the Region ........................................................................ 4
Ban on U.S. Trade and Investment with Iran ................................................................................... 5
Major Provisions: What U.S.-Iran Trade Is Allowed or Prohibited? ......................................... 6
Application to Foreign Subsidiaries of U.S. Firms ............................................................. 8
Energy and Other Sector Sanctions: Iran Sanctions Act (ISA) and Related Laws and
Executive Orders .......................................................................................................................... 9
The Iran Sanctions Act, Amendments, and Related Applications ............................................. 9
Key “Triggers” .................................................................................................................. 10
Mandate and Time Frame to Investigate ISA Violations ................................................... 14
Clarification of Responsibilities: Executive Order 13574................................................. 17
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 Exception .......................... 17
Application to Liquefied Natural Gas Development ......................................................... 18
Application to Private 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 ................................................................................. 21
Sanctions on Paying Iran with Hard Currency .................................................................. 22
Proliferation-Related Sanctions ..................................................................................................... 23
Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act .................................................. 23
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 ......................................................................................................... 26
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
Promoting Divestment ................................................................................................................... 29
Laws Supporting Democratic Change in Iran ................................................................................ 29
Expanding Internet and Communications Freedoms ............................................................... 29
Sanctions on Firms that Sell Censorship Gear to the Regime ........................................... 30
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Sanctions Against Iran’s Internet Censorship .................................................................... 30
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 ......................................................................................................................................... 37
Pakistan ................................................................................................................................... 38
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........................................................................... 46
Foreign Firms Reportedly Remaining in the Iran Market ................................................. 48
Effectiveness of Sanctions on Iran ................................................................................................. 49
Effect on Iran’s Nuclear Program Decisions and Capabilities ................................................ 49
Effects on Iran’s Nuclear and Strategic Programs and Regional Influence ............................. 50
General Political Effects .......................................................................................................... 51
Human Rights-Related Effects ................................................................................................ 51
Economic Effects ..................................................................................................................... 52
Iran’s Mitigation Efforts .................................................................................................... 53
Effect on Energy Sector Long-Term Development ................................................................. 54
Effect on Gasoline Availability and Importation ............................................................... 60
Humanitarian Effects/Air Safety ............................................................................................. 61
Sanctions Easings and Debate Following November 24, 2013, Nuclear Deal .............................. 62
Temporary Sanctions Relief in the JPA ................................................................................... 62
Permanent Sanctions Easing? .................................................................................................. 64
Possible Additional Sanctions ................................................................................................. 64
H.R. 850 and S. 1881 ........................................................................................................ 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 ............................................................................................................... 55
Table 6. Firms That Sold Gasoline to Iran ..................................................................................... 60
Table 7. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders ................................................................................................ 68
Contacts
Author Contact Information........................................................................................................... 79
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Overview and Objectives
U.S. sanctions have been a major feature of U.S. Iran policy since Iran’s 1979 Islamic revolution,
but U.N. and worldwide bilateral sanctions on Iran are a relatively recent (post-2006)
development. Many of the U.S. sanctions reinforce U.N. and multilateral sanctions put in place in
recent years by European and some Asian countries. Successive Administrations have sought to
ensure that U.S. sanctions do not hamper cooperation with key international partners whose
support is needed to isolate Iran.
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 sanctions provision is being suspended as a consequence of the JPA, the duration of which
is from January 20, 2014, to July 20, 2014, unless extended by mutual agreement or replaced by a
comprehensive agreement.
Blocked Iranian Property and Assets
Some U.S. sanctions began at the time of the U.S.-Iran hostage crisis of 1979-1981 in the form of
Carter Administration executive orders blocking Iranian assets held in the United States. The
assets were unblocked by subsequent Orders 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.
1 http://www.regulations.gov/#!documentDetail;D=DOS_FRDOC_0001-2175.
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The Algiers Accords established a “U.S.-Iran Claims Tribunal” at the Hague continues to arbitrate
cases resulting from the 1980 break in relations and freezing of some of Iran’s assets. Major cases
yet to be decided center on hundreds of Foreign Military Sales (FMS) cases between the United
States and the shah’s regime, which Iran claims it paid for but were unfulfilled. A reported $400
million in proceeds from the resale of that equipment was placed in a DOD FMS account and
may remain in this escrow account, although DOD has not provided CRS with a precise balance.
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 financial disputes include the mistaken U.S. shoot-down on July 3, 1988, of an Iranian
Airbus passenger jet (Iran Air flight 655), for which the United States paid Iran $61.8 million in
compensation ($300,000 per wage earning victim, $150,000 per 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
arranged to provide a substitute, used aircraft to Iran.
Another U.S.-Iran assets dispute is over a reported $2 billion in securities-related assets of Iran’s
Central Bank held in a Citigroup account, deposited there by Luxembourg-based Clearstream
Banking SA, a payments-clearing organization. The assets were 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. (In January 2014,
Clearstream agreed to pay a $152 million fine for transferring the accounts into the U.S. financial
system.) Among recent terrorism victim judgments, 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 brought 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.
Executive Order 13599
Aside from the cases above, several executive orders have been issued over the past two decades
that direct the blocking of assets of Iranian entities designated under these Orders. These Orders
include E.O. 13224, 13382, 13599, and others as discussed throughout this paper. Executive
Order 13599, issued February 5, 2012, imposes 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.”3
2 http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf.
3 http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication.
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The JPA does not commit the United States to take any action on these or other U.S.-Iran assets
disputes.
Sanctions Against Iran’s Support for International
Terrorism and Regional Activities
The United States began imposing sanctions again Iran again in the mid-1980s. The Secretary of
State designated Iran 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 state sponsor of terrorism designation
are:
• Restrictions on sales of U.S. dual use items. The restriction is required by the
Export Administration Act, as continued through presidential authorities under
the International Emergency Economic Powers Act, IEEPA, as implemented by
executive orders).
• Ban on direct U.S. financial assistance and arms sales to Iran. Section 620A of
the Foreign Assistance Act, FAA (P.L. 87-95) and Section 40 of the Arms Export
Control Act (P.L. 95-92, as amended), respectively, bar these benefits to terrorism
list countries. 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.
• Requirement that the United States vote to oppose multilateral lending. U.S.
representatives are required to vote against multilateral lending to any terrorism
list country by Section 1621 of the International Financial Institutions Act (P.L.
95-118, as amended), which was added by Section 327 of the Anti-Terrorism and
Effective Death Penalty Act of 1996 (P.L. 104-132). Waivers are provided under
these laws.
• Withholding of U.S. foreign assistance to Suppliers of Terrorism List Countries.
Under Section 620G and 620H of the Foreign Assistance Act, as added by the
Anti-Terrorism and Effective Death Penalty Act (sections 325 and 326 of P.L.
104-132), the President is required to withhold foreign aid from any country that
provides to a terrorism list country financial assistance or arms. 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.
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• Withholding of U.S. Aid to Organizations that Assist Iran. 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 JPA.
Executive Order 13224: Sanctioning Terrorism Supporting Entities
In signing Executive Order 13324 (September 23, 2001), the President ordered the freezing of the
U.S.-based assets of and a ban on 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. The Order is therefore not specific to Iran.
Implementation: Iran-related entities designated 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
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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 and related
Orders, as shown in the tables at the end of the report.
Ban on U.S. Trade and Investment with Iran
The next major sanction imposed on Iran after those required by the terrorism list designation was
a ban on U.S. trade with and investment in Iran. It 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.).4 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 and superseded an earlier (March
15, 1995) Executive Order (12957) barring U.S. investment in Iran’s energy sector, which
accompanied President Clinton’s declaration that a “state of emergency” exists with respect to
Iran. A subsequent Executive Order, 13059 (August 19, 1997), added a prohibition on U.S.
companies’ knowingly exporting goods to a third country for incorporation into products destined
for Iran. Each March since 1995, the U.S. Administration has renewed 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). The U.S. trade and investment ban is unaffected by the JPA –
with selected exceptions, U.S. firms remain generally banned from the Iran market.
Codification of the Trade and Investment Ban and U.S.-Iran Trade Figures. 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. In so doing, it reinstated the full ban on imports that
had been relaxed by executive order in April 2000 to allow U.S. importation of Iranian nuts, fruit
products (such as pomegranate juice), carpets, and caviar. The relaxations to the trade ban from
then until CISADA’s effective date of September 29, 2010, account for the fact that U.S. trade
with Iran expanded during that period. The restoration of the full import ban explains why U.S.
imports from Iran since that time have been negligible (a total of about $2.2 million for all of
2013). 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 2013, U.S. exporters sold about $293 million in goods to Iran, mostly grain sales.
CISADA also specified exemptions to the ban, such as on 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 for supporting democracy in Iran.
4 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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Section 101 of the Iran Freedom Support Act (P.L. 109-293) separately codified the ban on U.S.
investment in Iran. Section 101 of that law 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: What U.S.-Iran Trade Is Allowed or Prohibited?
The following provisions apply to the U.S. trade ban on Iran as specified in regulations (“Iran
Transaction Regulations,” ITRs) written pursuant to the various executive orders and laws
discussed above. The regulations are administered by the Office of Foreign Assets Control
(OFAC) of the Treasury Department.
• 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.
• The regulations pursuant to the U.S. trade ban 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.
• 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, on a case-by-case basis, 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. However, on June 23,
2011, the Administration sanctioned Iran Air under Executive Order 13382 (see
below), rendering future licensing of parts or repairs for Iran Air unclear. Other
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Iranian airlines are sanctioned under that and Executive Order 13224 discussed
below. The JPA provides for provision of spare civilian airline parts to Iran,
specifically including Iran Air (notwithstanding its designation), and relevant
provisions of E.O. 13382 have been suspended to enable Iran Air to benefit from
this commitment during the JPA period. Boeing and GE have applied for and
received export licenses to sell aircraft equipment to Iran during the JPA period.5
• Personal Communications, Remittances, and Publishing. The restrictions do not
apply to personal communications (phone calls, e-mails) or to personal
remittances—although U.S. banks may process remittances to family members in
Iran as long as the remittance is routed through a third country bank and the
receiving Iranian bank is not under U.S. sanctions. In December 2004, the trade
regulations were modified to allow Americans to engage in ordinary publishing
activities with entities in Iran (and Cuba and Sudan). 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. Among earlier relaxations, 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. The JPA commits the United States and its
partners to facilitate humanitarian sales to Iran. Implementing that commitment
did not require modifications to U.S. trade regulations on that issue.
• OFAC regulations have a specific definition of “food” that can be licensed for
sale to Iran, and that definition excludes alcohol, cigarettes, gum, or fertilizer.6
This definition might have been a reaction to a press account on December 24,
2010,7 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 have uses other than purely nutritive. Some of
the licensed U.S. goods were 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.
• Humanitarian and Related Services. Private non-financial donations by U.S.
residents to Iranian victims of natural disasters (such as mailed packages of food,
5 Reuters, February 21, 2014; Exclusive: Boeing Says Gets U.S. License to Sell Spare Parts to Iran. Reuters, April 4,
2014.
6 http://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf.
7 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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toys, clothes, etc.) are not prohibited, but donations to relief 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. On September 10,
2013, the Treasury Department eliminated those 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. A temporary general license that responded to an August 2012 earthquake in
Iran was issued for August 21, 2012-October 5, 2012, and then extended until
November 19, 2012. Under this license, an NGO could transfer up to $300,000.
