Iran Sanctions
Kenneth Katzman
Specialist in Middle Eastern Affairs
June 17, 2015
Congressional Research Service
7-5700
www.crs.gov
RS20871
Iran Sanctions
Summary
International sanctions on Iran’s key energy and financial sectors harmed Iran’s economy and
contributed to Iran’s acceptance of agreements that exchange constraints on its nuclear program
for sanctions relief. The economic pressure caused:
• Iran’s crude oil exports to fall from about 2.5 million barrels per day in 2011 to
about 1.1 million barrels per day (mbd) by late 2013. The effect of that volume
reduction has been further compounded by a fall in oil prices.
• Iran’s economy to shrink by about 9% in the two years that ended in March 2014.
The economy has rebounded modestly since the minor sanctions relief provided
as part of an interim nuclear agreement (Joint Plan of Action, JPA) that went into
effect on January 20, 2014.
Sanctions have constricted Iran’s ability to procure equipment for its nuclear and missile
programs and to import advanced conventional weaponry, but have not halted Iran’s provision of
arms to the Assad government in Syria, the Iraqi government, and to pro-Iranian factions such as
Lebanese Hezbollah or Houthi rebels in Yemen. Sanctions do not appear to have altered Iran’s
repression of domestic dissent, although sanctions undoubtedly contributed to the June 2013
election as president of Hassan Rouhani, who promised some easing of restrictions.
The JPA, which has been extended twice (until June 30, 2015) to allow time to negotiate a
comprehensive accord, provides sanctions relief through U.S. presidential waivers of several U.S.
sanctions laws and Administration suspension of some sanctions imposed by Executive Order.
The core of the relief is $700 million per month in access to hard currency from oil sales. The JPA
caps Iran’s crude oil exports at the 1.1 mbd level and suspends sanctions on Iran’s auto
manufacturing sector and on its sales of petrochemicals.
A comprehensive nuclear accord, if finalized along the lines of an April 2, 2015, framework
agreement, will entail much broader sanctions easing. U.S., U.N., and multilateral sanctions on
Iran’s energy, financial, shipping, automotive, and other sectors are likely to be eased as Iran
complies with a finalized deal. The relief is likely to remove the current caps on Iran’s oil exports
and enable Iran to access about $150 billion in hard currency held abroad and which Iran cannot
now repatriate to its Central Bank. The Administration asserts that it would implement the relief
using waiver authority (for relevant U.S. statutory sanctions) and administrative action (for those
sanctions in force only by Executive Order). The Administration adds that it would test Iran’s
compliance over “many years” before requesting that Congress terminate any sanctions that are
imposed by statute. According to the Administration, U.S. sanctions that apply only to U.S.
companies, and those imposed because of Iran’s support for terrorism or for human rights abuses
will not be eased in a finalized deal. The Iran Nuclear Review Act (P.L. 114-17) prevents the
President from suspending U.S. statutory sanctions on Iran pending congressional review of a
finalized nuclear deal. Experts disagree on whether Iran will utilize sanctions relief to resurrect its
economy or to empower additional expansion of Iran’s influence. See also CRS Report RL32048,
Iran, Gulf Security, and U.S. Policy, by Kenneth Katzman CRS Report R43311, Iran: U.S.
Economic Sanctions and the Authority to Lift Restrictions, by Dianne E. Rennack; and CRS
Report R43492, Achievements of and Outlook for Sanctions on Iran, by Kenneth Katzman.
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Iran Sanctions
Contents
Overview and Objectives ................................................................................................................. 1
Blocked Iranian Property and Assets ............................................................................................... 1
Executive Order 13599 Impounding Iran-Owned Assets .......................................................... 2
Sanctions for Iran’s Support for Terrorism and Its Regional Activities ........................................... 2
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 ...................................................................................... 3
Executive Order 13224 Sanctioning Terrorism-Supporting Entities ......................................... 4
Sanctions on Iran’s Involvement in Iraq and Syria .................................................................... 4
Ban on U.S. Trade and Investment with Iran ................................................................................... 5
Codification of the Ban and U.S.-Iran Trade Figures ................................................................ 5
What U.S.-Iran Trade Is Allowed or Prohibited? ................................................................ 5
Application to Foreign Subsidiaries of U.S. Firms ............................................................. 8
Energy Sanctions: Iran Sanctions Act (ISA) and Related Laws and Executive Orders ................... 8
The Iran Sanctions Act, Amendments, and Its Applications ..................................................... 9
Key Sanctions “Triggers” Under ISA ................................................................................. 9
Mandate and Time Frame to Investigate ISA Violations ................................................... 14
Interpretations and Administration of ISA and Related Laws ........................................... 16
Oil Export Sanctions: Section 1245 of the FY2012 NDAA .................................................... 20
Implementation: Exemptions Issued ................................................................................. 21
Sanctions on Paying Iran with Hard Currency .................................................................. 21
Proliferation-Related Sanctions ..................................................................................................... 22
Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act .................................................. 22
Iran-North Korea-Syria Nonproliferation Act ......................................................................... 23
Executive Order 13382 ............................................................................................................ 24
Foreign Aid Restrictions for Suppliers of Iran ........................................................................ 24
Sanctions on “Countries of Diversion Concern” ..................................................................... 24
Financial/Banking Sanctions ......................................................................................................... 26
Targeted Financial Measures ................................................................................................... 26
CISADA: Sanctioning Foreign Banks That Conduct Transactions with Sanctioned
Iranian Banks ........................................................................................................................ 26
Implementation of Section 104: Sanctions Imposed ......................................................... 27
Iran Designated a Money-Laundering Jurisdiction ................................................................. 27
Laws That Promote Divestment..................................................................................................... 28
Sanctions and Sanctions Exemptions to Support Democratic Change/Civil Society in Iran ........ 28
Expanding Internet and Communications Freedoms ............................................................... 29
Sanctions and Actions to Counter Iranian Censorship of the Internet ............................... 29
Laws and Administration Actions to Promote Internet Communications
by Iranians ...................................................................................................................... 29
Measures to Sanction Human Rights Abuses and Promote the Opposition ............................ 30
U.N. Sanctions ............................................................................................................................... 31
International Implementation and Compliance .............................................................................. 33
Europe ..................................................................................................................................... 33
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China and Russia ..................................................................................................................... 35
Japan/Korean Peninsula/Other East Asia ................................................................................ 36
South Asia: India, Pakistan, and Afghanistan .......................................................................... 37
India ................................................................................................................................... 37
Pakistan ............................................................................................................................. 37
Afghanistan ....................................................................................................................... 38
Turkey/South Caucasus ........................................................................................................... 38
Turkey ............................................................................................................................... 38
Caucasus: Azerbaijan, Armenia, and Georgia ................................................................... 39
Persian Gulf and Iraq ............................................................................................................... 39
Iraq .................................................................................................................................... 40
Africa and Latin America ........................................................................................................ 40
World Bank Loans ................................................................................................................... 41
Private-Sector Cooperation and Compliance........................................................................... 44
Effectiveness of Sanctions on Iran ................................................................................................. 46
Effect on Iran’s Nuclear Program and Strategic Capabilities .................................................. 46
Effects on Iran’s Regional Influence ....................................................................................... 47
General Political Effects .......................................................................................................... 48
Human Rights-Related Effects ................................................................................................ 48
Economic Effects ..................................................................................................................... 48
Iran’s Economic Coping Strategies ................................................................................... 50
Effect on Energy Sector Long-Term Development ................................................................. 51
Effect on Gasoline Availability and Importation ............................................................... 57
Humanitarian Effects/Air Safety ............................................................................................. 58
Sanctions Easing Related to a Nuclear Deal .................................................................................. 58
Sanctions Eased by the JPA ..................................................................................................... 59
Sanctions Easing Under a Comprehensive Nuclear Deal ........................................................ 60
Matters to be Clarified and Prognosis ............................................................................... 61
Possible Sanctions and Other Legislative Action While Talks Continue .......................... 62
Legislation Requiring Congressional Review (P.L. 114-17) ............................................. 63
Other Possible U.S. and International Sanctions ..................................................................... 64
Tables
Table 1. ISA Sanctions Determinations ......................................................................................... 19
Table 2. Top Oil Buyers From Iran and Reductions ...................................................................... 22
Table 3. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program (1737,
1747, 1803, and 1929) ................................................................................................................ 32
Table 4. Comparison Between U.S., U.N., and EU and Allied Country Sanctions ....................... 42
Table 5. Post-1999 Major Investments/Major Development Projects
in Iran’s Energy Sector ............................................................................................................... 52
Table 6. Firms That Sold Gasoline to Iran ..................................................................................... 57
Table 7. Entities Sanctioned Under U.N. Resolutions and
U.S. Laws and Executive Orders ................................................................................................ 66
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Contacts
Author Contact Information........................................................................................................... 76
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Iran Sanctions
Overview and Objectives
U.S. sanctions have been a major feature of U.S. Iran policy since Iran’s 1979 Islamic revolution,
but the imposition of U.N. and worldwide bilateral sanctions on Iran that began in 2006 and
increased dramatically as of 2010 is recent by comparison. The objectives of U.S. sanctions have
evolved over time. In the 1980s and 1990s, 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-2000s, U.S. sanctions have focused intently on compelling Iran to limit
the scope of its nuclear program to ensure purely civilian use. Particularly since 2010, the
international community has joined U.S. sanctions in pursuit of that goal. However, most
sanctions against Iran have multiple objectives and address multiple perceived threats from Iran
simultaneously. And, 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.
This report analyzes U.S. and international sanctions against Iran and 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 firm or other entity is complying with U.S. or
international sanctions against Iran. The sections below are grouped according to functional
theme, in the chronological order in which these themes have emerged in U.S. policy toward 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.1 It defines what products and chemicals
constitute “petroleum,” “petroleum products,” and “petrochemical products” that are used in the
laws and executive orders discussed below.
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.” The 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, about $50 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 related bank
accounts.2 Including Iranian assets blocked under Executive Order 13599 of February 2010,
discussed below, about $1.95 billion in Iranian assets is blocked, according to the 2013 “Terrorist
Assets Report.”
1 http://www.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf.
2 http://www.treasury.gov/resource-center/sanctions/Documents/tar2010.pdf.
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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.
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.
Some of Iran’s assets have been held against legal judgments ordering Iran to compensate U.S.
victims of Iranian-backed terrorism. Recent terrorism-related judgments include those in favor of
the families of the 241 U.S. soldiers killed in the October 23, 1983, bombing of the U.S. Marine
barracks in Beirut. About $8.8 billion has been awarded in eight judgments against Iran for that
bombing, which was perpetrated by elements that formed Lebanese Hezbollah. The Algiers
Accords appears to have precluded compensation for the 52 U.S. diplomats held hostage by Iran
from November 1979 until January 1981. For more information, see CRS Report RL31258, Suits
Against Terrorist States by Victims of Terrorism, by Jennifer K. Elsea.
Executive Order 13599 Impounding Iran-Owned Assets
Several executive orders discussed in this report direct the blocking of U.S.-based assets of
designated Iranian entities. Executive Order 13599, issued February 5, 2012, imposes sanctions
on 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, such as the June 21, 2013,
naming of 38 entities—mostly including oil, petrochemical, and investment companies.”3
Sanctions for Iran’s Support for Terrorism and Its
Regional Activities
The United States began imposing sanctions again Iran again in the mid-1980s as its support for
regional groups committing acts of international terrorism increased. 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.
3 http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication.
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Sanctions Triggered by Terrorism List Designation: Ban on U.S.
Aid, Arms Sales, Dual-Use Exports, and Certain Programs for Iran
The U.S. naming of Iran as a “state sponsor of terrorism”—commonly referred to as Iran’s
placement on the U.S. “terrorism list”—triggers several sanctions. The designation is 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.
officials 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 (added by Section 327 of the Anti-Terrorism and Effective
Death Penalty Act of 1996 [P.L. 104-132]). Waiver authority is provided.
• 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. Waiver authority
is provided. Section 321 of that act also makes it a criminal offense for U.S.
persons to conduct financial transactions with terrorism list governments.
• Withholding of U.S. Aid to Organizations That Assist Iran. 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.
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Requirements for Removal from Terrorism List
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.
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 are listed in the table at the end
of this report.
Sanctions on Iran’s Involvement in Iraq and Syria
Some relatively recent related 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, sanctioning persons who are posing a threat to Iraqi stability, presumably
by providing arms or funds to Shiite militias there. Persons sanctioned under the
order, including Qods Force officers, Iraqi Shiite militia-linked figures, and other
entities sanctioned under the Order are shown in the tables at the end.
• Executive Order 13572. Issued on April 29, 2011, the Order targets those
responsible for human rights abuses and repression of the Syrian people. The
IRGC-Qods Force, Qods Force officers including overall commander Qasem
Soleimani, and others sanctioned under this and related Orders are shown in the
tables at the end of the report.
Implementation: Iran-related entities designated under these Orders are listed in the table at the
end of this report.
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Ban on U.S. Trade and Investment with Iran
In 1995, U.S. sanctions on Iran were expanded dramatically by a ban on U.S. trade with and
investment in Iran imposed by President Clinton through Executive Order 12959 (May 6, 1995).
The Order was issued under the authority primarily of the International Emergency Economic
Powers Act (IEEPA, 50 U.S.C. 1701 et seq.),4 which gave 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 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 was relatively unaffected by the JPA and, according to the
Administration, will be unaffected by a finalized nuclear deal.
Codification of the 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, consisting mainly 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 $312
million in goods to Iran, mostly grain sales, but dropped to about half that for 2014. CISADA also
specifies exemptions to the trade ban, including (1) exports not only of food and medical goods;
(2) information technology to support personal communications among the Iranian people; (3)
goods to allow civilian aircraft to fly safely; and (4) goods for supporting democracy in Iran.
Section 101 of the Iran Freedom Support Act (P.L. 109-293) separately codified the ban on U.S.
investment in Iran, but gives the President the authority to terminate this sanction if he notifies
Congress 15 days in advance (or 3 days in advance if there are “exigent circumstances”).
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 Executive Orders and laws discussed
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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above. The regulations are administered by the Office of Foreign Assets Control (OFAC) of the
Department of the Treasury.
• Oil Transactions. The 1995 trade ban expanded a 1987 ban on imports from Iran
that was imposed by Executive Order 12613 of October 29, 1987. The1987 ban,
authorized by Section 505 of the International Security and Development
Cooperation Act of 1985 (22 U.S.C. 2349aa-9), barred U.S. oil companies from
importing Iranian oil into the United States but did not ban their trading Iranian
oil overseas. The 1995 ban prohibited that activity explicitly. The 1995 ban does
allow U.S. companies to apply for licenses to conduct “swaps” of Caspian Sea oil
with Iran, but 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.
