U.S. sanctions policy have had a substantial effect on Iran's economy and on some major strategic decisions, but little or no effect on Iran's regional malign activities. During 2012-2015, when the global community was relatively united in pressuring Iran, Iran's economy shrank by 9% per year, crude oil exports fell from about 2.5 million barrels per day (mbd) to about 1.1 mbd, and Iran was unable to repatriate more than $120 billion in reserves held in banks abroad. The 2015 multilateral nuclear accord (Joint Comprehensive Plan of Action, or JCPOA) provided Iran broad relief from the international and U.S. secondary sanctions as the U.S. Administration waived relevant sanctions, revoked relevant executive orders (E.O.s), and corresponding U.N. and EU sanctions were lifted. Remaining in place were a general ban on U.S. trade with Iran and sanctions imposed on Iran's support for regional governments and armed factions, its human rights abuses, its efforts to acquire missile and advanced conventional weapons capabilities, and the Islamic Revolutionary Guard Corps (IRGC). Some additional sanctions on these entities and activities were made mandatory by the Countering America's Adversaries through Sanctions Act (CAATSA, P.L. 115-44), which also increases sanctions on Russia and North Korea.
Under U.N. Security Council Resolution 2231, nonbinding U.N. restrictions on Iran's development of nuclear-capable ballistic missiles and a binding ban on its importation or exportation of arms remain in place for several years. However, Iran has continued to support regional armed factions and to develop ballistic missiles despite the U.N. restrictions, and did so even when strict international economic sanctions were in place during 2010-2015.
JCPOA sanctions relief enabled Iran to increase its oil exports to nearly pre-sanctions levels, regain access to foreign exchange reserve funds and reintegrate into the international financial system, achieve about 7% yearly economic growth, attract foreign investments in key sectors, and buy new passenger aircraft. The sanctions relief contributed to Iranian President Hassan Rouhani's reelection in the May 19, 2017, vote. Yet, perceived economic grievances still sparked protests in December 2017-January 2018.
On May 8, 2018, President Trump announced that the United States would no longer participate in the JCPOA and that all U.S. secondary sanctions suspended to implement the JCPOA would be reimposed after a "wind-down period" of 180 days (ending November 4, 2018). Some of the sanctions, but not on energy or banking transactions, went back into effect after a 90-day wind-down period (August 6). The Administration has indicated it will not support requests by foreign governments or companies for exemptions to these sanctions. U.S. licenses for the sale by Airbus and Boeing of commercial aircraft to Iran Air and other Iranian airlines have been revoked, causing cancellations of sales. The reimposition of U.S. sanctions has begun to harm Iran's economy as major companies exit the Iranian economy rather than risk being penalized by the United States. Iran's oil exports are decreasing and difficulties paying Iran for oil with hard currency are evident. The value of Iran's currency has sharply declined and economic-based unrest has continued, although not to the point where the regime is threatened. But it remains uncertain whether Iran's economy will be damaged to the extent it was during 2012-2015, because the European Union and other countries are trying to keep the economic benefits of the JCPOA flowing to Iran in order to persuade Iran to remain in the JCPOA.
See also CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by [author name scrubbed] and [author name scrubbed]; and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by [author name scrubbed].
U.S. sanctions—and U.S. attempts to achieve imposition of multilateral and international sanctions on Iran—have been a significant component of U.S. Iran policy since Iran's 1979 Islamic Revolution that toppled the Shah of Iran, a U.S. ally. 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. After the mid-2000s, U.S. and international sanctions focused largely on ensuring that Iran's nuclear program is for purely civilian uses. During 2010-2015, the international community cooperated closely with a U.S.-led and U.N.-authorized sanctions regime in pursuit of the goal of persuading Iran to agree to limits to its nuclear program. Still, sanctions against Iran have multiple objectives and address multiple perceived threats from Iran simultaneously.
This report analyzes U.S. and international sanctions against Iran. CRS has no way to independently corroborate whether any individual or other entity might be in violation of U.S. or international sanctions against Iran. The report tracks "implementation" of the various U.S. laws and Executive Orders as designations and imposition of sanctions. Some sanctions require the blocking of U.S.-based property of sanctioned entities. CRS has not obtained information from the Executive branch indicating that such property has been blocked, and it is possible that sanctioned entities do not have any U.S. assets that could be blocked.
The sections below are grouped by function, in the chronological order in which these themes have emerged.1
U.S. sanctions on Iran were first imposed during the U.S.-Iran hostage crisis of 1979-1981, in the form of executive orders issued by President Jimmy Carter blocking nearly all Iranian assets held in the United States. Many of these assets were unblocked by subsequent orders when the crisis was resolved in early 1981 in accordance with the "Algiers Accords." Assets still frozen are analyzed below.
The Accords established a "U.S.-Iran Claims Tribunal" at the Hague that continues to arbitrate cases resulting from the 1980 break in relations and freezing of some of Iran's assets. All of the 4,700 private U.S. claims against Iran were resolved in the first 20 years of the Tribunal, resulting in $2.5 billion in awards to U.S. nationals and firms.
The major government-to-government cases involved Iranian claims for compensation for hundreds of foreign military sales (FMS) cases that were halted in concert with the rift in U.S.-Iran relations when the Shah's government fell in 1979. In 1991, the George H. W. Bush Administration paid $278 million from the Treasury Department Judgment Fund to settle FMS cases involving weapons Iran had received but which were in the United States undergoing repair and impounded when the Shah fell.
On January 17, 2016, the day after Implementation Day of the JCPOA, the United States announced it had settled with Iran for FMS cases involving weaponry the Shah was paying for (fund deposited into a DOD-managed "Iran FMS Trust Fund") but were not completed and delivered to Iran when the Shah fell. The Trust Fund had a balance after 1990—the year $200 million was paid to Iran to settle some FMS cases—of about $400 million. Under the 2016 settlement, the United States sent Iran the $400 million balance in Trust Fund plus $1.3 billion in accrued interest, paid from the Department of the Treasury's "Judgment Fund." In order not to violate U.S. regulations barring direct U.S. dollar transfers to Iranian banks, the funds were remitted to Iran in late January and early February 2016 in foreign hard currency from the central banks of the Netherlands and of Switzerland. Some remaining claims involving the FMS program with Iran remain under arbitration at the Tribunal.
Iranian assets in the United States are blocked under several provisions, including Executive Order 13599 of February 2010. The United States did not commit to unblock any of these assets under the JCPOA. About $1.9 billion in blocked Iranian assets are bonds belonging to Iran's Central Bank, frozen in a Citibank account in New York belonging to Clearstream, a Luxembourg-based securities firm, in 2008. The funds were blocked on the grounds that Clearstream had improperly allowed those funds to access the U.S. financial system.. Another $1.67 billion in principal and interest payments on that account were moved to Luxembourg and are not blocked. About $50 million of Iran's assets frozen in the United States consists of Iranian diplomatic property and accounts, including the former Iranian embassy in Washington, DC, and 10 other properties in several states, along with related bank accounts.2
Among other frozen Iranian assets are real estate holdings of the Assa Company, a UK-chartered entity, which allegedly was maintaining the interests of Iran's Bank Melli in a 36-story office building in New York City and several other properties around the United States (in Texas, California, Virginia, Maryland, and other parts of New York City). An Iranian foundation, the Alavi Foundation, allegedly is an investor in the properties. The U.S. Attorney for the Southern District of New York blocked these properties in 2009. The Department of the Treasury report avoids valuing real estate holdings, but public sources assess these blocked real estate assets at nearly $1 billion. In June 2017, litigation won the U.S. government control over the New York City office building,
There are a total of about $46 billion in court awards that have been made to victims of Iranian terrorism. These include the families of the 241 U.S. soldiers killed in the October 23, 1983, bombing of the U.S. Marine barracks in Beirut. U.S. funds equivalent to the $400 million balance in the DOD account (see above) have been used to pay a small portion of these judgments. The Algiers Accords apparently precluded compensation for the 52 U.S. diplomats held hostage by Iran from November 1979 until January 1981. The FY2016 Consolidated Appropriation (Section 404 of P.L. 114-113) set up a mechanism for paying damages to the U.S. embassy hostages and other victims of state-sponsored terrorism using settlement payments paid by various banks for concealing Iran-related transactions, and proceeds from other Iranian frozen assets. In April 2016, the U.S. Supreme Court determined the Central Bank assets discussed above could be used to pay the terrorism judgments, and the proceeds from the sale of the frozen real estate assets mentioned above will likely be distributed to victims of Iranian terrorism as well.3 On the other hand, in March 2018, the U.S. Supreme Court ruled that U.S. victims of an Iran-sponsored terrorist attack could not seize a collection of Persian antiquities on loan to a University of Chicago museum to satisfy a court judgment against Iran. For further information, see CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by [author name scrubbed] and CRS Legal Sidebar LSB10104, It Belongs in a Museum: Sovereign Immunity Shields Iranian Antiquities Even When It Does Not Protect Iran, by [author name scrubbed].
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.
Executive Order 13599, issued February 5, 2012, directs the blocking of U.S.-based assets of entities determined to be "owned or controlled by the Iranian government." The order was issued to implement Section 1245 of the FY2012 National Defense Authorization Act (P.L. 112-81) that imposed secondary U.S. sanctions on Iran's Central Bank. The Order requires that any U.S.-based assets of the Central Bank of Iran, or of any Iranian government-controlled entity, be blocked by U.S. banks. The order goes beyond the regulations issued pursuant to the 1995 imposition of the U.S. trade ban with Iran, in which U.S. banks are required to refuse such transactions but to return funds to Iran. Even before the issuance of the Order, and in order to implement the ban on U.S. trade with Iran (see below) successive Administrations had designated many entities as "owned or controlled by the Government of Iran."
Numerous designations have been made under Executive Order 13599, including the June 4, 2013, naming of 38 entities (mostly oil, petrochemical, and investment companies) that are components of an Iranian entity called the "Execution of Imam Khomeini's Order" (EIKO).4 EIKO was characterized by the Department of the Treasury as an Iranian leadership entity that controls "massive off-the-books investments…"
Implementation of the U.S. JCPOA Withdrawal. To implement the JCPOA, many 13599-designated entities specified in the JCPOA (Attachment 3) were "delisted" from U.S. secondary sanctions (no longer considered "Specially Designated Nationals," SDNs). The delisted entities are presented in the tables at the end of the report. However, U.S. persons (or foreign entities owned or controlled by a U.S. person) continued to be prohibited from conducting transactions with these entities under Iran Transactions Regulations. The Treasury Department announced on May 8, 2018, in concert with the U.S. withdrawal from the JCPOA, that the 13599-designated entities that were delisted as SDNs will be relisted as SDNs on November 5, 2018.5
Most of the hostage crisis-related sanctions were lifted upon resolution of the crisis in 1981. The United States began imposing sanctions against Iran again in the mid-1980s for its support for regional groups committing acts of terrorism. The Secretary of State designated Iran a "state sponsor of terrorism" on January 23, 1984, following the October 23, 1983 bombing of the U.S. Marine barracks in Lebanon by elements that later established Lebanese Hezbollah. This designation triggers substantial sanctions on any nation so designated.
None of the laws or Executive Orders in this section were waived or revoked to implement the JCPOA. No entities discussed in this section were "delisted" from sanctions under the JCPOA.
The U.S. naming of Iran as a "state sponsor of terrorism"—commonly referred to as Iran's inclusion 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 as follows:
The terrorism list designation, and other U.S. sanctions laws barring assistance to Iran, do not bar U.S. 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 for 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 country's regime has changed: the President can remove a country from the list immediately by certifying that regime 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, and blocking the removal would require a veto override. |
Section 330 of the Anti-Terrorism and Effective Death Penalty Act (P.L. 104-132) added a Section 40A to the Arms Export Control Act that prohibits the sale or licensing of U.S. defense articles and services to any country designated (by each May 15) as "not cooperating fully with U.S. anti-terrorism efforts." The President can waive the provision upon determination that a defense sale to a designated country is "important to the national interests" of the United States.
Every May since the enactment of this law, Iran has been designated as a country that is "not fully cooperating" with U.S. antiterrorism efforts. However, the effect of the designation is largely mooted by the many other authorities that prohibit U.S. defense sales to Iran.
Executive Order 13324 (September 23, 2001) mandates the freezing of the U.S.-based assets of and a ban on U.S. transactions with entities determined by the Administration 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, initially targeting Al Qaeda.
E.O. 13224 is not specific to Iran and does not explicitly target Iranian arms exports to movements, governments, or groups in the Middle East region. However, successive Administrations have used the Order—and the orders discussed immediately below—to sanction such Iranian activity by designating persons or entities that are involved in the delivery or receipt of such weapons shipments. Some persons and entities that have been sanctioned for such activity have been cited for supporting groups such as the Afghan Taliban organization and the Houthi rebels in Yemen, which are not named as terrorist groups by the United States.
Section 105 of CAATSA, signed on August 2, 2017, mandates the imposition of E.O. 13324 penalties on the Islamic Revolutionary Guard Corps (IRGC) and its officials, agents, and affiliates by October 30, 2017 (90 days after enactment). The IRGC was named as a terrorism-supporting entity under E.O 13224 within that deadline. The Treasury Department made the designation of the IRGC as a terrorism-supporting entity under that E.O. on October 13, 2017.
As noted, no entities designated under E.O. 13224 were delisted to implement the JCPOA. Additional Iran-related entities have been designated under the Order since JCPOA implementation, as shown in the table at the end of this report.
Some sanctions have been imposed with the specific objective of trying to curtail Iran's destabilizing influence in the region.
In 1995, the Clinton Administration expanded U.S. sanctions against Iran by issuing Executive Order 12959 (May 6, 1995) banning U.S. trade with and investment in Iran. The order was issued under the authority primarily of the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. 1701 et seq.),6 which gives the President wide powers to regulate commerce with a foreign country when a "state of emergency" is declared in relations with that country. E.O. 12959 superseded Executive Order 12957 (March 15, 1995) barring U.S. investment in Iran's energy sector, which accompanied President Clinton's declaration of a "state of emergency" with respect to Iran. Subsequently, E.O 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 the "state of emergency" with respect to Iran. IEEPA gives the President the authority to alter regulations to license transactions with Iran—regulations enumerated in Section 560 of the Code of Federal Regulations (Iranian Transactions Regulations, ITRs).
Section 103 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) codified the trade ban and reinstated the full ban on imports that was relaxed by April 2000 regulations that allowed importation into the United States of Iranian nuts, fruit products (such as pomegranate juice), carpets, and caviar. U.S. imports from Iran after that time were negligible.7 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 the President notifies Congress 15 days in advance (or three days in advance if there are "exigent circumstances").
In accordance with the JCPOA, the ITRs were relaxed to allow U.S. importation of the Iranian luxury goods discussed above (carpets, caviar, nuts, etc.), but not to permit general U.S.-Iran trade. U.S. regulations were also altered to permit the sale of commercial aircraft to Iranian airlines that are not designated for sanctions. The modifications were made in the Departments of State and of the Treasury guidance issued on Implementation Day and since.8 In concert with the May 8, 2018, U.S. withdrawal from the JCPOA, the easing of the regulations to allow for importation of Iranian carpets and other luxury goods were reversed on August 6, 2018.
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 above and enumerated in regulations administered by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury.
The ITRs do not ban subsidiaries of U.S. firms from dealing with Iran, as long as the subsidiary is not "controlled" by the parent company. Most foreign subsidiaries are legally considered foreign persons 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 (ITRSHRA, P.L. 112-158) holds "controlled" foreign subsidiaries of U.S. companies to the same standards as U.S. parent firms, defining a controlled subsidiary as (1) one that is more than 50% owned by the U.S. parent; (2) one in which the parent firm holds a majority on the Board of Directors of the subsidiary; or (3) one in which the parent firm directs the operations of the subsidiary. No waiver is specifically provided under Section 218.
JCPOA Regulations and Reversal. To implement the JCPOA, the United States has licensed "controlled" foreign subsidiaries to conduct transactions with Iran that are permissible under JCPOA (almost all forms of civilian trade). The Administration asserts that the President has authority under IEEPA to license transactions with Iran, the ITRSHRA notwithstanding. This was implemented with the Treasury Department's issuance of "General License H: Authorizing Certain Transactions Relating to Foreign Entities Owned or Controlled by a United States Person."14 This licensing policy will revert to pre-JCPOA status as of November 5, 2018.
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Trade Ban Easing and Termination Termination: Section 401 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195) provides for the President to terminate the trade ban if the Administration certifies to Congress that Iran 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 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. There is no similar provision in CISADA to ease the ban on U.S. imports from Iran. The State and Treasury Department guidance issued on Implementation Day asserts that the statement of licensing policy fulfills the requirements of Section 103 of CISADA. |
In 1996, Congress and the executive branch began a long process of pressuring Iran's vital energy sector in order to deny Iran the financial resources to support terrorist organizations and other armed factions or to further its nuclear and WMD programs. Iran's oil sector is as old as the petroleum industry itself (early 20th century), and Iran's onshore oil fields are in need of substantial investment. Iran has 136.3 billion barrels of proven oil reserves, the third largest after Saudi Arabia and Canada. Iran's has large natural gas resources (940 trillion cubic feet, exceeded only by Russia), but Iran's gas export sector remains small but is expanding—most of Iran's gas is injected into its oil fields to boost their production. The energy sector still generates about 20% of Iran's GDP and as much as 30% of government revenue.
The Iran Sanctions Act (ISA) has been a pivotal component of U.S. sanctions against Iran's energy sector. Since its enactment in 1996, ISA's provisions have been expanded and extended to other Iranian industries. 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. It was first enacted as The Iran and Libya Sanctions Act (ILSA, (P.L. 104-172, signed on August 5, 1996) but 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 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 added by amendments over time, are detailed below:
The core trigger of ISA when first enacted was a requirement that the President sanction companies (entities, persons) that make an "investment"15 of more than $20 million16 in one year in Iran's energy sector.17 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 CISADA).
This provision of ISA was not waived under the JCPOA.
The Iran Freedom Support Act (P.L. 109-293, signed September 30, 2006) added Section 5(b)(1) of ISA, subjecting to ISA sanctions firms or persons determined to have sold to Iran (1) "chemical, biological, or nuclear weapons or related technologies" or (2) "destabilizing numbers and types" of advanced conventional weapons. Sanctions can be applied if the exporter knew (or had cause to know) that the end-user of the item was Iran. The definitions do not specifically include ballistic or cruise missiles, but those weapons could be considered "related technologies" or, potentially, a "destabilizing number and type" of advanced conventional weapon.
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.