Transferring larger amounts still required 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)8 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.
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.
8 The title is called the “Trade Sanctions Reform and Export Enhancement Act of 2000.”
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Trade Ban Easing and Termination
The trade ban has been codified by CISADA, as noted.
Termination:
Section 401 of CISADA provides for the President to terminate the trade ban codification provision of CISADA
(Section 103). The provision can be terminated if the Administration certifies to Congress that Iran has no longer
satisfies the requirements to be designated as a state sponsor of terrorism and that Iran has ceased pursuing and
dismantled its nuclear, biological, and chemical weapons and ballistic missiles and related launch technology.
Alternatively, the trade ban provision in CISADA could be repealed outright by congressional action.
Waiver Authority
In addition, Section 103(b)(vi) of CISADA al ows 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 through
a national interest determination.
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.
There are no indications Iran will demand the U.S. trade and investment ban be lifted or no longer implemented as
part of a comprehensive nuclear deal.
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 conduct
various energy-related transactions with Iran. The intent of energy sanctions has been to put
pressure on Iran’s economy and its leadership calculations, and to deny Iran the financial
resources to further its nuclear and WMD programs and support terrorist organizations. Iran’s
petroleum sector is vital to the Iran state and economy—prior to the imposition of oil export-
related sanctions in 2012 it generated about 20% of Iran’s GDP, about 80% of its foreign
exchange earnings, and about 50% of its government revenue.
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. As
initially enacted, ISA sought to thwart 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
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and gas is discovered and then produced. In September 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 was the first major “extra-territorial sanction” on Iran—a sanction that authorizes U.S.
penalties against third country 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”9 of
more than $20 million10 in one year in Iran’s energy sector.11 The definition of “investment” in
ISA (§14 (9)) includes not only equity and royalty arrangements but any contract that includes
“responsibility for the development of petroleum resources” of Iran. The definition includes
additions to existing investment (added by P.L. 107-24) and pipelines to or through Iran and
contracts to lead the construction, upgrading, or expansions of energy projects (added by 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
9 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.
10 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).
11 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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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
Section 102(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
(CISADA, signed on July 1, 2010, P.L. 111-195) amended Section 5 of ISA to exploit Iran’s
dependency on imported gasoline (40% dependency at that time). 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 or related equipment and
services to Iran—initiatives that prompted Reliance Industries Ltd. of India to cease new sales of
gasoline to Iran as of December 2008. (The Ex-Im Bank, in August 2008, had extended $900
million in financing guarantees to Relianced.) The provision made 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, 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 related services such as shipping or port operations.
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 (ITRSHA, P.L. 112-158). The ITRSHA 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
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products.12 This provision was not required to be waived as a consequence of the
November 24, 2013, interim nuclear deal with Iran, and was not waived.
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.13 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”
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.
12 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.
13 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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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 determined 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).
• 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.
Waiver authority is discussed in the box on ISA waivers below.
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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 was 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.
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).14
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,
14 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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and another such report a year later, on companies that have undertaken specified activities with
Iran that might constitute violations of ISA. Section 224 amends a reporting requirement in
Section 110(b) of CISADA by requiring an Administration report every 180 days on investment
in Iran’s energy sector, joint ventures with Iran, and estimates of Iran’s imports and exports of
petroleum products. The GAO reports have been issued; there is no information available on
whether the required Administration reports have been issued as well.
Available Sanctions Under ISA
Once a firm is determined to be a violator, the original version of ISA required the imposition of two of a menu of six
sanctions on that firm. CISADA added three new possible sanctions and required the imposition of at least three out
of the nine against violators. 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.
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ISA Waiver, Exemptions, and Sunset Provisions
ISA 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.
Related IFCA Waiver Authority
Sections 1244 and 1245 of IFCA provide for a waiver of sanctions for 180 days, renewable for 180 day periods, if such
a waiver is determined to be vital to U.S. national security. These sections were waived in order to implement the
JPA. In addition, Section 5(a)(7) of ISA was waived to allow for certain transactions with NIOC and NITC.
“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 work 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.15
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.
15 This termination requirement added by P.L. 109-293, which formally removed Libya from the Act. Application of
the Act to Libya terminated on April 23, 2004, with a determination that Libya had fulfilled U.N. requirements.
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Clarification of Responsibilities: Executive Order 13574
On May 23, 2011, President Obama issued Executive Order 13574 clarifying that it is the
responsibility of the Treasury Department to implement those ISA sanctions that involve the
financial sector, including bans on loans, credits, and foreign exchange for, or imports from the
sanctioned entity, as well as blockage of property of the sanctioned entity (if these sanctions are
selected by the Secretary of State, who makes the decision which penalties to impose on
sanctioned entities).
Interpretations and Administration of ISA and Related Laws
The sections below analyze how ISA, as amended by related laws, have been interpreted and
implemented through real-world cases and examples.
Application to Energy Pipelines
ISA’s definition of sanctionable “investment” has been consistently interpreted by successive
Administrations to include construction of energy pipelines to or through Iran. Such pipelines are
deemed to help Iran develop its petroleum (oil and natural gas) sector. This interpretation was
reinforced by amendments to ISA in CISADA, which specifically included in the definition of
petroleum resources “products used to construct or maintain pipelines used to transport oil or
liquefied natural gas.” In March 2012, then-Secretary of State Clinton made clear that the Obama
Administration interprets the provision to be applicable from the beginning of pipeline
construction, and not from the start of oil or gas flow through a finished project.16
Implementation. No gas pipelines built linking Iran to neighboring countries have been
sanctioned under ISA. Specific pipeline projects that are under various stages of construction 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. Any new customer for Iranian oil is automatically sanctionable
under the Order and P.L. 112-81.
Application to Natural Gas Purchases from Iran/Shah Deniz Exception
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 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.
16 http://dawn.com/2012/03/01/tough-us-warning-on-iran-gas-pipeline/.
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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”
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 Private Financing but Not Official Credit Guarantee Agencies
The definitions of investment and other sanctionable activity under ISA clearly include financing
for investment in Iran’s energy sector, or for sales of gasoline and refinery-related equipment and
services. Therefore, banks and other financial institutions that assist energy investment and
refining and gasoline procurement activities could be sanctioned under ISA.
However, 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).
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Implementation. On September 24, 2012, the Department of the Treasury informed Congress that
it had determined that NIOC and NITC are agents or affiliates of the IRGC. As noted below, on
November 8, 2012, the Treasury Department named NIOC as a proliferation entity under
Executive Order 13382. In accordance with Section 104 of CISADA, that designation bars any
foreign bank determined to have dealt directly with NIOC (including with a NIOC bank account
in a foreign country) from opening a U.S.-based account.
Some major components of NIOC have not been sanctioned, including the Iranian Offshore Oil
Company; the National Iranian Gas Export Co.; and Petroleum Engineering and Development
Co. There are also independent Iranian energy firms, such as Pasargad Oil Co, Zagros Petrochem
Co, Sazeh Consultants, Qeshm Energy, and Sadid Industrial Group. Their relations with NIOC or
the Revolutionary Guard (see below) are unclear, and none of these independent firms has been
sanctioned under any U.S. law or executive order.
Sanctions on dealings with NIOC and NITC were waived in accordance with the JPA.
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 billion17 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.18 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.
17 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.
18 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
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international financial system were based on that objective, as well as on the view that the Central
Bank helps other Iranian banks circumvent the U.S. and U.N. banking pressure.
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 reviewed every 180 days;
countries must continue to reduce their oil buys from Iran, relative to the
previous 180-day period, to retain the 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 accepted the legislation. In the signing statement on the 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 was waived on January 20, 2014, in order to implement the JPA. Iran’s existing oil customers will not
be required to further reduce oil purchases from Iran during the JPA period. Iran is certain to require that this
sanction no longer apply as part of a comprehensive nuclear deal, although Iran might be satisfied with non-application
through repeated waivers rather than outright repeal of this sanction through congressional action.
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,
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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).19 Administration officials said they largely adopted that standard. 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 Issued20
• 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 have all been renewed several times since, most recently on September
6, 2013. (Seventeen EU countries were not granted exemptions because they
were not buying Iran’s oil and could not “significantly reduce” buys from Iran.)
• 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 have been renewed
several times since, most recently 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. The exemptions were renewed repeatedly since, most recently on
November 29, 2013.
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
19 Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner, January 19, 2012.
20 Announcements by the Department of State, March 20, 2012, June 11, 2012, and June 28, 2012.
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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 the FY2012 NDAA (P.L. 112-81) applies to
this hard currency “lock-up” provision.
To implement the JPA, a waiver was issued under P.L. 112-81 to allow Iran to receive some hard currency from
ongoing oil sales in eight installments during the JPA period. Iran remains unable, even under the JPA, to remove hard
currency from existing accounts abroad.
Table 2. Top Energy Buyers From Iran and Reductions
(amounts in barrels per day, bpd)
Country/Bloc
2011 Average
Average (at time of JPA
implementation start)
European Union (particularly Italy,
600,000
Negligible
Spain, and Greece)
China 550,000
410,000
Japan 325,000
190,000
India 320,000
190,000
South Korea
230,000
130,000
Turkey 200,000
120,000
South Africa
80,000
Negligible
Malaysia 55,000
Negligible
Sri Lanka
35,000
Negligible
Taiwan 35,000
10,000
Singapore 20,000
Negligible
Other 55,000
Negligible
Total 2.5 mbd
1.057 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
Aside from the “terrorism list sanctions” discussed above, several laws and executive orders seek
to bars Iran from obtaining U.S. or other technology that can be used for weapons of mass
destruction programs (WMD).
Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act
The Iran-Iraq Arms Nonproliferation Act (P.L. 102-484, signed in October 1992) imposes a
number of sanctions on foreign entities that supply Iran with WMD technology or “destabilizing
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numbers and types of advanced 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 provides 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.”
Terminating this sanction outright would require congressional action.
Iran-North Korea-Syria Nonproliferation Act
The Iran Nonproliferation Act (P.L. 106-178, signed in March 2000), is now called the Iran-North
Korea-Syria Non-Proliferation Act (INKSNA) after amendments applying its provisions to North
Korea and to Syria. It 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.21 (A continuing resolution for FY2009, which funded the U.S. government through
March 2009, waived this law to allow NASA to continue to use Russian vehicles to access the
International Space Station.)
Implementation: Entities sanctioned under this law are listed in the tables at the end of the report.
21 The provision contains certain exceptions to ensure the safety of astronauts, but it nonetheless threatened to limit
U.S. access to the international space station after April 2006, when Russia started charging the United States for
transportation on its Soyuz spacecraft. Legislation in the 109th Congress (S. 1713, P.L. 109-112) amended the provision
in order to facilitate continued U.S. access and extended INA sanctions provisions to Syria.
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Waiver and Termination
Section 4 gives the President the authority to not impose sanctions if the President justifies that decision to Congress.
Section 5 provides for exemptions from sanctions if certain conditions are met, particularly that the government with
jurisdiction over the entity cooperating to stop future such transfers to Iran.
Termination of this law outright would require 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 have 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 been designated a “Country of Diversion Concern.”
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.
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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.
•
No IRGC-related laws or executive orders were required to be waived or suspended to implement the JPA.
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.