• Regulations pursuant to the 1995 trade ban do not ban the importation, from
foreign refiners, of gasoline or other energy products in which Iranian oil is
mixed with oil from other producers. The product of a refinery (for example
major refineries in the EU countries) is for legal purposes a product of the
country where that refinery is located and its products can therefore be imported
into the United States, even if the product contains some Iran-origin crude oil. No
EU refineries have imported Iranian oil since July 1, 2012, and only a few other
refineries worldwide both continue to receive Iranian oil and export gasoline to
the United States. U.S. gasoline imports from those refineries are minor.
• 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. Under the original 1995 Executive order banning U.S.
trade with Iran, 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.).
Some spare parts sales were licensed occasionally since that time. However, on
June 23, 2011, the Administration sanctioned Iran Air under Executive Order
13382 (see below), rendering licensing of parts or repairs for that airline
impermissible. Other Iranian airlines have been sanctioned under that and
Executive Order 13224, as 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. Boeing and
GE have received export licenses to sell aircraft equipment and aircraft manuals
to Iran since the JPA began implementation.5
• Personal Communications, Remittances, and Publishing. There are no applicable
restrictions on personal communications (phone calls, emails) between the U.S.
and Iran or on personal remittances. In December 2004, 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 cell phones) and services, on
5 Reuters, February 21, 2014; Exclusive: Boeing Says Gets U.S. License to Sell Spare Parts to Iran. Reuters, April 4,
2014.
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a fee basis, that enhance the ability of the Iranian people to access
communication technology. However, many banks refuse to process payments
for many of these transactions, making such sales difficult in practice.
• 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,
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 subject to sanctions. The JPA commits the United States and
its partners to facilitate humanitarian sales to Iran, but implementing that
commitment did not require modifications to U.S. trade regulations.
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 addresses information in a December 24, 2010,7 article 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.
• Humanitarian and Related Services. Private non-financial donations by U.S.
residents to Iranian victims of natural disasters (such as mailed packages of food,
toys, clothes, etc.) 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, which
apparently made work in Iran impractical. On September 10, 2013, the
Department of the Treasury eliminated licensing requirements for the provision
to Iran of services for health projects, disaster relief, wildlife conservation,
human rights projects, and activities related to sports matches and events. The
amended regulation also allows importation from Iran of services related to
sporting activities, including sponsorship of players, coaching, referees, and
training. In some cases, such as the earthquake in Bam in 2003 and the
earthquake in northwestern Iran in August 2012, OFAC has issued blanket
temporary general licensing for relief organizations to perform relief efforts in
Iran. The licensing requirements in the latter case allowed an NGO to transfer up
to $300,000 without requiring a specific license.
• 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
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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transactions. Title IX of the Trade Sanctions Reform and Export Enhancement
Act of 2000 (P.L. 106-387) 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 for any U.S. exports to 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 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 might not meet the criteria for sanctioning stipulated in that law.
Trade Ban Easing and Termination
Termination: Section 401 of CISADA provides for the President to terminate the trade ban (Section 103) 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 has 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: Section 103(b)(vi) of CISADA allows the President to license exports to Iran if he determines
that doing so is in the national interest of the United States. This gives the President flexibility to ease the ban on U.S.
exports through executive action. There is no similar provision in CISADA to ease the ban on U.S. imports from Iran.
The JPA did not require the United States to ease or lift the ban on U.S. trade with or investment in Iran. There
Administration has said that this sanction will not be lifted or suspended part of a comprehensive nuclear deal.
Energy 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 compel
foreign firms to cease transactions with Iran’s energy sector. 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.
Prior to the past decade’s intensification of Iran’s drive to reduce its dependency on energy
exports, the sector 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 few
exceptions, virtually all of Iran’s oil exports flow through the Strait of Hormuz, which carries
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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
gas export sector remains small—most of its gas is injected into its oil fields to boost their
production—but it was expanding prior to the sanctioning of such exports in 2010-2013.
The Iran Sanctions Act, Amendments, and Its Applications
The Iran Sanctions Act (ISA) has been a pivotal component of U.S. sanctions against Iran’s
energy sector, and its applications have been steadily expanded to other Iranian industries. As
initially enacted in 1996, ISA sought to thwart Iran’s 1995 opening of the sector to foreign
investment in late 1995 through a “buy-back” program in which foreign firms gradually recoup
their investments as oil and gas is 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 (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 expanded significantly, as
analyzed below.
Key Sanctions “Triggers” Under ISA
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. The
triggers, as expanded by amendments over time, are detailed below:
Original Trigger: “Investment” To Develop Iran’s Oil and Gas Fields
The core trigger of ISA, when first enacted, was a requirement that the President sanction
companies (entities, persons) that make an “investment”8 of more than $20 million9 in one year in
Iran’s energy sector.10 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]).
8 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.
9 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. P.L. 111-195 explicitly sets the
threshold investment level at $20 million. For Libya, the threshold was $40 million, and transactions subject to
sanctions included export to Libya of technology banned by Pan Am 103-related Security Council Resolutions 748
(March 31, 1992) and 883 (November 11, 1993).
10 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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Implementation: Several firms have been sanctioned under ISA for investing in Iran’s oil and gas
fields, as discussed below.
Trigger 2: Sales of Strategic Technology and Uranium Mining Ventures
The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) created Section 5(b)(1)
of ISA subjecting to ISA sanctions firms or persons determined to have sold to Iran (1)
technology useful for weapons of mass destruction (WMD) or (2) “destabilizing numbers and
types” of advanced conventional weapons. Sanctions apply if the exporter knew or had cause to
know that the final destination of the items sold would be to Iran.
The Iran Threat Reduction and Syria Human Rights Act (ITRSHRA, P.L. 112-158, signed August
10, 2012) created Section 5(b)(2) of ISA subjecting to sanctions entities determined by the
Administration to participate in a joint venture with Iran relating to the mining, production, or
transportation of uranium.
Implementation: No ISA sanctions have been imposed on any entities under these provisions.
Trigger 3: Sales of Gasoline
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 denies Ex-Im Bank credits to any firm that sold gasoline or related equipment and
services to Iran. Those initiatives prompted Reliance Industries Ltd. of India to cease new sales of
gasoline to Iran as of December 2008.11 The CISADA provision subjects to sanctions:
• 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.
Trigger 4: Sales of Energy Sector Equipment, Services, and Petrochemicals
Section 201 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHA, P.L.
112-158) codified an Executive Order, 13590 (November 21, 2011) by adding Section 5(a)(5 and
6) to ISA sanctioning firms that:
11 The Ex-Im Bank, in August 2008, had extended $900 million in financing guarantees to Reliance.
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• 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 subjects to sanctions, 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 like equipment.
• Provide to Iran $250,000 (or $1 million in a one year period) worth of goods or
services that Iran could use to maintain or expand its production of petrochemical
products.12 This provision was not required to be waived as a consequence of the
JPA.
Implementation: See Table 1 below for ISA sanctions imposed under this provision.
Trigger 5: Transporting Iranian Crude Oil
Section 201 of the ITRSHRA also amends ISA by applying ISA sanctions to entities determined
by the Administration to have done the following.
• 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 have been sanctioned for providing ships to transport Iranian oil.
Application of ISA Sanctions to Insurance for Iranian Oil Entities and
Purchases of Iranian Bonds by ITRSHRA
Separate provisions of the Iran Threat Reduction and Syria Human Rights Act (Sections 212, 213,
and 302) require the application of ISA sanctions (the same five out of 12 sanctions as required in
ISA itself) on any company that: (The provision does not specifically amend ISA.)
• that purchases or facilitates the issuance of sovereign debt of the government of
Iran, including Iranian government bonds.
• that provides insurance or reinsurance for the National Iranian Oil Company
(NIOC) or the National Iranian Tanker Company (NITC); or
• Section 312 of the ITRSHRA required an Administration determination, within
45 days of enactment (by September 24, 2012) whether NIOC and NITC are
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.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-
27642.pdf.
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IRGC agents or affiliates. If such a determination is made, financial transactions
with NIOC and NITC would be subject to sanctions under CISADA (prohibition
on opening U.S.-based accounts).
Implementation. On September 24, 2012, the Department of the Treasury informed Congress that
it had determined that NIOC and NITC are agents or affiliates of the IRGC. As noted below, on
November 8, 2012, the Department of the Treasury 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. (Sanctions on dealings with NIOC and
NITC were waived in accordance with the JPA.)
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.
Applications of ISA Sanctions to Transactions with Iran’s Energy, Shipbuilding,
and Shipping Sector - Iran Freedom and Counter-Proliferation Act (IFCA)
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), imposes at least five
out the 12 ISA sanctions (as of July 1, 2013, 180 days after enactment) on entities determined to
have engaged in the transactions below. The IFCA provision does not amend ISA itself. Waiver
authority is discussed in the box below.
• 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.
Implementation: On August 29, 2014, the State Department sanctioned UAE-based Goldentex
FZE in accordance with IFCA for providing support to Iran’s shipping sector.
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ISA Sanctions on the Purchase of Iranian Crude Oil and Petrochemical Products
and Dealings in Iranian Bank Notes—Executive Order 13622
Executive Order 13622 (July 30, 2012) applied the same sanctions requirements as provided by
ISA—as well as restrictions on foreign banks (see below)—to entities the Administration
determines have engaged in the following activities. (E.O. 13622 does not amend ISA itself).
• Purchased oil or other petroleum products from Iran.13 The part of this order
pertaining to petrochemical purchases is suspended under the JPA.
• Conducted transactions with the National Iranian Oil Company (NIOC) or
Naftiran Intertrade Company (NICO).
• Helped Iran purchase U.S. bank notes or precious metals.
E.O. 13622 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.)
Implementation: Several firms were sanctioned under this Order, as noted in the tables at the end
of this paper.
ISA Sanctions for Helping Iran Acquire Precious Metals, Industrial Software,
and U.S. Bank Notes - IFCA
• Dealings in Precious Metals. Section 1245 of IFCA imposes at least five 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.
• Dealings in U.S. Bank Notes. IFCA also codifies Section 5 of Executive Order
13622, discussed below, blocking U.S.-based property of individuals or firms
determined to have helped Iran deal in U.S. bank notes or to have provided
financial support to NIOC, NICO, or the Central Bank of Iran.
Implementation: The tables at the end of this paper include several firms and individuals
sanctioned for dealing in U.S. bank notes.
ISA and Other Sanctions on Iran’s Automotive Sector, Rial Trading, and Helping
Iran Acquire Precious Stones—Executive Order 13645
Executive Order 13645 of June 3, 2013, (effective July 1, 2013) does the following:
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.gpo.gov/fdsys/pkg/FR-2012-11-13/pdf/2012-27642.pdf.
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• 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 JPA.
• 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 mostly affects banks in countries bordering on or near Iran that
sometimes have dealt in the rial.
• Expands the application of Executive Order 13622 (above) to helping Iran
acquire precious stones or jewels.
• 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. The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added a
provision calling for, but not requiring, a 180-day time limit for a violation determination.14
CISADA (Section 102(g)(5)) mandated that the Administration begin an investigation of potential
ISA violations when there is “credible information” about a potential violation, and made
mandatory the 180-day time limit for a determination of violation.
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.
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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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 added three more sanctions to the ISA menu and required imposition at least 5
out of the 12 sanctions. Executive Orders 13590 and 13622 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 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.
Oversight and Implementation Clarification
The Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158, ITRSHRA) established
several mechanisms for Congress to oversee whether the Administration is investigating ISA
violations. Section 223 requires a Government Accountability Office report, within 120 days of
enactment, and another such report a year later, on companies that have undertaken specified
activities with Iran that might constitute violations of ISA. Section 224 amends a reporting
requirement in Section 110(b) of CISADA by requiring an Administration report every 180 days
on investment in Iran’s energy sector, joint ventures with Iran, and estimates of Iran’s imports and
exports of petroleum products. The GAO reports have been issued; there is no information
available on whether the required Administration reports have been issued as well.
On May 23, 2011, President Obama issued Executive Order 13574 clarifying that it is the
responsibility of the Department of the Treasury to implement those ISA sanctions that involve
the financial sector, including bans on loans, credits, and foreign exchange for, or imports from,
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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 “investment” that is subject to sanctions 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.15
Implementation. No gas pipelines built linking Iran to neighboring countries have been
sanctioned under ISA. Pipeline projects that are under various stages of construction or
consideration are discussed in the international compliance section below.
Application to Crude Oil Purchases
The original version of ISA did not provide for sanctioning purchases of oil from Iran. However,
Executive Order 13622 does so, and the ITRSHRA sanctions transactions that are essential to the
purchase of Iranian oil. Exceptions are provided if the parent country of the energy buyer or
shipper has not received an exemption under P.L. 112-81, which is discussed below. Any new
customer for Iranian oil is authorized to be sanctioned under the Order and P.L. 112-81.
Shah Deniz Project Exception
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 natural gas field and pipeline 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. An OFAC factsheet of 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. The factsheet states that transactions
with the consortium would not violate U.S. trade regulations on Iran nor require a license from
OFAC. The guidance appears to apply to both the existing pipeline as well as the second phase of
the project that is now under way, which also involves NICO and will carry gas to Europe.
15 http://dawn.com/2012/03/01/tough-us-warning-on-iran-gas-pipeline/.
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Application to Purchases from Iran of Natural Gas Purchases
IFCA, discussed above, authorizes sanctions on any dealings with Iran’s energy sector. However,
IFCA specifically excludes from sanctions 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, is potentially subject to sanctions.
Application to Iranian 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 subject to
sanctions LNG investment in Iran or supply of LNG tankers or pipelines to Iran.
Application to Private Financing but Not Official Credit Guarantee Agencies
The definitions of investment and other activity that can be sanctioned 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, the definitions of financial institutions in Iran sanctions laws are interpreted not 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 sanctioned
such entities but such provisions were not included in the final law, reportedly to avoid a backlash
from U.S. allies.
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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.
Administration Termination Process and Requirements
The Administration can immediately terminate all ISA provisions 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.16
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 (Automatic Termination) 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.
16 This termination requirement added by P.L. 109-293, which formally removed Libya from the act. Application of the
(continued...)
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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 line
1998
and Petronas (Malaysia)—$2 billion
with U.S.-EU agreement for EU to cooperate on anti-terrorism
project to develop South Pars gas
and anti-proliferation issues, and not to file complaint at the
field.
WTO. 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.
(http://www.parstimes.com/law/albright_southpars.html).
Sept. 30,
Naftiran Intertrade Co. (NICO), Iran
Sanctioned. For activities to develop Iran’s energy sector.