Section 102(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA, P.L. 111-195, signed July 1, 2010) amended Section 5 of ISA to exploit Iran's dependency on imported gasoline (40% dependency at that time). It followed enacted legislation such as 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 to Iran. The section subjects the following to sanctions:
Section 201 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHA, P.L. 112-158, signed August 10, 2012) codified an Executive Order, 13590 (November 21, 2011), by adding Section 5(a)(5 and 6) to ISA sanctioning firms that
Section 201 of the ITRSHRA amends ISA by sanctioning entities the Administration determines
Separate provisions of the ITRSHR Act—which do not amend ISA—require the application of ISA sanctions (the same 5 out of 12 sanctions as required in ISA itself) on any entity that
Implementation. Section 312 of ITRSHRA required an Administration determination, within 45 days of enactment (by September 24, 2012) whether NIOC and NITC are IRGC agents or affiliates. Such a determination would subject financial transactions with NIOC and NITC to sanctions under CISADA (prohibition on opening U.S.-based accounts). On September 24, 2012, the Department of the Treasury determined that NIOC and NITC are affiliates of the IRGC. On November 8, 2012, the Department of the Treasury named NIOC as a proliferation entity under Executive Order 13382—a designation that, in accordance with Section 104 of CISADA, bars any foreign bank determined to have dealt directly with NIOC (including with a NIOC bank account in a foreign country) from opening or maintaining a U.S.-based account.
Sanctions on dealings with NIOC and NITC were waived in accordance with the interim nuclear deal and the JCPOA, and designations of these entities under Executive Order 13382 were rescinded in accordance with the JCPOA. These entities will again be designated on November 5, 2018. Some NIOC partners were not sanctioned, including the Iranian Offshore Oil Company; the National Iranian Gas Export Co.; and Petroleum Engineering and Development Co. Several independent Iranian energy firms were not sanctioned, including Pasargad Oil Co., Zagros Petrochem Co., Sazeh Consultants, Qeshm Energy, and Sadid Industrial Group. Their relations with NIOC or the IRGC are unclear.
Status: Revoked (by E.O. 13716) but will go back into effect as stipulated below
Executive Order 13622 (July 30, 2012) imposes specified sanctions on the ISA sanctions menu, and bars banks from the U.S. financial system, for the following activities (E.O. 13622 did not amend ISA itself):
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, discussed below. An exemption also is provided for projects that bring gas from Azerbaijan to Europe and Turkey, if such project was initiated prior to the issuance of the Order.
JCPOA Status: Revoked (by E.O 13716) but most provisions below went back into effect as of August 6, 2018 (90-day wind-down period).
Executive Order 13645 of June 3, 2013 (effective July 1, 2013), contains the provisions below. (E.O. 13645 did not amend ISA itself.)
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.20 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.
The Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158), defines the "credible information" needed to begin an investigation of a violation 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. In addition, Section 219 of ITRSHRA requires that an investigation of an ISA violation begin if a company reports in its filings to the Securities and Exchange Commission (SEC) that it has knowingly engaged in activities that would violate ISA (or Section 104 of CISADA or transactions with entities designated under E.O 13224 or 13382, see below).
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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. The Iran Freedom Support Act 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 of 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 as follows: 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 ITRSHRA) 11. exclusion from the United States of corporate officers or controlling shareholders of a sanctioned firm (added by ITRSHRA) 12. imposition of any of the ISA sanctions on principal offices of a sanctioned firm (added by ITRSHRA). 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. Executive Order 13574 of May 23, 2011, specifies which sanctions are to be imposed. This executive order made a blanket stipulation that, when an entity is sanctioned under Section 5 of ISA, the penalties to be imposed are numbers 3, 6, 7, 8, and 9, above. The order also clarified 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, 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). This order was revoked by E.O. 13716 on Implementation Day, in accordance with the JCPOA. |
Several mechanisms for Congress to oversee whether the Administration is investigating ISA violations were added by ITRSHRA. Section 223 of that law required 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 amended a reporting requirement in Section 110(b) of CISADA by requiring an Administration report to Congress 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.
The sections below provide information on how some key ISA provisions have been interpreted and implemented.
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.21
The original version of ISA did not provide for sanctioning purchases of crude oil from Iran. However, subsequent laws and executive orders took that step.
The Iran Freedom and Counterproliferation Act (IFCA, discussed below), authorized sanctions on transactions with Iran's energy sector, but specifically excluded from sanctions purchases of natural gas from Iran. But: construction of gas pipelines involving Iran is subject to sanctions.
The effective dates of U.S. sanctions laws and Orders exclude long-standing joint natural gas projects that involve some Iranian firms—particularly the Shah Deniz natural gas field and related pipelines in the Caspian Sea. These projects involve a consortium in which Iran's Naftiran Intertrade Company (NICO) holds a passive 10% share, and includes BP, Azerbaijan's natural gas firm SOCAR, Russia's Lukoil, and other firms. NICO was sanctioned under ISA and other provisions (until JCPOA Implementation Day), but an OFAC factsheet of November 28, 2012, stated 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) and that transactions with the consortium were permissible.
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. CISADA specifically included LNG in the ISA definition of petroleum resources and therefore made subject to sanctions LNG investment in Iran or supply of LNG tankers or pipelines to Iran.
The definitions of investment and other activity that can be sanctioned under ISA 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 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.
Entities sanctioned under the Executive Orders or laws cited in this section are listed in the tables at the end of this report. As noted, some of the Orders cited provide for blocking U.S.-based assets of the entities designated for sanctions. OFAC has not announced the blocking of any U.S.-based property of the sanctioned entities, likely indicating that those entities sanctioned do not have a presence in the United States.
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ISA Waiver, Exemptions, and Sunset Provisions The President can waive ISA sanctions in several ways—general, country-specific, or company-specific. General Waiver. Under Section 4(c)(1)(a), the President can waive (for six months at a time) the requirement to investigate violations every six (6) months. To implement the JCPOA, this waiver was exercised by the Obama Administration (the latest on January 18, 2017), and was last renewed by the Trump Administration on January 12, 2018. Country-Specific Waiver. Under Section 4(c)(1)(B), the President can waive ISA sanctions (for 12 months at a time) of all companies whose governments are determined to be "closely cooperating with the United States in multilateral efforts to prevent Iran from" acquiring WMD or acquiring advanced conventional weapons. The President must also certify that the waiver is vital to the national security interests of the United States. Company-Specific Waiver. Under Section 9(c), the President can waive ISA sanctions (for one year at a time) on any company for which the President determines that the waiver is "essential to the national security interests of the United States." This waiver was used in 1998 to avoid penalizing Total, Gazprom, and Petronas for an Iran investment. Once ISA snaps back into effect, some governments reportedly might seek the country-specific or country-specific waivers to avoid penalties on their companies that invested in Iran while U.S. sanctions were waived. 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 is not required to prevent procurement of essential spare parts or component parts. "Special Rule" Exempting Firms That End Their Business with Iran Under a provision added by CISADA (§102[g][5]), ISA provides a means—a so-called "special rule"—for firms to avoid ISA sanctions by pledging to verifiably end their business with Iran and such business with Iran in the future. Under the special rule, which has been invoked on several occasions, as discussed below, the Administration is not required to impose sanctions against a firm that makes such pledges. However, firms are allowed several years, in some cases, to wind down existing business in Iran, in part because the buy-back program used by Iran pays energy firms 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 Iran: (1) has ceased its efforts to acquire WMD; (2) has been removed from the U.S. list of state sponsors of terrorism; and (3) no longer "poses a significant threat" to U.S. national security and U.S. allies.22 This termination provision, and the sunset provision discussed below, does 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 was scheduled to sunset on December 31, 2016, as provided for by CISADA. This followed prior sunset extensions to December 31, 2011 (by P.L. 109-293); December 31, 2006 (P.L. 107-24, August 3, 2001); and August 5, 2001 (original law). 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. In December 2016, P.L. 114-277 extended the law, as is, until December 31, 2026. |
In 2011, Congress sought to reduce Iran's exportation of oil by imposing sanctions on the mechanisms that importers use to pay Iran for oil. The Obama Administration asserted that such legislation could lead to a rise in oil prices and harm U.S. relations with Iran's oil customers, and President Obama, in his signing statement on the bill, indicated he would implement the provision so as not to damage U.S. relations with partner countries.
The law imposed penalties on transactions with Iran's Central Bank. Section 1245 of the FY2012 National Defense Authorization Act (NDAA, P.L. 112-81, signed on December 31, 2011):
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.
The January 2016 waivers issued to implement the JCPOA suspended the requirement for a country to cut oil purchases from Iran in order to maintain their exceptions. Virtually all the countries that received exceptions resumed buying Iranian oil after the waiver was issued. The provision will go back into effect after November 4, 2018, and countries will be required to cut their oil purchases from Iran by that time in order to requalify for an exception.24 On June 26, 2016, a senior State Department official, in a background briefing, stated that Department officials, in meetings with officials of countries that import Iranian oil, were urging these countries to cease buying Iranian oil entirely by November 4, 2018.25 However, some Administration officials have indicated that requests for exceptions will be evaluated on a case-by-case basis, taking into account the ease of substituting for Iranian oil or other considerations.
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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 to implement the JPA (to allow Iran's oil customers to maintain purchases level at 1.1 million barrels per day) and again to implement the JCPOA (to remove any ceiling on Iran's exports of oil). Waivers to Implement the JCPOA The provision (Section 1245(d)(5)) was waived on January 18, 2017, just before the Obama Administration left office. The Trump Administration renewed the waiver on May 18, 2017, on September 14, 2017, and on January 12, 2018. This law will go back into effect on November 4, 2018 (180-day wind-down period). |
The ability of Iran to repatriate its earned hard currency to the Central Bank was impeded by a provision of the ITRSHRA which went into effect on February 6, 2013 (180 days after enactment). Section 504 of the ITRSHRA amended Section 1245 of the FY2012 NDAA (adding "clause ii" to Paragraph D[1]) by requiring that any funds paid 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 essentially prevented Iran from repatriating to its Central Bank any hard currency Iran held in foreign banks around the world, and mainly the banks of Iran's main oil customers. The provision largely compelled Iran to buy the products of the oil customer countries.
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ITRSHRA Waiver Provision The waiver provision that applies to the sanctions imposed under the FY2012 NDAA (P.L. 112-81) applies to this hard currency "lock-up" provision. A waiver period of six months is permitted. To implement the JPA, a waiver was issued under P.L. 112-81 (Section 212 and 213) to allow Iran to receive some hard currency from ongoing oil sales in eight installments during the JPA period. Iran remained unable under the JPA to remove hard currency from existing accounts abroad. As of Implementation Day, the restriction was waived completely, enabling Iran to gain access to hard currency from ongoing purchases of its oil. Waivers to Implement the JCPOA Sections 212(d)(10 and 2134(b)(1) of ITRSHRA were waived by the Obama Administration on January 18, 2017. The waiver was last renewed on January 12, 2018. Its provisions go back into effect no later than November 4, 2018. |
|
Country/Bloc |
2011 Average |
JPA period average (2014-2016) |
Levels at U.S. JCPOA Exit |
September 2018 |
|
European Union (particularly Italy, Spain, and Greece, and some Eastern Europe) |
600,000 |
Negligible |
520,000 + |
300,000 |
|
China |
550,000 |
410,000 |
700,000 |
500,000 |
|
Japan |
325,000 |
190,000 |
133,000 |
22,000 |
|
India |
320,000 |
190,000 |
620,000 |
488,000 |
|
South Korea |
230,000 |
130,000 |
100,000 |
0 |
|
Turkey |
200,000 |
120,000 |
200,000 |
133,000 |
|
South Africa |
80,000 |
negligible |
negligible |
negligible |
|
Other Asia (Malaysia, Sri Lanka, Indonesia) |
90,000 |
negligible |
negligible |
0 |
|
Taiwan |
35,000 |
10,000 |
67,000 |
0 |
|
Singapore |
20,000 |
negligible |
negligible |
50,000 |
|
Syria |
negligible |
negligible |
33,000 |
33,000 |
|
Other (UAE, Iraq swaps) |
55,000 |
negligible |
100,000 |
72,000 |
|
Total (mbd) |
2.5 |
1.06 |
2.45 |
1.6 |
Source and Note: Bloomberg News and other press articles on Iran oil customer purchase volumes. Figures do not include purchases of condensates, which are light petroleum liquids that are associated with oil and natural gas production. South Korea is a large customer for Iranian condensates, and as of August 2018 it had cut its purchases of that product from Iran to zero.
Several laws and executive orders seek to bar Iran from obtaining U.S. or other technology that can be used for weapons of mass destruction (WMD) programs. Sanctions on Iran's exportation of arms are discussed in the sections above on sanctions for Iran's support for terrorist groups.
The Iran-Iraq Arms Nonproliferation Act (Title XIV of the FY1993 National Defense Authorization 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."26 Advanced conventional weapons are defined as:
(1) such long-range precision-guided munitions, fuel air explosives, cruise missiles, low observability aircraft, other radar evading aircraft, advanced military aircraft, military satellites, electromagnetic weapons, and laser weapons as the President determines destabilize the military balance or enhance the offensive capabilities in destabilizing ways;
(2) such advanced command, control, and communications systems, electronic warfare systems, or intelligence collections systems as the President determines destabilize the military balance or enhance offensive capabilities in destabilizing ways; and
(3) such other items or systems as the President may, by regulation, determine necessary for the purposes of this title.
The definition is generally understood to include technology used to develop ballistic missiles.
Sanctions to be Imposed: Sanctions imposed on violating entities include
If the violator is determined to be a foreign country, sanctions to be imposed are
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).
A number of entities were sanctioned under the act in the 1990s, as shown in the tables at the end of this paper. None of the designations remain active, because the sanctions have limited duration.
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Waiver 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 that is "essential to the national interest." |
Another law reinforces the authority of the President to sanction governments that sell arms to Iran. Under Sections 620G and 620H of the Foreign Assistance Act, as added by the Anti-Terrorism and Effective Death Penalty Act of 1996 (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.
No foreign assistance cuts or other penalties under this law have been announced.
As noted above, Section 5(b)(1) of ISA subjects 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. This, and Section 5(b)(2) pertaining to joint ventures to mine uranium, are the only provisions of ISA that were not waived to implement the JCPOA.
As noted earlier, no sanctions under this section have been imposed.
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—for two years unless renewed—on foreign persons (individuals or corporations, not governments) that are determined in a report by the Administration to have assisted Iran's WMD programs. Sanctions imposed include (1) a prohibition on U.S. exportation of arms and dual use items to the sanctioned entity; and (2) a ban on U.S. government procurement and of imports to the United States from the sanctioned entity under Executive Order 12938 (of November 14, 1994). INKSNA also banned U.S. extraordinary payments to the Russian Aviation and Space Agency in connection with the international space station unless the President certified that the agency had not transferred any WMD or missile technology to Iran within the year prior.27
Entities that have been sanctioned under this law are listed in the tables at the end of the report. Designations more than two years old are no longer active. The JCPOA required the United States to suspend INKSNA sanctions against "the acquisition of nuclear-related commodities and services for nuclear activities contemplated in the JCPOA," but no entities were "delisted" to implement the JCPOA.
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Waiver and Termination Section 4 gives the President the authority to not impose sanctions if the President justifies that decision to Congress. Section 5 provides for exemptions from sanctions if certain conditions are met, particularly that the government with jurisdiction over the entity cooperating to stop future such transfers to Iran. Termination of this law would require congressional action. |
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. Entities delisted and which were to be delisted in accordance with the JCPOA (in October 2023) are in italics and boldface type, respectively. All entities delisted to implement the JCPOA are to be relisted on November 5, 2018, according to the Treasury Department.
The CAATSA law, signed on August 2, 2017, mandates sanctions on arms sales to Iran and on entities that "materially contribute" to Iran's ballistic missile program.
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Sanctions on the Islamic Revolutionary Guard Corps (IRGC) Numerous sanctions discussed in this report target Iran's Islamic Revolutionary Guard Corps (IRGC), which plays a role in repressing domestic dissent, developing Iran's energy sector, developing Iran's WMD programs particularly by procuring technology abroad, and supporting pro-Iranian militant movements and governments in the Middle East region. Many of the IRGC's subordinate units, such as the IRGC Qods Force and the Basij militia, have been designated for sanctions under various Executive Orders, as have corporate entities owned or controlled by the IRGC. One such firm is the large engineering firm Khatam ol-Anbia. Secretary of State Michael Pompeo has cited estimates that the IRGC's affiliates might control about 20% of Iran's economy, but details of how such figures are arrived at are scant. Sanctions targeting the IRGC are discussed below—and no IRGC-related sanctions were waived or terminated to implement the JCPOA. IRGC-related entities designated for sanctions are in the tables at the end of the report.
No IRGC-related laws or executive orders were waived or suspended to implement the JCPOA and no IRGC affiliates were "delisted." There are no commitments in the JCPOA for the United States to suspend any IRGC-related sanctions. |
Some past foreign aid appropriations have withheld U.S. assistance to the Russian Federation unless it terminates technical assistance to Iran's nuclear and ballistic missiles programs. The provision applied to the fiscal year for which foreign aid is appropriated. Because U.S. aid to Russia generally has not gone to the Russian government, little or no funding was withheld as a result of the provision. The JCPOA makes no reference to any U.S. commitments to waive this sanction or to request that Congress not enact such a provision.
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 reexported 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 Commerce 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 reexported or diverted to Iran.
Implementation: To date, no country has been designated a "Country of Diversion Concern." Some countries adopted or enforced antiproliferation laws apparently to avoid designation.
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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 diversions and reexports. 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 reexports to Iran in the future. The JCPOA makes no reference to waiving or terminating this sanction. |
U.S. efforts to shut Iran out of the international banking system were a key component of the 2010-2016 international sanctions regime.
During 2006-2016, the Department of the Treasury used longstanding authorities to persuade foreign banks to cease dealing with Iran, in part by briefing them on Iran's use of 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. Upon implementation of the JCPOA, the Treasury Department largely dropped this initiative, and instead largely sought to encourage foreign banks to conduct normal transactions with Iran.
U.S. regulations ban Iran from direct access to the U.S. financial system. The ITRs (C.F.R. Section 560.516) allow U.S. banks to send funds (including U.S. dollars) to Iran for allowed (licensed) transactions. However, the U.S. dollars cannot be directly transferred to an Iranian bank, but must instead be channeled through an intermediary financial institution, such as a European bank. Section 560.510 specifically allows for U.S. payments to Iran to settle or pay judgments to Iran, such as those reached in connection with the U.S.-Iran Claims Tribunal, discussed above. However, the prohibition on dealing directly with Iranian banks still applies.
Ban on U-Turn Transactions. There is no blanket ban on foreign banks or persons paying Iran for goods using U.S. dollars. However: on November 6, 2008, the Department of the Treasury barred U.S. banks from handling any transactions with foreign banks that are handling transactions on behalf of an Iranian bank ("U-turn transactions").28 Meaning: a foreign bank or person that pays Iran for goods in U.S. dollars cannot access the U.S. financial system (through a U.S. correspondent account, which most foreign banks have) to acquire dollars for any transaction involving Iran. This ban remained in effect under the JCPOA implementation, and Iran argued that these U.S. restrictions deter European and other banks from reentering the Iran market, as discussed later in this report.