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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, and convinced at least 80
foreign banks to cease handling financial transactions with Iranian banks. 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.22
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. 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 December 2009, Credit Suisse agreed to pay $536 million for illicit
processing of Iranian transactions with U.S. banks. In June 2012, Dutch bank IMG agreed to pay
$619 million 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.23 In January 2014, Clearstream Banking, based in
Luxembourg, agree to pay $152 million for permitting Iran to evade restrictions on dealing with
U.S. banks. That same month, the Bank of Moscow agreed to pay $9.5 million for illicitly
moving money through the U.S. financial system on behalf of Bank Melli.24
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 Section 104 of CISADA (P.L.
111-195) and U.N. and EU sanctions. The intent of Section 104 was to weaken Iran’s economy by
preventing Iranian traders from obtaining “letters of credit” (trade financing) to buy or sell goods.
The binding provisions of Section 104 of CISADA require the Secretary of the Treasury to
prescribe several sets of regulations to forbid U.S. banks from opening new “correspondent
accounts” or “payable-through accounts” (or force the cancellation of existing such accounts) for
foreign banks that process “significant transactions” with
• Any foreign entity that is sanctioned by Executive Order 13224 or 13382
(terrorism and proliferation activities, respectively). These orders are discussed
22 Glenn Kessler, “U.S. Moves to Isolate Iranian Banks,” Washington Post, September 9, 2006.
23 Jessica Silver-Greenberg, “Regulator Says Bank Helped Iran Hide Deals,” New York Times, August 7, 2012.
24 Rick Gladstone. “U.S. Announces Actions to Enforce Iran Sanctions.” New York Times, April 29, 2014.
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elsewhere in this report. To date, several hundred entities (including individuals),
many of them Iran-based or of Iranian origin, have been sanctioned under these
two Orders; a full list is at the end of this report.
• Any entity designated under by U.N. Security Council resolutions that 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. The Treasury Department has authority 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
Under Section 401(a) of CISADA, the Section 104 sanctions provisions 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.
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.
Waivers of CISADA was not required to implement the JPA. Iran is likely to demand that this sanction not apply after
any comprehensive nuclear deal.
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”25 under Section 311 of
the USA Patriot Act (31 U.S.C. 5318A). The Treasury Department determined that Iran’s
financial system, including the Central Bank, constitutes a threat to governments or financial
institutions that do business with these banks. The designation carried no immediate penalty, but
it imposed additional requirements on U.S. banks to ensure against improper Iranian access to the
U.S. financial system.
25 http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx.
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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.26
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. Sanctions on the IRGC (see box above) 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 oppositionists. 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.”
No suspension of U.S. sanctions on Iran for its human rights practices was required by the JPA.
The JPA and associated statements indicate that sanctions related specifically to human rights
issues will not be eased as part of a comprehensive nuclear settlement.
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.
26 For information on the steps taken by individual states, see National Conference of State Legislatures, “State
Divestment Legislation.”
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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 2008.27 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 the Iran Digital Empowerment Act (H.R. 4301 in the 111th
Congress). 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.28 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.
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.
27 Christopher Rhoads, “Iran’s Web Spying Aided by Western Technology,” Wall Street Journal, June 22, 2009.
28 Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran,
March 20, 2012.
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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.29 Various entities have been
designated under Executive Order 13628 on November 8, 2012,30 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
Section 105 of CISADA was modeled on a Senate bill, S. 3022, the Iran Human Rights Sanctions
Act, in the 111th Congress. The section bans travel and freezing assets of those Iranians
determined to be human rights abusers. On September 29, 2010, pursuant to Section 105,
President Obama signed an executive order (13553) providing for the CISADA sanctions against
Iranians determined to be responsible for or complicit in post-2009 Iran election human rights
abuses.
Termination Authority
Section 105 contains its own specific authority to terminate the section through Administration action. Section 105
can be terminated if the President certifies to Congress that Iran has: (1) unconditionally released all political
prisoners detained in the aftermath of the June 2009 uprising; (2) ceased its practices of violence, unlawful detention,
torture, and abuse of citizens who were engaged in peaceful protest; (3) ful y investigated abuses of political activists
that occurred after the uprising; and (4) has committed to and is making progress toward establishing an independent
judiciary and respecting human rights recognized in the Universal Declaration of Human Rights.
29 Department of Treasury Documents, Fact Sheet: New Executive Order Targeting Human Rights Abuses Via
Information Technology, April 23, 2012.
30 http://www.state.gov/r/pa/prs/ps/2012/11/200338.htm.
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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.31 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, the State Department imposed visa restrictions on more than 50 Iranian officials
for participating in political repression in Iran. The State Department announcement stated that
the names of those subject to the ban would not be released because visa records are confidential.
The action was taken under the authorities of Section 212(a)(3)(C) of the Immigration and
Nationality Act, which renders inadmissible to the United States a foreign person whose activities
could have serious consequences for the United States. On May 30, 2013, the State Department
announced it had imposed visa restrictions on an additional 60 Iranian officials and other
individuals who participated in human rights abuses related to political repression in Iran.32
31 U.S. Department of the Treasury, Office of Public Affairs, Treasury Sanctions Iranian Security Forces for Human
Rights Abuses, June 9, 2011.
32 http://www.state.gov/r/pa/prs/ps/2013/05/210102.htm.
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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, then President 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.
U.N. Security Council action was not needed to implement the JPA. The JPA makes reference to a
comprehensive settlement satisfying all provisions of U.N. resolutions on Iran, indicating that
Security Council action might be taken to implement any comprehensive agreement.
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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 voluntary restraint on transactions with 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 Compliance33
Since 2010, converging international views on Iran have produced substantial global cooperation
in pressuring Iran with sanctions, including among Iran’s neighbors that are often reluctant to
antagonize Iran. 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. U.S.
officials say they expect that same degree of cooperation with respect to the Joint Plan of
Action—both in easing sanctions temporarily and in preventing an easing beyond those stipulated
by the JPA. The JPA—which runs from January 20, 2014, until July 20, 2014, unless extended—
requires Iran’s oil exports to remain constant (about 1 million barrels per day) for the duration of
33 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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the deal, meaning that customers are not required to cut average purchases further and not
permitted to increase either.
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
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. The EU is a party to the JPA, and, as of January 20, 2014, the EU is
implementing easing of those sanctions below – unless specified otherwise. EU sanctions are as
follows.
• A ban on EU oil imports from Iran went into effect, pursuant to a January 23,
2012 EU decision, after July 1, 2012. 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. Because of the embargo, 10 EU countries have maintained
exemptions from sanctions under (P.L. 112-81). A ban on EU imports of natural
gas from Iran went into effect in October 2012 and intended to stall Iran’s efforts
to expand gas exports to Europe. The JPA calls for Iran’s oil exports to remain
constant during the period of the deal, and the JPA has not altered the EU ban on
imports of oil or gas from Iran.
• An EU ban on insurance for shipping oil or petrochemicals from Iran took full
effect on July 1, 2012. Earlier, some EU-based insurers closed their offices in
Iran.
• The EU has banned all trade with Iran in gold, precious metals, diamonds, and
petrochemical products.
• The EU has frozen the assets of Iran’s Central Bank, although transactions are
still be permitted for approved legitimate trade, and it froze the assets of several
Iranian firms involved in shipping arms to Syria or which support shipping by
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IRISL, and cease doing business with port operator Tidewater (see above). This
sanction has not been eased to implement the JPA.
• As of October 15, 2012, there has been a ban on transactions between European
and all Iranian banks, unless specifically authorized.
• The EU has banned short-term export credits, guarantees, and insurance.
• The EU bans exports to Iran of graphite, semi-finished metals such as aluminum
and steel, and industrial software, and shipbuilding technology, oil storage
capabilities, and flagging or classification services for Iranian tankers and cargo
vessels. Exports for Iran’s automotive sector, but not other technologies listed,
have been eased for the JPA period.
SWIFT Cutoff. Section 220 of P.L. 112-158 requires reports on electronic payments systems such
as the Brussels-based SWIFT (Society of Worldwide Interbank Financial Telecommunications)
that might be doing business with Iran, but does not mandate sanctions against such systems. The
EU reacted to that legislation by requesting that SWIFT cut off sanctioned Iranian banks from the
network. SWIFT acceded to that request on March 17, 2012, 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.34 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.” The SWIFT sanctions have not been
suspended to implement the JPA.
Europe also 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)
ongoing potential sanctions violations including export of machine tools to Iran by Spain and
satellite equipment sales to Iran by Germany.35 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.36
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 bucked U.S. objections and rescheduled about $16 billion in Iranian 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) that would have
34 Avi Jorish, “Despite Sanctions, Iran’s Money Flow Continues,” Wall Street Journal, June 25, 2013.
35 Louis Charbonneau and Michelle Nichols, “Exclusive: Glencore, Trafigura Deals with Iran May Have Skirted
Sanctions—U.N.,” Reuters, May 22, 2013.
36 James Kanter, “Iran Ruling in Europe Draws Anger from U.S.,” New York Times, September 7, 2013.
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lowered the tariffs or increased quotas for Iranian exports to the EU countries.37 Negotiations
were discontinued in late 2005 after Iran abrogated an agreement to suspend uranium enrichment.
Similarly, there has, to date, 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 imposed significant sanctions on Iran, in part to avoid friction with their
close ally, the United States. In 2010, both imposed trade, banking, and energy Iran sanctions
similar to those of the European Union. Both countries have cut imports of Iranian oil sharply
since 2011. Some South Korean firms have been active in energy infrastructure construction in
Iran but, on December 16, 2011, South Korea banned sales to Iran of energy sector equipment.
The main South Korean refiners that import Iranian crude are SK Energy and Hyundai Oilbank.
The U.S. sanctions that require on oil buyers pay Iran in local accounts to avoid U.S. sanctions—
a requirement that took effect on February 6, 2013—have 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 using local currency accounts. The
two countries have been the source of the direct hard currency payments to Iran for oil under the
JPA (a total of $4.2 billion in such direct payments is allowed during the JPA period).
North Korea
South Korea is an ally of the United States. North Korea is an ally of Iran and, like Iran, is a
subject of international sanctions. North Korea generally does not comply with international
sanctions against Iran, and reportedly cooperates with Iran on a wide range of WMD-related
ventures. Press reports in April 2013 said that Iran might begin supplying oil directly to North
Korea, although financial terms are not known. It has not been reported that deliveries had begun.
Currently, according to experts, a portion of China’s purchases of oil from Iran and other
suppliers is re-exported to North Korea.
India
India has implemented U.N.-mandated sanctions against Iran but its cultural, economic, and
historic ties to Iran—as well as its strategic need for access to Afghanistan—have made the
Indian government hesitant to impose all the sanctions on Iran that the United States and the EU
have imposed. Yet, India’s private sector increasingly has viewed Iran as a “controversial
market”—a term used by many international firms to describe markets that entail significant
reputational and financial risks.
37 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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India began reducing economic relations with Iran in 2010, when India’s central bank ceased
using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.
In January 2012, Iran agreed to accept India’s local currency, the rupee, to settle 45% of its sales
to India. That local account funds the sale to Iran of Indian wheat, pharmaceuticals, rice, sugar,
soybeans, auto parts, and other products. Still, there is a large trade imbalance, because the oil
Iran exports to India are worth far more than the value of the products that India sells to an.