2010
and Switzerland
Sept. 30,
Total (France); Statoil (Norway); ENI
Exempted. Under from sanctions under ISA “special rule” for
2010
(Italy); and Royal Dutch Shell
pledging to wind down work on Iran energy fields.
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 29,
Belarusneft (Belarus, subsidiary of
Sanctioned. For $500 million contract with NICO (see above)
2011
Belneftekhim)
to develop Jofeir oil field. Other subsidiaries of Belneftekhim
were sanctioned in 2007 under E.O. 13405 (Belarus sanctions).
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 were
(UAE); Tanker Pacific (Singapore);
issued on September 13, 2011, to “clarify” the May 24
Allvale Maritime (Liberia); Societie
determinations that had named Ofer Brothers Group. The two,
Anonyme Monegasque Et Aerienne
as well as Tanker Pacific, are affiliated with a Europe-based trust
(SAMAMA, Monaco); Speedy Ship
linked to deceased Ofer brother Sami Ofer, and not Ofer
(UAE/Iran); Associated Shipbroking
Brothers Group based in Israel. Firms named subjected
(Monaco); and Petroleos de
primarily to the financial sanctions provided in ISA. U.S.-based
Venezuela (PDVSA, Venezuela).
subsidiaries of PDVSA, such as Citgo, were not sanctioned.
Jan. 12,
Zhuhai Zhenrong Co. (China); Kuo
Sanctioned. For brokering sales or making sales to Iran of
2012
Oil Pte Ltd. (Singapore); FAL Oil Co.
gasoline.
(UAE)
Aug. 12,
Sytrol (Syria)
Sanctioned. For sales of gasoline to Iran.
2012
Mar. 14,
Dr. Dimitris Cambis; Impire Shipping;
Sanctioned under ISA amendments sanctioning owning vessels
2013
Kish Protection and Indemnity (Iran);
that transport Iranian oil or providing insurance for the
and Bimeh Markasi-Central Insurance
shipments. Treasury sanctions also imposed on eight UAE-based
of Iran (CII, Iran)
oil traders that concealed the transactions.
April 12,
Tanker Pacific; SAMAMA; and Allvale
Sanctions lifted. Special rule applied after firms provided to the
2013
Maritime
U.S. “reliable assurances” they will not engage in similar activity
in the future.
May 31,
Ferland Co. Ltd. (Cyprus and
Sanctioned for cooperating with National Iranian Tanker Co. to
2013
Ukraine)
illicitly sel Iranian crude oil.
August 29,
Dettin SPA
Sanctioned. Italy-based company sanctioned for providing goods
2014
and services to Iran’s petrochemical industry.
Source: State Department announcements.
(...continued)
act to Libya terminated on April 23, 2004, with a determination that Libya had fulfilled U.N. requirements.
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Oil Export Sanctions: Section 1245 of the FY2012 NDAA
In late 2011, Congress sought to reduce Iran’s exportation of oil by imposing sanctions on the
mechanisms that oil importers use to pay Iran for oil. The sanctions took the form of sanctioning
transactions with Iran’s Central Bank. The FY2012 national defense authorization bill (H.R.
1540, P.L. 112-81, signed on December 31, 2011, provides for the following:
• Requires the President to prevent a foreign bank from opening an account in the
United States—or impose strict limitations on existing U.S. accounts—if that
bank processes payments through Iran’s Central Bank. The provision applies to a
foreign central bank only if the transaction with Iran’s Central Bank is for oil
purchases. The provision went into effect for non-oil related transactions 60 days
after enactment (February 29, 2012), and for transactions for oil purchases after
180 days (June 28, 2012).
• Exemption Provision. The statute provided a strong incentive for Iran’s oil buyers
to cut purchases of Iranian oil through an exemption provision. The President
may grant an exemption for foreign banks—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. The Iran
Threat Reduction Act (P.L. 112-158) amended Section 1245 such that any
country that completely ceases purchasing oil from Iran would retain an
exemption.
• 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. The
first required EIA report was issued on February 29, 2012, and, on March 30,
2012, President Obama determined that there was a sufficient supply of oil
worldwide to permit countries to reduce oil purchases from Iran. An EIA report
of April 27, 2012, and Administration determination of June 11, 2012, made
similar findings and certifications, triggering potential sanctions as of June 28,
2012. Subsequent EIA reports and Administration determinations of the state of
the oil market have kept the sanctions triggers in place.
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. 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, meaning that Iran’s existing oil
customers are not required to further reduce oil purchases from Iran while the JPA is in effect.
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Implementation: Exemptions Issued
The lack of precise definition of “significant reduction” in oil purchases gave 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 Department of the Treasury
should define “significant reduction” as an 18% purchase reduction based on total price paid (not
just volumes).17 Administration officials said they largely adopted that standard. 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 Issued and Maintained18
• Since March 20, 2012, Japan has maintained and exemption for significantly
reducing purchases and 10 EU countries have maintained exemptions for ending
purchases pursuant to the EU Iran oil purchase embargo of July 1, 2012. The 10
EU countries are Belgium, Czech Republic, France, Germany, Greece, Italy, the
Netherlands, Poland, Spain, and Britain. (Seventeen EU countries were not
granted exemptions because they were not buying Iran’s oil and could not
“significantly reduce” buys from Iran.)
• Since June 2012, the following countries have maintained exemptions for
significant reductions: China, India, South Korea, Turkey, and Taiwan.
• Also since June 2012, the following countries have maintained exemptions based
on their ending oil purchases from Iran: Singapore, Malaysia, South Africa, and
Sri Lanka.
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 provision has further complicated
Iran’s efforts to bring hard currency back to the Central Bank and compels Iran 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. Iran is likely to demand that this sanction be lifted as part of a
comprehensive nuclear deal so that Iran can access its hard currency accounts abroad unfettered.
17 Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner, January 19, 2012.
18 Announcements by the Department of State, March 20, 2012, June 11, 2012, and June 28, 2012.
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Table 2. Top Oil Buyers From Iran and Reductions
(amounts in barrels per day, including condensates)
Average At JPA Start
Country/Bloc 2011
Average
(and since)
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 and Note: International Energy Agency and rough estimates based on CRS conversations with foreign
diplomats and press reports. Actual volumes might differ, and import volumes may fluctuate dramatically over
short periods of time as actual tanker deliveries occur. Figures include purchases of condensates, which are light
petroleum liquids that are associated with oil and natural gas production. Iran’s oil buyers reportedly have
increased purchases of condensates since the JPA began by about 200,000 barrel per day equivalent.
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
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
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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 amended an earlier law, the Iraq Sanctions Act of
1990 (Section 586G(a) of P.L. 101-513), to provide for a “presumption of denial” for all dual use
exports to Iran (including 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 Nonproliferation 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.19 (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.
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 would require congressional action.
19 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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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: To date, no country has been designated a “Country of Diversion Concern.”
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Waiver and Termination
Waiver: The President may waive sanctions on countries designated as of Diversion Concern for 12 months, and
additional 12-month periods, pursuant to certification that the country is taking steps to prevent such diversions and
re-exports.
Termination: The designation terminates on the date the President certifies to Congress that the country has
adequately strengthened its export controls to prevent such diversion and re-exports to Iran in the future.
Sanctions on the Islamic Revolutionary Guard Corps (IRGC)
Numerous sanctions discussed in this report target Iran’s Islamic Revolutionary Guard Corps (IRGC), which plays a
role in repressing domestic dissent, developing Iran’s energy sector, developing Iran’s WMD programs particularly by
procuring technology abroad, and supporting pro-Iranian militant movements and governments in the Middle East
region. Much of the work on Iran’s oil and gas fields is done through a series of contractors. Some of them, such as
Khatam ol-Anbia and Oriental Kish, have been identified by the U.S. government as control ed by the IRGC and have
been sanctioned under various executive orders, discussed below. The 2011 appointment 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 was replaced by President Hassan Rouhani with a former Oil Minister and
oil industry professional, but the IRGC involvement in Iran’s energy sector is not shrinking. The Wall Street Journal
reported on May 27, 2014, that Khatam ol-Anbia has $50 billion in contracts with the Iranian government, including in
the energy sector but also in port and highway construction. It has as many as 40,000 employees. 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 waived or suspended to implement the JPA.
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Financial/Banking Sanctions
U.S. efforts to shut Iran out of the international banking system have gained strength as other
countries have joined the effort. These efforts have been implemented primarily by the
Department of the Treasury through progressively strong actions, particularly using the authority
in legislation in 2011 to cut off Iran’s Central Bank from the international financial system.
Targeted Financial Measures
Since 2006, the Department of the Treasury has used existing 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 Department of the Treasury 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 Department of the Treasury 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.20
Implementation: The Department of the Treasury has imposed penalties on banks that have
helped Iran violate U.S. financial restrictions. (1) In 2004, UBS paid a $100 million fine for the
unauthorized movement of U.S. dollars to Iran and other sanctioned countries; (2) in December
2005, the Dutch bank ABN Amro paid an $80 million fine for failing to fully report the
processing of financial transactions involving Iran’s Bank Melli; (3) in December 2009, Credit
Suisse paid a $536 million settlement for illicitly processing Iranian transactions with U.S. banks;
(4) in June 2012, Dutch bank ING paid $619 million for concealing the movement of billions of
dollars through the U.S. financial system on behalf of Iranian and Cuban clients; (5) in August
2012, Standard Chartered paid $340 million to New York State regulators for processing
transactions with Iran;21 (6) in January 2014, Luxembourg-based Clearstream Banking paid $152
million for helping Iran evade restrictions on dealing with U.S. banks; (7) in January 2014, the
Bank of Moscow paid $9.5 million for illicitly moving money through the U.S. financial system
on behalf of Bank Melli;22 and (8) in June 2014, BNP Paribas paid $9 billion in fines for helping
Iran (and Sudan and Cuba) violate U.S. sanctions.
CISADA: Sanctioning Foreign Banks That Conduct Transactions
with Sanctioned Iranian Banks
Department of the Treasury efforts were enhanced substantially by Section 104 of CISADA (P.L.
111-195, signed July 1, 2010) and U.N. and EU sanctions. The intent of the section was, in part,
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
20 Glenn Kessler, “U.S. Moves to Isolate Iranian Banks,” Washington Post, September 9, 2006.
21 Jessica Silver-Greenberg, “Regulator Says Bank Helped Iran Hide Deals,” New York Times, August 7, 2012.
22 Rick Gladstone. “U.S. Announces Actions to Enforce Iran Sanctions.” New York Times, April 29, 2014.
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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
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 Department of the Treasury 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 Department of the Treasury 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 were not required to implement the JPA. Iran is likely to demand that this sanction no longer
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”23 under Section 311 of
23 http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx.
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the USA Patriot Act (31 U.S.C. 5318A). The Department of the Treasury 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.
Laws That Promote Divestment
Some U.S. laws require or call for divestment of shares of firms that conduct certain transactions
with Iran. A divestment-promotion provision was contained in CISADA, providing a “safe
harbor” for investment managers who sell shares of firms that invest in Iran’s energy sector at
levels that would trigger U.S. sanctions under the Iran Sanctions Act.
Another provision, Section 219 of the Iran Threat Reduction and Syria Human Rights Act of
2012, requires company reports to the Securities and Exchange Commission to disclose whether
it or any corporate affiliate has engaged in any transactions with Iran that could trigger sanctions
under ISA, CISADA, and other applicable laws.
Sanctions and Sanctions Exemptions to Support
Democratic Change/Civil Society 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.”
General Implementation: Individuals and entities designated under the Executive Orders and
provisions discussed below are listed in the tables at the end of this report. For those provisions
that ban visas to enter the United States, the State Department interprets the provisions to apply to
all members of the designated entity.24 Similar sanctions against many of these same officials—as
well as several others—have been imposed by the European Union.
No suspension of U.S. sanctions on Iran for its human rights practices was required by the JPA.
The White House fact sheet on the April 2, 2015, framework nuclear accord with Iran states that
human rights sanctions will not be eased as part of a comprehensive nuclear settlement.
24 U.S. Department of the Treasury, Office of Public Affairs, Treasury Sanctions Iranian Security Forces for Human
Rights Abuses, June 9, 2011.
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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 Iranian presidential election. Section
1241 of the act also required an Administration report by January 31, 2010, on U.S. enforcement
of sanctions against Iran, and the effect of those sanctions on Iran.
Sanctions and Actions to Counter Iranian Censorship of the Internet
• Section 106 of CISADA incorporated the Reduce Iranian Cyber-Suppression Act
(111th Congress, S. 1475 and H.R. 3284), prohibiting 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 a joint venture between Nokia (Finland) and Siemens (Germany) that
reportedly sold Internet monitoring and censorship technology to Iran in 2008.25
• 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 (1) 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; or (2) selling to Iran (or Syria)
any technology that enables those governments to carry out such disruptions or
monitoring.
• Section 403 of the ITRSHRA 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. On October 9, 2012, the
President issued Executive Order 13628 reinforcing 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 sanctions authorities of the Department of State and of the Treasury.
Laws and Administration Actions to Promote Internet Communications
by Iranians
• On March 8, 2010, OFAC amended the Iran Transactions Regulations to allow
for a general license for providing free mass market software to Iranians. The
25 Christopher Rhoads, “Iran’s Web Spying Aided by Western Technology,” Wall Street Journal, June 22, 2009.
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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.
• Section 103(b)(2) of CISADA exempts equipment to help Iranians communicate
and use the Internet from the U.S. export ban on Iran.
• On March 20, 2012, the Department of the Treasury amended U.S.-Iran trade
regulations to permit several additional types of software and information
technology products to be exported to Iran under general license, provided the
products were available at no cost to the user.26The items included personal
communications, personal data storage, browsers, plug-ins, document readers,
and free mobile applications related to personal communications.
• On May 30, 2013, the Department of the Treasury further amended the trade
regulations 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.
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.
• Sanctions Against Iranian Human Rights Abusers. 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 issued Executive Order 13553 providing for
CISADA sanctions against Iranians determined to be responsible for or complicit
in post-2009 Iran election human rights abuses. Those sanctioned under the
provisions are listed in the tables at the end of this report.
• Section 105 CISADA Termination Provision: 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) fully
investigated abuses of political activists that occurred after the uprising; and (4)
committed to and is making progress toward establishing an independent
judiciary and respecting human rights recognized in the Universal Declaration of
Human Rights.
• Sanctions on Sales of Anti-Riot Equipment. Section 402 of the ITRSHRA
amended Section 105 by adding provisions that sanction (visa ban, U.S. property
26 Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran,
March 20, 2012.
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blocked) 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.
• Sanctions Against Iranian Government Broadcasters. Section 1248 of IFCA
(Subtitle D of P.L. 112-239) 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.