Then-Treasury Secretary Lew in March and April 2016 suggested the Obama Administration was considering licensing transactions by foreign (non-Iranian) clearinghouses to acquire dollars that might facilitate transactions with Iran, without providing Iran with dollars directly.29 However, doing so was not required by the JCPOA and the Administration declined to take that step. Instead, the Obama Administration encouraged bankers to reenter the Iran market without fear of being sanctioned. The Trump Administration has not, at any time, expressed support for allowing Iran greater access to dollars, and the reimposition of U.S. sanctions has further reduced the willingness and ability of foreign firms to use dollars in transactions with Iran.
The Department of the Treasury and other U.S. authorities has announced financial settlements (forfeiture of assets and imposition of fines) with various banks that have helped Iran (and other countries such as Sudan, Syria, and Cuba) access the U.S. financial system. The settlement dollar amounts were reportedly determined, at least in part, by the dollar value, number, and duration of illicit transactions conducted, and the strength of the evidence collected by the accusing U.S. regulators,30 but is not known from published sources how final settlement amounts compare to the amounts sought by U.S. regulators. (As noted above, the FY2016 Consolidated Appropriation (P.L. 114-113) provides for use of the proceeds of the settlements above to pay compensation to victims of Iranian terrorism.)
(1) In 2004, UBS paid a $100 million settlement for the unauthorized movement of U.S. dollars to Iran and other sanctioned countries; (2) in December 2005, Dutch bank ABN Amro paid an $80 million settlement 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;31 (4) in June 2012, Dutch bank ING paid a $619 million settlement for concealing the movement of billions of dollars through the U.S. financial system on behalf of Iranian and Cuban clients;32 (5) in August 2012, Standard Chartered paid a $340 million settlement to New York State regulators for allegations that it had processed transactions on behalf of Iran;33 (6) in January 2014, Luxembourg-based Clearstream Banking paid $152 million for helping Iran evade U.S. banking restrictions; (7) in January 2014, the Bank of Moscow paid a $9.5 million settlement for illicitly allowing Bank Melli to access the U.S. financial system;34 and (8) in June 2014, BNP Paribas pled guilty to helping Iran (and Sudan and Cuba) violate U.S. sanctions and forfeited $8.9 billion and paid $140 million in fines.35
Section 104 of CISADA requires the Secretary of the Treasury to forbid U.S. banks from opening new "correspondent accounts" or "payable-through accounts" (or force the cancellation of existing such accounts) for36
One additional intent of the provision was to reduce the ability of Iran's pivotal import-export community (referred to in Iran as the "bazaar merchants" or "bazaaris") from obtaining "letters of credit" (trade financing) to buy or sell goods. The Department of the Treasury has authority to determine what constitutes a "significant" financial transaction.
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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. As noted, Section 104 was not waived to implement the JCPOA, but many entities with which transactions would have triggered sanctions under Section 104 have been "delisted" in accordance with the JCPOA. These entities are to be relisted as Specially Designated Nationals (SDNs) and therefore subject to secondary sanctioning by November 5, 2018. |
On July 31, 2012, the sanctioned the Bank of Kunlun in China and the Elaf Islamic Bank in Iraq under Section 104 of CISADA. 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 the Export Development Bank of Iran.
On November 21, 2011, the Obama Administration identified Iran as a "jurisdiction of primary money laundering concern"37 under Section 311 of the USA Patriot Act (31 U.S.C. 5318A), based on a determination that Iran's financial system, including the Central Bank, constitutes a threat to governments or financial institutions that do business with Iran's banks. The designation imposed additional requirements on U.S. banks to ensure against improper Iranian access to the U.S. financial system.
The Administration justified the designation as implementation of recommendations of the Financial Action Task Force (FATF)—a multilateral standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). The FATF characterizes Iran as a high-risk and noncooperative jurisdiction with respect to AMF/CFT issues.38 On June 24, 2016, the FATF welcomed an "Action Plan" filed by Iran to address its strategic AML/CFT deficiencies and decided to suspend, for one year, "counter-measures"—mostly voluntary recommendations of increased due diligence with respect to Iran transactions—pending an assessment of Iran's implementation of its Action Plan. The FATF continued the suspension of counter-measures in June and November 2017, and February 2018,39 but Iran remained blacklisted because of its refusal to implement anti-terrorism financing measures, such as accession to the Convention for the Suppression of Financing of Terrorism. Iranian bodies, including its Supreme National Security Committee and its Majles (parliament) sought in May 2018 to condition that accession on its not applying to Iran's support for groups Iran supports, such as Hezbollah and Hamas, which Iran does not consider to be terrorist groups.40 On October 19, 2018, the FATF stated that Iran had only acted on nine out of ten of its guidelines, and that Iran's Majles had not completed legislation to adopt international standards. The FATF continued to suspend counter-measures and gave Iran until February 2019 to fully accede to all FATF guidelines.
On October 12, 2018, one week prior to the FATF meeting discussed above, the Treasury Department Financial Crimes Enforcement Network (FINCEN) issued a warning to U.S. banks to guard against likely Iranian efforts to evade U.S. financial sanctions. Earlier, in January 1, 2013, OFAC 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 U.S. financial sanctions. Because the involvement of an Iranian client is often opaque, banks have sometimes inadvertently processed hawala transactions involving Iranians.
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) sanctions a wide swath of Iran's economy. (Its provisions on Iran's human rights record are discussed elsewhere.)
Several sections of IFCA impose ISA sanctions on entities determined to have engaged in specified transactions below. (The provisions apply ISA sanctions but do not amend ISA.)
On August 29, 2014, the State Department sanctioned UAE-based Goldentex FZE in accordance with IFCA for providing support to Iran's shipping sector. It was "delisted" from sanctions on Implementation Day of the JCPOA.
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Waiver and Termination 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. Sections 1244(i), 1245(g), 1246(e), and 1247(f) of IFCA were waived to implement the JCPOA on January 18, 2017, and that waiver was last renewed on January 12, 2018. IFCA goes back into full effect as specified above. |
Executive Order 13608 of May 1, 2012, gives 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.
Several persons and entities have been designated for sanctions, as shown in the tables at the end of the report.
The Trump Administration appears to be making increasing use of executive orders issued during the Obama Administration to sanction Iranian entities determined to be engaged in malicious cyberactivities or in transnational crime. Iranian entities have attacked, or attempted to attack, using cyberactivity, infrastructure in the United States, Saudi Arabia, and elsewhere. Iran's ability to conduct cyberattacks appears to be growing. Separately, the Justice Department has prosecuted Iranian entities for such activity. The section below discusses Executive Order 13694 on malicious cyberactivities and Executive Order 13581 on transnational crime.
Executive Order 13694 blocks U.S.-based property of foreign entities determined to have engaged in cyber-enabled activities that (1) harm or compromise the provision of services by computers or computer networks supporting in the critical infrastructure sector; (2) compromise critical infrastructure; (3) disrupt computers or computer networks; or (4) cause misappropriation of funds, trade secrets, personal identifiers or financial information for financial advantage or gain.
Executive Order 13581 blocks the U.S.-based property of entities determined (1) to be a foreign person that constitutes a significant transnational criminal organization; (2) to have materially assisted any person sanctioned under this order; or (3) to be owned or controlled by or to have acted on behalf of a person sanctioned under the order.
Iran-related entities sanctioned under the Orders are listed in the tables at the end of this report.
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. As noted above, Section 219 of the ITRSHRA of 2012 requires companies to reports to the Securities and Exchange Commission whether they or any corporate affiliate has engaged in any transactions with Iran that could trigger sanctions under ISA, CISADA, and E.O 13382 and 13224.
Implementation: Numerous states have adopted laws, regulations, and policies to divest from—or avoid state government business with—foreign companies that conduct certain transactions with Iran. The JCPOA requires the United States to work with state and local governments to ensure that state-level sanctions do not conflict with the sanctions relief provided by the federal government under the JCPOA. Most states that have adopted Iran sanctions continue to enforce those measures.
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 and to sanction Iranian officials that commit human rights abuses. Sanctions on the IRGC represent one facet of that trend because the IRGC is key suppressive instrument. 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.42
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 required an Administration report by January 31, 2010, on U.S. enforcement of sanctions against Iran and the effect of those sanctions on Iran.
Some legislation has sought to sanction regime officials involved in suppressing the domestic opposition in Iran or in human rights abuses more generally. Much of this legislation centers around amendments to Section 105 of CISADA.
U.N. sanctions on Iran, enacted by the Security Council under Article 41 of Chapter VII of the U.N. Charter,46 applied to all U.N. member states. During 2006-2008, three U.N. Security Council resolutions—1737, 1747, and 1803—imposed sanctions on Iran's nuclear program and weapons of mass destruction (WMD) infrastructure. Resolution 1929, adopted on June 9, 2010, was key for its assertion that major sectors of the Iranian economy support Iran's nuclear program—giving U.N. member states authorization to sanction civilian sectors of Iran's economy. It also imposed strict limitations on Iran's development of ballistic missiles and imports and exports of arms.
Table 2. Summary of Provisions of U.N. Resolutions on Iran Nuclear Program
(1737, 1747, 1803, 1929, and 2231)
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Iran required 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) No longer applicable. |
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Assets frozen of Iranian persons and entities named in annexes to the resolutions, and countries required to ban the travel of named Iranians. (Initial list in Resolution 1737, and additional designations in subsequent resolutions). |
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Transfer to Iran of nuclear, missile, and dual use items to Iran prohibited, except for use in light-water reactors (1737 and 1747). Resolution 2231 delegates to a Joint Commission the authority to approve Iran's applications to purchase dual-use items. |
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Resolution 1747 prohibited Iran from exporting arms. Resolution 2231 requires Iran to obtain Security Council approval to export arms for a maximum of five years. |
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Resolution 1929 prohibited Iran from investing abroad in uranium mining, related nuclear technologies or nuclear capable ballistic missile technology, and prohibits Iran from developing, including testing, nuclear-capable ballistic missiles. |
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Resolution 1929 mandated 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. Resolution 2231 makes arms sales to Iran and exportation of arms from Iran subject to approval by the U.N. Security Council, for a maximum of five years from Adoption Day (until October 2020). |
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Resolution 1929 called for restraint on transactions with Iranian banks, particularly Bank Melli and Bank Saderat. Not applicable under Resolution 2231. |
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Resolution called for "Vigilance" (but not a ban) on making international lending to Iran and providing trade credits and other financing. Not applicable under Resolution 2231. |
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Resolution 1929 called 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. Resolution 2231 requires U.N. member states to continue to enforce all remaining restrictions on shipment of banned items to Iran. |
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A Sanctions Committee, composed of the 15 members of the Security Council, monitored implementation of all Iran sanctions and collected and disseminated information on Iranian violations and other entities involved in banned activities. A "panel of experts" was 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, 1929, and 2231. http://www.un.org.
U.N. Security Council Resolution 2231 of July 20, 2015
No change to the status of Resolution 2231 is anticipated as a consequence of the May 8, 2018, U.S. announcement that it will cease participating in the JCPOA.
U.N. reports on Iranian compliance with Resolution 223147 have noted assertions by several U.N. Security Council members, including the United States, that Iranian missile tests have been inconsistent with the Resolution. The reports required by Resolution 2231, as well as those required by other Resolutions pertaining to various regional crises, such as that in Yemen, also note apparent violations of the Resolution 2231 restrictions on Iran's exportation of arms. The Security Council is responsible for prescribing penalties on Iran for violations, and no U.N. Security Council actions have been taken against Iran for these violations to date.
Under Paragraph 6(c) of Annex B of Resolution 2231, entities sanctioned by the previous Iran-related Resolutions would continue to be sanctioned for up to eight years from Adoption Day (until October 2023). An attachment to the Annex listed 36 entities for which this restriction would no longer apply (entities "delisted") as of Implementation Day. Most of the entities immediately delisted were persons and entities connected to permitted aspects of Iran's nuclear program and its civilian economy. According to press reports, two entities not on the attachment list, Bank Sepah and Bank Sepah International PLC, also were delisted on Implementation Day by separate Security Council action.48 Paragraph 6(c) provides for the Security Council to be able to delist a listed entity at any time, as well as to add new entities to the sanctions list. Delisted entities are in italics in the table of U.N.-listed sanctioned entities at the end of the report.
The following sections discuss sanctions relief provided under the November 2013 interim nuclear agreement (JPA) and, particularly, the JCPOA. Later sections discuss the degree to which Iran is receiving the expected benefits of sanctions relief.
U.S. officials said that the JPA provided "limited, temporary, targeted, and reversible" easing of international sanctions. Under the JPA (in effect January 20, 2014-January 16, 2016)49
Under the JCPOA, sanctions relief occurred at Implementation Day (January 16, 2016), following IAEA certification that Iran had completed stipulated core nuclear tasks. U.S. secondary sanctions were waived or terminated, but most sanctions on direct U.S.-Iran trade. The secondary sanctions eased included52 (1) sanctions that limited Iran's exportation of oil and sanction foreign sales to Iran of gasoline and energy sector equipment, and which limit foreign investment in Iran's energy sector; (2) financial sector sanctions; and (3) sanctions on Iran's auto sector and trading in the rial. The EU lifted its ban on purchases of oil and gas from Iran; and Iranian banks were readmitted to the SWIFT electronic payments system. All U.N. sanctions were lifted.
All of the U.S. sanctions that were eased will go back into effect on November 4, 2018, in accordance with the May 8, 2018, announcement that the United States will cease participating in the JCPOA. The Administration has stated that the purpose of reimposing the sanctions is to deny Iran the revenue with which to conduct regional malign activities and advance its missile, nuclear, and conventional weapons programs.
Some sanctions went back into effect on August 6, 2018 (effect 12:01 AM August 7) after a 90-day wind-down period. These include U.S. sanctions on
The sanctions that go back into effect on November 4 (effective November 5) are
The JCPOA-related suspension of U.S. sanctions required issuing waivers of the laws below. These waivers were issued on January 16, 2016, and the Obama Administration and Trump Administration renewed all waivers by their prescribed date until the May 8 U.S. announcement of its exit from the JCPOA. Treasury and State Department documents issued on May 8 state that the waivers are all being revoked, rendering post-May 8 waiver expiration deadlines moot. All the provisions discussed below will go back into effect on November 5, 2018.
The JCPOA did not commit the United States to suspend U.S. sanctions on Iran for terrorism or human rights abuses, on foreign arms sales to Iran or sales of proliferation-sensitive technology such as ballistic missile technology, or on U.S.-Iran direct trade (with the selected exceptions of the latter discussed above). The sanctions that remained in place included
Aside from reimposing U.S. sanctions, sanctions might have also been reimposed by congressional action in accordance with President Trump's withholding of certification of Iranian compliance with the JCPOA. Such certification under the Iran Nuclear Agreement Review Act (INARA, P.L. 114-17), was withheld in October 2017 and January and April of 2018. Congress had the opportunity to act on legislation, under expedited procedures, to reimpose sanctions that were suspended. Congress did not take such action. For more information on these options, see CRS Report R44942, U.S. Decision to Cease Implementing the Iran Nuclear Agreement, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].
Additionally, the JCPOA (paragraph 36 and 37) contains a mechanism for the "snap back" of U.N. sanctions if Iran does not satisfactorily resolve a compliance dispute. According to the JCPOA (and Resolution 2231), the United States (or any veto-wielding member of the U.N. Security Council) would be able to block a U.N. Security Council resolution that would continue the lifting of U.N. sanctions despite Iran's refusal to resolve the dispute. In that case "... the provisions of the old U.N. Security Council resolutions would be reimposed, unless the U.N. Security Council decides otherwise." There are no indications that the Administration plans to try to snap back U.N. sanctions under this process.
During 2010-2016, converging international views on Iran produced substantial global cooperation in pressuring Iran with sanctions. In addition to asserting that the international community needed to ensure that Iran did not develop a nuclear weapon, some countries joined the sanctions regime primarily as a means of heading off unwanted military action against Iran by the United States or by Israel, and some countries cooperated in order to preserve their close relationships with the United States. This section assesses international cooperation and compliance with U.S. sanctions, and cooperation with U.S. sanctions reimposed as a consequence of the May 8, 2018, U.S. exit from the JCPOA. All the JCPOA parties publicly opposed the U.S. decision to exit the JCPOA and have sought to keep their companies engaged in the Iran market in order to continue to provide the JCPOA's economic benefits to Iran.
A comparison between U.S., U.N., and EU sanctions against Iran is contained in Table 3 below. Broader issues of Iran's relations with the countries discussed in this section can be found in CRS Report R44017, Iran's Foreign and Defense Policies, by [author name scrubbed].
After the passage of Resolution 1929 in June 2010, European Union (EU) sanctions on Iran became nearly as extensive as those of the United States This was a contrast from most of the 1990s, when the EU countries refused to join the 1995 U.S. trade and investment ban on Iran, and (along with Japanese creditors) rescheduled $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 negotiations between the EU 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.58
Under the JCPOA, EU sanctions, most of which were imposed in 2012, were lifted, including
The following EU sanctions remained in place:
EU diplomats have said that none of the EU sanctions will be reimposed by EU governments in concert with the U.S. exit from the JCPOA, and European diplomats have indicated that they intend to try to protect their economic relations with Iran despite the U.S. pullout from the JCPOA. On August 6, 2018, a 1996 EU "blocking statute" took effect which seeks to protect EU firms from reimposed U.S. sanctions.
With the blocking statute widely assessed as likely to provide only limited protection from U.S. sanctions, EU diplomats have reportedly sought country-level or company-level waivers or exemptions from reimposed U.S. sanctions, but Administration officials have indicated that the Trump Administration is not inclined to issue any waivers or exemptions. For several months, EU countries have discussed mechanisms under which EU countries could continue to import Iranian oil and pay with hard currency. On September 25, 2018, Germany, France, and Britain, joined by Russia and China, as well as Iran, endorsed the creation of a "special purpose vehicle"—an entity that would process payments for non-dollar denominated transactions with Iran and thereby presumably not be subject to U.S. sanctions. Secretary of State Michael Pompeo denounced the plan as counterproductive, and likely to "solidify[] Iran's ranking as the No.1 state sponsor of terrorism." Some experts assessed the new vehicle as unlikely to succeed because its personnel and operations could be made subject to additional U.S. sanctions or sanctions designations. Perhaps indicating the difficulty of implementing that plan, reports in late October 2018 indicate that no European country is offering to host the special purpose vehicle.60
Still, apparently seeking to avoid risk to their position in the large U.S. market, 100 companies—mostly in Europe—have announced they are leaving Iran. Press reports indicate that European exports to Iran have fallen as well, including German exports down about 4% in the first eight months of 2018. Some of the post-2016 European investments in/transactions with Iran that are being unwound or which might be vulnerable to reimposed U.S. sanctions on Iran include61
Russia and China, two permanent members of the U.N. Security Council, historically have imposed only those sanctions required by Security Council resolutions. Both countries' governments, which are parties to the JCPOA, have said they will not cooperate with reimposed U.S. secondary sanctions in concert with the U.S. pullout from the JCPOA. Many observers expect that, because companies in both countries have limited U.S. exposure and are strongly influenced by their governments, much of Iran's trade and economic engagement will shift to China and Russia from EU countries and Japan and South Korea.63
Increasingly close politically primarily on the issue of the conflict in Syria, Iran and Russia have discussed expanding energy and trade cooperation. The two countries reportedly agreed on broad energy development deals during President Putin's visit to Tehran in late October 2017, with an estimated investment value of up to $30 billion,64 although implementation remains uncertain.