Even though purchases of Iranian oil are financially advantageous because of the barter nature of
their trade, India has reduced its imports of Iranian oil substantially since 2011 in an effort to
conform to U.S. and EU policy. 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 need for significant investment to switch over refineries that handle
Iranian crude. 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. According to a GAO report of January 7, 2013, at least one Indian
firms—ONGC Videsh Ltd.—ended its investment activity in Iran since the end of 2012, but some
Indian firms might still maintain investments there as shown in the table later in this paper on
investments in Iran’s energy fields.
India’s weakening economy as of 2014 could still cause U.S.-India differences on Iran sanctions.
In mid-August 2013, India’s finance minister said that India wants to increase oil imports from
Iran.38 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 comply with U.S. sanctions.39 India reportedly
increased shipments from Iran during January-March 2014 to about 320,000 bpd, but U.S.
officials say India plans to make cuts during April-June 2014 to bring average purchases in line
with the pre-JPA level of about 200,000 bpd.
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 a formally agreed completion date of mid-2014, Iran reportedly has completed the
pipeline on its side of the border. Potentially complicating the construction on the Pakistani side
38 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.
39 “India Should Import More Iran Oil- Ministry Before Barack Obama Meeting,” Reuters, September 24, 2013.
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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. In March 2014, possibly
in part because of a Saudi grant to Pakistan that might have been intended to persuade Pakistan to
distance itself from Iran, Pakistani officials said U.S. sanctions precluded construction on the
Pakistan side of the border.40 Still, Pakistan is obligated to begin buying gas from Iran as of
January 1, 2015, lest it incur a $200 million per month penalty due Iran.
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 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. A press report in early January 2014 (before the crisis over Ukraine
erupted) indicated that Russia and Iran are negotiating an agreement under which they would
barter Iranian oil (500,000 barrels per day) for Russian goods. That deal that would appear to
violate the JPA.41 Russia is an oil exporter and a need to preserve oil imports from Iran has not
been a factor in its Iran policy calculations. The Iranian oil that Russia might buy under this
arrangement, were it to take effect, would presumably free up additional Russian oil for export.
China has been of concern to U.S. officials because it is Iran’s largest oil customer, and therefore
its cooperation has been pivotal to U.S. efforts to reduce 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. Under
Secretary of State Wendy Sherman and Under Secretary of the Treasury David Cohen testified
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, as shown in
the table. As is the case with other Iranian oil customers, some months might show spikes to
higher levels as oil shipments get scheduled. 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—explaining
China’s maintenance of its Section 1245 U.S. sanctions exemption. Some energy firms remain
present in Iran’s energy sector, according to a January 7, 2014, GAO report, but observers say
there is not much actual work being performed on these projects – an observation confirmed by
Iranian energy officials in early May 2014.
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. The February
6, 2013, “lock-up” requirement has caused Iran to purchase even more of its imports from China.
Some reports in late August 2013 indicated that China would settle some of its Iran oil bill by
providing 315 subway cars for the Tehran metro.42 Press reports indicated that Iran’s automotive
sector obtains a significant proportion of its parts from China, and two Chinese companies,
Geelran and Chery, produce cars in Iran.
40 Asia Times, March 21, 2014. http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html.
41 “Iran, Russia Negotiating Big Oil-for-Goods Deal.” Reuters, January 10, 2014.
42 Author conversation with journalists based in China, September 1, 2013.
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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 Section
1245 NDAA sanctions exemption on June 11, 2012, renewed every six months thereafter. 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. 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 hedge against the
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 no ISA sanctions were imposed. Many experts assert that the
State Department views the line as crucial to the energy security of Turkey, which is 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.43
Turkey has, on several occasions, blocked or impounded Iranian arms and other contraband
shipments bound for Syria or Lebanese Hezbollah. This was discussed in the June 12, 2012,
report on sanctions implementation by the U.N. panel of experts chartered by Resolution 1929.
On January 6, 2014, the Commerce Department issued an emergency order blocking a Turkey-
based firm (3K Aviation Consulting and Logistics) from re-exporting two U.S.-made jet engines
to Iran. That and other firms reportedly involved in the deal denied that the engines were bound
for an Iranian airline (Pouya Airline). 44
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
43 Information provided to the author by the New York State government, July 2012.
44 “US Acts to Block Turkish Firm from Sending GE Engines to Iran.” Reuters, January 6, 2014.
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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.45 However, Azerbaijani officials assert that Iran is using Armenian
banks operating in the Armenia-occupied Nagorno-Karabakh territory to circumvent international
financial sanctions. These institutions could include Artsakhbank and Ameriabank.46
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.47 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 Iraq48
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 supplying the
global oil market with extra oil to counter-balance the drop in Iranian oil exports and thereby
keep global oil prices steady. 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, the Gulf countries still conduct a wide range of trade with
Iran and some Gulf countries allow some sanctioned Iranian banks to continue operating in their
countries. Gulf-based shipping companies such as United Arab Shipping Company have paid port
loading fees to such sanctioned IRGC-controlled port operators as Tidewater.49
The UAE is particularly closely watched by U.S. officials because of the large presence of Iranian
firms there. Several UAE-based firms have been sanctioned for efforts to evade sanctions, as
noted in the tables at the end of the report. U.S. officials 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 into jet fuel, gasoline, and other petroleum
products.
45 Louis Charbonneau, “Iran Looks to Armenia to Skirt Banking Sanctions,” Reuters, August 21, 2012.
46 Information provided to the author by regional observers. October 2013.
47 “As Sanctions Bite, Iran Invests Big in Georgia,” Wall Street Journal, June 20, 2013.
48 The CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman, discusses the relations
between Iran and other Middle Eastern states.
49 Mark Wallace, “Closing U.S. Ports to Iran-Tainted Shipping. Op-ed,” Wall Street Journal, March 15, 2013.
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Iran and Kuwait have held talks on the construction of a 350-mile pipeline that would bring
Iranian gas to Kuwait. No construction has been reported. 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.50
Iran has sought to use its close relations with Iraq to evade some sanctions. As noted above, the
United States sanctioned an Iraqi bank that has cooperated with Iran’s efforts, but 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.51 It was reported in February 2014 that Iraq had ordered $200 million worth of arms and
ammunition from Iran, despite the U.N. ban on Iranian arms exports, although some Iraqi
diplomats have said the order was later rescinded.
Afghanistan
Some reports say that Iranian currency traders are using Afghanistan to acquire dollars that are
plentiful there but in short supply in Iran. 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.52
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 lost a key Latin
American ally with the March 2013 death of Venezuelan President Hugo Chavez. As noted
elsewhere in this report, several Venezuelan firms have been sanctioned for dealings with Iran.
50 http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?
nn=8901181055.
51 Ben Lando, “Iraq Inks Gas Supply Deal with Iran,” Iraq Oil Report, July 23, 2013.
52 “Pentagon Contractor Used Iran for Project,” Wall Street Journal, September 26, 2013.
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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.53 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.
53 “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 closely aligns its sanctions
sweeping sanctions on Iran of
intended to primarily target Iran’s
tightening—as well as sanctions
virtually any country in the world
nuclear and other WMD programs.
relief in the context of the nuclear
No mandatory sanctions on Iran’s
deal—with those of the U.S.
energy sector.
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 bans on
sector investment in Iran. Nor do
certain types of trade as discussed.
Executive Order 12959 bans (with
U.N. sanctions mandate restrictions
limited exceptions) U.S. firms from
on provision of trade financing or
Japan and South Korea have banned
exporting to Iran, importing from
financing guarantees by national
medium- and long-term trade
Iran, or investing in Iran. There is an
export credit guarantee agencies.
financing and financing guarantees.
exemption for sales to Iran of food
Short-term credit still al owed.
and medical products.
Sanctions on Foreign Firms that
No U.N. equivalent exists. However,
With certain exceptions likely to
Do Business with Iran’s Energy
preambular language in Resolution
fulfill the nuclear deal, the EU bans
Sector:
1929 “not[es] the potential
almost all dealings with Iran’s energy
connection between Iran’s revenues
sector.
The Iran Sanctions Act, P.L. 104-172,
derived from its energy sector and
and subsequent laws and executive
the funding of Iran’s proliferation-
Japanese and South Korean
orders, discussed throughout the
sensitive nuclear activities.” This
measures ban new energy projects
report, mandate sanctions on
wording is interpreted by most
in Iran and call for restraint on
virtually any type of transaction
observers as providing U.N. support
ongoing projects. South Korea in
with/in Iran’s energy sector. Some
for countries who want to ban their
December 2011 cautioned its firms
exemptions are permitted for firms
companies from investing in Iran’s
not to sel energy or petrochemical
of countries that have “significantly
energy sector.
equipment to Iran. Both have cut oil
reduced” purchases of Iranian oil
purchases from Iran sharply.
each 180 days.
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).
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.
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Implementation by EU and
U.S. Sanctions
U.N. Sanctions
Some Allied Countries
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.
Primarily under §6(j) of the Export
Administration Act (P.L. 96-72) and
Japan and S. Korea have announced
§38 of the Arms Export Control Act,
full adherence to strict export
there is a denial of license
control regimes when evaluating
applications to sell Iran goods that
sales to Iran.
could have military applications.
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.
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.
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Implementation by EU and
U.S. Sanctions
U.N. Sanctions
Some Allied Countries
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
Brussels-based SWIFT expelled
Table 5 at end of report).
sanctioned Iranian banks from the
electronic payment transfer system.
CISADA prohibits banking
relationships with U.S. banks for any
Japan and South Korea measures
foreign bank that conducts
similar to the 2010 EU sanctions,
transactions with Iran’s
with South Korea adhering to the
Revolutionary Guard or with Iranian
same 40,000 Euro authorization
entities sanctioned under the various
requirement. Japan and S. Korea
U.N. resolutions.
froze the assets of 15 Iranian banks;
South Korea targeted Bank Mel at
FY2012 Defense Authorization (P.L.
for freeze.
112-81) prevents U.S. accounts with
foreign banks that process
Some measures by these allies likely
transactions with Iran’s Central Bank
to be eased to implement nuclear
(with specified exemptions).
deal.
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.
Private-Sector Cooperation and Compliance
The multiplicity of sanctions have caused Iran to be viewed by many worldwide 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
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that, prior to the interim nuclear deal of late 2013, discontinued 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, as did. Indian conglomerate
Tata is ending its Iran business.
• Auto manufacturing and sales of automotive equipment to Iran are sanctionable
under Executive Order 13645. Sales of finished autos were not sanctionable, yet
several firms ceased selling cars to Iran in 2010, including Germany’s Daimler
(Mercedes-Benz) and Porsche; Toyota (Japan); Fiat (Italy); and South Korea’s
Hyundai, and Kia Motors. French carmaker Peugeot, which produces cars locally
in partnership with Iran’s Khodro Group, suspended operations in Iran after E.O.
13645 took effect in July 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.
• 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, the Danish shipping giant Maersk said 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, of sanctions on the operator of those ports,
Tidewater Middle East Co., under Executive Order 13382.
• Well before Executive Order 13590 was issued (see above), one large oil services
firm, Schlumberger, incorporated in the Netherlands Antilles, said it would wind
down its business with Iran.54
Foreign Subsidiaries of U.S. Firms That Have Exited the Iran Market
Even before their activities became sanctionable as a consequence of post-2010 legislation and
executive orders, many foreign subsidiaries of U.S. firms had exited the Iran market voluntarily.
• Chemical manufacturer Huntsman announced in January 2010 its subsidiaries
would halt sales to Iran.