• Sanctions Against Iranian Profiteers. Section 1249 of IFCA amends CISADA by
imposing sanctions under Section 105 of CISADA 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 Bans. 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.27
• 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 and thereby provide political cover for countries
to direct their companies to cooperate with U.S. sanctions. As part of a multilateral process of
27 http://www.state.gov/r/pa/prs/ps/2013/05/210102.htm.
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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).
Resolution 1929 was key for its assertion that the energy, financial, and other sectors of the
Iranian economy support Iran’s nuclear program. That concept in the Resolution is interpreted as
giving U.N. member states authorization to cooperate with U.S. sanctions against Iran’s energy,
financial, and related sectors. A summary of the major provisions of all four of these resolutions is
contained in the table below, and Iranian entities under U.N. sanctions are in Table 5.
U.N. Security Council action was not needed to implement the JPA. The April 2, 2015, framework
nuclear accord states that U.N. sanctions are to be lifted as part of a comprehensive nuclear deal
with Iran. The U.N. sanctions are all considered by the Administration and its P5+1 partners as
“nuclear-related” because the sanctions were imposed with the expressed purpose of slowing
Iran’s nuclear program and persuading Iran to negotiate limits on its nuclear program.
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 requires that countries
ban the travel of named Iranians. (1737, 1747, 1803, and 1929)
Prohibits transfer to Iran of nuclear, missile, and dual use items to Iran, except for use in light-water reactors. (1737,
and 1747)
Prohibits Iran from exporting arms or WMD-useful technology (1747)
Prohibits 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, Gulf Security, and U.S. Policy, by Kenneth Katzman.
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International Implementation and Compliance28
During 2010-2013, converging international views on Iran produced substantial global
cooperation in pressuring Iran with sanctions. Some countries apparently joined the sanctions
regime primarily as a means of heading off unwanted military action against Iran by the United
States or by Israel. Countries in the region cooperated at least partly in order to preserve their
close relationships with the United States.
The JPA requires Iran’s oil exports to remain constant at the levels they were when it began
implementation in January 2014—about 1.1 million barrels per day (mbd) of crude oil. Iran’s oil
customers are not required to cut average purchases further but are not permitted to increase
purchases either. The following countries have active exemptions under Section 1245 of the
FY2012 NDAA (on dealings with the Central Bank for oil purchases or other transactions):
(1) 10 EU countries,29 for complying with an EU embargo on Iran oil purchases; (2) China, India,
Turkey, South Korea, Japan, and Taiwan, for significantly reducing oil purchases from Iran; and
(3) Singapore, Malaysia, South Africa, and Sri Lanka for ending oil purchases from Iran.
Because U.S. sanctions laws do not penalize increases in purchases of condensates (which are
produced in association with crude oil or natural gas), during the JPA Iran’s oil buyers appear to
have increased condensate purchases by about 200,000 barrels per day (crude oil equivalent),30
making Iran’s exports of crude and condensates combined about 1.3 mbd.
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 May 1, 2012, President Obama
issued Executive Order 13608, giving the Department of the Treasury 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. On January 10, 2013, the Department of the Treasury’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 financial
sanctions. Because the involvement of an Iranian client is often opaque, banks have sometimes
inadvertently processed hawala transactions involving Iranians.
The following sections discuss international cooperation with U.S. and U.N. sanctions on Iran.
Broader issues of Iranian foreign policy can be found in: CRS Report R42335, Iran’s Threat to
the Strait of Hormuz, coordinated by Kenneth Katzman. A comparison between U.S., U.N., and
EU sanctions against Iran is contained in Table 4 below.
Europe
U.S. and European approaches on Iran have converged since 2002, when it was revealed that Iran
was developing a uranium enrichment capability. Previously, European and other countries
appeared less concerned than the United States about Iranian policies and were reluctant to
28 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, noting that there are many aspects to U.S. relations with the countries discussed here.
29 The 10 are Belgium, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain, and Britain.
30 “Iran Reaps Less Cash From Eased Sanctions Than Predicted.” Bloomberg, November 25, 2014.
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sanction Iran. Since the passage of Resolution 1929 (June 2010), European Union (EU) sanctions
on Iran have become nearly as extensive as those of the United States as discussed below.
• The EU banned oil imports as of July 1, 2012, pursuant to a January 23, 2012,
EU decision. Collectively, the EU had previously 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, ten EU countries have exemptions from sanctions
under P.L. 112-81. The EU also banned imports of natural gas from Iran as of
October 2012. The JPA did not ease these EU bans.
• An EU ban on insurance for shipping oil or petrochemicals from Iran took effect
on July 1, 2012. The EU eased this sanction to implement the JPA.
• There EU has banned trade with Iran in gold, precious metals, diamonds, and
petrochemical products. The EU eased this sanction to implement the JPA.
• The EU has frozen the assets of Iran’s Central Bank, although transactions are
permitted for approved legitimate trade, and a freezing of the assets of several
Iranian firms involved in shipping. The JPA did not alter this sanction.
• The EU banned a ban on transactions between European and all Iranian banks,
unless specifically authorized, and a ban on short-term export credits, guarantees,
and insurance, as of October 15, 2012. This sanction was eased in accordance
with the JPA.
• The EU has banned exports to Iran of graphite, semi-finished metals such as
aluminum and steel, industrial software, shipbuilding technology, oil storage
capabilities, and flagging or classification services for Iranian tankers and cargo
vessels. With the exception of exports to Iran’s automotive sector, the JPA did not
alter EU implementation of these sanctions.
• SWIFT Cutoff. Section 220 of the ITRSHRA 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. Subsequently, the EU
requested 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. Iranian banks not sanctioned by the EU can still access the
SWIFT system.31 (The United States has sanctioned about 50 Iranian banks, but
only those sanctioned by the EU have been cut off from SWIFT.) 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 cutoff was not suspended to implement the JPA, but this ban
apparently is to be lifted as part of a comprehensive nuclear deal with Iran.
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
31 Avi Jorish, “Despite Sanctions, Iran’s Money Flow Continues,” Wall Street Journal, June 25, 2013.
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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 lowered the tariffs or
increased quotas for Iranian exports to the EU countries.32 Negotiations were discontinued in late
2005 after Iran abrogated an agreement with several EU countries 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.
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.
Some experts express concern that Russia’s compliance with sanctions is eroding as a
comprehensive nuclear deal appears close to fruition. In August 2014, the two countries
reportedly agreed to a broad trade and energy deal which might include an exchange of Iranian oil
(500,000 barrels per day) for Russian goods. That deal would appear to violate the JPA, if
implemented.33 Russia is an oil exporter, but Iranian oil that Russia would buy under this
arrangement would presumably free up additional Russian oil for export. Russia and Iran
reaffirmed the deal in April 2015, following the April 2, 2015, framework nuclear accord, and
Press reports in early June 2015 indicated the two countries might start implementing the
arrangement.34 Also in April 2015, Russia lifted its own ban on delivering the S-300 air defense
system that it sold Iran in 2007 but refused to deliver after Resolution 1929 was adopted—even
though that Resolution would technically not bar supply of that defensive system. The Russian
announcements in April appeared part of an effort to ensure that Russia has an advantage in
access to Iranian markets if sanctions are lifted as part of a comprehensive nuclear deal.
China remains Iran’s largest oil customer and its cooperation has been pivotal to U.S. efforts to
reduce Iran’s revenue from oil sales. Cooperating with U.S. sanctions to a large degree, during
2012-13 China cut its buys of oil from Iran to about 435,000 barrels per day from its 2011
average of about 550,000 barrels per day. The State Department has asserted that, 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 and China merits a Section 1245 (P.L. 112-81) sanctions exemption. Several
Chinese energy firms invested in Iran’s energy sector, but some of these projects have been given
to Iranian or other country firms or show little evidence of actual development work.
32 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.
33 “Iran, Russia Negotiating Big Oil-for-Goods Deal.” Reuters, January 10, 2014.
34 “Iran Hopes to Begin Russia Oil-for-Goods Exports This Week: Report.” Reuters. June 7, 2015.
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China settles much of its trade balance with Iran with goods rather than hard currency. Doing so
is highly favorable to China financially. Press reports indicated that Iran’s automotive sector—the
largest industrial sector aside from the energy sector—obtains a significant proportion of its parts
from China, and two Chinese companies, Geelran and Chery, produce cars in Iran. Iran’s auto
production fell about 60% during 2011-2013 because of sanctions, but have recovered somewhat
since the JPA went into effect in early 2014.35
Japan/Korean Peninsula/Other East Asia
Since 2010, in part in deference to their alliances with the United States, Japan and South Korea
have imposed trade, banking, and energy sanctions on Iran that are similar to those imposed by
the EU. Both countries have cut imports of Iranian oil sharply since 2011. 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—did not affect Japan and South Korea’s trading patterns with Iran
significantly. The two countries have been the main sources of the $700 million per month in
direct hard currency payments to Iran for oil, as provided for by the JPA. And, banks in the two
countries are said by experts to be the repositories of a large part of the approximately $150
billion in foreign exchange (payments for past oil shipments) that Iran holds abroad but cannot
repatriate because of financial sector sanctions.
The main South Korean refiners that import Iranian crude are SK Energy and Hyundai Oilbank.
Some South Korean firms have been active in energy infrastructure construction in Iran but, in
December 2011, South Korea banned sales to Iran of energy sector equipment. South Korea
generally pays Iran’s Central Bank through local currency accounts at its Industrial Bank of
Korea and Woori Bank, and it exports to Iran mainly iron, steel, consumer electronics, and
appliances. Japan exports to Iran significant amounts of chemical and rubber products, as well as
consumer electronics.
Iran reportedly has ordered from Singapore (Yangzijiang Shipbuilding Holdings Ltd.) ten ships
that Iran (IRISL) is expected to use to transport iron ore and copper to foreign buyers.36 The
purchase could potentially violate IFCA, as discussed above.
North Korea is an ally of Iran and, like Iran, is a subject of international sanctions. North Korea
asserts that it is not bound by international sanctions against Iran, and it reportedly cooperates
with Iran on a wide range of WMD-related ventures. Press reports in April 2013 said that Iran
might supply oil directly to North Korea, but it has not been reported that any such arrangement
was finalized. A portion of China’s buys of Iranian oil is reportedly re-exported to North Korea.
35 Nahid Kalbasi.”Have International Sanctions Crippled Iran’s Auto Industry?” Washington Institute for Near East
Policy, June 3, 2015.
36 Iran Aims to Return to Shipping Market. Wall Street Journal, September 17, 2014.
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South Asia: India, Pakistan, and Afghanistan
India
India has implemented U.N.-mandated sanctions against Iran but India has been reluctant to
impose sanctions on Iran to the extent the United States, EU, Japan, and South Korea have. Yet,
India’s private sector has come to view Iran as a “controversial market”—a term used by many
international firms to describe markets that entail reputational and financial risks.
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 oil
sales to India. The 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 Iran.
Still, India has reduced its imports of Iranian oil substantially since 2011 in an apparent effort to
comply with U.S. policy. By the time of the JPA, Iran was only supplying about 6% of India’s oil
imports (down from over 16% in 2008). India has incurred significant costs to retrofit refineries
that were handling Iranian crude. In advance of President Obama’s visit to India in January 2015,
the Indian government reportedly requested refiners to further cut purchases from Iran. As shown
in the table later in this report, some Indian firms have ended or slowed work on investments in
Iranian oil and gas fields.
India has said it intends to develop Iran’s Chahbahar port that would enable India to trade with
Afghanistan unimpeded by Pakistan, but Indian investment in the project appears to be contingent
on finalization of the nuclear deal an accompanying easing of sanctions. Iranian and Indian
officials reportedly have periodically discussed the issue of constructing an underwater natural
gas pipeline, which would avoid going through Pakistani territory. However, such a route would
be expensive to construct.
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. In line with an agreed completion date of mid-2014, Iran reportedly completed the
pipeline on its side of the border. Pakistan has not completed its portion of the project, but
China’s announcement in April 2015 of a $3 billion investment in the project could pave the way
for the line’s completion. In March 2013, the State Department reiterated earlier comments that
the project might be sanctioned under ISA.37 In 2009, India dissociated itself from the project,
which was initially conceived as bringing Iranian gas to India, over stated concerns about the
security of the pipeline, the location at which the gas would be transferred to India, pricing of the
gas, and tariffs.
37 Asia Times, March 21, 2014. http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html.
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Afghanistan
Iran has extensive security interests in Afghanistan. However, Afghanistan’s economy is small,
and very few Iran-Afghanistan economic interactions are subject to international sanctions.
Iranian firms have been involved in road and building construction in Afghanistan, mostly near
the Iranian border and in Kabul. Some reports say that Iranian currency traders acquire dollars
that are plentiful in Afghanistan 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 have been
allegations that Iran is using an Iran-owned bank in Afghanistan, Arian Bank, to move funds in
and out of Afghanistan. The U.S. Department of the Treasury 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.38
Turkey/South Caucasus
Turkey
Turkey remains a significant buyer of Iranian oil. In 2011, it purchased about 200,000 bpd, but it
subsequently reduced those buys and Turkey has maintained a Section 1245 NDAA sanctions
exemption. Turkey is Iran’s main gas customer via a pipeline built in 1997. 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. Even though direct Iranian gas exports to Turkey through
the line began in 2001—with additional such exports through a second pipeline built in 2013—no
ISA sanctions have been imposed, possibly because the State Department views the line as crucial
to the energy security of Turkey. 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).
Earlier, press reports 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.
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).39
38 “Pentagon Contractor Used Iran for Project,” Wall Street Journal, September 26, 2013.
39 “US Acts to Block Turkish Firm from Sending GE Engines to Iran.” Reuters, January 6, 2014.
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Caucasus: Azerbaijan, Armenia, and Georgia
The Clinton and George W. Bush Administrations used the threat of ISA sanctions to deter oil
pipeline routes involving Iran and thereby successfully promoted an alternate route from
Azerbaijan (Baku) to Turkey (Ceyhan). The route became operational in 2005. Section 6 of
Executive Order 13622 exempts from sanctions 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 largest direct gas customer,
after Turkey. In May 2009, Iran and Armenia inaugurated a natural gas pipeline between the two,
built by Gazprom of Russia. No determination of ISA sanctions has been issued. Armenia has
said its banking controls are strong and that Iran is unable to process transactions illicitly through
Armenia’s banks.40 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.41 In May
2014, Iran and Armenia increased weekly flights between the two from 3 to 50.
Some press reports say that Iran might have used another Caucasian state, Georgia, to circumvent
sanctions. IRGC companies reportedly have established 150 front companies in Georgia for the
purpose of importing dual-use items and to boost Iran’s non-oil exports with sales of products
such as roofing materials and jams. On the other hand, observers assert that since extensive Iran-
Georgia economic ties were highly publicized in mid-2013, Georgia has obtained cooperation
from its businessmen in reducing transactions with Iran.