In April 2015, Russia lifted its own restriction 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 technically did not bar supply of that defensive system. In April 2016, Russia began delivering the five S-300 batteries. Iran's Defense Minister visited Russia in February 2016 to discuss a possible purchase of major combat systems—a sale that would require an unlikely approval of the U.N. Security Council. Alternatively, the two countries might complete the sale without such approval, presumably calculating a limited penalty for doing so. There has been no announcement that such sales have been concluded, to date.
China is Iran's largest oil customer and, as noted above, China's government has said it will not instruct China's firms to exit the Iran market. During 2012-2014, China sought to comply with U.S. sanctions somewhat by cutting its buys of oil from Iran to about 435,000 barrels per day from its 2011 average of nearly 600,000 barrels per day. The State Department asserted that, because China was the largest buyer of Iranian oil, percentage cuts by China had a large impact in reducing Iran's oil sales by volume and China merited a Section 1245 (P.L. 112-81) sanctions exemption. After sanctions were lifted in early 2016, China increased its purchases of Iranian oil to levels that sometimes exceeded those of 2011. Several Chinese energy firms that invested in Iran's energy sector put those projects on hold in 2012, but resumed or considered resuming work in earnest, subject to energy market considerations, after sanctions were eased in 2016. Chinese firms might also take over some investments in Iran's energy sector that EU firms will abandon in order to avoid the risk of reimposed U.S. sanctions. Some reports indicate that China has asked its refiners to cut imports of Iranian oil as the November 4, 2018 reimposition of U.S. energy sanctions approaches, but, as shown in the table earlier in this report, China was still buying Iranian oil at volumes close to 2011 pre-sanctions levels.
During 2012-2016, China settled much of its trade balance with Iran with goods rather than hard currency. Doing so was highly favorable to China financially. Press reports indicated that Iran's automotive sector—the largest industrial sector aside from the energy sector—obtained a significant proportion of its parts from China, and subsidiaries of two China-based companies, Geelran and Chery, produce cars in Iran. Iran's auto production fell about 60% during 2011-2013 because of sanctions, but recovered somewhat after the JPA went into effect.65 Iran's auto parts imports increased as Iran was able to obtain at least some trade financing. Iran and China also have a separate escrow account to pay for China's infrastructure projects in Iran, such as the long Niayesh Tunnel, funded by about $20 billion of Iran's hard currency reserves.
In the days after JCPOA Implementation Day, China's President Xi Jinping visited Iran and other Middle East countries, and stated that Iran is a vital link in an effort to extend its economic influence westward through its "One Belt, One Road" initiative. Chinese firms and entrepreneurs are integrating Iran into this vision by modernizing Iran's rail and other infrastructure, particularly where that infrastructure links to that of neighboring countries, including the Sultanate of Oman, funded by loans from China.66 Iran's place in this initiative offers China's government and firms further incentive to avoid cooperating with reimposed U.S. sanctions.
In April 2018, the Commerce Department (Bureau of Industry and Security, BIS, which administers Export Administration Regulations) issued a denial of export privileges action against China-based ZTE Corporation and its affiliates. The action was taken on the grounds that ZTE did not uphold the terms of March 2017 settlement agreement with BIS over ZTE's shipment of prohibited U.S. telecommunications technology to Iran (and North Korea).
During 2010-2016, in part in deference to their alliances with the United States, Japan and South Korea enforced sanctions on Iran similar to those imposed by the United States and the EU. Both countries cut imports of Iranian oil sharply after 2011. Banks in the two countries were the repositories of a large part of the approximately $115 billion in foreign exchange that Iran held abroad—a balance that represents payments for oil shipments. Since 2016, both countries continued to import Iranian oil at about half of 2011 volumes, and Iran has been able to access funds in banks in both countries.
Japan exports to Iran significant amounts of chemical and rubber products, as well as consumer electronics. South Korean firms have been active in energy infrastructure construction in Iran, and its exports to Iran are mainly iron, steel, consumer electronics, and appliances.
Both countries—and their companies—have historically been unwilling to undertake transactions with Iran that could violate U.S. sanctions, and firms in both countries have said they will comply with reimposed U.S. sanctions. In part to avoid economic disruption, both countries have asked the Trump Administration for some exceptions to U.S. sanctions. For example, South Korea depends heavily on Iranian exports of condensates (a petroleum product sometimes considered as crude oil), and has asked to be able to import condensates from Iran at existing levels. Administration officials reportedly are considering the exception requests.67 Perhaps to encourage the Administration to grant an exemption on condensates, as of August 2018 South Korea has completed halted purchases of oil and condensates from Iran, and Japan has reduced its Iran oil imports to nearly zero as of September 2018.
The following firms have announced their postures following the U.S. exit from the JCPOA:
North Korea, like Iran, has been subject to significant international sanctions. North Korea has never pledged to abide by international sanctions against Iran, and it reportedly cooperates with Iran on a wide range of WMD-related ventures, particularly the development of ballistic missiles. A portion of the oil that China buys from Iran (and from other suppliers) is reportedly sent to North Korea, but it is not known if North Korea buys any Iranian oil directly. The potential for North Korea to try to buy Iranian oil illicitly increased in the wake of the adoption in September 2017 of U.N. Security Council sanctions that limit North Korea's importation of oil, but there are no publicly known indications that it is doing so. While serving as Iran's president in 1989, the current Supreme Leader, Ayatollah Ali Khamene'i, visited North Korea. North Korea's titular head of state Kim Yong Nam attended President Rouhani's second inauguration in August 2017, and during his visit signed various technical cooperation agreements of unspecified scope.69
Taiwan has generally been a small buyer of Iranian oil. It resumed imports of Iranian oil after sanctions were eased in 2016. In the wake of the May 8, 2018, U.S. exit from the JCPOA, a Taiwan refiner, Formosa Petrochemical Corp, said it is considering ending imports of Iran's oil. Taiwan bought no Iranian oil in September 2018.
During 2011-2016, India implemented U.N.-mandated sanctions against Iran and generally cooperated with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran. Its private sector assessed Iran as a "controversial market"—a term used by many international firms to describe markets that entail reputational and financial risks. India's central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran, and the two countries agree to settle half of India's oil buys from Iran in local currency, the rupee. Iran used the rupee proceeds to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts, and other products.
India reduced its imports of Iranian oil substantially after 2011, lowering purchases to 6% of its oil imports by 2013, from over 16% in 2008, in the process incurring significant costs to retrofit refineries that were handling Iranian crude. However, since sanctions were eased, India's oil imports from Iran increased to as much as 800,000 bpd in July 2018—well above 2011 levels. Indian firms ended or slowed work on investments in Iranian oil and gas fields during 2012-2016, but reportedly resumed work after sanctions were lifted. After international sanctions were lifted, India reportedly also paid Iran the $6.5 billion it owed for oil purchased during 2012-2016.70
The degree to which Indian firms and the government of India will cooperate with reimposed U.S. sanctions is not certain. Indian leaders assert that Iran did not violate the JCPOA and sanctions should not be reimposed on it.71 In June 2018, the two countries again agreed to use the rupee in order to maintain economic engagement. Nonetheless, major Indian refiners Reliance Ltd. and Indian Oil Corp—citing a decision by the State Bank of India to cease transactions with Iran as complicating efforts to stay engaged with Iran—have announced they are considering cutting oil buys from Iran. India's purchases of Iranian oil fell sharply from July to August 2018, and press reports say that the country might try to cut Iranian oil imports dramatically in November 2018, when U.S. energy sanctions go back into effect.72
In 2015, India and Iran agreed that India would help develop Iran's Chahbahar port that would enable India to trade with Afghanistan unimpeded by Pakistan. With sanctions lifted, the project no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra Modi visited Iran and signed an agreement to invest $500 million to develop the port and related infrastructure. Construction at the port is proceeding. During a late June 2018 visit to India, U.S. Ambassador to the United Nations Nikki Haley said that "We know the port has to happen and the United States is going to work with India to do that."73 This suggested the Administration might use the "Afghanistan reconstruction" exception under Section 1244(f) of IFCA to allow for firms to continue developing it.
One test of Pakistan's compliance with sanctions was a pipeline project that would carry Iranian gas to Pakistan—a project that U.S. officials on several occasions stated would be subject to ISA sanctions. Despite that threat, 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. China's announcement in April 2015 of a $3 billion investment in the project seemed to remove financial hurdles to the line's completion, and the JCPOA removed sanctions impediments to the project.74 However, during President Hassan Rouhani's visit to Pakistan in March 2016, Pakistan still did not commit to complete the line, and observers note that there are few indications of progress on the project. In 2009, India dissociated itself from the project over concerns about the security of the pipeline, the location at which the gas would be transferred to India, pricing of the gas, and tariffs.
Iran has substantial economic relations with Turkey and the countries of the South Caucasus.
Turkey buys about 40% of its oil from Iran, and bought about 6% of its total gas imports from Iran in 2017. Turkey did reduce purchases of oil from Iran during 2012-2016, but its purchases returned to 2011 levels after sanctions on Iran were eased in 2016. Turkey also is Iran's main gas customer via a pipeline built in 1997, which at first was used for a swap arrangement under which gas from Turkmenistan was exported to Turkey. Turkey's leaders have said that the country will not cooperate with reimposed U.S. sanctions, but its oil import volumes from Iran have remained about 33% below what they were before the U.S. pullout from the JCPOA in May 2018.
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 were imposed on the grounds that the gas supplies were crucial to Turkey's energy security. Prior to the October 2012 EU decision to bar purchases of Iranian gas, this pipeline was a conduit for Iranian gas exports to Europe (primarily Bulgaria and Greece).
Pre-JCPOA, in response to press reports that Turkey's Halkbank was settling Turkey's payments to Iran for energy with gold, U.S. officials testified on May 15, 2013, 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. A U.S. criminal case involves a dual Turkish-Iranian gold dealer, arrested in the United States in 2016, who allegedly violated U.S. sanctions prohibiting helping Iran deal in precious metals.
Among past cases of possible Turkish violations of Iran sanctions, on November 7, 2016, the U.S. Attorney for New York's Southern District indicted several individuals for using money services businesses in Turkey and in the UAE for conspiring to conceal from U.S. banks transactions on behalf of and for the benefit of sanctioned Iranian entities, including Mahan Air.75 On January 6, 2014, the Commerce Department blocked a Turkey-based firm (3K Aviation Consulting and Logistics) from reexporting two U.S.-made jet engines to Iran's Pouya Airline.76
The rich energy reserves of the Caspian Sea creates challenges for U.S. efforts to deny Iran financial resources. The Clinton and George W. Bush Administrations cited potential ISA sanctions to deter oil pipeline routes involving Iran - thereby successfully promoting an the alternate route from Azerbaijan (Baku) to Turkey (Ceyhan), which became operational in 2005. Section 6 of Executive Order 13622 exempts from sanctions any pipelines that bring gas from Azerbaijan to Europe and Turkey.
Agreements reached in 2018 between Russia and the Caspian Sea states on the legal division of the sea could spawn new energy development in the Caspian. Iran's energy firms will undoubtedly become partners in joint ventures to develop the Caspian's resources, and Iran's involvement in such projects will require the Administration to determine whether to impose sanctions.
Iran's relations with Azerbaijan—even though that country is inhabited mostly by Shiite Muslims—are hindered by substantial political and ideological differences. Iran and Azerbaijan have in recent years tried to downplay these differences for joint economic benefit, and they have been discussing joint energy and infrastructure projects among themselves and with other powers, including Russia.
Iran and Armenia—Azerbaijan's adversary—have long enjoyed 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 was issued. Armenia has said its banking controls are strong and that Iran is unable to process transactions illicitly through Armenia's banks.77 However, observers in the South Caucasus assert that Iran is using Armenian banks operating in the Armenia-occupied Nagorno-Karabakh territory to circumvent international financial sanctions.78
The Persian Gulf countries of the Gulf Cooperation Council (GCC: Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman) are oil exporters and close allies of the United States. As Iranian oil exports decreased after 2012, the Gulf states supplied the global oil market with additional oil. Since the U.S. exit from the JCPOA, U.S. officials have said that they are working with Gulf oil exporters to make sure the oil market is well supplied as U.S. officials work to reduce Iranian oil exports. However, largely in order not to antagonize Iran, the Gulf countries maintained relatively normal trade with Iran. Some Gulf-based shipping companies, such as United Arab Shipping Company reportedly continued to pay port loading fees to such sanctioned IRGC-controlled port operators as Tidewater, despite the imposition of sanctions on that company.80
The UAE has been 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, which Iran reportedly used to process oil payments. Some Iranian gas condensates (120,000 barrels per day) were imported by Emirates National Oil Company (ENOC) and refined mostly into jet fuel. Subsequent to the May 8, 2018, U.S. exit from the JCPOA, ENOC officials said they are trying to find alternative supplies of the hydrocarbon products it buys from Iran.81
Iran and several of the Gulf states have had discussions on various energy and related projects, but few have materialized because of broad regional disputes between Iran and the Gulf states. Kuwait and Iran have held talks on the construction of a 350-mile pipeline that would bring Iranian gas to Kuwait, but the project does not appear to be materializing. Bahrain's discussions of purchasing Iranian gas have floundered over sharp political differences.82 Qatar and Iran share the large gas field in the Gulf waters between them, and their economic relations have become closer in light of the isolation of Qatar by three of its GCC neighbors, Saudi Arabia, UAE, and Bahrain. The only GCC state that has moved forward with economic joint ventures with Iran is Oman, particularly in the development of Oman's priority project to expand its port at Al Duqm port, which Oman and Iran envision as a major hub for regional trade. In September 2015, the two countries also recommitted to a gas pipeline joint venture.
Omani banks, some of which operate in Iran, were used to implement some of the financial arrangements of the JPA and JCPOA.83 As a consequence, a total of $5.7 billion in Iranian funds had built up in Oman's Bank Muscat by the time of implementation of the JCPOA in January 2016. In its efforts to easily access these funds, Iran obtained from the Office of Foreign Assets Control (OFAC) of the Treasury Department a February 2016 special license to convert the funds (held as Omani rials) to dollars as a means of easily converting the funds into Euros. Iran ultimately used a different mechanism to access the funds as hard currency, but the special license issuance resulted in a May 2018 review by the majority of the Senate Permanent Subcommittee on Investigation to assess whether that license was consistent with U.S. regulations barring Iran access to the U.S. financial system.84
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 sanctions-related dilemma in July 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 would supply several power plants. No sanctions were imposed on the arrangement, which was agreed while applicable sanctions were in effect. In May 2015, the Treasury Department sanctioned Iraq's Al Naser Airlines for helping Mahan Air (sanctioned entity) acquire nine aircraft.85
The Trump Administration reportedly is discussing with Iraqi leaders ways to accommodate Iraq's need for Iranian electricity supplies and other economic interactions with the U.S. policy of curtailing economic engagement with Iran broadly. As of October 2018, Iraq reportedly has discontinued crude oil swaps with Iran – about 50,000 barrels per day – in which Iranian oil flowed to the Kirkuk refinery and Iran supplied oil to Iraq's terminals in the Persian Gulf.
Iran is supplying advisers and weapons to help Iraq try to defeat Islamic State forces. The Iranian support to the Iraqi government has not been sanctioned, even though Iranian arms exports remain prohibited by Resolution 2231.
Iran has had extensive economic relations with both Syria and Lebanon, where its key regional ally Lebanese Hezbollah is politically powerful. Most experts assess that the compliance of Syrian or Lebanese banks and other institutions with international sanctions against Iran was limited even during 2012-2015. Iran reportedly uses banks in Lebanon to skirt international financial sanctions, according to a wide range of observers, and these banks are among the conduits for Iran to provide financial assistance to Hezbollah as well as to the regime of Syrian President Bashar Al Assad. In January 2017, Iran and Syria signed a series of economic agreements giving Iranian firms increased access to Syria's mining, agriculture, and telecommunications sectors, as well as management of a Syrian port.86
During the presidency of Ahmadinejad, Iran looked to several Latin American and African countries to try to circumvent international sanctions. For the most part, however, Iran's trade and other business dealings with these regions are apparently too modest to weaken the effect of international sanctions significantly.
The united approach to sanctions on Iran during 2010-2016 carried over to international lending to Iran. 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 slated more than $7.5 million in loans for Iran to dispose of harmful chemicals.87 The 2016 lifting of sanctions increased international support for new international lending to Iran, but the U.S. exit from the JCPOA will likely lead to differences between the United States and other lenders over extending any new loans to Iran.
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, contributing to a temporary halt in new bank lending to Iran. But, 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.
An issue related to sanctions is Iran's request to join the World Trade Organization (WTO). Iran began accession talks in 2006 after the George W. Bush Administration dropped its objection to Iran's application as part of an effort to incentivize Iran to reach an interim nuclear agreement. The lifting of sanctions presumably paves the way for talks to accelerate, but the accession process generally takes many years. Accession generally takes place by consensus of existing WTO members. Iran's accession might be complicated by the requirement that existing members trade with other members; as noted above, the U.S. ban on trade with Iran remains in force. The Trump Administration does not advocate Iran's admission to that convention.