• 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),55 because the deals involved a subsidiary of Halliburton
(Cayman Islands-registered Halliburton Products and Service, Ltd., based in
54 Farah Stockman, “Oil Firm Says It Will Withdraw From Iran,” Boston Globe, November 12, 2010.
55 “Iran Says Halliburton Won Drilling Contract,” Washington Times, January 11, 2005.
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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.56 Ingersoll Rand, maker of air compressors and
cooling systems, followed suit.57
• 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.58
• 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 2006.59 FMC
Technologies took similar action in 2009, as did Weatherford60 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
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.
Some foreign firms still active in Iran are subsidiaries of U.S. firms and some of them also
received U.S. government contracts, grants, loans, or loan guarantees. They include:
56 “Caterpillar Says Tightens ‘No-Iran’ Business Policy,” Reuters, March 1, 2010.
57 Ron Nixon, “2 Corporations Say Business With Tehran Will Be Curbed,” New York Times, March 11, 2010.
58 Peter Baker, “U.S. and Foreign Companies Feeling Pressure to Sever Ties With Iran,” New York Times, April 24,
2010.
59 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.
60 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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• 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.
• Kansas-based Koch Industries may have sold equipment to Iran to be used in
petrochemical plants (making methanol) and possibly oil refineries, until 2007.
Sales of refinery equipment to Iran were later made sanctionable under ISA.61
• Some subsidiaries of U.S. energy equipment and energy-related shipping firms
were in the Iranian market as late as 2010, including Natco Group,62 Overseas
Shipholding Group,63 UOP (United Oil Products, a Honeywell subsidiary based
in Britain),64 Itron,65 Fluor,66 Parker Drilling, Vantage Energy Services,67 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.
Effectiveness of Sanctions on Iran
The following sections examine the effectiveness of sanctions on a variety of criteria and goals.
These issues are discussed in depth in CRS Report R43492, Achievements of and Outlook for
Sanctions on Iran, by Kenneth Katzman.
Effect on Iran’s Nuclear Program Decisions and Capabilities
During the term of former President Mahmoud Ahmadinejad, U.S. and U.N. sanctions did not
accomplished their core strategic objective of compelling Iran to verifiably limit its nuclear
development to purely peaceful purposes. Many experts interpret Iran’s acceptance of the JPA as
evidence that sanctions contributed substantially to a shift in Iran’s nuclear policies. The deal
came after the June 14, 2013, presidential election in Iran in which Iranians elected the relatively
61 Asjylyn Loder and David Evans, “Koch Brothers Flout Law Getting Richer With Iran Sales,” Bloomberg News,
October 3, 2011.
62 Form 10-K Filed for fiscal year ended December 31, 2008.
63 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.
64 New York Times, March 7, 2010, cited previously.
65 “Subsidiaries of the Registrant at December 31, 2009,” http://www.sec.gov/Archives/edgar/data/780571/
000078057110000007/ex_21-1.htm.
66 “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.
67 Form 10-K for Fiscal year ended December 31, 2007.
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moderate mid-ranking cleric Hassan Rouhani as president; he ran on a platform of achieving an
easing of sanctions and ending Iran’s international isolation. However, Director of National
Intelligence James Clapper testified in his “Worldwide Threat Assessment” presentation to
Congress on January 29, 2014, that Iran’s ultimate nuclear intentions remain unclear.
Effects on Iran’s Nuclear and Strategic Programs and Regional
Influence
A related issue is whether sanctions have weakened Iran strategically. One aspect of that question
is whether sanctions have prevented Iran from acquiring needed technology or skills for its
nuclear program or its missile or advanced conventional weapons programs. Some U.S. officials
have asserted that sanctions have complicated Iran’s efforts to acquire key materials and
equipment for its enrichment program.68 On March 16, 2014, Principal Deputy Assistant
Secretary of State for International Security and Non-Proliferation Vann Van Diepen said Iran was
still “very actively” creating front companies and engaging in other activity to conceal
procurements, and that Iran’s procurement activities had not changed since the JPA was agreed
to.69 Sanctions did not prevent Iran from developing more advanced centrifuges and expanding its
uranium enrichment program, as widely noted by the International Atomic Energy Agency
(IAEA). Director of National Intelligence James Clapper has testified that Iran continues to
expand the scale, reach, and sophistication of its ballistic missile arsenal. See also CRS Report
R40094, Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, by Paul
K. Kerr, and CRS Report R42849, Iran’s Ballistic Missile and Space Launch Programs, by
Steven A. Hildreth.
Sanctions might have eroded those aspects of Iran’s conventional military capabilities that are
most dependent on foreign supplies, but the effect of sanctions on Iran’s overall military capacity
is not clear. Resolution 1929 of June 2010 prohibited the sale to Iran of major combat systems,
and there have been no reports of sales to Iran of tanks or combat aircraft since then. However,
Iran might have acquired some ships and small submarines,70 and, Iran is able to produce some
advanced conventional weaponry indigenously, including short range ballistic and cruise missiles.
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.71 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. Other reports indicate Iran continues to
try to arm Palestinian Islamist factions in the Gaza Strip and it has sought to supply arms to
radical Shiite factions in Bahrain, according to DNI Clapper in January 2014.
68 Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011.
69 William Maclean. “Iran Pursuing Banned Items for Nuclear, Missile Wor: U.S. Official.” Reuters, March 16, 2014.
70 Department of Defense, Annual Report of Military Power of Iran, April 2012.
71 Louis Charbonneau, “U.N. Monitors See Arms Reaching Somalia From Yemen, Iran,” Reuters, February 10, 2013.
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General Political Effects
Sanctions might have produced some political change in Iran. Most of the candidates permitted
by the regime to run for president in June 2013 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,
because it achieves some sanctions relief, he has publicly backed the JPA negotiated by Rouhani’s
team.
However, sanctions have not achieved the objective, sought by some experts, of producing the
outright replacement of Iran’s regime. At the popular level, since 2012 there have been labor and
public unrest over escalating food prices and the dramatic fall of the value of Iran’s currency. But
these strikes and demonstrations have not been sufficiently large or sustained to threaten the
regime’s grip on power.
Human Rights-Related Effects
Some see sanctions as a tool to compel improvement in human rights practices in Iran. The State
Department human rights report for 2013, released February 27, 2014, contains many of the same
criticisms of Iran’s human rights practices as do the reports for previous years. However, as that
and other reports note, President Rouhani has released a few political prisoners and press reports
say media freedoms have increased slightly since he took office.
Sanctions have not reduced the regime’s ability to monitor and censor use of the Internet, even
though some major firms have exited the Iran market. 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-2010.72 A Chinese Internet infrastructure firm, Huawei, announced in December 2011
that it was withdrawing its sales staff from Iran. A South African firm, MTN Group, owns 49% of
a private cellular phone network, Irancell, and was accused by some groups of helping the Iranian
government shut down some social network services during times of protest in Iran.73 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. The GAO report of January 7, 2014, did not identify
any foreign firms that exported technology to Iran for monitoring, filtering, or disrupting
information and communications flow from October 1, 2012, to November 7, 2013.74
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.
72 Aurelia End, “Siemens Quits Iran Amid Mounting Diplomatic Tensions,” Agence France Press, January 27, 2010.
73 http://www.examiner.com/article/obama-adviser-plouffe-received-100-000-from-iranian-associated-firm.
74 GAO-14-218R Iran, January 7, 2014.
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Economic Effects
Many experts attribute Iran’s acceptance of the JPA to the toll sanctions have taken on Iran’s
economy. The sanctions have amplified the effect of Iran’s own mismanagement, according to
several experts. Indicators of the economic effect of sanctions include:
• Oil Export Declines. As noted in Table 2, sanctions drove Iran’s oil sales down
about 60% from the 2.5 mbd of sales in 2011, reducing Iran’s oil sales revenue
from $100 billion in 2011 to about $35 billion in 2013. The JPA specifies that
Iran’s oil sales remain constant at 1 mbd for the six-month duration of the deal.
The International Energy Agency (IEA) reported in April 2014 that Iran exported
about 1.65 mbd in February 2014 because of an increase in imports by China,
India, and South Korea. However, U.S. officials say that these customers will
subsequently reduce buys and the average for the six month JPA period will
likely be in line with the 1 mbd stipulated by the JPA.75
• Falling Oil Production. At the time the JPA began implementation, Iran’s oil
production had fallen to about 2.6-2.8 mbd from the level of nearly 4.0 mbd at
the end of 2011.76 Iran tried at first to avoid production cuts by storing as many
as 30 million barrels of unsold crude oil on tankers in the Persian Gulf, and it
built additional storage tanks on shore. Shutting wells entirely risks harming
them, and it is costly to resume production at a shut well.
• Hard Currency Inaccessible. Not only have Iran’s oil exports fallen by volume,
but Iran has not been paid in hard currency for its oil and was unable to access
much of its hard currency held in accounts abroad. Prior to the implementation of
the JPA, about $1.5 billion per month was accumulating in foreign accounts, out
of about $3.4 billion in the total value of monthly oil sales77—in part because
Iran cannot always identify a sufficient amount of goods in those countries to
import to make use of all the oil money it receives. Iran’s hard currency reserves
are estimated to be nearly $100 billion, of which as much as $60-$80 billion
cannot be repatriated due to banking restrictions. About $20 billion is believed to
be accessible—aside from the $4.2 billion Iran can receive directly during the
JPA period. Iran will be adding to the balance of funds locked up abroad for the
duration of the JPA.
• GDP Decline. Sanctions caused Iran to suffer its first gross domestic product
(GDP) contraction in two decades—it dropped about 5% in 2013. Many
businesses failed and the number of non-performing loans increased. Many
employees in the private sector went unpaid or were subject to long delays in
salary payments. The unemployment rate rose to about 20%, although the Iranian
government reports that the rate is 13%. The sanctions relief of the JPA is
estimated to enable Iran to return to slight growth of about 1% for all of 2014,
according to the International Monetary Fund.
75 Iran’s Oil Exports Surge Above West’s Sanctions Cap: IEA. Reuters, April 11, 2014; Iran Exports Will Be in Line
with Sanctions Target: U.S. Reuters, April 4, 2014.
76 Rick Gladstone, “Data on Iran Dims Outlook for Economy,” New York Times, October 13, 2012.
77 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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• Currency Decline. Sanctions caused the value of the rial on unofficial markets to
decline from about 13,000 to the dollar in September 2011 to about 40,000 as of
October 2012. The unofficial rate was about 37,000 to the dollar in May 2013,
but optimism over Rouhani’s presidency and the JPA caused the rial to appreciate
to about 29,000 to the dollar as of the start of 2014.
• Inflation. The drop in value of the currency caused inflation to accelerate. The
Iranian Central Bank acknowledged an inflation rate of 45% rate as of July 2013.
Many economists asserted that the actual inflation rate was 50% and 70%.
However, some assert that inflation was fed by the policies of Ahmadinejad,
particularly the substitution of subsidies with cash payments. The economic
benefits of the JPA, according to some experts, has contributed to a reduction in
the inflation rate to 20%.
• Industrial Production. Because Iran’s manufacturing sector relies on imported
parts, the currency decline and financing restrictions have made it difficult for
that sector to operate. Many Iranian manufacturers were unable to obtain credit
and must pre-pay, often through time-consuming and circuitous mechanisms, to
obtain parts from abroad. This difficulty is particularly acute in the automotive
sector; Iran’s production of automobiles fell by about 40% from 2011 to 2013.