Persian Gulf and Iraq42
The Persian Gulf countries are oil exporters and close allies of the United States. As Iranian oil
exports decreased 2012 and 2013, the Gulf states supplied the global oil market with additional
oil. The Gulf states have generally sought to prevent the re-exportation to Iran of U.S. technology,
and have curtailed banking relationships with Iran. On the other hand, in order not to antagonize
Iran, the Gulf countries still conduct relatively normal trade with Iran. Gulf-based shipping
companies such as United Arab Shipping Company reportedly still pay port loading fees to such
sanctioned IRGC-controlled port operators as Tidewater.43
Iran and several of the Gulf states have had discussions on various energy transportation projects,
but virtually none has come to fruition, probably at least in part because of broad regional
disputes between Iran and the Gulf states Kuwait have held talks on the construction of a 350-
mile pipeline that would bring Iranian gas to Kuwait. Oman and Iran have reportedly discussed a
gas pipeline linkage, and Bahrain has discussed purchasing Iranian gas as well.44 Qatar and Iran
both appear to be successfully sharing the large gas field in the Gulf waters between them.
40 Louis Charbonneau, “Iran Looks to Armenia to Skirt Banking Sanctions,” Reuters, August 21, 2012.
41 Information provided to the author by regional observers. October 2013.
42 The CRS Report RL32048, Iran, Gulf Security, and U.S. Policy, by Kenneth Katzman, discusses the relations
between Iran and other Middle Eastern states.
43 Mark Wallace, “Closing U.S. Ports to Iran-Tainted Shipping. Op-ed,” Wall Street Journal, March 15, 2013.
44 http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?
(continued...)
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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 praised the UAE’s March 1, 2012, ban
on transactions with Iran by Dubai-based Noor Islamic Bank; Iran reportedly used it to process a
substantial portion of its oil payments. Some Iranian gas condensates (120,000 barrels per day)
reportedly are imported by Emirates National Oil Company (ENOC) and refined into jet fuel,
gasoline, and other products.
Iraq
Iran has sought to use its close relations with Iraq’s Shiite-dominated government 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. Iraq presented the
United States with a significant 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 enters Iraq at Diyala province and will supply several power plants. The two countries signed
a contract for the pipeline construction, estimated at $365 million, in July 2011, and it reportedly
has been completed on both sides of the border.45 No sanctions have been imposed on the project,
to date. In May 2015, Iraq’s Al Naser Airlines reportedly helped Iran’s sanctioned Mahan Air
acquire nine previously-owned aircraft.46 On May 21, 2015, the Department of the Treasury
sanctioned Al Naser and other parties allegedly involved in the transfer.
Iran is supplying advisers and weapons to help Iraq try to defeat Islamic State forces, an
organization the United States has said needs to be degraded and ultimately defeated. The Iranian
support to the Iraqi government has not been sanctioned, even though Iranian arms exports are
prohibited by U.N. Security Council Resolution 1747. The United States has, however, cited that
Resolution in pressing Iraq to halt military resupply flights from Iran to Syria. Iran supports the
Assad government of Syria, whereas the United States has called for Assad to step down in the
face of the armed uprising that began as peaceful protests in 2011.47
Africa and Latin America
During the presidency of Ahmadinejad, Iran looked to several Latin American countries,
particularly Venezuela, to try to circumvent international sanctions. For the most part, however,
Iran’s trade and other business dealings with Latin America have remained too modest to weaken
the effect of international sanctions significantly. As noted elsewhere in this report, several
Venezuelan firms have been sanctioned for dealings with Iran.
Also 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
(...continued)
nn=8901181055.
45 Ben Lando, “Iraq Inks Gas Supply Deal with Iran,” Iraq Oil Report, July 23, 2013.
46 Eli Lake. “Iran Sanctions Collapsing Already.” Bloomberg News, May 11, 2015.
47 Michael Gordon and Eric Schmitt, “Iran Secretly Sending Drones and Supplies to Iraq, U.S. Officials Say,” New
York Times, June 25, 2014.
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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. 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. No new
loans have been approved to Iran since 2005, including several environmental projects under the
Bank’s “Global Environmental Facility” (GEF). The initiative has slated more than $7.5 million
in loans for Iran to dispose of harmful chemicals.48
Earlier, in 1993, the United States voted its 16.5% share of the World Bank against loans to Iran
of $460 million for electricity, health, and irrigation projects, but the loans were approved. To
block that lending, the FY1994-FY1996 foreign aid appropriations (P.L. 103-87, P.L. 103-306,
and P.L. 104-107) cut the amount appropriated for the U.S. contribution to the bank by the
amount of those loans. The legislation contributed to a temporary halt in new bank lending to
Iran. In the 111th Congress, a provision of H.R. 6296—Title VII—cut off U.S. contributions to the
World Bank, International Finance Corp., and the Multilateral Investment Guarantee Corp. if the
World Bank approves a new Country Assistance Strategy for Iran or makes a loan to Iran.
During 1999-2005, Iran’s moderating image had led the World Bank to consider new loans over
U.S. opposition. In May 2000, the United States’ allies outvoted the United States to approve
$232 million in loans for health and sewage projects. During April 2003-May 2005, a total of
$725 million in loans were approved for environmental management, housing reform, water and
sanitation projects, and land management projects, in addition to $400 million in loans for
earthquake relief.
48 Barbara Slavin. “Obama Administration Holds Up Environmental Grants to Iran.” Al Monitor, June 23, 2014.
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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 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. Department of the Treasury 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 reinsurance 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 imposition of sanctions on Iran by many governments has caused Iran to be viewed by many
worldwide corporations as a “controversial market”—a market that carries political and
reputational risks. On the other hand, travelers to Iran say many foreign products, including U.S.
products, have been readily available in Iran even at the height of the effectiveness of
international (2012-2015). Several major non-U.S. companies discontinued business with Iran,
include the following:
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• ABB of Switzerland, a major plant and equipment firm, said in January 2010 it
would cease doing business with Iran. Siemens of Germany; Finemeccanica, a
defense and transportation conglomerate of Italy; Thyssen-Krupp, a German
steelmaker; and Indian conglomerate Tata subsequently followed suit.
• Even though selling finished cars to Iran is not subject to any sanctions,
Germany’s Daimler (Mercedes-Benz) and Porsche; Toyota (Japan); Fiat (Italy);
and South Korea’s Hyundai and Kia Motors suspended direct auto sales to Iran.
• As of 2007, BNP Paribas of France ceased pursuing new business in Iran,
according to attorneys for the financial firm.
• The State Department reported on September 30, 2010, that Hong Kong company
NYK Line Ltd. had ended shipping business with Iran on any goods. In June
2011, the Danish shipping giant Maersk ceased operating out of Iran’s three
largest ports—decision based on the U.S. announcement on June 23, 2011, of
sanctions on port operator Tidewater Middle East Co. under E.O. 13382.
• Well before Executive Order 13590 was issued (see above), one large oil services
firm, Schlumberger, incorporated in the Netherlands Antilles, ended its business
with Iran.49 As of mid-2010, almost all energy sector-related sales to Iran became
subject to sanctions and subsidiaries of U.S. energy equipment and energy-
related shipping firms that were in the Iranian market have apparently exited.
These firms include Natco Group,50 Overseas Shipholding Group,51 UOP (United
Oil Products, a Honeywell subsidiary based in Britain),52 Itron,53 Fluor,54 Parker
Drilling, Vantage Energy Services,55 PMFG, Ceradyne, Colfax, Fuel Systems
Solutions, General Maritime Company, Ameron International Corporation, and
World Fuel Services Corp.
Foreign Subsidiaries of U.S. Firms That Have Exited the Iran Market
Many foreign subsidiaries of U.S. firms exited the Iran market voluntarily, before any of their
business activities with Iran became subject to sanctions.
• Chemical manufacturer Huntsman announced in January 2010 its subsidiaries
would halt sales to Iran.
• In January 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
49 Farah Stockman, “Oil Firm Says It Will Withdraw From Iran,” Boston Globe, November 12, 2010.
50 Form 10-K filed for fiscal year ended December 31, 2008.
51 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.
52 New York Times, March 7, 2010, cited previously.
53 “Subsidiaries of the Registrant at December 31, 2009,” http://www.sec.gov/Archives/edgar/data/780571/
000078057110000007/ex_21-1.htm.
54 “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.
55 Form 10-K for fiscal year ended December 31, 2007.
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Pars. Halliburton reportedly had been providing$30 million to $35 million worth
of services per year through Oriental Kish.56 In April 2007, Halliburton
announced that its subsidiaries were no longer operating in Iran.
• As of early 2005, General Electric (GE) ceased pursuing 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, marketed
through Italian, Canadian, and French subsidiaries, are not generally subject to
sanctions 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.57 Ingersoll Rand, maker of air compressors and
cooling systems, followed suit.58
• 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.59
• 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 2006.60 FMC
Technologies took similar action in 2009, as did Weatherford61 in 2008. However,
in November 2013, Weatherford was fined by the Department of the Treasury for
violating sanctions against Iran and other countries.
Effectiveness of Sanctions on Iran
The following sections examine the effectiveness of sanctions on a variety of criteria and goals.
Effect on Iran’s Nuclear Program and Strategic Capabilities
Iran’s acceptance of the JPA and the April 2, 2015, framework of a comprehensive nuclear accord
are widely considered evidence that sanctions have shifted Iran’s nuclear policies. The JPA came
after the June 14, 2013, presidential election in Iran in which Iranians elected as president the
relatively moderate mid-ranking cleric Hassan Rouhani, who ran on a platform of achieving an
easing of sanctions and ending Iran’s international isolation. Still, Director of National
56 “Iran Says Halliburton Won Drilling Contract,” Washington Times, January 11, 2005.
57 “Caterpillar Says Tightens ‘No-Iran’ Business Policy,” Reuters, March 1, 2010.
58 Ron Nixon, “2 Corporations Say Business With Tehran Will Be Curbed,” New York Times, March 11, 2010.
59 Peter Baker, “U.S. and Foreign Companies Feeling Pressure to Sever Ties With Iran,” New York Times, April 24,
2010.
60 In September 2011, the Commerce Department fined Flowserve $2.5 million to settle 288 charges of unlicensed
exports and re-exports of oil industry equipment to Iran, Syria, and other countries.
61 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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Intelligence James Clapper has testified in his recent annual “Worldwide Threat Assessment”
briefings to Congress that Iran’s ultimate nuclear intentions remain “unclear.”
A related question is whether sanctions have actually slowed Iran’s nuclear program or strategic
weapons programs. Iran’s nuclear and other WMD programs advanced despite sanctions. Director
of National Intelligence James Clapper has testified that Iran continues to expand the scale, reach,
and sophistication of its ballistic missile arsenal, and on March 16, 2014, Principal Deputy
Assistant Secretary of State for International Security and Nonproliferation Vann Van Diepen said
that Iran was still “very actively” creating front companies and engaging in other activity to
conceal procurement.62 Still, some argue that Iran’s programs might have advanced faster in the
absence of sanctions.63
With respect to Iran’s conventional military capabilities, sanctions might have eroded those
aspects of Iran’s conventional capabilities that are most dependent on foreign supplies. 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. Iran’s arsenal of these systems are
aging and a failure to modernize likely reduces Iran’s ability to project power. In December 2014,
Iran used 40 year-old aircraft (U.S.-supplied F-4 jets) to strike Islamic State targets in Iraq, near
the Iranian border. However, Russia’s apparent decision in April 2015 to proceed with delivery of
the S-300 air defense system—which is not technically banned by Resolution 1929—could help
modernize Iran’s air defense system to the point where these systems pose new threats to aircraft
flown by the U.S. or other air forces.
On the other hand, Iran’s indigenous arms industry has grown over the past two decades, partly
mitigating the limited foreign supplies of weaponry. Iran is able to produce some advanced
conventional weaponry indigenously, including short range ballistic and cruise missiles. In
addition, Iran might be acquiring some systems, such as smaller ships and small submarines, from
foreign suppliers such as North Korea that do not abide by U.N. restrictions.64
Effects on Iran’s Regional Influence
Another question is whether sanctions have weakened Iran’s ability to accomplish its foreign
policy objectives. To date, neither sanctions nor oil prices that fell by nearly 50% in 2014 appear
to have materially reduced Iran’s ability to arm militant movements in the Middle East and to
provide military equipment and advisers to the embattled governments of Syria and Iraq. Some
regional governments express concern that the sanctions relief that will come from a finalized
nuclear deal will provide Iran with greater resources with which it could pursue its regional
objectives. The Administration has not dismissed that possibility, while at the same time arguing
that the more likely scenario is that Iran uses the bulk of any additional funds to rebuild its
civilian economy. The issue of Iran’s regional influence is analyzed extensively in: CRS Report
R44017, Iran’s Foreign Policy, by Kenneth Katzman.
62 William Maclean. “Iran Pursuing Banned Items for Nuclear, Missile War: U.S. Official.” Reuters, March 16, 2014.
63 Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011.
64 Department of Defense, Annual Report of Military Power of Iran, April 2012.
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General Political Effects
Sanctions appear to have produced some political change in Iran. The support of Iranians seeking
reintegration with the international community helped power Rouhani—the most moderate of the
candidates permitted to run—to a first round victory in the June 2013 presidential election.
No U.S. Administration has stated that sanctions on Iran are intended to bring about the change of
Iran’s regime. However, some Iran sanctions advocates have stated that this outcome should be
the goal of the sanctions. The major unrest in Iran in 2009 was, by all accounts, a response to
repression and alleged fraud in the June 2009 re-election of Mahmoud Ahmadinejad as president
rather than to international sanctions. Since 2012 there has been labor and other public unrest
over escalating food prices and the fall of the value of Iran’s currency, but the unrest has not been
large or sustained.
Some experts assess that popular unrest could re-emerge if no comprehensive nuclear deal is
finalized. Many Iranians cheered when the April 2, 2015, framework accord was reached, and
there will undoubtedly be deep public disappointment in Iran if no accord is finalized. There is
also speculation among experts that Rouhani might voluntarily or involuntarily leave office if
Supreme Leader Khamene’i vetoes a comprehensive nuclear deal that Rouhani’s negotiating
team, led by Foreign Minister Mohammad Javad Zarif, accepts.
Human Rights-Related Effects
Recent State Department human rights reports and reports of the U.N. Special Rapporteur on
Iran’s human rights practices assess that there has not been significant net improvement in Iran’s
human rights practices in recent years. President Rouhani has achieved the release of a few
political prisoners and press reports say media freedoms have increased slightly since he took
office, but executions have become more frequent. Sanctions have apparently not reduced the
regime’s ability to monitor and censor use of the Internet, even though the Government
Accountability Office (GAO) stated on January 13, 2015 (GAO-15-258R) that no foreign firms
were reported to have exported technologies to the Iranian government for blocking
telecommunications during 2014. This GAO analysis suggests that firms that pledged to stop
selling the Iranian government such equipment, including German telecommunications firm
Siemens, Chinese Internet infrastructure firm Huawei, and South African firm, MTN Group, have
done so. In October 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.