Table 3. Comparison Between U.S., U.N., and EU and Allied Country Sanctions (Prior to Implementation Day)
|
U.S. Sanctions |
U.N. Sanctions |
EU and Other Allied Countries |
|
General Observation: Most sweeping sanctions on Iran of virtually any country in the world |
As of 2010, U.N. sanctions were intended to give countries justification to cooperate with U.S. secondary sanctions. Post-JCPOA: Resolution 2231 is the only operative Resolution on Iran. |
EU closely aligned its sanctions tightening with that of the United States. Most EU sanctions lifted in accordance with the JCPOA, although some sanctions on arms, dual-use items, and human rights remain. Japan, South Korean, and China sanctions also became extensive but were almost entirely lifted in concert with the JCPOA. |
|
Ban on U.S. Trade with, Investment in, and Financing for Iran: Executive Order 12959 bans (with limited exceptions) U.S. firms from exporting to Iran, importing from Iran, or investing in Iran. |
U.N. sanctions did not at any time ban civilian trade with Iran or general civilian sector investment in Iran. |
No comprehensive EU ban on trade in civilian goods with Iran was imposed at any time. Japan and South Korea did not ban normal civilian trade with Iran. |
|
Sanctions on Foreign Firms that Do Business with Iran's Energy Sector: The Iran Sanctions Act, P.L. 104-172, and subsequent laws and executive orders, discussed throughout the report, mandate sanctions on virtually any type of transaction with/in Iran's energy sector. |
No U.N. equivalent existed. However, Resolution 1929 "not[es] the potential connection between Iran's revenues derived from its energy sector and the funding of Iran's proliferation-sensitive nuclear activities." This wording was interpreted as providing U.N. support for countries to ban their companies from dealing with Iran's energy sector. |
With certain exceptions, the EU banned almost all dealings with Iran's energy sector after 2011. These sanctions now lifted. Japanese and South Korean measures banned new energy projects in Iran and called for restraint on ongoing projects. South Korea in December 2011 cautioned its firms not to sell energy or petrochemical equipment to Iran. Both cut oil purchases from Iran sharply. These sanctions now lifted. |
|
Ban on Foreign Assistance: U.S. foreign assistance to Iran—other than purely humanitarian aid—is banned under §620A of the Foreign Assistance Act, which bans U.S. assistance to countries on the U.S. list of "state sponsors of terrorism." Iran is also routinely denied direct U.S. foreign aid under the annual foreign operations appropriations acts (most recently in §7007 of division H of P.L. 111-8). |
No U.N. equivalent |
EU measures of July 27, 2010, banned grants, aid, and concessional loans to Iran. Also prohibited financing of enterprises involved in Iran's energy sector. These sanctions now lifted. Japan and South Korea measures did not specifically ban aid or lending to Iran. |
|
Ban on Arms Exports to Iran: Iran is ineligible for U.S. arms exports under several laws, as discussed in the report. |
As per Resolution 1929 (paragraph 8), as superseded by Resolution 2231, Security Council approval is required to sell Iran major weapons systems. |
EU sanctions include a comprehensive ban on sale to Iran of all types of military equipment, not just major combat systems. Arms embargo remains post-JCPOA. No similar Japan and South Korean measures announced, but neither has exported arms to Iran. |
|
Restriction on Exports to Iran of "Dual Use Items": Primarily under §6(j) of the Export Administration Act (P.L. 96-72) and §38 of the Arms Export Control Act, there is a denial of license applications to sell Iran goods that could have military applications. |
U.N. resolutions on Iran banned the export of many dual-use items to Iran. Resolution 2231 sets up a procurement network for the P5+1 to approve of all purchases for Iran's ongoing nuclear program. |
EU banned the sales of dual use items to Iran, including ballistic missile technology, in line with U.N. resolutions. These restrictions generally remain post-JCPOA. Japan and S. Korea have announced full adherence to strict export control regimes when evaluating sales to Iran. These restrictions generally remain post-JCPOA. |
|
Sanctions Against Lending to Iran: Under §1621 of the International Financial Institutions Act (P.L. 95-118), U.S. representatives to international financial institutions, such as the World Bank, are required to vote against loans to Iran by those institutions. |
Resolution 1747 (oper. paragraph 7) requested, but did not mandate, that countries and international financial institutions refrain from making grants or loans to Iran, except for development and humanitarian purposes. (No longer applicable.) |
The July 27, 2010, measures prohibited EU members from providing grants, aid, and concessional loans to Iran, including through international financial institutions. Sanctions lifted post-JCPOA. Japan and South Korea banned medium- and long-term trade financing and financing guarantees. Short-term credit was still allowed. These sanctions now lifted. |
|
Sanctions Against the Sale of Weapons of Mass Destruction-Related Technology to Iran: Several laws and regulations provide for sanctions against entities, Iranian or otherwise, that are determined to be involved in or supplying Iran's WMD programs (asset freezing, ban on transaction with the entity). |
Resolution 1737 (oper. paragraph 12) imposed a worldwide freeze on the assets and property of Iranian WMD-related entities named in an Annex to the Resolution. Each subsequent resolution expanded the list of Iranian entities subject to these sanctions. |
The EU measures imposed July 27, 2010, commit the EU to freezing the assets of WMD-related entities named in the U.N. resolutions, as well as numerous other named Iranian entities. Most of these restrictions remain. Japan and South Korea froze assets of U.N.-sanctioned entities. Most of these restrictions have been lifted. |
|
Ban on Transactions with Terrorism Supporting Entities: Executive Order 13224 bans transactions with entities determined by the Administration to be supporting international terrorism. Numerous entities, including some of Iranian origin, have been designated. |
No direct equivalent, but Resolution 1747 (oper. paragraph 5) bans Iran from exporting any arms. Resolution 2231 continues that restriction for a maximum of five years. |
No direct equivalent, but many of the Iranian entities named as blocked by the EU, Japan, and South Korea overlap or complement Iranian entities named as terrorism supporting by the United States. Japan and S. Korea did not impose specific terrorism sanctions on Iran. |
|
Human Rights Sanctions: CISADA provides for a prohibition on travel to the U.S., blocking of U.S.-based property, and ban on transactions with Iranians determined to be involved in serious human rights abuses against Iranians since the June 12, 2009, presidential election there, or with persons selling Iran equipment to commit such abuses. |
No U.N. sanctions were imposed on Iran for terrorism or human rights abuses. |
EU sanctions include 87 named Iranians subject to a ban on travel to the EU countries. The EU also retains a ban on providing equipment that can be used for internal repression. Japan and South Korea have announced bans on named Iranians involved in WMD programs. |
|
Restrictions on Iranian Shipping: Under Executive Order 13382, the U.S. Department of the Treasury has named Islamic Republic of Iran Shipping Lines and several affiliated entities as entities whose U.S.-based property is to be frozen. |
Resolution 1803 and 1929 authorize countries to inspect cargoes carried by Iran Air and Islamic Republic of Iran Shipping Lines (IRISL)—or any ships in national or international waters—if there is an indication that the shipments include goods whose export to Iran is banned. These resolutions no longer apply. |
The EU measures announced July 27, 2010, bans Iran Air Cargo from access to EU airports. The measures also freeze the EU-based assets of IRISL and its affiliates. Insurance and reinsurance for Iranian firms are banned. These sanctions now lifted. Japan and South Korean measures took similar action against IRISL and Iran Air. Sanctions now lifted. |
|
Banking Sanctions: During 2006-2011, several Iranian banks have been named as proliferation or terrorism supporting entities under Executive Orders 13382 and 13224, respectively (see Table 4 at end of report). CISADA prohibits banking relationships with U.S. banks for any foreign bank that conducts transactions with Iran's Revolutionary Guard or with Iranian entities sanctioned under the various U.N. resolutions. FY2012 Defense Authorization (P.L. 112-81) prevents U.S. accounts with foreign banks that process transactions with Iran's Central Bank (with specified exemptions). |
No direct equivalent However, two Iranian banks were named as sanctioned entities under the U.N. Security Council resolutions. U.N. restrictions on Iranian banking now lifted. |
The EU froze Iran Central Bank assets January 23, 2012, and banned all transactions with Iranian banks unless authorized on October 15, 2012. Brussels-based SWIFT expelled sanctioned Iranian banks from the electronic payment transfer system. This restriction has been lifted. Japan and South Korea took similar measures South Korea imposed the 40,000 Euro threshhold requiring authorization. Japan and S. Korea froze the assets of 15 Iranian banks; South Korea targeted Bank Mellat for freeze. These sanctions now lifted. |
|
Ballistic Missiles: U.S. proliferations laws provide for sanctions against foreign entities that help Iran with its nuclear and ballistic missile programs. |
Resolution 1929 (paragraph 9) prohibited Iran from undertaking "any activity" related to ballistic missiles capable of delivering a nuclear weapon. Resolution 2231 calls on Iran not to develop or launch ballistic missiles designed to be capable of carrying a nuclear weapon. |
EU measures on July 27, 2010, required adherence to this provision of Resolution 1929. EU has retained ban on providing ballistic missile technology to Iran in post-JCPOA period. |
It can be argued that the question "are sanctions on Iran 'working'?" should be assessed based on an analysis of the goals of the sanctions. The following sections try to assess the effectiveness of Iran sanctions according to a number of criteria.
The sanctions regime of 2011-2015 is widely credited with increasing Iran's willingness to accept restraints on its nuclear program, at least for a long period of time, as stipulated in the JCPOA. Hassan Rouhani was elected president of Iran in June 2013 in part because of his stated commitment to achieving an easing of sanctions and ending Iran's international isolation—a commitment that would undoubtedly require accepting such restraints. Still, as to the long term effects of sanctions, the intelligence community assesses that it "does not know" whether Iran plans to eventually develop a nuclear weapon.88
It remains uncertain whether Iran will remain in the JCPOA despite the U.S. exit from it.89 There are no indications that Iranian leaders will answer the Trump Administration call for negotiations on a new agreement that would cover not only Iran's nuclear program but also its missile program and its regional malign activities. Both President Trump and President Rouhani have publicly said they would accept bilateral talks without conditions, but both leaders generally indicate that the other's demands are too extensive to make such a meeting productive.
There is little evidence that even the strict sanctions of 2011-2016 slowed Iran's nuclear program or its missile program. And, even though U.S. and EU sanctions remain on Iran's missile programs, U.S. intelligence officials have testified that Iran continues to expand the scale, reach, and sophistication of its ballistic missile arsenal. Still, some U.S. officials have asserted that Iran's nuclear and missile programs might have advanced faster were sanctions not imposed.90
Sanctions have apparently prevented Iran from buying significant amounts of major combat systems since the early 1990s. Iran has been able to acquire defensive systems; Russia delivered the S-300 air defense system in April 2016. However, Iran's indigenous arms industry has grown over the past two decades and Iran might have acquired some systems from foreign suppliers such as North Korea that do not abide by U.N. restrictions.91 U.S. intelligence directors testified in February 2018 that Iran is fielding increasingly lethal weapons systems, including more advanced naval mines and ballistic missiles, small but capable submarines, armed UAVs (unmanned aerial vehicles), coastal defense cruise missile batteries, attack craft, and anti-ship ballistic missiles.92
Strict sanctions during 2012-2016, and U.N. restrictions and U.S. sanctions against Iran's exportation of weaponry, did not prevent Iran from supplying arms, including missiles, to its regional allies, such as the Asad regime in Syria, the Houthi rebels in Yemen, Lebanese Hezbollah, or Shiite militia groups in Iraq. Iran apparently is able to manufacture domestically the weaponry it suppliers to such entities, and sanctions do not appear to be an effective tool to limit such Iranian efforts. Nor did sanctions prevent Iran from sending thousands of IRGC advisers to help the Asad regime in Syria beginning in 2013.
Iran has remained engaged in these regional conflicts since sanctions were eased in early 2016. In his May 8, 2018, announcement of withdrawal from the JCPOA, President Donald Trump stated that Iran's defense budget had increased 40% since Implementation Day, but it is not clear that the extra defense funds contributed to any expansion of Iran's regional activities. The President stated on August 6, 2018, the day that many U.S. sanctions were reimposed on Iran, that "Since the deal [JCPOA] was reached, Iran's aggression has only increased. The regime has used the windfall of newly accessible funds it received under the JCPOA to build nuclear-capable missiles, fund terrorism, and fuel conflict across the Middle East and beyond…. The Reimposition of nuclear-related sanctions through today's actions further intensifies pressure on Tehran to change its conduct."93 However, there are no indications that the reimposition of U.S. sanctions has caused any Iranian regional retrenchment, to date.
In terms of congressional oversight, a provision of the FY2016 Consolidated Appropriation (P.L. 114-113) requires an Administration report to Congress on how Iran has used the financial benefits of sanctions relief. And, a provision of the Iran Nuclear Agreement Review Act (P.L. 114-17) requires that a semiannual report on Iran's compliance with the JCPOA include information on any Iranian use of funds to support acts of terrorism.
No U.S. Administration, including the Trump Administration, has asserted that sanctions on Iran—or the reimposition of sanctions—were/are intended to bring about the change of Iran's regime, although some experts asserted that this should be the goal of sanctions. But, the support of Iranians seeking reintegration with the international community and sanctions relief helped propel Rouhani—the most moderate of the candidates permitted to run—to a first round victory in the June 2013 presidential election, and to reelection in May 2017. Many Iranians cheered the finalization of the JCPOA in July 15, 2015, undoubtedly contributing to Supreme Leader Khamene'i's acceptance of the deal.
Still, the IRGC and other hardliners control domestic security and the judiciary, and these factions have criticized Rouhani's compromises, particularly in light of the U.S. exit from the JCPOA. The security forces have continued to arrest U.S. and dual nationals and to prosecute Rouhani allies on various charges. In July 2018, the IRGC and Iran's parliament (Majles) called for cabinet changes to address economic mismanagement and the Majles has given Rouhani until early September to appear before it to answer questions about the economic situation.94 In July 2018, Rouhani replaced Iran's Central Bank governor as an apparent gesture to indicate responsiveness to economic concerns expressed by members of Iran's political establishment. Still, apparently out of hardliner concern that forcing Rouhani out could touch off massive unrest, there does not appear to be an imminent threat to Rouhani's grip on his office.
Some assert that the sanctions relief of the JCPOA played a role in the widespread unrest that erupted in Iran in late December 2017-January 2018 by feeding unrealized public expectations of better economic conditions. Others note that the unrest illustrates that sanctions relief of the JCPOA did not yield the domestic stability that Iran's regime expected to achieve. The U.S. pullout from the JCPOA on May 8 has begun to cause economic effects, discussed below, that led to protests in the Tehran bazaar in late June 2018, subsequent demonstrations in several cities, and labor strikes and unrest beginning in late summer 2018. However, experts on Iran assesses that the level of unrest in Iran is not sufficient to cause a change in regime.
Sanctions took a substantial toll on Iran's economy, and sanctions relief caused Iran's economy to rebound, although perhaps not to the extent that Iranians expected. Assessing the effects of the U.S. exit from the JCPOA will likely require time for most economic indicators to be accurately measured.
Iran had some success mitigating the economic effect of sanctions, and which will likely be used to try to cope with reimposed U.S. sanctions.
Promoting Nonoil Exports. Over the past ten years, Iran has promoted sales of nonoil products such as minerals, cement, urea fertilizer, and other agricultural and basic industrial goods. Nonoil exports now generate over half the revenue required to fund Iran's imports of goods and services.102
Oil Products/Condensate Sales. Iran has increased sales of oil products such as petrochemicals and condensates, earning about $4.7 billion in revenue from that source by 2016.103 Condensates are not generally included in figures for Iran's export of crude oil.
Reallocation of Investment Funds and Import Substitution. Sanctions compelled some Iranian manufacturers to increase domestic production of some goods as substitutes for imports. This trend was hailed by Iranian economists and Supreme Leader Khamene'i, who has long maintained that Iran should build a "resistance economy" less dependent on imports and foreign investment.
Partial Privatization/IRGC in the Economy. 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 incorporated as holding companies, foundations, or investment groups. Based on data from the Iranian Privatization Organization, there are about 120 such entities that account for a significant proportion of Iran's GDP.104 Rouhani has sought to push the IRGC out of Iran's economy through divestment, to the extent possible. However, a substantial part of the economy remains controlled by government-linked conglomerates, including the IRGC. The IRGC's corporate affiliates are widely assessed as controlling at least 20% of Iran's economy, although there is little available information on the degree of IRGC-affiliated ownership stakes.
Subsidy Reductions. In 2007, the Ahmadinejad government began trying to wean the population off of generous subsidies by compensating families with cash payments of about $40 per month. Gasoline prices were raised to levels similar to those in other regional countries, and far above the subsidized price of 40 cents per gallon. Rouhani has continued to reduce subsidies, including by raising gasoline and staple food prices further and limiting the cash payments to only those families who could claim financial hardship. Rouhani also has improved collections of taxes and of price increases for electricity and natural gas utilities.105
Import Restrictions/Currency Controls. To conserve hard currency, Iran has at times 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. These restrictions eased after sanctions were lifted in 2016 but have been reimposed in 2018 to deal with economic unrest and the falling value of the rial.
The Iran Sanctions Act (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 or increase production. U.S. officials estimated in 2011 that Iran had lost $60 billion in investment in the sector as numerous major firms pulled out of Iran. Iran says it needs $130 billion-$145 billion in new investment by 2020 to keep oil production capacity from falling.106 Further development of the large South Pars gas field alone requires $100 billion.107
During 2012-2016, there was little development activity at Iran's various oil and gas development sites, as energy firms sought to avoid sanctions (see Table 4). Some work abandoned by foreign investors was assumed by domestic companies, particularly those linked to the IRGC. However, the Iranian firms are not as technically capable as the international firms that have withdrawn. The lifting of sanctions in 2016 lured at least some foreign investors back into the sector, encouraged by Iran's more generous investment terms under a concept called the "Iran Petroleum Contract." That contract gives investing companies the rights to a set percentage of Iran's oil reserves for 20-25 years.108 Iran signed a number of new agreements with international energy firms since mid-2016 but, as noted in the tables and other information above, major energy firms have begun to divest in response to the U.S. exit from the JCPOA.