However, the JPA has begun to benefit the auto sector because of the sanctions
easing on that sector required by the agreement. Still, press reports say that
manufacturing has rebounded only modestly since the JPA implementation
began.
Iran’s Mitigation Efforts
Prior to the JPA, Iran had mixed success mitigating the economic effect of sanctions. Its primary
strategy was to substitute for oil sales. Iran’s 2013-2014 budget relied far less on oil exports than
have previous budgets, but the 2014-2015 budget, approved by Iran’s parliament on February 10,
2014, assumes that there will be a comprehensive nuclear deal will be reached that eases
sanctions on oil exports—the budget projects a 22% increase in oil revenue over the 2013-2014
figures. Iran’s non-oil exports have become less expensive than previously because of the decline
in value of its currency, and non-oil exports grew 20% in 2012 from the prior year, including
exports of minerals, cement, urea fertilizer, and other agricultural and basic industrial goods. The
main customers for Iran’s non-oil exports reportedly are countries in the immediate
neighborhood, including Iraq, Afghanistan, and Armenia.
Diversification and Developing Manufacturing Base. Arguing a position similar to that held by
Supreme Leader Khamene’i, some economists have long maintained that Iran could best mitigate
the effect of sanctions by diversifying its economy and reducing 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. In addition, 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.
Oil Products Sales. Iran has sought to increase sales of oil products. The Iran Customs
Administration estimated that Iran sold $8.1 billion from petrochemical sales during March-
November 2013, even though U.S. sanctions on petrochemical sales went into effect during that
time. Petrochemical sales are allowed under the JPA. However, the definition of permissible
petrochemical exports does not include condensates, which are refined into jet fuel. The sanctions
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on sales of condensates apparently is being only loosely enforced because Iran doubled sales of
condensates in 2013 from previous years, and might have doubled again from August 2013 to
March 2014, according to Credit Suisse. Still, all of these exports do not fully compensate for the
loss of crude oil revenues.
Subsidy Reductions. In late 2012, in order to conserve funds, Ahmadinejad’s government
postponed phase two of his effort to wean the population off subsidies. That effort provided for
cash payments to about 60 million Iranians of about $40 per month Iranians to compensate them
for ending subsidies for commodities such as gasoline. Gasoline prices began to 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. In April 2014, Rouhani
raised gasoline prices further and began to limit the cash payments to only those families who
could claim financial hardship.
Import Restrictions. 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.
Effect on Energy Sector Long-Term Development
Sanctions have been intended to reduce Iran’s production capacity over the longer term, taking
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 that Iran had
lost $60 billion in investment in the sector as numerous major firms have announced pullouts
from some of their Iran projects, declined to make further investments, or resold their investments
to other companies. Iran says it needs $130 -$145 billion in new investment by 2020 to keep oil
production capacity from falling.78 Iranian energy officials add that continued development of the
large South Pars gas field requires $100 billion in new investment.79
Observers at key energy fields in Iran say there is little evidence of foreign investment activity
and little new development activity sighted at various oil and gas development sites, 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. Iran is reportedly working actively to
lure foreign investors back into the sector, including by hiring back many of the former officials
that successfully negotiated such past investments.
78 Khajehpour presentation at CSIS. Op. cit.
79 Iran Faces Steep Climb to Join Gas Superpowers by 2017. International Oil Daily, April 29, 2014.
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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 reportedly not as technically capable as the
international firms that have withdrawn from Iran.
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
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Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
(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.
LG Engineering and
$1.6 billion
2 billion cfd
2002
Phase 9 + 10, South Pars (gas)
Construction Corp. (now
known as GS Engineering and
(“OIEC Surpasses South Korean Company in
Construction Corp., South
South Pars.” IPR Strategic Business Information
Korea)
Database, November 15, 2004.)
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) – South and North
Inpex (Japan) and CNPC
$200 million
260,000 bpd
2004
(China)
(Inpex stake);
October 15, 2010: Inpex announced it would
China $2.5
exit the Azadegan project entirely by selling its
billion
10% stake; “special rule” exempting it from ISA
investigation invoked November 17, 2010.
China National Petroleum Corp. took a majority
stake in South and North Azadegan fields in
January 2009. However, on April 29, 2014, Iran
cancel ed the South Azadegan contract citing
CNPC for performing “no effective work” since
taking the stake in 2009. Industry sources say
CNPC likely to also lose North Azadegan
project also. (Iran-CNPC Breakup: Tehran Eyes
the West, Christian Science Monitor, May 5,
2014.
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.)
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
October
Yadavaran (oil)
Sinopec (China), deal
$2 billion
300,000 bpd
2004
finalized Dec. 9, 2007
Christian Science Monitor reports May 5, 2014
(op.cit.) that Iran says Sinopec has “experienced
problems with regards to progress” on the field,
which also extends into Iraq. But International
Oil Daily quotes company on May 7, 2014 as
saying project is on course to produce an initial
85,000 bpd by the end of 2014.
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
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
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
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 reports; 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)
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
Jan. 7, 2014, GAO report says INA has
size)
withdrawn from Iran.
-
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
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
January
Bushehr Polymer Plants
Sasol (South Africa)
?
Capacity is 1
2009
million tons
Production of polyethelene at two polymer
per year.
plants in Bushehr Province.
Products are
GAO Jan. 7, 2014, report says Sasol has
exported from
withdrawn from Iran.
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
Jan.7, 2014, GAO reports says ONGC Videsh has
minor stakes by Sonanagol
Sonangol/$780
withdrawn from Iran, but project continued by
(Angola) and PDVSA
million
NIOC subsidiary Petropars. Field began producing
(Venezuela)..
PDVSA
in March 2014.
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
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
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Iran Sanctions
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.80 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. The GAO report
of January 7, 2014, identified no foreign firms selling Iran gasoline between October 1, 2012, and
November 7, 2013. This suggests that the phaseout of gasoline subsidies has reduced demand for
gasoline, and that Iran has increased domestic production.
Table 6. Firms That Sold Gasoline to Iran
Vitol of Switzerland (notified GAO it stopped selling to Iran in early 2010)
Trafigura of Switzerland (notified GAO it stopped selling to Iran in November 2009)
Glencore of Switzerland (notified GAO it stopped selling in September 2009)
Total of France (notified GAO it stopped sales to Iran in May 2010)
Reliance Industries of India (notified GAO it stopped sales to Iran in May 2009)
Petronas of Malaysia (said on April 15, 2010, it had stopped sales to Iran)81
Lukoil of Russia (reported to have ended sales to Iran in April 2010,82 although some reports continue that Lukoil
affiliates are supplying Iran)
Royal Dutch Shell of the Netherlands (notified GAO it stopped sales in October 2009)
Kuwait’s Independent Petroleum Group (told U.S. officials it stopped selling gasoline to Iran as of September 2010)83
Tupras of Turkey (stopped selling to Iran as of May 2011, according to the State Department)
British Petroleum of United Kingdom, Shel , Q8, Total, and OMV are no longer selling aviation fuel to Iran Air,
according to U.S. State Department officials on May 24, 2011
A UAE firm, Golden Crown Petroleum FZE, told the author in April 2011 that, as of June 29, 2010, it no longer leases
vessels for the purpose of shipping petroleum products from or through Iran
Munich Re, Allianz, Hannover Re (Germany) were providing insurance and re-insurance for gasoline shipments to
Iran. However, they reportedly have exited the market for insuring gasoline shipments for Iran84
Lloyd’s (Britain). The major insurer had been the main company insuring Iranian gas (and other) shipping, but
reportedly ended that business in July 2010.
According to the State Department 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.
80 Information in this section derived from Javier Blas, “Traders Cut Iran Petrol Line,” Financial Times, March 8, 2010.
81 http://www.ft.com/cms/s/0/009370f0-486e-11df-9a5d-00144feab49a.html.
82 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
83 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
84 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
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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, ZhenHua Oil, and China Oil of China. Zhuhai Zhenrong is no longer sel ing Iran gasoline,
according to the January 7, 2014, GAO report (GAO-14-281R). ZhenHua, a subsidiary of arms manufacturer
Norinco, supplied one third of Iran’s gasoline in March 2010, but there is little information on supplies since.
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.
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 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. The JPA provides for the international community to provide enhanced
financial channels for Iran to import medicines, although the exact mechanism for such
facilitation remains unclear.
In the aviation sector, some Iranian pilots have complained 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 to difficultly in acquiring U.S. spare parts.85 The JPA provides for new sales of civilian
aircraft parts to address this issue and Boeing and GE have applied for and obtained licenses to
make some spare part sales to Iranian airlines. 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.
85 Thomas Erdbink, “Iran’s Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions,” July 14, 2012.
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Sanctions Easings and Debate Following November
24, 2013, Nuclear Deal
U.S. officials have said publicly that the JPA requires “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.”86 The JPA 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. Treasury Department officials say the interim deal will have a small
positive impact on Iran’s economy.87 The sanctions relief during the six-month JPA period
amounts to about $7 billion, and Iran’s oil export earnings will not increase during it.
Critics of the JPA assert that although the formal sanctions relief might appear modest, the easing
of sanctions has ignited a process of sanctions unraveling. In making this argument, critics
particularly point to a 100+ member French business delegation that visited Iran in the first week
of February 2014. The delegation reportedly included representatives of such major French
companies as Airbus, GDF-Suez, Renault, Alcatel, and L’Oreal.88 Even though all accounts say
no firm deals were signed with Iran, the delegation prompted President Obama to warn at a joint
press conference with visiting French President Francois Hollande on February 11, 2014, that
companies that might violate sanctions that are in force “do so at their own peril right now
because we will come down on them like a ton of bricks with respect to the sanctions that we
control, and we expect full compliance ... during this interim [period].”89 Business delegations
from Italy and other European countries have also visited Iran or conducted informal talks with
Iranian economic actors since the JPA period began.
Temporary Sanctions Relief in the JPA
In summary, the JPA provides for the following sanctions easing:90
• During the JPA 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 has exercised waiver authority under Section 1245(d)(1) of the
National Defense Authorization Act for FY2012 (P.L. 112-81) and Section
1244c(1) of the Iran Freedom and Counter-Proliferation Act of 2012
(“IFCA,”Title XII, subtitle D, of the FY2013 National Defense Authorization
86 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program.” November 23, 2013.
87 Elad Benari. “Zarif: We Only Spoke with the U.S. About the Nuclear Program.” Arutz Sheva, November 27, 2013.
88 http://www.thedailybeast.com/articles/2014/02/24/lawmakers-warn-michelin-over-iran.html.
89 Press Conference by President Obama and President Hollande of France. February 11, 2014.
90 The Administration sanctions suspensions and waivers are detailed at: http://www.state.gov/p/nea/rls/220049.htm.
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Act, P.L. 112-239); the Administration has said it will not impose sanctions on
foreign banks under Executive Orders 13622, 13645, and 13382 and related
regulations. Waivers of Section 302(a) of the Iran Threat Reduction and Syria
Human Rights Act of 2012 (P.L. 112-158) and of Section 5(A)(7) of the Iran
Sanctions Act (P.L. 104-172, as amended) have been issued to permit transactions
with Iran’s national oil company (NIOC). The European Union has based its own
regulations to allow shipping insurers to provide insurance for ships carrying oil
from Iran.91
• Iran will be able to repatriate about $4.2 billion in oil sales proceeds during the
JPA period, which is a fraction of the approximately $18 billion Iran will earn
from oil sales during the JPA period. Iran will also be able to use an additional
$400 million of oil earnings to make tuition payments for Iranian students
abroad. Under the agreed JPA implementation plan, Iran is accessing $4.2 billion
in hard currency in eight installments, beginning with a $550 million installment
on February 1, 2014 (received from Japan for oil purchases). The schedule is
intended to ensure that Iran completes at least the early stages of implementation,
including diluting its 20% enriched uranium, before too much of the funds are
released. The waiver authority under Section 1245(d)(1), discussed above,
enables Iran to receive the oil proceeds installments directly.