Economic Effects
Sanctions have taken a toll on Iran’s economy, by all accounts, as indicated below.
• GDP Decline. Treasury Secretary Jacob Lew told a Washington, DC think tank
on April 29, 2015, that Iran’s GDP shrank by 9% in the two years ending in
March 2014, and is now 15%-20% smaller than it would have been had post-
2010 sanctions not been imposed.65 The sanctions relief of the JPA enabled Iran
65 Department of the Treasury. Remarks of Secretary Jacob J. Lew at the Washington Institute for Near East Policy 30th
(continued...)
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to achieve slight growth of about 1%-1.5% for all of 2014, according to the
International Monetary Fund. Many Iranian businesses have failed, the number of
nonperforming loans held by Iranian banks increased to about 15%-30%,66 and
many employees in the private sector have gone unpaid or underpaid. The
unemployment rate is about 20%, although the Iranian government reports the
rate at 13%. The likely sanctions relief provided under a finalized nuclear deal is
likely to return Iran to about 2% growth in the first year if, as Secretary Lew
asserts, Iran uses the sanctions relief mostly to try to rebuild its civilian
economy.67
• Oil Exports. As noted in Table 2, sanctions drove Iran’s crude oil sales down
about 60% from the 2.5 mbd of sales in 2011, reducing Iran’s crude oil sales
revenue from $100 billion in 2011 to about $35 billion in 2013 and even less in
2014—in part because oil prices fell in the second half of 2014. The JPA caps
Iran’s crude oil exports at about 1.1 mbd.68 According to the comments by
Treasury Secretary Lew, cited above, U.S. sanctions have cost Iran over $160
billion in oil revenues since 2012.
• Falling Oil Production. When the JPA began implementation in early 2014,
Iran’s oil production stood at about 2.6-2.8 mbd down from nearly 4.0 mbd at the
end of 2011.69 Iran has avoided more dramatic production by storing about 40
million barrels on tankers in the Persian Gulf or in tanks on shore. According to
Treasury Secretary Lew (cited above), it is not certain that Iran could quickly
return its exports to pre-2012 levels even if sanctions were suspended, because
Iran’s infrastructure needs substantial improvement. However, others argue that
Iran’s oil exports would begin to rebound almost immediately after significant
sanctions relief because the stored oil could be released instantly. Iran’s existing
oil buyers could easily order more oil on a monthly basis, whereas exports to the
EU might take longer pending an EU decision to lift its Iran oil import ban.
• Hard Currency Inaccessible. Not only have Iran’s oil exports fallen by volume,
but Iran is not paid in hard currency for its oil (other than the $700 million per
month agreed under the JPA) and cannot access most of its hard currency held in
accounts abroad. The total Iranian hard currency reserves held in foreign banks
are estimated to be about $150 billion.70 Of that amount, about $120 billion is
reportedly held in foreign banks that are abiding by sanctions by refusing to
transfer the funds to Iran’s Central Bank.
• Currency Decline. Sanctions caused the value of the rial on unofficial markets to
decline about 56% from January 2012 until January 2014. The unofficial rate is
currently about 37,000 to the dollar, and the government has repeatedly adjusted
(...continued)
Anniversary Gala. April 29, 2015.
66 “Iran’s Pivotal Moment.” http://www.euromoney.com. September, 2014.
67 http://www.middleeasteye.net/news/iran-economy-could-grow-2-if-sanctions-are-lifted-748524949
68 “Why Higher Iran Oil Exports Are Not Roiling Nuclear Deal.” Reuters, June 13, 2014.
69 Rick Gladstone, “Data on Iran Dims Outlook for Economy,” New York Times, October 13, 2012.
70 Interview with President Obama. The Atlantic. May 21, 2015.
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Iran Sanctions
the official rate (currently about 27,000 to the dollar) to reduce the spread
between it and the unofficial rate.
• Inflation. The drop in value of the currency caused inflation to accelerate during
2011-2013. The estimated actual inflation rate was between 50% and 70% (a
higher figure than that acknowledged by Iran’s Central Bank). The sanctions
relief of the JPA has helped reduce the inflation rate to about 20%.
• Industrial Production. Iran’s economy is industrializing, but the manufacturing
sector remains dependent on imported parts. The decline of the rial and financial
sanctions that complicated obtaining trade credit have created difficulties for this
sector. Many Iranian manufacturers must pre-pay to obtain parts from abroad,
often through time-consuming and circuitous mechanisms. This difficulty is
particularly acute in the automotive sector; Iran’s production of automobiles fell
by about 60% from 2011 to 2013. Press reports say that the auto sector, and
manufacturing overall, has rebounded modestly since during the JPA.
Iran’s Economic Coping Strategies
Iran has had some success mitigating the economic effect of sanctions, primarily by reducing its
dependency on oil exports. Iran has key inherent economic strengths, including an educated
workforce—including the highest percentage of engineering graduates in the world—that is
familiar with the use of the Internet and other modern technologies.
Promoting Non-Oil Exports. Iran’s primary strategy has been to substitute for crude oil sales by
increasing sales of non-oil products. Some of the non-oil exports that have grown in recent years
include 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. Currently, non-oil exports generate about two-thirds of the revenue required to
fund Iran’s imports of goods and services, greatly reducing the proportion of funds that oil
exports contribute to Iran’s budget.71
Oil Products/Condensate Sales. Iran has sought to increase sales of oil products such as
petrochemicals and condensates, which are allowed under the JPA, to compensate for some lost
crude oil export revenue. In 2014, Iran exported to its main oil customers the equivalent of about
200,000 barrels per day of crude oil in condensates,72 producing about $4.7 billion in additional
revenue (but not in the form of retrievable hard currency) in the first half of 2014 as compared to
the latter half of 2013.73
Reallocation of Investment Funds and Import Substitution. Iranian manufacturers have increased
production of some goods as Iranians cut back on purchases of imported goods. This trend is
considered positive by Iranian economists and Iranian political leaders including Supreme Leader
Khamene’i who have long maintained that Iran should expand domestic manufacturing
capabilities and reduce dependence on oil revenues and 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.
71 Testimony of Patrick Clawson before the Senate Banking Committee. January 21, 2015.
72 Clifford Krauss. “With Gas Byproduct, Iran Sidesteps Sanctions.” New York Times, August 13, 2014.
73 “Iran Reaps Less Cash from Eased Sanctions Than Predicted.” op. cit.
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Partial Privatization. Some observers report that, over the past few years, portions of Iran’s state-
owned enterprises have been transferred to the control of quasi-governmental or partially private
entities. Some of them are apparently incorporated as holding companies, foundations, or
investment groups. Observers, using data from the Iranian Privatization Organization, say there
might be about 120 such entities and that they now control perhaps 50% of Iran’s GDP.74
Subsidy Reductions. In 2007, Ahmadinejad’s government instituted a program to wean the
population off of generous subsidies by compensating families with cash payments of about $40
per month. Gasoline prices began to run on a tiered system that brought them closer to regional
prices—and far above the subsidized price of 40 cents per gallon. However, as sanctions began to
crimp government revenues, in late 2012 Ahmadinejad postponed “phase two” of the subsidy
phase-out effort. In April 2014, Rouhani instituted phase two by raising gasoline prices further
and limiting the cash payments to only those families who could claim financial hardship. On
December 1, 2014, subsidies on bread were reduced and bread prices rose 30%. Rouhani also has
improved collections of taxes and of price increases for electricity and natural gas utilities.75
Import Restrictions. To conserve hard currency, Iran has reduced the supply of hard currency to
importers of luxury goods, such as cars or cellphones, in order to maintain hard currency supplies
to importers of essential goods. As noted above, the government has sought to align the official
“reference” rate with the free market (or “black market”) exchange rate.
Effect on Energy Sector Long-Term Development
ISA was enacted in large part to reduce Iran’s oil and gas production capacity over the longer
term by denying Iran the outside technology and investment to maintain, let alone increase,
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 billion-$145 billion in new investment by 2020 to keep oil production capacity from
falling.76 Of that amount, further development of the large South Pars gas field alone requires
$100 billion.77
Even though some international firms remain invested in Iran’s energy sector, observers at key
energy fields in Iran say there has been little evidence of foreign company development activity
sighted at Iran’s various oil and gas development sites over the past several years (see Table 5) as
energy firms apparently have sought to avoid triggering U.S. sanctions. Some investments have
avoided sanctions either through Administration waivers or invocation of the ISA “special rule.”
Other ongoing foreign investment projects have not been determined as ISA violations and may
still be under State Department investigation.
Some work abandoned by foreign investors has been assumed by domestic companies,
particularly those controlled or linked to the Revolutionary Guard (IRGC). Foreign firms are
reluctant to partner with IRGC firms because international sanctions target the IRGC and its
74 Kevan Harris. “Iran’s Political Economy Under and After the Sanctions.” Washington Post blogs, April 23, 2015.
75 Patrick Clawson testimony, January 21, 2015, op. cit.
76 Khajehpour presentation at CSIS, op. cit.
77 Iran Faces Steep Climb to Join Gas Superpowers by 2017. International Oil Daily, April 29, 2014.
Congressional Research Service
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corporate affiliates. The Iranian firms, in particular, are reportedly not as technically capable as
the international firms that have withdrawn.
The JPA did not ease sanctions against investing in Iran’s energy sector. However, the
implementation of the JPA, and the reaching of the April 2, 2015, framework nuclear accord, have
apparently caused some international firms to discuss with Iranian energy officials future
investment. 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 past
investments. Press reports in May 2015 indicated that representatives of U.S. energy firms are
planning to visit Tehran to discuss future investment opportunities in Iran, even though the
Administration has indicated that the ban on U.S. investment in Iran will not be altered in the
event of a comprehensive nuclear deal.78
Others maintain that Iran’s gas sector can compensate for declining oil exports, although Iran has
used its gas development primarily to re-inject 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.
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
February
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
(MEED Special Report, December 16, 2005, pp.
Lukoil (Russia)
48-50.)
No production to date;
Statoil and Norsk exited.
July 2000 Phase 4 and 5, South Pars (gas)
ENI
$1.9 billion
2 billion cu.
ft./day (cfd)
78 “U.S. Oil Delegation to Visit Iran
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
ENI exempted 9/30 based on pledge to exit Iran
Gas onstream as of Dec.
market
2004
March
Caspian Sea oil exploration—construction of
GVA Consultants (Sweden)
$225 million
NA
2001
submersible drilling rig for Iranian partner
(IPR Strategic Business Information Database,
March 11, 2001.)
June
Darkhovin (oil)
ENI
$1 billion
100,000 bpd
2001
(“Darkhovin Production Doubles.” Gulf Daily
Field in production
News, May 1, 2008.) ENI told CRS in April 2010 it
would close out all 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 exit
China $2.5
the Azadegan project entirely by selling its 10%
billion
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
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Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
Prospects for Iran Oil,” (http://www.reuters.com/
article/idUSN0317110720090703.)
October
Yadavaran (oil)
Sinopec (China), deal
$2 billion
300,000 bpd
2004
finalized Dec. 9, 2007
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)
February
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
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
Royal Dutch Shel and Repsol wil not pursue this
project any further
March
Esfahan refinery upgrade
Daelim (S. Korea)
NA
2007
(“Daelim, Others to Upgrade Iran’s Esfahan
Refinery.” Chemical News and Intelligence, March 19,
2007.)
July 2007 Phase 22, 23, 24—South Pars (gas)
Turkish Petroleum Company $12. billion
2 billion cfd
(TPAO)
Pipeline to transport Iranian gas to Turkey, and on
to Europe and building three power plants in Iran.
Contract not finalized to date.
Dec.
Golshan and Ferdowsi onshore and offshore
Petrofield Subsidiary of SKS
$15 billion
3.4 billion cfd
2007
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 on March
No production to date
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 reports
February
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
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 withdrawn
size)
from Iran.
2008
Kermanshah petrochemical plant (new
Uhde (Germany)
300,000 metric
construction)
tons/yr
GAO reports
June
Resalat Oilfield
Amona (Malaysia). Joined in
$1.5 billion
47,000 bpd
2008
June 2009 by CNOOC and
Status of work unclear
another China firm, COSL.
January
Bushehr Polymer Plants
Sasol (South Africa)
?
Capacity is 1
2009
million tons
Production of polyethelene at two polymer plants
per year.
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Iran Sanctions
Company(ies)/Status
Date Field/Project
(If Known)
Value
Output/Goal
in Bushehr Province.
Products are
exported from
GAO Jan. 7, 2014, report says Sasol has withdrawn
Iran.
from 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
(Oil and Natural Gas Corp.
from Indian
tonnes of LNG
bloc.
of India, Oil India Ltd., India
firms/$1.5
annual y by
Oil Corp. Ltd. in 2007); may
billion
2012
also include minor stakes by
Sonangol/$780
Sonanagol (Angola) and
million
PDVSA (Venezuela).
PDVSA
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. Some
information comes from various GAO reports, the latest of which was January 13, 2015 (GAO-15-258R).
Note: CRS has neither the mandate, the authority, nor the means to determine which of these projects, if any,
might constitute a violation of the Iran Sanctions Act. CRS has no way to confirm the precise status of any of the
announced investments; some investments may have been resold to other firms or terms altered since
agreement. In virtual y all cases, such investments and contracts represent private agreements between Iran and
its instruments and the investing firms, and firms are not necessarily required to confirm or publicly release the
terms of their arrangements with Iran. Reported $20 million+ investments in oil and gas fields, refinery upgrades,
and major project leadership are included in this table. Responsibility for a project to develop Iran’s energy
sector is part of ISA investment definition.
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Iran Sanctions
Effect on Gasoline Availability and Importation
As the enactment of U.S. sanctions on the sale of gasoline to Iran became increasingly likely in
2010, several suppliers apparently stopped selling gasoline to Iran.79 Others ceased after the
enactment of CISADA. 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.
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)80
Lukoil of Russia was reported to have ended sales to Iran in April 2010,81 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)82
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 reinsurance for gasoline shipments to Iran.
However, they reportedly have exited the market for insuring gasoline shipments for Iran83
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.
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.
79 Information in this section derived from Javier Blas, “Traders Cut Iran Petrol Line,” Financial Times, March 8, 2010.
80 http://www.ft.com/cms/s/0/009370f0-486e-11df-9a5d-00144feab49a.html.