Sanctions relief also opened opportunities for Iran to resume developing its gas sector. Iran has used its gas development primarily to reinject into its oil fields rather than to export. Iran exports about 3.6 trillion cubic feet of gas, primarily to Turkey and Armenia. Sanctions have rendered Iran unable to develop a liquefied natural gas (LNG) export business, and derailed several gas ventures, including a 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. However, it was reported in March 2017 that the Philippine National Oil Company is seeking to build a 2-million-ton LNG plant in Iran, suggesting that patent issues do not necessarily preclude Iran from pursuing LNG.
|
Date |
Field/Project |
Company(ies)/Status (If Known) |
Value |
Output/ |
|
Feb. 1999 |
Doroud (oil) Total and ENI exempted from sanctions because of pledge to exit Iran |
Total (France)/ENI (Italy) |
$1 billion |
205,000 bpd |
|
Apr. 1999 Dec./May 2016 |
Balal (oil) Initial development completed in 2004 Dec. 2016: Thailand PTTEP signed agreement with NIOC to study further development. May 2016: KOGAS signed a memorandum of understanding (MoU) to assess the field. |
Total/ Bow Valley (Canada)/ENI Thailand PTTEP KOGAS (South Korea) |
$300 million |
40,000 bpd |
|
Nov. 1999 |
Soroush and Nowruz (oil) Royal Dutch exempted from sanctions because of pledge to exit Iran market |
Royal Dutch Shell (Netherlands)/Japex (Japan) |
$800 million |
190,000 bpd |
|
Apr. 2000 |
Anaran bloc (oil) Lukoil and Statoil invested in 2000 but abandoned work in 2009. As of Dec. 2016, Lukoil reportedly is considering returning to the project. |
Lukoil (Russia) and Statoil (Norway) |
$105 million |
65,000 |
|
Jul. 2000 |
Phase 4 and 5, South Pars (gas) On stream as of 2005. ENI exempted from sanctions based on pledge to exit Iran market |
ENI |
$1.9 billion |
2 billion cu. ft./day (cfd) |
|
Mar. 2001 |
Caspian Sea oil exploration—construction of submersible drilling rig for Iranian partner |
GVA Consultants (Sweden) |
$225 million |
NA |
|
Jun. 2001 |
Darkhovin (oil) ENI exited in 2013 and doing so enabled the firm to be exempted from U.S. sanctions |
ENI Field in production |
$1 billion |
100,000 bpd |
|
May 2002 |
Masjid-e-Soleyman (oil) |
Sheer Energy (Canada)/CNPC (China))/ Naftgaran Engineering (Iran) |
$80 million |
25,000 bpd |
|
Sept. 2002 |
Phase 9 + 10, South Pars (gas) On stream as of early 2009 |
GS Engineering and Construction Corp. (South Korea) |
$1.6 billion |
2 billion cfd |
|
Oct. 2002 |
Phase 6, 7, 8, South Pars (gas) Field began producing late 2008; operational control handed to NIOC in 2009. Statoil exempted from sanctions upon pledge to divest |
Statoil (Norway) |
$750 million |
3 billion cfd |
|
Jan. 2004 Dec. 2016 |
Azadegan (oil)—South and North Oct. 2010: original investor Inpex sold its stake and was exempted from ISA investigation. China National Petroleum Corp. took a majority stake in South and North Azadegan fields in January 2009. However, in 2014, Iran cancelled the contracts for for nonperformance Dec. 2016: Royal Dutch Shell and Petronas signed a MoU to assess S. Azadegan for possibly taking the project over. |
Inpex (Japan) CNPC (China) Royal Dutch Shell/Petronas (Malaysia) |
$200 million (Inpex stake); China $2.5 billion |
260,000 bpd |
|
Jan. 2004 |
Tusan Block Oil found in block in Feb. 2009, but not in commercial quantity, according to the firm. |
Petrobras (Brazil) |
$178 million |
|
|
Oct. 2004
|
Yadavaran (oil) In 2014, Iran says Sinopec has "experienced problems with regards to progress" on the field, which also extends into Iraq. December 2016: Royal Dutch Shell signed MoU to assess taking over developing the field. |
Sinopec (China), deal finalized Dec. 9, 2007 |
$2 billion |
300,000 bpd |
|
2005 |
Saveh bloc (oil) GAO report, cited below |
PTT (Thailand) |
||
|
Jun. 2006 |
Garmsar bloc (oil) 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.) |
Sinopec (China) |
$20 million |
|
|
Jul. 2006 |
Arak Refinery expansion (GAO reports; Fimco FZE Machinery website; http://www.fimco.org/index.php?option=com_content&task=view&id=70&Itemid=78.) |
Sinopec (China); JGC (Japan). Work may have been taken over or continued by Hyundai Heavy Industries (S. Korea) |
$959 million (major initial expansion; extent of Hyundai work unknown) |
Expansion to produce 250,000 bpd |
|
Sept. 2006 |
Khorramabad block (oil) Seismic data gathered, but no production is planned. (Statoil factsheet, May 2011) |
Norsk Hydro and Statoil (Norway). |
$49 million |
no estimates |
|
Dec. 2006 |
North Pars Gas Field (offshore gas). Includes gas purchases Work crews reportedly pulled from the project in early-mid 2011. ("China Curbs Iran Energy Work" Reuters, September 2, 2011) |
China National Offshore Oil Co. |
$16 billion |
3.6 billion cfd |
|
Feb. 2007 |
LNG Tanks at Tombak Port 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. |
Daelim (S. Korea) |
$320 million |
200,000 ton capacity |
|
Feb. 2007 |
Phase 13, 14—South Pars (gas) Deadline to finalize (May 2009) not met; firms submitted revised proposals to Iran in June 2009. State Department said on September 30, 2010, that Royal Dutch Shell and Repsol will not pursue this project any further. |
Royal Dutch Shell, Repsol (Spain) |
$4.3 billion |
|
|
Mar. 2007 |
Esfahan refinery upgrade |
Daelim (S. Korea) |
NA |
|
|
Jul. 2007 |
Phase 22, 23, 24—South Pars (gas) Pipeline to transport Iranian gas to Turkey, and on to Europe and building three power plants in Iran. Contract not finalized to date. |
Turkish Petroleum Company (TPAO) |
$12. billion |
2 billion cfd |
|
Dec. 2007 |
Golshan and Ferdowsi onshore and offshore gas and oil fields and LNG plant Contract modified but reaffirmed December 2008 (GAO reports; Oil Daily, January 14, 2008.) |
Petrofield Subsidiary of SKS Ventures (Malaysia) |
$15 billion |
3.4 billion cfd of gas/250,000 bpd of oil |
|
2007 (unspec.) |
Jofeir Field (oil) GAO report cited below. Belarusneft, a subsidiary of Belneftekhim, sanctioned under ISA on March 29, 2011. Naftiran sanctioned on September 29, 2010, for this and other activities. |
Belarusneft (Belarus) under contract to Naftiran. No production to date |
$500 million |
40,000 bpd |
|
2008 |
Dayyer Bloc (Persian Gulf, offshore, oil) GAO reports. |
Edison (Italy) |
$44 million |
|
|
Feb. 2008 |
Lavan field (offshore natural gas) 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). |
PGNiG (Polish Oil and Gas Company, Poland) |
$2 billion |
|
|
Mar. 2008 |
Danan Field (on-shore oil) "PVEP Wins Bid to Develop Danan Field." Iran Press TV, March 11, 2008. |
Petro Vietnam Exploration and Production Co. (Vietnam) |
||
|
Apr. 2008 |
Iran's Kish Gas Field Includes pipeline from Iran to Oman. |
Oman (cofinancing of project) |
$7 billion |
1 billion cfd |
|
Apr. 2008 |
Moghan 2 (onshore oil and gas, Ardebil province) January 7, 2014, GAO report says INA has withdrawn from Iran. |
INA (Croatia) |
$40-$140 million (dispute over size) |
|
|
2008 |
Kermanshah petrochemical plant (new construction) GAO reports. |
Uhde (Germany) |
300,000 metric tons/yr |
|
|
Jun. 2008 |
Resalat Oilfield Status of work unclear. |
Amona (Malaysia). Joined in June 2009 by CNOOC and another China firm, COSL. |
$1.5 billion |
47,000 bpd |
|
Jan. 2009 |
Bushehr Polymer Plants Production of polyethelene at two polymer plants in Bushehr Province. GAO January 7, 2014, report says Sasol has withdrawn from Iran. |
Sasol (South Africa) |
Capacity is 1 million tons per year. Products are exported from Iran. |
|
|
Mar. 2009 |
Phase 12 South Pars (gas)—Incl. LNG terminal construction and Farsi Block gas field/Farzad-B bloc. |
Indian firms: Oil and Natural Gas Corp. of India (ONGC); Oil India Ltd., India Oil Corp. Ltd./minor stakes by Sonanagol (Angola) and PDVSA (Venezuela). |
$8 billion |
20 million tonnes of LNG annually by 2012 |
|
Aug. 2009 |
Abadan refinery Upgrade and expansion; building a new refinery at Hormuz on the Persian Gulf coast. |
Sinopec |
Up to $6 billion if new refinery is built |
|
|
Oct. 2009 |
South Pars Gas Field—Phases 6-8, Gas Sweetening Plant CRS conversation with Embassy of S. Korea in Washington, DC, July 2010. Contract signed but then abrogated by S. Korean firm. |
G and S Engineering and Construction (South Korea) |
$1.4 billion |
|
|
Nov. 2009 |
South Pars: Phase 12—Part 2 and Part 3 ("Italy, South Korea To Develop South Pars Phase 12." Press TV [Iran], November 3, 2009, http://www.presstv.com/pop/Print/?id=110308.) |
Daelim (S. Korea)—Part 2; Tecnimont (Italy)—Part 3 |
$4 billion ($2 bn each part) |
|
|
Feb. 2010/July 2017 |
South Pars: Phase 11 Project originally awarded to CNPC in 2010, but CNPC exited the project in October 2012. In July 2017, Total took over the project as operator, with CNPC as minority partner (30%). Iran's Petropars has a 20% stake as well. |
Total SA (France) and CNPC (China), with Iran Petropars |
$4.7 billion |
|
|
2011 |
Azar Gas Field Iran cancelled Gazprom's contract due to Gazprom's failure to fulfill its commitments. |
Gazprom (Russia) |
||
|
Dec. 2011 |
Zagheh Oil Field Preliminary deal signed December 2011 |
Tatneft (Russia) |
$1 billion |
55,000 barrels per day |
|
Jul. 2016 |
Aban Oil Field Zarubezhneft signed a MoU to assess the field. |
Zarubezhneft (Russia) |
||
|
Jul. 2016 |
Paydar Garb Oil Field Zarubezhneft signed a MoU to assess the field. |
Zarubezhneft (Russia) |
||
|
Nov. 2016 |
Parsi and Rag E-Sefid Schlumberger signed a MoU to assess the fields. |
Schlumberger (France) |
||
|
Nov. 2016 |
South Pars Phase 11 Total has announced it will divest in response to U.S. reimposition of sanctions in 2018 |
Total SA (France)/CNPC (China) and Petropars |
$4.8 billion |
1.8 billion cu ft/day |
|
Nov. 2016 |
Sumar Oil Field Polish Oil and Gas Company (PGNiG) signed a MoU to assess the field for six months. |
PGNiG (Poland) |
||
|
Nov. 2016 |
Karanj International Pergas Consortium signed a MoU to assess this field. |
Pergas (consortium of 15 firms from Norway, Britain, and Iran) |
||
|
Dec. 2016 |
Changuleh Oil Field Companies signed MoU's to assess field. |
Gazprom (Russia), PTTEP (Thailand), and DNO (Norway) |
||
|
Dec. 2016 |
Kish Gas Field Royal Dutch Shell signed MoU to assess the field |
Royal Dutch Shell |
||
|
Dec. 2016 |
Chesmekosh Gas Field Gazprom signed MoU to assess the field |
Gazprom (Russia) and Petronas (Malaysia) |
||
|
Mar. 2017 |
Shadegan Oil Field Khuzestan province (southern Iran). Currently producing about 65,000 bpd. |
Tatneft (Russia) |
500,000 bpd max. |
Sources: Various oil and gas journals, as well as CRS conversations with some U.S. and company officials. Some information comes from various GAO reports, the latest of which was January 13, 2015 (GAO-15-258R).
Note: CRS has no mandate, authority, or means to determine violations of the Iran Sanctions Act, and no way to confirm the status of any of the reported investments. The investments are private agreements between Iran and the firms involved, which are not required to reveal the terms of their arrangements. 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.
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.109 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. In 2017, Iranian officials said Iran had become largely self-sufficient in gasoline production.
It is difficult to draw any direct relationship between sanctions and Iran's human rights practices. Recent human rights reports by the State Department and the U.N. Special Rapporteur on Iran's human rights practices generally assess that there has been some modest improvement in some of Iran's practices in recent years, particularly relaxation of enforcement of the public dress code for women. But the altered policies cannot necessarily be attributed to sanctions relief.
Since at least 2012, foreign firms have generally refrained from selling the Iranian government equipment to monitor or censor social media use. Such firms include German telecommunications firm Siemens, Chinese Internet infrastructure firm Huawei, and South African firm MTN Group. In October 2012, Eutelsat, a significant provider of satellite service to Iran's state broadcasting establishment, ended that relationship after the EU sanctioned the then head of the Islamic Republic of Iran Broadcasting (IRIB), Ezzatollah Zarghami. However, the regime retains the ability to monitor and censor social media use.
During 2012-2016, sanctions produced significant humanitarian-related effects, particularly in limiting the population's ability to obtain expensive Western-made medicines, such as chemotherapy drugs. Some of the scarcity was caused by banks' refusal to finance such sales, even though doing was not subject to any sanctions. Some observers say the Iranian government exaggerated reports of medicine shortages to generate opposition to the sanctions. Other accounts say that Iranians, particularly those with connections to the government, took advantage of medicine shortages by cornering the import market for key medicines.
Other reports say that pollution in Tehran and other big cities worsened because Iran produces 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.
In the aviation sector, some Iranian pilots complained publicly that U.S. sanctions caused 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.110
Sanctions relief ameliorated at least some of the humanitarian difficulties discussed above. In the aviation sector, several sales of passenger aircraft have been announced, and licensed by the Department of the Treasury, since Implementation Day. However, as noted, the licenses are being revoked and deliveries will not proceed beyond November 2018.
The JCPOA, its implications, and related Iran issues have been the subject of legislation. The JCPOA states that as long as Iran fully complies with the JCPOA, the sanctions that were suspended or lifted shall not be reimposed on other bases (such as terrorism or human rights).
The Obama Administration stated that it would adhere to that provision but that some new sanctions that seek to limit Iran's military power, its human rights abuses, or its support for militant groups might not necessarily violate the JCPOA. During 2015-2016, supporters of the bills below asserted that they addressed weaknesses of the agreement or unrelated Iran issues, or increased oversight of the JCPOA.
The Iran Nuclear Agreement Review Act of 2015 (INARA, P.L. 114-17) provided for a 30- or 60-day congressional review period after which Congress could pass legislation to approve or to disapprove of the JCPOA, or do nothing. No such legislation of disapproval was enacted.
There are several certification and reporting requirements under INARA:
The FY2016 Consolidated Appropriation (P.L. 114-113) contained a provision amending the Visa Waiver Program to require a visa to visit the United States for any person who has visited Iraq, Syria, or any terrorism list country (Iran and Sudan are the two aside from Syria still listed) in the previous five years. Iran argued that the provision represented a violation of at least the spirit of the JCPOA by potentially deterring European businessmen from visiting Iran. The Obama Administration issued a letter to Iran stating it would implement the provision in such a way as not to not impinge on sanctions relief, and allowances for Iranian students studying in the United States were made in the implementing regulations. Another provision of that law requires an Administration report to Congress on how Iran has used the benefits of sanctions relief.
President Trump has issued and amended executive orders that, in general, prohibit Iranian citizens (as well as citizens from several other countries) from entering the United States. This marked a significant additional restriction beyond the FY2016 Consolidated Appropriation.
The 114th Congress acted to prevent ISA from expiring in its entirety on December 31, 2016. The Iran Sanctions Extension Act (H.R. 6297), which extended ISA until December 31, 2026, without any other changes, passed the House on November 15 by a vote of 419-1 and then passed the Senate by 99-0. President Obama allowed the bill to become law without signing it (P.L. 114-277), even though the Administration considered it unnecessary because the President retains ample authority to reimpose sanctions on Iran. Iranian leaders called the extension a breach of the JCPOA,111 but the JCPOA's "Joint Commission" did not determine it breached the JCPOA.
The conference report on the FY2017 National Defense Authorization Act (S. 2943, P.L. 114-328) contained a provision (Section 1226) requiring a quarterly report to Congress on Iran's missile launches the imposition of U.S. sanctions with respect to Iran's ballistic missile launches until December 31, 2019. The conference report on the FY2018 NDAA (P.L. 115-91) extended that reporting requirement until December 31, 2022. The report is to include efforts to sanction entities or individuals that assist those missile launches.
Some Iran sanctions legislation in the 114th Congress appeared to be intended to address Iran's objectionable behavior, but was not enacted:
With the threat of a Trump Administration pullout from the JCPOA looming, Congress acted on or considered additional Iran sanctions legislation. Still, the sanctions laws adopted appeared to avoid violating U.S. JCPOA commitments. Now that the Trump Administration has decided to exit the pact, there might be increased potential for Congress to consider legislation that sanctions those core Iranian economic sectors that could not be sanctioned under the JCPOA. The following sections discuss some Iran sanctions legislation enacted or under consideration in the 115th Congress.
A bill, S. 722, which initially contained only Iran-related sanctions, was reported out by the Senate Foreign Relations Committee on May 25, 2017. After incorporating an amendment adding sanctions on Russia, the bill was passed by the Senate on June 15, 2017, by a vote of 98-2. A companion measure, H.R. 3203, was introduced in the House subsequent to the Senate passage of S. 722, and contained Iran-related provisions virtually identical to the engrossed Senate version of S. 722. Following a reported agreement among House and Senate leaders, H.R. 3364, with additional sanctions provisions related to North Korea (and provisions on Iran remaining virtually unchanged from those of the engrossed S. 722), was introduced and passed both chambers by overwhelming margins. President Trump signed it into law on August 2, 2017 (P.L. 115-44), accompanied by a signing statement expressing reservations about the degree to provisions pertaining to Russia, might conflict with the President's constitutional authority.
CAATSA's Iran-related provisions are analyzed above. Overall, CAATSA does not appear to conflict with the JCPOA insofar as it does not reimpose U.S. secondary sanctions on Iran's civilian economic sectors. The JCPOA did not require the United States to refrain from imposing additional sanctions—as CAATSA does—on Iranian proliferation, human rights abuses, terrorism, or the IRGC. Section 108 of CAATSA requires an Administration review of all designated entities to assess whether such entities are contributing to Iran's ballistic missile program or contributing to Iranian support for international terrorism. No entities promised to be delisted by the United States in October 2023, under the JCPOA, appear to fall into these categories, and the section would therefore not appear to preclude delisting any entities as required.
There are a number of other possible sanctions that might receive consideration—either in a global or multilateral framework. These possibilities are analyzed in CRS In Focus IF10801, Possible Additional Sanctions on Iran, by [author name scrubbed].
Table 5. 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. For U.S. executive order, names in italics are entities and individuals that were delisted to implement the JCPOA. Entities in boldface were to be delisted on Transition Day (October 2023). However, all delisted entities will be relisted on November 5, 2018, and no entities to be delisted will be delisted.
|
U.N. Security Council Resolutions Entities in italics were "delisted" on Implementation Day. Entities in standard font to remain listed until Transition Day (October 2023), unless removed earlier by Security Council |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Entities Sanctioned by Resolution 1737 (resolution no longer active) |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Entities/Persons Added by Resolution 1747 (resolution no longer active) |
|||||||||||||||||||||||||||||||||||||||||||||||||
* Bank Sepah and Bank Sepah International were delisted on Implementation Day by a separate decision the Security Council. They were not named on the Resolution 2231 attachment of entities to be delisted on that day. No information has been publicized whether Ahmad Derakshandeh, the head of Bank Sepah, was also delisted. |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Entities Added by Resolution 1803 (resolution no longer active) |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Requires that countries report when the following persons enter or transit their territories:
Travel banned for five Iranians sanctioned under Resolutions 1737 and 1747. Adds entities to the sanctions list:
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Entities Added by Resolution 1929 (resolution no longer active) |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
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.