• As of the start of implementation of the JPA on January 20, 2014, Iran was
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
automotive manufacturing sector. The Administration estimates the value of the
revenue Iran will accrue from these changes during the six months of the interim
arrangement at about $2 billion. To enable these transactions, the Administration
suspended application of Executive Orders 13622 and 13645, several provisions
of U.S. trade regulations with Iran, and several sections of IFCA. It should be
noted that the waivers and sanctions suspensions do not permit U.S. companies
trading in such goods with Iran, but rather suspend U.S. sanctions on foreign
companies that trade in such goods with Iran.
• The parties to the JPA pledged to facilitate humanitarian transactions that are
already allowed by U.S. and partner country laws, such as sales of medicine to
Iran, but which many banks refuse to finance. The United States also commited
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, which blocks U.S.-based property of
entities designated as “proliferation supporters.” To implement this commitment,
the Administration has issued a new “Statement of Licensing Policy” to enable
U.S. aircraft manufacturers to sell the appropriate equipment to Iranian airlines
and, as noted above, Boeing and GE have applied for such licenses. The
Administration has suspended application of Executive Order 13382 and certain
91 Daniel Fineren. “Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales.” Reuters, November 24, 2013.
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provision of U.S. trade regulations with Iran to allow the supply of equipment to
Iran Air.
• The P5+1 and Iran agreed to set up a Joint Commission whose tasks will include
evaluating P5+1 compliance with its commitments for sanctions relief. The
commission is empowered to consider Iranian complaints about foreign firms
that Tehran believes have been sanctioned inappropriately for commercial
interactions with Iran.
• The JPA requires that the P5+1 “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.”92 However, since many of the
international sanctions are intended to address Iran’s nuclear advancement, it is
likely that any sanction that is imposed would be defined by Iran as a nuclear
sanction.
Permanent Sanctions Easing?
As noted, the P5+1 are discussing a comprehensive nuclear deal that would, if agreed, likely
involve U.S. pledges of a very broad easing of U.S. sanctions against Iran. The JPA indicates that
“nuclear-related” sanctions would be eased in a comprehensive deal, but in practice many
sanctions are related to Iran’s nuclear program even if they are not proliferation-related sanctions
specifically. It is likely that Iran will demand easing of all sanctions that address its oil and oil
products exports, its use of the international financial system, and its receipt and repatriation of
hard currency. Sanctions addressed purely at human rights and Iranian foreign policy will
probably not be candidates for easing in a comprehensive nuclear deal.
It is possible that the Administration might ask Congress to repeal or terminate those sanctions
that cannot be lifted through Administration action alone. The termination and repeal
requirements are noted throughout this paper. In a background briefing on the eve of March 17,
2014, talks with Iran on a comprehensive deal, a senior Administration official said
we are doing a considerable amount of work, including consultations with the Congress, in
that regard. We need to understand in great detail how to unwind sanctions and what – under
what authorities and what can be done by the Executive Branch, what can be done by
waivers, what will need congressional action....any sanctions relief, should we get to a
comprehensive agreement, will be phased in and will be in response to actions that Iran
takes.93
Possible Additional Sanctions
Should no comprehensive nuclear deal be reached and Iran resume pre-JPA nuclear activities, the
Administration and many in Congress have indicated they seek to impose additional sanctions on
Iran. The 113th Congress could decide to act on legislation already pending.
92 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program.” November 23, 2013.
93 Dept. of State. “Background Briefing on Next Week’s EU-Coordinated P5+1 Talks With Iran.” March 14, 2014.
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H.R. 850 and S. 1881
Two pending bills could affect the course of nuclear negotiations with Iran and could advance if
negotiations on a comprehensive settlement break down. S. 1881, the “Nuclear Weapon Free Iran
Act of 2013” was introduced on December 19, 2013. The operative provisions are similar to those
of H.R. 850, a House bill that was passed 400-20 in July 2013, before the interim nuclear
agreement.
• Both bills contain virtually identical provisions to 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.
• Both bills expand the proportion of the Iranian economy for which transactions
are sanctionable (under IFCA; P.L. 112-239). H.R. 850 references the automotive
and mining sectors; S. 1881 references the shipbuilding, construction,
engineering, and mining sectors—defining them, along with the energy and
shipping sectors, as “strategic sectors.”
• H.R. 850 authorizes, but does not mandate, sanctions for conducting financial
transaction with Iran’s Central Bank or other sanctioned Iranian banks for trade
with Iran in any goods.
• Both bills would sanction foreign banks that help Iran exchange its foreign
currency abroad—a provision identical to S. 892 (introduced on May 8, 2013).
• H.R. 850 would require the Administration to determine whether the
Revolutionary Guard should be named a Foreign Terrorist Organization.
• S. 1881 contains provisions to delay the effective date of the sanctions beyond
the duration of the interim nuclear deal (which expires July 19, 2014, based on
implementation start on January 20). The sanctions contained in S. 1881 can be
delayed for 180 days, provided the President certifies Iran is implementing the
interim nuclear agreement, is negotiating in good faith on a final deal, has not
(directly or through proxies) supported an act of terrorism against the United
States, and has not conducted any tests of ballistic missile of over 500 kilometer
range. The suspension can be continued for an additional 60 days (two 30-day
extensions) if the President certifies that a comprehensive deal that would
“terminate” Iran’s “illicit” nuclear program is imminent. The sanctions
suspension would end if the President cannot submit a certification that Iran is
fully implementing the interim nuclear deal. A waiver provision enables the
President to forestall reinstatement of the Act’s sanctions.
• S. 1881 also provides for sanctions to be suspended if there is a final
comprehensive nuclear agreement. The sanctions in the bill can be suspended for
one year, with additional one year periods, if the President certifies there is a final
deal under which Iran agrees to dismantle its “illicit” nuclear infrastructure, is
brought into compliance with U.N. Security Council resolutions, resolves all
issues of possible military dimensions of its nuclear program, and permits
constant monitoring of all “suspect” facilities in Iran. Under S. 1881, this
sanctions suspension could be terminated if Congress enacts a joint resolution of
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disapproval. None of these delay provisions are contained in H.R. 850, which
was passed by the House before the interim nuclear deal was reached.
Supporters of these bills have expressed mistrust of Iranian intentions, perhaps partly based on
past nuclear discussions with Iran. 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
negotiations by reinforcing to Iran that it would face consequences for failing to reach an
acceptable comprehensive agreement. No legislation has been introduced, to date, to repeal or
terminate sanctions against Iran if there is a permanent nuclear deal.
The Administration and outside critics of imposing new sanctions at this time argue that the
enactment of any new sanctions legislation by Congress—no matter the effective date of the
provisions—could split the international coalition that negotiated it. The Administration argues
that some countries could end their cooperation with international sanctions if they perceive that
the United States is not upholding the JPA pledge not to increase nuclear sanctions.94 After the
interim deal was reached, Iran’s Foreign Minister Mohammad Javad Zarif said in an NBC
interview that any U.S. imposition of new sanctions during the JPA period would void the deal.
That Iranian position has been reiterated since the introduction of S. 1881. Other critics say that
S. 1881 adds requirements to avoid new sanctions that are not in the interim deal—particularly
that Iran not test new longer-range missiles. Others say S. 1881 imposes unattainable conditions
on a final nuclear deal—that Iran’s nuclear infrastructure be eliminated. Supporters of the bill say
that the term “illicit” allows flexibility to allow Iran to continue some enrichment as part of a
final deal. The President has said he will veto S. 1881 if it is passed by both chambers.
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 receive consideration—either in a
global or multilateral framework—presumably if the interim nuclear deal is not translated into a
permanent deal and Iran continues to develop its nuclear program.
• 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 U.N.-mandated, worldwide embargo on the purchase of any Iranian crude oil
would put significant pressure on Iran. Even before the interim nuclear deal, the
concept lacked sufficient support in the U.N. Security Council. Some advocate a
94 Ibid.
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U.N. Security Council ban on all investment in and equipment sales to Iran’s
energy sector. During the 1990s, U.N. sanctions against Libya for the Pan Am
103 bombing banned the sale of energy equipment to Libya.
• Iran Oil Free Zone. Prior to the EU oil embargo on Iran, there was discussion of
forcing a similar result by closing the loophole in the U.S. trade ban under which
Iranian crude oil, when mixed with other countries’ oils at foreign refineries in
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)
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Entities Added by Resolution 1929
Over 40 entities added; makes mandatory a previously nonbinding travel ban on most named Iranians of previous
resolutions. Adds one individual banned for travel—AEIO head Javad Rahiqi
Amin Industrial Complex; Armament Industries Group; Defense Technology and Science Research Center (owned or
control ed by Ministry of Defense); Doostan International Company; Farasakht Industries; First East Export Bank, PLC
(only bank added by Resolution 1929); Kaveh Cutting Tools Company; M. Babaie Industries; Malek Ashtar University
(subordinate of Defense Technology and Science Research Center, above); Ministry of Defense Logistics Export (sel s
Iranian made arms to customers worldwide); Mizan Machinery Manufacturing; Modern Industries Technique
Company; Nuclear Research Center for Agriculture and Medicine (research component of the AEIO); Pejman
Industrial Services Corp.; Sabalan Company; Sahand Aluminum Parts Industrial Company; Shahid Karrazi Industries;
Shahid Sattari Industries; Shahid Sayyade Shirazi Industries (acts on behalf of the DIO); Special Industries Group
(another subordinate of DIO); Tiz Pars (cover name for SHIG); Yazd Metallurgy Industries
The following Revolutionary Guard affiliated firms (several are subsidiaries of Khatam ol-Anbiya, the main Guard
construction affiliate): Fater Institute; Garaghe Sazendegi Ghaem; Gorb Karbala; Gorb Nooh; Hara Company;
Imensazan Consultant Engineers Institute; Khatam ol-Anbiya; Makin; Omran Sahel; Oriental Oil Kish; Rah Sahel; Rahab
Engineering Institute; Sahel Consultant Engineers; Sepanir; Sepasad Engineering Company
The fol owing entities owned or control ed by Islamic Republic of Iran Shipping Lines (IRISL): Irano Hind Shipping
Company; IRISL Benelux; and South Shipping Line Iran
Entities Designated Under U.S. Executive Order 13382
(many designations coincident with designations under U.N. resolutions)
Entity Date
Named
Shahid Hemmat Industrial Group (Iran)
June 2005, September 2007
Shahid Bakeri Industrial Group (Iran)
June 2005, February 2009
Atomic Energy Organization of Iran
June 2005
Novin Energy Company (Iran) and Mesbah Energy Company (Iran)
January 2006
Four Chinese entities: Beijing Alite Technologies, LIMMT Economic and Trading
June 2006
Company, China Great Wall Industry Corp, and China National Precision
Machinery Import/Export Corp.