81 http://www.defenddemocracy.org/index.php?option=com_content&task=view&id=11788115&Itemid=105.
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.
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Iran Sanctions
Emirates National Oil Company of UAE has been reported by GAO to still be selling to Iran, as have three other
UAE energy traders, FAL, Royal Oyster Group, and Speedy Ship (UAE/Iran).
Hin Leong Trading of Singapore has asserted that it is no longer selling gasoline to Iran. There is no current available
information on whether Kuo Oil of Singapore has or has not stopped selling gasoline to Iran.
Source: CRS conversations with various firms, various 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. 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 have suggested potential solutions. The JPA provides for the
international community to provide enhanced financial channels for Iran to import medicines,
although the exact mechanism has generally been limited to a U.S.-led information campaign for
international banks. In July 2014, the U.S. Administration asked European medical firms to
expedite sales of medical goods to Iran, and the Administration reportedly cleared banks in
Switzerland and Japan to process financing for the shipments.84
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
sell spare part and operating manuals 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. As noted
above, Iran’s efforts to deal with environment hazards and problems might be hindered by denial
of World Bank lending for that purpose.
Sanctions Easing Related to a Nuclear Deal
The following sanctions discuss sanctions relief provided or to be provided in connection with the
interim nuclear agreement and potential comprehensive nuclear agreement.
84 U.S. Pushes to Expedite Some Humanitarian Shipments to Iran. WSJ.com, July 28, 2014.
85 Thomas Erdbink, “Iran’s Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions,” July 14, 2012.
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Sanctions Eased by the JPA
U.S. officials have said that the JPA provides “limited, temporary, targeted, and reversible” easing
of international sanctions and that, despite visits to Iran by business delegations, there has not
been a decline in international compliance with the sanctions regime since JPA implementation
began. Under the JPA:86
• Iran’s current oil customers are not required reduce their oil purchases from Iran
“significantly” from the levels they were when the JPA went into effect. To avoid
penalizing these oil buyers while the JPA is in effect, 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 IFCA (Title
XII, subtitle D, of the FY2013 National Defense Authorization Act, P.L. 112-
239). The Administration also stated it would 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 NIOC. The
European Union has amended its own regulations to allow shipping insurers to
provide insurance for ships carrying oil from Iran.87 These waivers and sanctions
suspensions do not permit U.S. companies to trade in such goods with Iran.
• Iran is able to repatriate $700 million per month in oil sales proceeds while the
JPA is in effect and $65 million per month to make tuition payments for Iranian
students abroad (paid directly to the educational institutions). The waiver
authority under Section 1245(d)(1) of the FY2012 NDAA, discussed above,
enables Iran to receive these proceeds directly.
• The JPA permits Iran 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. To enable these transactions, the
Administration suspended application of Executive Orders 13622 and 13645,
several provisions of U.S.-Iran trade regulations, and several sections of IFCA.
• 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 committed
to license safety-related repairs and inspections inside Iran for certain Iranian
airlines. To implement this commitment, the Administration issued a new
“Statement of Licensing Policy” to enable U.S. aircraft manufacturers to sell the
appropriate equipment to Iranian airlines. 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.”
The Administration has suspended application of Executive Order 13382 and
certain provisions of U.S. trade regulations with Iran to allow the supply of
equipment to Iran Air.
86 The Administration sanctions suspensions and waivers are detailed at http://www.state.gov/p/nea/rls/220049.htm.
87 Daniel Fineren. “Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales.” Reuters, November 24, 2013.
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• The P5+1 and Iran set up a Joint Commission to evaluate P5+1 compliance with
its commitments for sanctions relief.
• The JPA requires that the P5+1 “not impose new nuclear-related sanctions,” if
Iran abides by its commitments under this deal, to the extent permissible within
their political systems.88
Sanctions Easing Under a Comprehensive Nuclear Deal
The prospects for finalizing a nuclear agreement (Joint Comprehensive Plan of Action, or JCPA)
has raised questions over the extent and the implications of the sanctions relief. Some of the
economic and other implications were discussed above in the section on the “Effectiveness of
Sanctions.” According to the White House fact sheet on the April 2, 2015, framework nuclear
accord, the following sanctions easing will occur if a deal is finalized:
• U.S and EU “nuclear -related sanctions” will be suspended after the IAEA has
verified that Iran has taken “key nuclear-related steps” and that U.N. sanctions
will be lifted after Iran completes additional nuclear-related commitments.
• According to a wide range of observers, the U.S. sanctions to be suspended in a
finalized deal (those that are considered “nuclear-related”) are mostly those
imposed since 2010, including (1) energy sanctions of the Iran Sanctions Act and
amendments to that Act made by CISADA, the ITRSHRA, and IFCA; (2) ISA
sanctions mandated by various executive orders and some of these post-2010
laws; (3) the FY2012 NDAA requiring cuts in purchases of Iranian oil; (4) core
CISADA provisions sanctioning foreign banks; (5) the executive order
sanctioning transactions with Iran’s auto sector and trading in the rial; and (6) the
EU oil and gas ban, other EU sanctions, and the ban on Iran’s use of the SWIFT
electronic payments system.
• U.S. sanctions on Iran for terrorism, human rights abuses, and ballistic missiles
will remain in place.
• U.S. sanctions that apparently will remain in place will be (1) E.O. 13224
sanctioning terrorism entities; (2) sanctions resulting from Iran’s place on the
“terrorism list”; (3) the ban on U.S. trade with and investment in Iran; (4) the
Iran-Iraq Arms Non-Proliferation Act; (5) the Iran-North Korea-Syria Non-
Proliferation Act; and (6) the Executive Orders and the provisions of CISADA
and the Iran Threat Reduction Act that pertain to human rights or democratic
change in Iran.
• If a dispute over Iran’s compliance with the accord cannot be resolved through a
to-be-established resolution mechanism, all U.N. sanctions could be reimposed.
This is a so-called “snap back” provision, and which Treasury Secretary Lew said
on April 29, 2015 (cited above) will not be subject to a veto by a permanent
member of the U.N. Security Council.
88 White House Office of the Press Secretary. “Fact Sheet: First Step Understandings Regarding the Islamic Republic of
Iran’s Nuclear Program.” November 23, 2013.
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Matters to be Clarified and Prognosis
Several issues remain to be clarified in a JCPA. Among them are (1) the sequencing and pace of
sanctions relief; and (2) the potential for an immediate re-imposition of sanctions should Iran be
found to be not complying with the terms of a finalized deal. And, some question whether
sanctions could ever be fully re-imposed.
Sequencing and Pace of Sanctions Relief
First and foremost are the precise requirements Iran must meet in order for sanctions relief to
begin. Iran’s Supreme Leader Ali Khamene’i has said that all agreed sanctions relief must be
provided upon signature of an agreement. However, even the fact sheet released by Iran refers to
sanctions relief upon “implementation” of the agreement—implying that Iran expects to have to
complete certain stipulated tasks before further sanctions relief would begin.89 Observers indicate
that it might take Iran about four months to complete the first set of required tasks.90 However,
based on Supreme Leader Khamene’i’s stated demands, it is likely that Iran will begin agitating
for sanctions relief very shortly after the agreement is signed.
Automatic Re-imposition of Sanctions (“Snap-Back”)
In an effort to accommodate the Iranian demands for immediate sanctions suspensions, press
reports indicate that President Obama has directed U.S. negotiators to try to focus on ways to put
sanctions back in place (“snap back”) if Iran violates the terms of the deal, rather than focus on
delaying sanctions relief.91 According to the April 2 framework agreement, if a dispute over Iran’s
compliance with the accord cannot be resolved through a to-be-established resolution mechanism,
all U.N. sanctions “could” be re-imposed. Treasury Secretary Lew said on April 29, 2015, that
this provision for a “snap back” of U.N. Security Council sanctions would not be subject to a veto
by any permanent member of the U.N. Security Council.92 Press reports quote unnamed P5+1
officials discussing several snap-back provision proposals, but it is unclear whether consensus has
been reached on any specific formulation. The dispute resolution mechanism will be outlined in a
finalized deal, but press reports indicate that a dispute resolution mechanism might be set up to
include representatives of the P5+1 countries and Iran.93
A related question is whether the effect of sanctions currently realized could ever be reconstituted
if sanctions are lifted as part of a JCPA. The effect of the sanctions depends largely on the degree
of international compliance and cooperation. A wide range of countries depend on energy and
other trade with Iran and might be reluctant to restore cooperation with U.S. sanctions unless Iran
commits clear and egregious violations of its commitments. Countries that do not wish to re-
impose their sanctions on Iran could argue that, because U.N. Security Council sanctions are
lifted, they are no longer bound to cooperate with U.S. sanctions.
89 http://iranmatters.belfercenter.org/blog/translation-iranian-factsheet-nuclear-negotiations.
90 Author conversations with experts in Washington, DC 2015.
91 Peter Baker. “President Favors Way to Give Iran Political Cover.” New York Times, April 18, 2015.
92 Department of the Treasury. Remarks of Secretary Jacob J. Lew at the Washington Institute for Near East Policy 30th
Anniversary Gala. April 29, 2015.
93 http://www.al-monitor.com/pulse/originals/2015/05/iran-us-p51-nuclear-dispute-mechanism.html.
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Suspension of Sanctions Versus Outright Lifting
Another question is whether Iran will be satisfied with suspension of sanctions rather than
outright lifting. The Administration has said that it would initially use waiver and other
authorities to implement sanctions relief.94 After testing Iran’s compliance over a period of “years
to come,” according to March 2015 testimony by then director of the Department of the
Treasury’s Office of Foreign Assets Control, Adam Szubin, the Administration would presumably
request that Congress repeal or terminate sanctions imposed by statute.95 However, it is likely that
some international firms, such as foreign banks that are inherently cautious, might refuse to
resume transactions with Iran as long as U.S. sanctions remain in law—whether or not the United
Nations has lifted sanctions. If such reluctance is widespread, Iran could potentially complain that
it is not receiving the sanctions relief that was promised. In that scenario, it is possible that Iran
might agitate for an outright lifting of sanctions by Congress, including potentially threatening to
pull out of the agreement.
Possible Sanctions and Other Legislative Action While Talks Continue
Another issue is whether the 114th Congress might seek to enact additional sanctions before an
accord is finalized. Supporters of enacting additional sanctions while negotiations are ongoing
express doubts that the likely deal will ensure that Iran’s nuclear program can only be used for
peaceful purposes and argue that the threat of additional sanctions could prod Iran into agreeing
to a deal that Congress considers acceptable. Those who take this view also dispute that Iran
would walk away from the negotiations if new sanctions are enacted. Israeli Prime Minister
Benjamin Netanyahu stated his support for these views in his address to a Joint Session of
Congress on March 3, 2015. President Obama has stated on several occasions that he will veto
any new Iran sanctions legislation while talks continue. However, this issue appears to have faded
since the April 2, 2015, framework accord is reached, and with the June 30, 2015, deadline to
finalize the accord imminent.
114th Congress: Nuclear Weapon Free Iran Act (S. 269) and S.Res. 40
At the start of the 114th Congress, some Members introduced legislation that would require a
congressional vote on any comprehensive nuclear deal and would stipulate additional sanctions
that would go into effect if stated deadlines for the comprehensive nuclear deal with Iran are not
met. A major initiative was draft legislation entitled the Nuclear Weapon Free Iran Act of 2015 (S.
269). In February 2015, the bill was marked up by the Senate Banking Committee, which has
jurisdiction over sanctions legislation affecting the U.S. financial system. However, President
Obama’s threat to veto the legislation appears to have contributed to a statement by its main
sponsors to delay further consideration of the bill as long as talks on finalizing a nuclear accord
continued. S. 269 contained elements of bills in the 113th Congress: S. 1881, the “Nuclear
Weapon Free Iran Act of 2013” and H.R. 850, a House bill that was passed 400-20 in July 2013,
including provisions that:
• would require Iran’s remaining oil customers to accelerate the reductions of their
imports of Iranian oil by reducing purchases by, collectively, an additional 1
94 http://thehill.com/blogs/blog-briefing-room/221528-kerry-congress-consulted-on-iran-but-dont-need-initial-vote.
95 http://www.pbs.org/newshour/rundown/president-obama-may-need-congress-defang-sanctions-iran/.
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million barrels per day (within one year of enactment). Countries that do not
“dramatically reduce” their Iran oil buys would lose their exemptions from U.S.
sanctions.
• would add sectors of the Iranian economy with which transactions would be
subject to sanctions (under IFCA; P.L. 112-239), including the automotive and
mining sectors or the shipbuilding, construction, engineering, and mining sectors.
• requiring the Administration to determine whether the Revolutionary Guard
should be named a Foreign Terrorist Organization.
• unlike S. 1881 from the 113th Congress, S. 269 does not set out the parameters of
a final accord that Congress would find acceptable as binding. The bill describes
Congress’s views of an acceptable deal in nonbinding preamble language.
• delineating that sanctions would take effect in successive months in late 2015.
The core provision adopts the elements of S. 1881 that would compel Iran’s
remaining oil customers to make “dramatic” (30%) cuts in purchases of Iranian
oil, every successive eight months, in order to retain an exemption of their banks
from U.S. sanctions.
President Obama’s stated intent to veto the Nuclear Free Iran Act apparently also contributed to
the introduction of alternative legislation that would not likely jeopardize the nuclear talks. S.Res.
40 was introduced on January 26, 2015, expressing the nonbinding sense of Congress that new
sanctions should be enacted if the talks fail to produce an accord.
Other Initiatives
A legislative initiative pending in the 114th Congress is a proposed amendment to a Senate
substitute version of the FY2016 National Defense Authorization Act (H.R. 1735). S.Amdt. 1710,
to S.Amdt S. 1463 (amendment in the nature of a substitute) proposes to extend the sunset date of
ISA for ten years, until December 31, 2026. S. 1463 is currently under consideration in the
Senate. The Administration might view termination of ISA at the end of 2016 as a means of
lifting some sanctions on Iran as part of a JCPA without requesting specific congressional action,
and the Administration presumably opposes this amendment. Such a proposal, if adopted, could
potentially be interpreted by Iran as a violation of the JPA commitment not to add any nuclear-
related sanctions while the JPA is in effect. Supporters of the amendment argue that extending
ISA’s termination date preserves a role for Congress in considering outright lifting of sanctions
and gives the Administration additional leverage to ensure Iran complies with a JCPA.
Legislation Requiring Congressional Review (P.L. 114-17)
Some in Congress asserted the need for formal congressional review of any comprehensive deal
with Iran. A congressional review requirement provision was included in S. 269, discussed above.