The following Revolutionary Guard affiliated firms (several are subsidiaries of Khatam ol-Anbiya, the main Guard construction affiliate):
The following entities owned or controlled 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 coincide 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 Company, China Great Wall Industry Corp, and China National Precision Machinery Import/Export Corp. |
June 2006 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Sanam Industrial Group (Iran) and Ya Mahdi Industries Group (Iran) |
July 2006 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Bank Sepah (Iran) |
January 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Kalaye Electic Company |
February 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Defense Industries Organization (Iran) |
March 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Pars Trash (Iran, nuclear program), Farayand Technique (Iran, nuclear program), Fajr Industries Group (Iran, missile program), Mizan Machine Manufacturing Group (Iran, missile program). |
June 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Aerospace Industries Organization (AIO) (Iran); Korea Mining and Development Corp. (N. Korea). |
September 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 |
October 21, 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
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. |
October 21, 2007 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Future Bank (Bahrain-based but allegedly controlled by Bank Melli) |
March 12, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Yahya Rahim Safavi (former IRGC Commander in Chief); Mohsen Fakrizadeh-Mahabadi (senior Defense Ministry scientist); Dawood Agha-Jani (head of Natanz enrichment site); Mohsen Hojati (head of Fajr Industries, involved in missile program); Mehrdada Akhlaghi Ketabachi (heads Shahid Bakeri Industrial Group); Naser Maliki (heads Shahid Hemmat Industrial Group); Tamas Company (involved in uranium enrichment); Shahid Sattari Industries (makes equipment for Shahid Bakeri); 7th of Tir (involved in developing centrifuge technology); Ammunition and Metallurgy Industries Group (partner of 7th of Tir); Parchin Chemical Industries (deals in chemicals used in ballistic missile programs) |
July 8, 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) |
August 12, 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 10, 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 (SEI) |
September 17, 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. |
October 22, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Assa Corporation (alleged front for Bank Melli involved in managing property in New York City on behalf of Iran) |
December 17, 2008 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
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 |
March 3, 2009 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
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 |
February 10, 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 (SAIG, controlled by the Aircraft Industries Org that manages Iran's missile programs) - Five front companies for IRISL: Hafiz Darya Shipping Co.; Soroush Sarzamin Asatir Ship Management Co.; Safiran Payam Darya; and Hong Kong-based Seibow Limited and Seibow Logistics. Also identified on June 16 were 27 vessels linked to IRISKL and 71 new names of already designated IRISL ships. Several Iranian entities were also designated as owned or controlled by Iran for purposes of the ban on U.S. trade with Iran. |
June 16, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Europaisch-Iranische Handelsbank (EIH) for providing financial services to Bank Sepah, Mellat, EDBI, and others. |
September 7, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Pearl Energy Company (formed by First East Export Bank, a subsidiary of Bank Mellat, 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. |
November 30, 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) |
December 21, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Bank of Industry and Mine (BIM) |
May 17, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Tidewater Middle East Company; Iran Air; Mehr-e Eqtesad Iranian Investment Co. |
June 23, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
For proscribed nuclear activities, including centrifuge development and heavy water research: By State—Nuclear Reactor Fuels Company; Noor Afzar Gostar Company; Fulmen Group; Yasa Part. By Treasury—Javad Rahiqi; Modern Industries Technique Company; Iran Centrifuge Technology Company (TESA); Neka Novin; Parto Sanat; Paya Partov; Simatic Development Co |
November 21, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
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) |
March 28, 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 Medical Lab (DML) and Value Laboratory (owned or controlled by Rabiee or AICTC); Ministry of Defense Logistics Export (MODLEX); Daniel Frosh (Austria) and International General Resourcing FZE)—person and his UAE-based firm allegedly supply Iran's missile industry. |
July 12, 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. |
November 8, 2012 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
Atomic Energy Organization of Iran (AEOI) chief Fereidoun Abbasi Davani; Seyed Jaber Safdari of Novin Energy, a designated affiliate of AEOI; Morteza Ahmadi Behzad, 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 13, 2012 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
SAD Import Export Company (also designated by U.N. Sanctions Committee a few days earlier for violating Resolution 1747 ban on Iran arms exports, along with Yas Air) for shipping arms and other goods to Syria's armed forces; Marine Industries Organization—designated for affiliation with Iran Ministry of Defense and Armed Forces Logistics; Mustafa Esbati, for acting on behalf of Marine Industries; Chemical Industries and Development of Materials Group—designated as affiliate of Defense Industries Org.; Doostan International Company—designated for providing services to Iran Aerospace Industries Org, which oversees Iran missile industries. |
December 21, 2012 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
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—controlled by Babak Zanjani; Naftiran Intertrade Company Ltd.—owned by NIOC. |
April 11, 2013 |
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|
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. Aluminat, for providing centrifuge components to Kalaye Electric Co. |
May 9, 2013 |
||||||||||||||||||||||||||||||||||||||||||||||||
|
For supporting Iran Air, the IRGC, and NIOC: Aban Air; Ali Mahdavi (part owner of Aban Air); DFS Worldwide; Everex; Bahareh Mirza Hossein Yazdi; Farhad Ali Parvaresh; Petro Green; Hossein Vaziri. For helping Iran's nuclear program: Farhad Bujar; Zolal Iran Company; Andisheh Zolal Co. For helping MODAFL: Reza Mozaffarinia. |
May 23, 2013 |
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|
Bukovnya AE (Ukraine) for leasing aircraft to Iran Air. |
May 31, 2013 |
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|
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. |
December 12, 2013 |
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|
Ali Canko (Turkey) and Tiva Sanat Group, for procuring IRGC-Navy fast boats; Advance Electrical and Industrial Technologies and Pere Punti (Spain), for procurement for Neka Novin; Ulrich Wipperman and Deutsche Forfait (Germany), and Deutsche Forfait Americas (U.S.) for facilitating oil deals for NIOC. |
February 6, 2014 |
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|
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. |
April 29, 2014 |
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By State: Organization of Defensive Innovation and Research (nuclear esearch); 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 Imarad 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. |
April 29, 2014 (by both State and Treasury) |
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11 ballistic missile-related entities: Mabrooka Trading Co LLC (UAE); Hossein Pournaghshband; Chen Mingfu; Anhui Land Group (Hong Kong); Candid General Trading; Rahim Reza Farghadani; Sayyed Javad Musavi; Seyed Mirahmad Nooshin; Sayyed Medhi Farahi (deputy director of the Ministry of Defense and Armed Forces Logistics); Seyed Mohammad Hashemi; Mehrdada Akhlaghi Ketabachi. According to the designations, Musavi (has worked with North Korean officials involved in that country's ballistic missile programs. |
January 17, 2016 |
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Two Iranian entities subordinate to SHIG: Shahid Nuri Industries and Shahid Movahed Industries. Updating of prior IRGC Missile Command designation to include IRGC Al Ghadir Missile Command (specific IRGC element with operational control of Iran's missile program). |
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17 ballistic missile-related Entities. Abdollah Asgharzadeh Network (for supporting SHIG): Abdollah Asgharzadeh; Tenny Darian; East Start Company; Ofog Sabze Company; Richard Yue (China); Cosailing Business Trading Company (China); Jack Qin (China); Ningbo New Century Import and Export Co. Ltd (China); and Carol Zhou (China). Gulf-Based Rostamian Network (supporting SHIG and AIO): MKS International; Kambiz Rostamian; Royal Pearl General Trading. Iran-Based Network Working with Navid Composite and Mabrooka Trading: Ervin Danesh Aryan Company; Mostafa Zahedi; Mohammad Magham. Ghodrat Zargair and Zist Tajhiz Pooyesh Company (supporting Mabrooka Trading): Ghodrat Zargari, and Zist Tajhiz Pooyesh Company. |
February 3, 2017 |
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Ballistic missile-related entities. Rahim Ahmadi (linked to Shahid Bakeri Industrial Group); Morteza Farasatpour (linked to Defense Industries Organization); Matin Sanat Nik Andishan (for supporting SHIG); and Ruan Ruling and three associated Chinese companies (for supporting Iran's missile guidance capabilities): Shanghai Gang Quan Trade Company, Shanghai North Begins International, and Shanghai North Transway International Trading Company. |
May 17, 2017 |
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12 IRGC/military and ballistic missile entities designated by Treasury and two by State. By Treasury: Rayan Roshd Afzar Company for IRGC drone and censorship equipment, plus three company officials: Mohsen Parsajam, Seyyed Reza Ghasemi, and Farshad Hekemzadeh; Qeshm Madkandaloo Cooperative Co., Ramor Group (Turkey) and Resit Tavan of Ramor Group for supplying IRGC-Navy infrastructure; Emily Liu, Abascience Tech Co. Ltd, Raybeam Optronics Co. Ltd., Raytronic Corporation Ltd., and Sunway Tech Co. Ltd (all China) for supporting MODAFL subcontractor Shiraz Electronics Industries. By State: IRGC Aerospace Force Self Sufficiency Jihad Org and IRGC Research and Self Sufficiency Jihad Org—both for supporting Iran ballistic missile program. |
July 18, 2017 |
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Missile entities related to Iran Simorgh space launch on July 27: six subordinate entities to Shahid Hemmat Industrial Group (SHIG, main Iran missile contractor) involved in making various components of Iranian missiles: Shaid Karimi Industries; Shahid Rastegar Industries; Shahid Cheraghi Industries; Shahid Varamini Industries; Shahid Kalhor Industries; and Amir Al Mo'Menin Industries. |
July 28, 2017 |
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Suppliers to Iran's Naval Defence Missile Industry Group (SAIG): Shahid Alamolhoda Industries; Rastafann Ertebat Engineering Company, Fanamoj. For supporting Iran's military: Wuhan Sanjiang Import and Export Company |
October 13, 2017 |
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Five ballistic missile entities (owned or controlled by Shahid Bakeri Industrial Group, SBIG) : Shahid Kharrazi Industries; Shahid Sanikhani Industries; Shahid Moghaddam Industries; Shahid Eslami Research Center; and Shahid Shustari Industries. |
January 4, 2018 |
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Green Wave Telecommunications (Malaysia) and Morteza Razavi (for supporting Fanamoj, designated on October 13, 2017); Iran Helicopter Support and Renewal Company (PANHA) and Iran Aircraft Industries (SAHA) (for supporting Iran's military aviation industry); Shi Yuhua (China) (for selling Iran navigation equipment); Pardazan System Namad Arman (PASNA)(for procuring lead zirconium tritanate (PZT) for Iranian military undersea and aircraft weaponry); and Bochuang Ceramic Inc. and Zhu Yuequn (China) for selling Iran PZT. |
January 12, 2018 |
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Sayyed Mohammad Ali Haddadnezhad Tehrani, for supporting the IRGC Research and Self-Sufficiency Jihad Organization (see above), which is improving Houthi missile capabilities |
May 22, 2018 |
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Iran-Related Entities Sanctioned Under Executive Order 13224 (Terrorism Entities) |
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Total SA (France); Gazprom (Russia); and Petronas (Malaysia)—$2 billion project to develop South Pars gas field. ISA violation determined but sanctions waived in line with U.S.-EU agreement for EU to cooperate on antiterrorism and antiproliferation issues and not file a complaint at the 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). Violation determined but sanctions waived. |
May 18, 1998 |
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Naftiran Intertrade Co. (NICO), Iran and Switzerland. Sanctioned for activities to develop Iran's energy sector. Sanctions lifted under JCPOA. |
Sept. 30, 2010 |
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Total (France); Statoil (Norway); ENI (Italy); and Royal Dutch Shell. Exempted under ISA "special rule" for pledging to wind down work on Iran energy fields. |
Sept. 30, 2010 |
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Inpex (Japan) Exempted under the Special rule for divesting its remaining 10% stake in Azadegan oil field. |
Nov. 17, 2010 |
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Belarusneft (Belarus, subsidiary of Belneftekhim) Sanctioned for $500 million contract with NICO (see above) to develop Jofeir oil field. Other subsidiaries of Belneftekhim were sanctioned in 2007 under E.O. 13405 (Belarus sanctions). Sanctions remain. |
March 29, 2011 |
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Petrochemical Commercial Company International (PCCI) of Bailiwick of Jersey and Iran; Royal Oyster Group (UAE); Tanker Pacific (Singapore); Allvale Maritime (Liberia); Societie Anonyme Monegasque Et Aerienne (SAMAMA, Monaco); Speedy Ship (UAE/Iran); Associated Shipbroking (Monaco); and Petroleos de Venezuela (PDVSA, Venezuela). Sanctioned under CISADA amendment to ISA imposing sanctions for selling gasoline to Iran or helping Iran import gasoline. Allvale Maritime and SAMAMA determinations were issued on September 13, 2011, to "clarify" the May 24 determinations that had named Ofer Brothers Group. The two, as well as Tanker Pacific, are affiliated with a Europe-based trust linked to deceased Ofer brother Sami Ofer, and not Ofer Brothers Group based in Israel. Firms named subjected primarily to the financial sanctions provided in ISA. U.S.-based subsidiaries of PDVSA, such as Citgo, were not sanctioned. Sanctions lifted under JCPOA. |
May 24, 2011 |
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Zhuhai Zhenrong Co. (China); Kuo Oil Pte Ltd. (Singapore); FAL Oil Co. (UAE) Sanctioned for brokering sales or making sales to Iran of gasoline. Sanctions lifted under JCPOA. |
Jan. 12, 2012 |
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Sytrol (Syria), for sales of gasoline to Iran. Sanctions remain. |
Aug. 12, 2012 |
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Dr. Dimitris Cambis; Impire Shipping; Kish Protection and Indemnity (Iran); and Bimeh Markasi-Central Insurance of Iran (CII, Iran) Sanctioned under ISA provision on owning vessels that transport Iranian oil or providing insurance for the shipments. Treasury sanctions also imposed on eight UAE-based oil traders that concealed the transactions. Sanctions lifted under JCPOA. |
Mar. 14, 2013 |
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Tanker Pacific; SAMAMA; and Allvale Maritime Sanctions lifted. Special rule applied after "reliable assurances" they will not engage in similar activity in the future. |
April 12, 2013 |
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Ferland Co. Ltd. (Cyprus and Ukraine) Sanctioned for cooperating with National Iranian Tanker Co. to illicitly sell Iranian crude oil. Sanctions lifted under JCPOA. |
May 31, 2013 |
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Dettin SPA Sanctioned. Italy-based company sanctioned for providing goods and services to Iran's petrochemical industry. Sanctions lifted under JCPOA. |
August 29, 2014 |
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Entities Sanctioned Under the Iran North Korea Syria Nonproliferation Act or Executive Order 12938 for Iran-Specific Violations The designations are under the Iran, North Korea, Syria Nonproliferation Act (INKSNA) unless specified. These designations expire after two years, unless redesignated |
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Baltic State Technical University and Glavkosmos, both of Russia. (Both "delisted" in 2010) |
July 30, 1998 |
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D. Mendeleyev University of Chemical Technology of Russia and Moscow Aviation Institute (Both removed on May 21, 2010) |
January 8, 1999 |
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Changgwang Sinyong Corp. (North Korea) |
January 2, 2001 |
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Changgwang Sinyong Corp. (North Korea) and Jiangsu Yongli Chemicals and Technology Import-Export (China) |
June 14, 2001 |
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Three entities from China |
January 16, 2002 |
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Armen Sargsian and Lizen Open Joint Stock Co. (Armenia); Cuanta SA and Mikhail Pavlovich Vladov (Moldova); and eight China entities |
May 9, 2002 |
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Norinco (China). For alleged missile technology sale to Iran. |
May 2003 |
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Taiwan Foreign Trade General Corporation (Taiwan) |
July 4, 2003 |
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Tula Instrument Design Bureau (Russia). For alleged sales of laser-guided artillery shells to Iran. (Also designated under Executive Order 12938) |
September 17, 2003 |
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13 entities sanctioned including companies from Russia, China, Belarus, Macedonia, North Korea, UAE, and Taiwan. |
April 1, 2004 |
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14 entities from China, North Korea, Belarus, India (two nuclear scientists, Dr. Surendar and Dr. Y.S.R. Prasad), Russia, Spain, and Ukraine. |
September 23, 2004 |
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14 entities, mostly from China, for supplying of Iran's missile program. Designations included North Korea's Changgwang Sinyong and China's Norinco and Great Wall Industry Corp, have been sanctioned several times previously. Others sanctioned included North Korea's Paeksan Associated Corporation, and Taiwan's Ecoma Enterprise Co. |
December 2004 and January 2005 |
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Nine entities, including those from China (Norinco, Hondu Aviation, Dalian Sunny Industries, Zibo Chemet Equipment); India (Sabero Organicx Chemicals and Sandhya Organic Chemicals); and Austria (Steyr Mannlicher Gmbh). Sanctions against Dr. Surendar of India (see September 29, 2004) were ended, presumably because of information exonerating him. |
December 23, 2005 |
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Two Indian chemical companies (Balaji Amines and Prachi Poly Products); two Russian firms (Rosobornexport and aircraft manufacturer Sukhoi); two North Korean entities (Korean Mining and Industrial Development, and Korea Pugang Trading); and one Cuban entity (Center for Genetic Engineering and Biotechnology). |
July 28, 2006 |
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Abu Hamadi (Iraq); Aerospace Logistics Services (Mexico); Al Zargaa Optical and Electronics (Sudan); Alexey Safonov (Russia); Arif Durrani (Pakistan)China National Aero Technology Import-Export (China); China National Electronic Import Export (China); Defense Industries Org. (Iran); Giad Industrial Complex (Sudan); Iran Electronics Industry (Iran); Kal al-Zuhiry (Iraq); Kolomna Design Bureau of Machine Building (Russia); NAB Export Co. (Iran); Rosoboronexport (Russia); Sanam Industrial Group (Iran); Target Airfreight (Malaysia); Tula Design Bureau of Instrument Building (Russia); Yarmouk Industrial Complex (Sudan) Zibo Chemet Equipment Co. (China) |