Sanam Industrial Group (Iran) and Ya Mahdi Industries Group (Iran)
July 2006
Bank Sepah (Iran)
January 2007
Defense Industries Organization (Iran)
March 2007
June 2007
Pars Trash (Iran, nuclear program); Farayand Technique (Iran, nuclear program); Fajr Industries Group (Iran, missile
program); Mizan Machine Manufacturing Group (Iran, missile prog.)
Aerospace Industries Organization (AIO) (Iran)
September 2007
Korea Mining and Development Corp. (N. Korea)
September 2007
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October 21, 2007
Islamic Revolutionary Guard Corps (IRGC); Ministry of Defense and Armed Forces Logistics; Bank Melli (Iran’s largest
bank, widely used by Guard); Bank Melli Iran Zao (Moscow); Melli Bank PC (U.K.); Bank Kargoshaee; Arian Bank
(joint venture between Melli and Bank Saderat). Based in Afghanistan; Bank Mellat (provides banking services to Iran’s
nuclear sector); Mellat Bank SB CJSC (Armenia). Reportedly has $1.4 billion in assets in UAE; Persia International
Bank PLC (U.K.); Khatam ol Anbiya Gharargah Sazendegi Nooh (main IRGC construction and contracting arm, with
$7 billion in oil, gas deals); Oriental Oil Kish (Iranian oil exploration firm); Ghorb Karbala; Ghorb Nooh (synonymous
with Khatam ol Anbiya); Sepasad Engineering Company (Guard construction affiliate); Omran Sahel (Guard
construction affiliate); Sahel Consultant Engineering (Guard construction affiliate); Hara Company; Gharargahe
Sazandegi Ghaem
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
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
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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, Gomshall Shipping, and Horsham Shipping (all located in the Isle of Man).- IRISL and affiliate
officials: Mohammad Hosein Dajmar, Gholamhossein Golpavar, Hassan Jalil Zadeh, and Mohammad 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.
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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 reactor;
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, for acting on behalf of Marine Industries; Chemical Industries and Development of Materials
Group—designated as affiliate of Defense Industries Org.; Doostan International Company—designated for providing
services to Iran Aerospace Industries Org, which oversees Iran missile industries.
April 11, 2013
Babak Morteza Zanjani—chairmen of Sorinet Group that Iran uses to finance oil sales abroad; International Safe Oil—
provides support to NIOC and NICO; Sorinet Commercial Trust Bankers (Dubai) and First Islamic Investment Bank
(Malaysia)—finance NIOC and NICO; Kont Kosmetik and Kont Investment Bank—control ed by Babak Zanjani;
Naftiran Intertrade Company Ltd.—owned by NIOC
May 9, 2013
Iranian-Venezuelan Bi-National Bank (IVBB), for activities on behalf of the Export Development Bank of Iran that was
sanctioned on October 22, 2008, (see above). EDBI was sanctioned for providing financial services to Iran’s Ministry
of Defense.
May 31, 2013
Bukovnya AE (Ukraine) for leasing aircraft to Iran Air.
December 12, 2013
Several Iranian firms and persons: Eyvaz Technic Manufacturing Company; The Exploration and Nuclear Raw Materials
Company; Maro Sanat Company; Navid Composite Material Company; Negin Parto Khavar; Neka Novin Officials
Iradj Mohammadi Kahvarin and Mahmoud Mohammadi Dayeni; Neka Novin alisaes including Kia Nirou; Qods
Aviation Industries (operated by IRGC, produces UAVs, paragliders, etc); iran Aviation Industries Organization; Reza
Amidi; Fan Pardazan; Ertebat Gostar Novin
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February 6, 2014
Ali Canko (Turkey) and Tiva Sanat Group, for procuring IRGC-Navy fast boats; Advance Electrical and Industrial
Technologies (Spain), for procurement for Neka Novin; Ulrich Wipperman and Deutsche Forfait (Germany), and
Deutsche Forfait Americas (U.S.) for facilitating oil deals for NIOC.
April 29, 2014
Karl Lee (aka Li Fangwei) and 8 China-based front companies: Sinotech Industry Co. Ltd.; MTTO Industry and Trade
Limited; Success Move Ltd.; Sinotech Dalian Carbon and Graphite Manufacturing Corporation; Dalian Zhongchuang
Char-White Co., Ltd.; Karat Industry Co., Ltd.; Dalian Zhenghua Maoyi Youxian Gongsi; and Tereal Industry and
Trade Ltd.
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
October 21, 2007
Qods Force and Bank Saderat (al egedly used to funnel Iranian money to Hezbol ah, Hamas, PIJ, and other Iranian
supported terrorist groups)
January 16, 2009
Al Qaeda Operatives in Iran: Saad bin Laden; Mustafa Hamid; Muhammad Rab’a al-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
December 21, 2010
Liner Transport Kish (for providing shipping services to transport weapons to Lebanese Hezbol ah)
October 11, 2011 (For alleged plot against Saudi Ambassador to the U.S).:
Qasem Soleimani (Qods Force commander); Hamid Abdollahi (Qods force); Abdul Reza Shahlai (Qods Force); Ali
Gholam Shakuri (Qods Force); Manssor Arbabsiar (al eged plotter)
October 12, 2011
Mahan Air (for transportation services to Qods Force)
February 16, 2012
Ministry of Intelligence and Security of Iran (MOIS)
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Iran Sanctions
March 27, 2012
Yas Air (successor to Pars Air); Behineh Air (Iranian trading company); Ali Abbas 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.
May 31, 2013
Ukraine-Mediterranean Airlines (Um Air, Ukraine) for helping Mahan Air and Iran 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.
February 6, 2014
Several persons/entities in UAE aiding Mahan Air (see above): Blue Sky Aviation FZE; Avia Trust FZE; Hamidreza
Malekouti Pour; Pejman Mahmood Kosrayanifard; and Gholamreza Mahmoudi.
Several IRGC-Qods Force offices or facilitators involved in Iran’s efforts in Afghanistan: Sayyed Kamal Musavi; Alireza
Hemmati; Akbar Seyed Alhosseini; and Mahmud Afkhami Rashidi.
One Iran-based Al Qaeda facilitator (supporting movement of Al Qaeda affiliated fightes to Syria): Olimzhon
Adkhamovich Sadikov (aka Jafar al-Uzbeki or Jafar Muidinov).
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
(Both removed —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
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.
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7 entities. Two Indian chemical companies (Balaji Amines and Prachi Poly
August 4, 2006 (see below for
Products); two Russian firms (Rosobornexport and aircraft manufacturer Sukhoi);
Rosobornexport removal)
two North Korean entities (Korean Mining and Industrial Development, and Korea
Pugang Trading); and one Cuban entity (Center for Genetic Engineering and
Biotechnology).
9 entities. Rosobornexport, Tula Design, and Komna Design Office of Machine
January 2007 (see below for
Building, and Alexei Safonov (Russia); Zibo Chemical, China National
Tula and Rosoboronexport
Aerotechnology, and China National Electrical (China). Korean Mining and
removal)
Industrial Development (North Korea) for WMD or advanced weapons sales to
Iran (and Syria).
14 entities, including Lebanese Hezbol ah. Some were penalized for transactions
April 23, 2007
with Syria. Among the new entities sanctioned for assisting Iran were Shanghai
Non-Ferrous Metals Pudong Development Trade Company (China); Iran’s Defense
Industries Organization; Sokkia Company (Singapore); Challenger Corporation
(Malaysia); Target Airfreight (Malaysia); Aerospace Logistics Services (Mexico); and
Arif Durrani (Pakistani national).
13 entities: China Xinshidai Co.; China Shipbuilding and Offshore International
October 23, 2008.
Corp.; Huazhong CNC (China); IRGC; Korea Mining Development Corp. (North
Korea); Korea Taesong Trading Co. (NK); Yolin/Yullin Tech, Inc. (South Korea);
Rosoboronexport (Russia sate arms export agency); Sudan Master Technology;
Sudan Technical Center Co; Army Supply Bureau (Syria); R and M International
FZCO (UAE); Venezuelan Military Industries Co. (CAVIM). (Rosoboronexport
removed May 21, 2010.)
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
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Iranians Sanctioned Under September 29, 2010, Executive Order 13553 on Human Rights Abusers
1. IRGC Commander Mohammad Ali Jafari
September 29, 2010
2. Minister of Interior at time of June 2009 elections Sadeq Mahsouli
3. Minister of Intelligence at time of elections Qolam Hossein Mohseni-Ejei
4. Tehran Prosecutor General at time of elections Saeed Mortazavi
5. Minister of Intelligence Heydar Moslehi
6. Former Defense Minister Mostafa Mohammad Naj ar
7. Deputy National Police Chief Ahmad Reza Radan
8. Basij (security militia) Commander at time of elections Hossein Taeb
9. Tehran Prosecutor General Abbas Dowlatabadi (appointed August 2009). Has
February 23, 2011
indicted large numbers of Green movement protesters.
10. Basij forces commander (since October 2009) Mohammad Reza Naqdi (was
head of Basij intel igence during post 2009 election crackdown)
11. Islamic Revolutionary Guard Corps (IRGC)
June 9, 2011.
12. Basij Resistance Force
13. Law Enforcement Forces (LEF)
14. LEF Commander Ismail Ahmad Moghadam
15. Ministry of Intelligence and Security of Iran (MOIS)
February 16, 2012
16. Ashgar Mir-Hejazi for human rights abuses on/after June 12, 2009, and for
May 30, 2013
providing material support to the IRGC and MOIS.
Iranians Sanctioned Under Executive Order 13572 (April 29, 2011) for Repression of the Syrian People
Revolutionary Guard—Qods Force
April 29, 2011
Qasem Soleimani (Qods Force Commander)
May 18, 2011
Mohsen Chizari (Commander of Qods Force operations and training)
Same as above
Iranian Entities Sanctioned Under Executive Order 13606 (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
Designations on February 6, 2014, (persons or firms that facilitated deceptive transactions for or on
behalf of persons subject to U.S. sanctions on Iran)
Three persons based in the Republic of Georgia: Pourya Nayebi, Houshang Hosseinpour, and Houshang Farsoudeh;
and eight firms owned or controlled by the three: Caucasus Energy (Georgia); Orchidea Gulf Trading (UAE and/or
Turkey); Georgian Business Development (Georgia and/or UAE); Great Business Deals (Georgia and/or UAE); KSN
Foundation (Lichtenstein); New York General Trading (UAE); New York Money Exchange (UAE and/or Georgia); and
European Oil Traders (Switzerland).
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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.
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
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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.
Entities Designated Pursuant to Executive Order I3645
December 12, 2012 (all for providing material support to NITC)
- Mid Oil Asia (Singapore)
- Singa Tankers (Singapore)
- Siqiriya Maritime (Philippines)
-Ferland Company Limited (previously designated under other E.O.)
- Vitaly Sokolenko (general manager of Ferland)
April 29, 2014 (for connections to deceptive oil dealings for Iran)
- Saeed Al Aqili (co-owner of Al Aqili Group LLC)
- Al Aqili Group LLC
- Anwar Kamal Nizami (Dubai-based Pakistani facilitator, manages bank relations for affilates of Al Aqili and Al Aqili
Group. Also works for Sima General Trading, sanctioned under E.O. 13599)
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Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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