A separate bill, the Iran Nuclear Agreement Review Act of 2015 (S. 615/S. 625) was introduced
on February 27, 2015. S. 615 was ordered to be reported by the Senate Foreign Relations
Committee by a unanimous vote of the 19 Senators present. On May 7, 2015, by a vote of 98-1, it
was passed as a substitute for a House-passed bill, H.R. 1191, which was a revenue measure. It
subsequently passed the House and was signed into law (P.L. 114-17). The bill provides for the
following.
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• A 30-day congressional review period after which Congress could pass
legislation to approve or to disapprove of the deal, or do nothing. Such legislation
would be subject to possible veto by the President. (If the agreement is presented
to Congress between July 10 and September 7, 2015, the review period is 60
days.)
• During the review period, the President is barred from using waiver authority to
provide any additional sanctions relief to Iran beyond that already provided under
the existing JPA. The period of sanctions relief injunction extends for an
additional 12 days if Congress passes a resolution to disapprove the finalized
accord, and a further 10 days if the President vetoes the resolution of disapproval.
• If a resolution to disapprove the accord is enacted (presumably by overriding a
presidential veto), sanctions relief provided to Iran by laws enacted by Congress,
including that provided under the JPA using waiver authority, would be ended.
• Every 90 days after the congressional review, the President is required to certify
that Iran is fully complying with the agreement, according to criteria stipulated in
the bill. If the President does not make the required certification of Iranian
compliance, Congress “may” initiate within 60 days “expedited consideration” of
legislation that would reimpose any Iran sanctions that the President had
suspended through use of waiver or other authority. As is any legislation, such
“snap back” sanctions legislation would be subject to potential presidential veto.
• The bill requires an Administration report every 180 days on Iran’s nuclear
program and Iran’s compliance with the agreement during the period covered in
the report. The report is to include not only Iran’s compliance with its nuclear
commitments but also whether Iranian banks are involved in terrorism financing;
Iran’s ballistic missile advances; and whether Iran continues to support terrorism.
The Administration initially had stated opposition to the legislation, asserting that Congress
already had involvement in an Iran nuclear deal with Iran through its legislative powers to decide
whether to repeal or amend existing sanctions laws. However, the Administration asserted that the
version of the bill that was reported out by the Senate Foreign Relations Committee met the
Administration’s criteria and that President Obama would sign it—if it remained in that form
throughout the remainder of the legislative process. It remained in that form through Senate
passage; no amendments were adopted. It might be voted on in the House on May 13, 2015.
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 no comprehensive nuclear deal is reached and
Iran returns to expanding 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.
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• 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. This concept would likely require support
from the U.N. Security Council. Some advocate a 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.
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• 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.
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.
Sanctions imposed, revoked, or exempted under the Iran Sanctions Act, CISADA, and IFCA are discussed
above and not included in this table.)
Entities Sanctioned Under Resolution 1737
Atomic Energy Organization of Iran (AEIO) Mesbah Energy Company (Arak supplier); Kalaye Electric (Natanz
supplier); Pars Trash Company (centrifuge program); Farayand Technique (centrifuge program); Defense Industries
Organization (DIO); 7th of Tir (DIO subordinate); Shahid Hemmat Industrial Group (SHIG)—missile program; Shahid
Bagheri Industrial Group (SBIG)—missile program; Fajr Industrial Group (missile program); Mohammad Qanadi, AEIO
Vice President; Behman Asgarpour (Arak manager); Ehsan Monajemi (Natanz construction manager); Jafar
Mohammadi (Adviser to AEIO); Gen. Hosein Salimi (Commander, IRGC Air Force); Dawood Agha Jani (Natanz
official); Ali Hajinia Leilabadi (director of Mesbah Energy); Lt. Gen. Mohammad Mehdi Nejad Nouri (Malak Ashtar
University of Defence Technology rector); Bahmanyar Morteza Bahmanyar (AIO official); Reza Gholi Esmaeli (AIO
official); Ahmad Vahid Dastjerdi (head of Aerospace Industries Org., AIO); Maj. Gen. Yahya Rahim Safavi (Commander
in Chief, IRGC)
Entities/Persons Added by Resolution 1747
Ammunition and Metallurgy Industries Group (controls 7th of Tir); Parchin Chemical Industries (branch of DIO); Karaj
Nuclear Research Center; Novin Energy Company; Cruise Missile Industry Group; Sanam Industrial Group
(subordinate to AIO); Ya Mahdi Industries Group; Kavoshyar Company (subsidiary of AEIO); Sho’a Aviation
(produces IRGC light aircraft for asymmetric warfare); Bank Sepah (funds AIO and subordinate entities); Esfahan
Nuclear Fuel Research and Production Center and Esfahan Nuclear Technology Center; Qods Aeronautics Industries
(produces UAV’s, para-gliders for IRGC asymmetric warfare); Pars Aviation Services Company (maintains IRGC Air
Force equipment); Gen. Mohammad Baqr Zolqadr (IRGC officer serving as deputy Interior Minister; Brig. Gen.
Qasem Soleimani (Qods Force commander); Fereidoun Abbasi-Davani (senior defense scientist); Mohasen
Fakrizadeh-Mahabai (defense scientist); Seyed Jaber Safdari (Natanz manager); Mohsen Hojati (head of Fajr Industrial
Group); Ahmad Derakshandeh (head of Bank Sepah); Brig. Gen. Mohammad Reza Zahedi (IRGC ground forces
commander); Amir Rahimi (head of Esfahan nuclear facilities); Mehrdada Akhlaghi Ketabachi (head of SBIG); Naser
Maleki (head of SHIG); Brig. Gen. Morteza Reza’i (Deputy commander-in-chief, IRGC); Vice Admiral Ali Akbar
Ahmadiyan (chief of IRGC Joint Staff); Brig. Gen. Mohammad Hejazi (Basij commander)
Entities Added by Resolution 1803
Thirteen Iranians named in Annex 1 to Resolution 1803; al reputedly involved in various aspects of nuclear program.
Bans travel for five named Iranians.
Electro Sanam Co.; Abzar Boresh Kaveh Co. (centrifuge production); Barzaganin Tejaral Tavanmad Saccal; Jabber Ibn
Hayan; Khorasan Metallurgy Industries; Niru Battery Manufacturing Co. (Makes batteries for Iranian military and
missile systems); Ettehad Technical Group (AIO front co.); Industrial Factories of Precision; Joza Industrial Co.;
Pshgam (Pioneer) Energy Industries; Tamas Co. (involved in uranium enrichment); Safety Equipment Procurement
(AIO front, involved in missiles)
Entities Added by Resolution 1929
Over 40 entities added; makes mandatory a previously nonbinding travel ban on most named Iranians of previous
resolutions. Adds one individual banned for travel—AEIO head Javad Rahiqi
Amin Industrial Complex; Armament Industries Group; Defense Technology and Science Research Center (owned or
control ed by Ministry of Defense); Doostan International Company; Farasakht Industries; First East Export Bank, PLC
(only bank added by Resolution 1929); Kaveh Cutting Tools Company; M. Babaie Industries; Malek Ashtar University
(subordinate of Defense Technology and Science Research Center, above); Ministry of Defense Logistics Export (sel s
Iranian made arms to customers worldwide); Mizan Machinery Manufacturing; Modern Industries Technique
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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
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
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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
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.
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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.
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
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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
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.
August 29, 2014 (by both State and Treasury)
By State: Organization of Defensie Innovation and Research (nuclear weapons research); Nuclear Science and
Technology Research Institute (implements nuclear projects including heavy water reactor at Arak); Jahan Tech
Rooyan Pars: and Mandegar Baspar Kimiya Company (latter two are involved in procuring carbon fiber for proscribed
aspects of Iran’s nuclear program).
By Treasury: Mohammad Javad and Arman Imanirad (for acting on behalf of Aluminat, which procures aluminum
products for Iran’s nuclear program); Nefertiti Shipping (IRISL’s agent in Egypt); Sazeh Morakab (provides services to
Shahid Hemat Industrial Group, SHIG, and Iran’s Aircraft Manufacturing Industrial Co., HESA); Ali Gholami and
Marzieh Bozorg (officials of Sazeh Morakab). SHIG aliases identified: Sahand Aluminum Parts Co and Ardalan
Machineries Co.
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; Goodwill 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—Hezbollah 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)
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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 al egedly providing support to Hezbol ah
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)
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).
August 29, 2014
Meraj Air (for delivering weapons to Syria from Iran); Caspian Air (supports IRGC by transporting personnel and
weapons to Syria); Sayyed Jabar Hosseini (manager of Liner Transport Kish which IRGC uses to support terrorist
activities outside Iran); Pioneer Logistics (Turkey, helps Mahan Air evade sanctions); Asian Aviation Logistics
(Thailand, helps Mahan Air evade sanctions). Pouya Air designated as alias of Yas Air.
May 21, 2015
Al Naser Airlines (Iraq) for transferring nine aircraft to Mahan Air, which is a 13224 designee: Issam Shamout, a Syrian
businessman, and his company Sky Blue Bird Aviation, for the same transaction.
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Entities Sanctioned Under the Iran North Korea Syria Nonproliferation Act or Executive Order 12938
The designations are under the Iran, North Korea, Syria Nonproliferation 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, removed
shel s to Iran. (Also designated under Executive Order 12938)
May 21, 2010
13 entities sanctioned including companies from Russia, China, Belarus, Macedonia, April 7, 2004
North Korea, UAE, and Taiwan.
14 entities from China, North Korea, Belarus, India (two nuclear scientists, Dr.
September 29, 2004
Surendar and Dr. Y.S.R. Prasad), Russia, Spain, and Ukraine.
14 entities, mostly from China, for al eged supplying of Iran’s missile program.
December 2004 and January
Many, such as North Korea’s Changgwang Sinyong and China’s Norinco and Great 2005
Wall Industry Corp, have been sanctioned several times previously. Newly
sanctioned entities included North Korea’s Paeksan Associated Corporation, and
Taiwan’s Ecoma Enterprise Co.
9 entities, including those from China (Norinco yet again), India (two chemical
December 26, 2005
companies), and Austria. Sanctions against Dr. Surendar of India (see September
29, 2004) were ended, presumably because of information exonerating him.
7 entities. Two Indian chemical companies (Balaji Amines and Prachi Poly
August 4, 2006 (see below for
Products); two Russian firms (Rosobornexport and aircraft manufacturer Sukhoi);
Rosobornexport removal)
two North Korean entities (Korean Mining and Industrial Development, and Korea
Pugang Trading); and one Cuban entity (Center for Genetic Engineering and
Biotechnology).
9 entities. Rosobornexport, Tula Design, and Komna Design Office of Machine
January 2007 (see below for
Building, and Alexei Safonov (Russia); Zibo Chemical, China National
Tula and Rosoboronexport
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.
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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
January 8, 2008
Ahmad Forouzandeh. Commander of the Qods Force Ramazan Headquarters, accused of fomenting sectarian
violence in Iraq and of organizing training in Iran for Iraqi Shi te militia fighters; Abu Mustafa al-Sheibani. Iran based
leader of network that funnels Iranian arms to Shiite militias in Iraq; Isma’il al-Lami (Abu Dura). Shiite militia leader,
breakaway from Sadr Mahdi Army, alleged to have committed mass kidnapings and planned assassination attempts
against Iraqi Sunni politicians; Mishan al-Jabburi. Financier of Sunni insurgents, owner of pro-insurgent Al-Zawra
television, now banned; Al Zawra Television Station
July 2, 2009
Khata’ib Hezbol ah (pro-Iranian Mahdi splinter group); Abu Mahdi al-Muhandis
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Iranians Sanctioned Under September 29, 2010, Executive Order 13553 on Human Rights Abusers
September 29, 2010
1. IRGC Commander Mohammad Ali Jafari
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
February 23, 2011
9. Tehran Prosecutor General Abbas Dowlatabadi (appointed August 2009). Has 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)
June 9, 2011
11. Islamic Revolutionary Guard Corps (IRGC)
12. Basij Resistance Force
13. Law Enforcement Forces (LEF)
14. LEF Commander Ismail Ahmad Moghadam
February 16, 2012
15. Ministry of Intelligence and Security of Iran (MOIS)
May 30, 2013
16. Ashgar Mir-Hejazi for human rights abuses on/after June 12, 2009, and for providing material support to the IRGC
and MOIS.
December 30, 2014
Abyssec, for training the IRGC in cyber tradecraft and supporting its development of offensive information operations
capabilities
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)
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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).
Entities Names as Iranian Government Entities Under Executive Order 13599
February 12, 2012
Central Bank of Iran (aka Bank Markazi)
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)
58 vessels of National Iranian Tanker Company (NITC)
20 banks: Ansar Bank; Future Bank B.S.C; Post Bank of Iran; Dey Bank; Eghtesad Novin Bank; Hekmat Iranian Bank;
Iran Zamin Bank; Islamic Regional Cooperation Bank; Joint Iran-Venezuela Bank; Karafarin Bank; Mehr Iran Credit
Union Bank; Parsian Bank; Pasargad Bank; Saman Bank; Sarmayeh Bank; Tat Bank; Tosee Taavon Bank; and Tourism
Bank.
March 14, 2013:
Dimitris Cambis and several affiliated firms named in Treasury Dept. press release.
May 9, 2013:
Sambouk Shipping FZC, which is tied to Dr. Dimitris Cambis and his network of front companies.
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.
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.
August 29, 2014
Five Iranian banks: Khavarmianeh Bank, Ghavamin Bank, Gharzolhasaneh Bank, Kish International Bank, and
Kafolatbank (Tajikistan).
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)
August 29, 2014:
Asia Bank (for delivering from Moscow to Tehran of $13 million in U.S. bank notes paid to representatives of the
Iranian government).
December 30, 2014
Five individuals and one company for helping Iran acquire U.S. banknotes: Hossein Zeidi, Seyed Kamal Yasini, Azizullah
Qulandary, Asadollah Seifi, Teymour Ameri, and Belfast General Trading.
Anahita Nasirbeik – Asia Bank official (see above)
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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)
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.
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
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.
May 23, 2014:
Morteza Tamaddon for cutting mobile phone communications and harassing opposition leaders Mir Hosein Musavi
and Mehdi Karrubi when Tamaddon was governor-general of Tehran Province in 2009.
December 30, 2014
Douran Software Technologies, for acting on behalf of the Committee to Determine Instances of Criminal Content
(see above).
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)
August 29, 2014
Faylaca Petroleum (for obscuring the origin of Iranian sales of gas condensates); Lissome Marine Services LLC and six
of its vessels (for supporting NITC with ship-to-ship transfers); Abdelhak Kaddouri (manages Iranian front comp;anies
on behalf of NICO); Mussafer Polat (for obscuring origin of Iran’s gas condensate sales); Seyedeh Hanje Seyed Nasser
Seyyedi (managing director of Faylaca).
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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