December 28, 2006 |
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Rosobornexport, Tula Design, and Komna Design Office of Machine Building, and Alexei Safonov (Russia); Zibo Chemical, China National Aerotechnology, and China National Electrical (China). Korean Mining and Industrial Development (North Korea) for WMD or advanced weapons sales to Iran (and Syria). |
January 2007 (see below for Tula and Rosoboronexport removal) |
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14 entities, including Lebanese Hezbollah. Some were penalized for transactions with Syria. Among the new entities sanctioned for assisting Iran were Shanghai Non-Ferrous Metals Pudong Development Trade Company (China); Iran's Defense Industries Organization; Sokkia Company (Singapore); Challenger Corporation (Malaysia); Target Airfreight (Malaysia); Aerospace Logistics Services (Mexico); and Arif Durrani (Pakistani national). |
April 17, 2007 |
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China Xinshidai Co.; China Shipbuilding and Offshore International Corp.; Huazhong CNC (China); IRGC; Korea Mining Development Corp. (North Korea); Korea Taesong Trading Co. (NK); Yolin/Yullin Tech, Inc. (South Korea); Rosoboronexport (Russia sate arms export agency); Sudan Master Technology; Sudan Technical Center Co; Army Supply Bureau (Syria); R and M International FZCO (UAE); Venezuelan Military Industries Co. (CAVIM). (Rosoboronexport removed May 21, 2010.) |
October 23, 2008 |
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BelTechExport (Belarus); Dalian Sunny Industries (China); Defense Industries Organization (Iran); Karl Lee; Shahid Bakeri Industries Group (SBIG); Shanghai Technical By-Products International (China); Zibo Chemet Equipment (China) |
July 14, 2010 |
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16 entities: Belarus: Belarusian Optical Mechanical Association; Beltech Export; 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. |
May 23, 2011 |
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Belvneshpromservice (Belarus); Dalian Sunny Industries (China); Defense Industries Organization (Iran); Karl Lee (China); SAD Import-Export (Iran); Zibo Chemet Equipment Co. (Iran); F |
December 20, 2011 |
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Al Zargaa Engineering Complex (Sudan); BST Technology and Trade Co. (China); China Precision Machinery Import and Export Co. (China); Dalian Sunny Industries (China); Iran Electronics Industries (Iran); Karl Lee (China); Marine Industries Organization (Iran); Milad Jafari (Iran); Poly Technologies (China); Scientific and Industrial Republic Unitary Enterprise (Belarus); SMT Engineering (Sudan); TM Services Ltd. (Belarus); Venezuelan Military Industry Co. (CAVIM, Venezuela). |
February 5, 2013 (these designations, and prior designations above, have expired) |
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Al Zargaa Engineering Complex (Sudan); Belvneshpromservice (Belarus); HSC Mic NPO Mashinostroyenia (Russia); Russian Aircraft Corporation (MiG); Giad Heavy Industries Complex (Sudan); Sudan Master Technologies (Sudan); Military Industrial Corps. (Sudan); Yarmouk Industrial Complex (Sudan); Venezuelan Military Industry Co. (CAVIM, Venezula) |
December 19, 2014. Sanctions still active. Syria designations not included |
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BST Technology and Trade Co. (China); Dalian Sunny Industries (China); Li Fang Wei (China); Tianjin Flourish Chemical Co. (China); Qods Force Commander Qasem Soleimani; IRGC; Rock Chemie (Iran); Polestar Trading Co. Ltd. (North Korean entity in China); RyonHap-2 (North Korea) Tula Instrument Design Bureau (Russia); Joint Stock Co. Katod (Russia); JSC Mic NPO Mashinostroyenia (Russia); Rosoboronexport (Russia) Russian Aircraft Corp. MiG (Russia); Sudanese Armed Forces (Sudan); Vega Aeronautics (Sudan); Yarmouk Complex (Sudan); Hezbollah; Eliya General Trading (UAE). |
August 28, 2015. Sanctions still active. Designations that applied to Syria or North Korea not included. |
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Asaib Ahl Haq (Iraqi Shiite militia); Katai'b Hezbollah (Iraqi militia); IRGC; Shahid Moghadam-Yazd Marine Industries (Iran); Shiraz Electronic Industries (Iran); Hezbollah; Military Industrial Corp. (Sudan); Khartoum Industrial Complex (Sudan); Khartoum Military Industrial Complex (Sudan); Luwero Industries (Uganda) |
June 28, 2016 Sanctions still active. |
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11 entities sanctions for transfers of sensitive items to Iran's ballistic missile program (all China except as specified: Beijing Zhong Ke Electric Co.; Dalian Zenghua Maoyi Youxian Gongsi; Jack Qin; Jack Wang; Karl Lee; Ningbo New Century Import and Export Co.; Shenzhen Yataida High-Tech Company; Sinotech Dalian Carbon and Graphite Corp.; Sky Rise Technology (aka Reekay); Saeng Pil Trading Corp. (North Korea); Mabrooka Trading (UAE) |
March 21, 2017 |
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Entities Designated under the Iran-Iraq Arms Non-Proliferation Act of 1992 (all designations have expired or were lifted) |
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Mohammad al-Khatib (Jordan); Protech Consultants Private (India) |
December 13, 2003 |
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China Machinery and Electric Equipment Import and Export Corp. (China); China Machinery and Equipment Import-Export Co. (China); China National Machinery and Equipment Import-Export Co. (China); China Shipbuilding Trading Co. (China); CMEC Machinery (China); Hans Raj Shiv (India); Jiangsu Youngli Chemicals and Technology Import-Export Co. (China); Q.C. Chen (China); Wha Cheong Tai Co. Ltd. (China). |
July 9, 2002 |
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Entities Designated as Threats to Iraqi Stability under Executive Order 13438 (July 17, 2007) |
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Iranians Designated Under Executive Order 13553 on Human Rights Abusers (September 29, 2010) These persons are named in a semiannual report to Congress, required under CISADA. Virtually all of the persons on this list, and those listed under Executive order 13628 (below) are designated as human rights abusers by the European Union, whose list contains 87 individuals, including several province-level prosecutors |
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Iranian Entities Sanctioned Under Executive Order 13572 for Repression of the Syrian People |
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Revolutionary Guard—Qods Force (IRGC-QF) |
April 29, 2011 |
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Qasem Soleimani (Qods Force Commander); Mohsen Chizari (Commander of Qods Force operations and training) |
May 18, 2011 |
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Ministry of Intelligence and Security (MOIS) |
February 16, 2012 |
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Iranian Entities Sanctioned Under Executive Order 13606 (GHRAVITY, April 23, 2012)) |
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Ministry of Intelligence and Security (MOIS); IRGC (Guard Cyber Defense Command); Law Enforcement Forces; Datak Telecom |
April 23, 2012 |
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IRGC Electronic Warfare and Cyber Defense Organization |
January 12, 2018 |
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Hanista Programming Group. For operating technology that monitors or tracks computers |
May 30, 2018 |
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Entities Sanctioned Under Executive Order 13608 Targeting Sanctions Evaders (May 1, 2012) |
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Ferland Company Ltd. for helping NITC deceptively sell Iranian crude oil |
May 31, 2013 |
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Three persons based in the Republic of Georgia: Pourya Nayebi, Houshang Hosseinpour, and Houshang Farsoudeh. 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). |
February 6, 2014 |
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Entities Named as Iranian Government Entities Under Executive Order 13599 (February 5, 2012) Hundreds of entities—many of which are names and numbers of individual ships and aircraft—are designated under this Order, or were earlier designated as entities owned or controlled by the government of Iran (and were subsequently added to the 13599 list). The full list can be accessed at: https://www.treasury.gov/ofac/downloads/13599/13599list.pdf Below are selected entities that were designated as Iran owned or controlled before and after the issuance of E.O. 13599. Those in italics were delisted for secondary sanctions, but remain designated as entities with which U.S. persons are prohibited from conducting transactions. |
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Entities Sanctioned Under Executive Order 13622 for Oil and Petrochemical Purchases from All entities were delisted (and are italicized) and the Order was revoked to implement the JCPOA |
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Entities Designated as Human Rights Abusers or Limiting Free Expression under Executive Order 13628 (October 9, 2012, E.O pursuant to Iran Threat Reduction and Syria Human Rights Act) |
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Entities Designated under E.O. I3645 on Auto production, Rial Trading, and Precious Stones (June 3, 2013) All entities were delisted (and are italicized) and the Order was revoked to implement the JCPOA |
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Author Contact Information
Acknowledgments
The author wishes to acknowledge that Sarah Manning, Research Associate, Foreign Affairs, Defense, and Trade Division contributed research to this report.
| 1. |
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, and in particular defining what products and chemicals constitute "petroleum," "petroleum products," and "petrochemical products" that are used in the laws and executive orders discussed below. See 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. |
| 3. |
"U.S. Court Reverses Record Forfeiture Order over Iran Assets." Associated Press. July 21, 2016. |
| 4. |
http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=Publication; and Department of Treasury announcement of June 4, 2013. |
| 5. |
For a full list of entities designated under E.O. 13599, go to the following link: https://www.treasury.gov/ofac/downloads/13599/13599list.pdf. |
| 6. |
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. |
| 7. |
Imports were mainly of artwork for exhibitions around the United States, which are counted as imports even though the works return to Iran after the exhibitions conclude. |
| 8. |
The text of the guidance is at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf. |
| 9. |
Shipping insurers granted the waiver include Assuranceforeningen Skuld, Skuld Mutual Protection and Indemnity Association, Ltd. (Bermuda), Gard P and I Ltd. (Bermuda), Assuranceforeningen Gard, the Britannia Steam Ship Insurance Association Limited, The North of England Protecting and Indemnity Association Ltd., the Shipowners' Mutual Protection and Indemnity Association (Luxembourg), the Standard Club Ltd., the Standard Club Europe Ltd., The Standard Club Asia, the Steamship Mutual Underwriting Association Ltd. (Bermuda), the Swedish Club, United Kingdom Mutual Steam Ship Assurance Association Ltd. (Bermuda), United Kingdom Mutual Steam Ship Association Ltd. (Europe), and the West of England Ship Owners Mutual Insurance Association (Luxembourg). |
| 10. |
Reuters, February 21, 2014; "Exclusive: Boeing Says Gets U.S. License to Sell Spare Parts to Iran," Reuters, April 4, 2014. |
| 11. | |
| 12. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/gl_food_exports.pdf. |
| 13. |
The information in this bullet is taken from Jo Becker, "With U.S. Leave, Companies Skirt Iran Sanctions," New York Times, December 24, 2010. |
| 14. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf. |
| 15. |
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. |
| 16. |
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). |
| 17. |
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. |
| 18. |
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. |
| 19. |
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. |
| 20. |
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. |
| 21. |
http://dawn.com/2012/03/01/tough-us-warning-on-iran-gas-pipeline/. |
| 22. |
This termination requirement added by P.L. 109-293 formally removed Libya from the act. Application of the act to Libya terminated on April 23, 2004, with a determination that Libya had fulfilled U.N. requirements. |
| 23. |
Text of letter from Senators Mark Kirk and Robert Menendez to Secretary Geithner, January 19, 2012. |
| 24. |
Department of State. Background Briefing on President Trump's Decision to Withdraw from the JCPOA. May 8, 2018. |
| 25. |
Department of State. "Senior State Department Official on U.S. Efforts to Discuss the Reimposition of Sanctions on Iran with Partners Around the World." June 26, 2018. |
| 26. |
The act originally only applied to advanced conventional weapons. The extension to WMD, defined as chemical, biological, or nuclear weapons-related technology was added by the FY1996 National Defense Authorization Act (P.L. 104-106). |
| 27. |
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. |
| 28. |
For text of the OFAC ruling barring U-Turn transactions, see https://www.treasury.gov/resource-center/sanctions/Documents/fr73_66541.pdf. |
| 29. |
See Katherine Bauer. "Potential U.S. Clarification of Financial Sanctions Regulations." April 5, 2016. http://www.washingtoninstitute.org/policy-analysis/view/potential-u.s.-clarification-of-financial-sanctions-regulations. |
| 30. |
Analyst conversations with U.S. banking and sanctions experts. 2010-2015. |
| 31. | |
| 32. | |
| 33. |
Jessica Silver-Greenberg, "Regulator Says Bank Helped Iran Hide Deals," New York Times, August 7, 2012. |
| 34. |
Rick Gladstone. "U.S. Announces Actions to Enforce Iran Sanctions." New York Times, April 29, 2014. |
| 35. |
http://www.reuters.com/article/2015/05/01/us-bnp-paribas-settlement-sentencing-idUSKBN0NM41K20150501. |
| 36. |
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. |
| 37. |
http://www.treasury.gov/press-center/press-releases/Pages/tg1367.aspx. |
| 38. | |
| 39. | |
| 40. |
Katherine Bauer. "Pushing Iran to Take Steps against Terrorist Financing." Washington Institute for Near East Policy, February 20, 2018. |
| 41. |
Sections 5-7 and 15 of Executive Order 13628 which have to do primarily with Iran's energy sector, were revoked, but the remaining sections, which concern human rights issues, remain in place. |
| 42. |
U.S. Department of the Treasury, Office of Public Affairs, Treasury Sanctions Iranian Security Forces for Human Rights Abuses, June 9, 2011. |
| 43. |
Christopher Rhoads, "Iran's Web Spying Aided by Western Technology," Wall Street Journal, June 22, 2009. |
| 44. |
Fact Sheet: Treasury Issues Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran, March 20, 2012. |
| 45. | |
| 46. |
Security Council resolutions that reference Chapter VII of the U.N. Charter represent actions taken with respect to threats to international peace and acts of aggression. Article 41 of that Chapter, in general, provides for enforcement of the resolution in question through economic and diplomatic sanctions, but not through military action. |
| 47. |
The report is reprinted in, Iran Watch, at http://www.iranwatch.org/library/multilateral-organizations/united-nations/un-secretary-general/third-report-secretary-general-implementation-security-council-resolution-2231. |
| 48. | |
| 49. |
The Administration sanctions suspensions and waivers are detailed at http://www.state.gov/p/nea/rls/220049.htm. |
| 50. |
Daniel Fineren, "Iran Nuclear Deal Shipping Insurance Element May Help Oil Sales," Reuters, November 24, 2013. |
| 51. |
White House Office of the Press Secretary. "Fact Sheet: First Step Understandings Regarding the Islamic Republic of Iran's Nuclear Program," November 23, 2013. |
| 52. |
http://iranmatters.belfercenter.org/blog/translation-iranian-factsheet-nuclear-negotiations; and author conversations with a wide range of Administration officials, think tank, and other experts, in Washington, DC, 2015. |
| 53. |
http://www.politico.com/story/2015/07/full-text-iran-deal-120080.html. |
| 54. |
For more information on these Executive Orders and their provisions, see CRS Report RS20871, Iran Sanctions, by [author name scrubbed]; and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by [author name scrubbed]. |
| 55. |
The JCPA does commit the United States to terminate sanctions with respect to some entities designated for sanctions under INKSNA. |
| 56. |
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_faqs.pdf. |
| 57. |
Note: CRS has no mandate or capability to "judge" compliance of any country with U.S. or other sanctions against Iran. This section is intended to analyze some major trends in third country cooperation with U.S.sanctions. |
| 58. |
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. |
| 59. |
Avi Jorish, "Despite Sanctions, Iran's Money Flow Continues," Wall Street Journal, June 25, 2013. |
| 60. |
https://www.ft.com/content/0cb5534c-daac-11e8-9f04-38d397e6661c?accessToken=zwAAAWbAjV2wkc8MtVNM2qwR6NOfBDjTl-ZmHA.MEUCIQC_qlKGBQawZd6gBdcijaQ_i5NyqZ5qPFmNkrlqBZU5XQIgJlMwIfsF8VBVNud2DibGW06vPC0tjTJmkEBeJ01QpX4&sharetype=gift |
| 61. |
"Iran Nuclear Deal: The EU's Billion-Dollar Deals at Risk," BBC News, May 11, 2018. |
| 62. |
Germany's Central Bank Imposes Rule to Stop Cash Delivery to Tehran. Jerusalem Post, August 6, 2018. |
| 63. |
"Iran's Door to the West is Slamming Shut, and That Leaves China," Bloomberg News, May 10, 2018. |
| 64. |
https://www.yahoo.com/news/putin-visits-tehran-talks-syria-nuclear-deal-133507932.html. |
| 65. |
Nahid Kalbasi."Have International Sanctions Crippled Iran's Auto Industry?" Washington Institute for Near East Policy, June 3, 2015. |
| 66. |
Thomas Erdbrink. "China's Push to Link East and West Puts Iran at 'Center of Everything.'" New York Times, July 25, 2017. |
| 67. |
CRS conversations with diplomats from Japan and South Korea. 2018. |
| 68. |
"Some Top Oil Buyers are Thinking about Shunning Iran Oil." Bloomberg News, June 27, 2018. |
| 69. |
https://www.thedailybeast.com/north-koreas-deadly-partnership-with-iran. |
| 70. |
"India Seeks to Pay $6.5 Billion to Iran for Oil Imports." Economic Times of India. May 16, 2016. |
| 71. |
CRS conversations with Indian officials and U.S. experts on India. 2017-18. |
| 72. |
The Hill. Thehill.com September 14, 2018. |
| 73. |
"U.S. Envoy Haley tells Modi Important to Cut Imports of Iranian Oil." Reuters, June 27, 2018. |
| 74. |
Asia Times, March 21, 2014, http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html. |
| 75. | |
| 76. |
"US Acts to Block Turkish Firm from Sending GE Engines to Iran," Reuters, January 6, 2014. |
| 77. |
Louis Charbonneau, "Iran Looks to Armenia to Skirt Banking Sanctions," Reuters, August 21, 2012. |
| 78. |
Information provided to the author by regional observers. October 2013. |
| 79. |
The CRS Report RL32048, Iran: Internal Politics and U.S. Policy and Options, by [author name scrubbed], discusses the relations between Iran and other Middle Eastern states. |
| 80. |
Mark Wallace, "Closing U.S. Ports to Iran-Tainted Shipping. Op-ed," Wall Street Journal, March 15, 2013. |
| 81. |
Some Top Oil Buyers are Thinking about Shunning Iran Oil, op. cit. |
| 82. |
http://www.kuwaittimes.net/read_news.php?newsid=NDQ0OTY1NTU4; http://english.farsnews.com/newstext.php?nn=8901181055. |
| 83. |
Omani banks had a waiver from U.S. sanctions laws to permit transferring those funds to Iran's Central Bank, in accordance with Section 1245(d)(5) of the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-81). For text of the waiver, see a June 17, 2015, letter from Assistant Secretary of State for Legislative Affairs Julia Frifield to Senate Foreign Relations Committee Chairman Bob Corker, containing text of the "determination of waiver." |
| 84. |
"Obama Misled Congress, Tried and Failed to Give Iran Secret Access to US Banks Before the Deal." Business Insider, June 6, 2018; Permanent Subcommittee on Investigations of the U.S. Senate. Majority Report. "Review of U.S. Treasury Department's License to Convert Iranian Assets Using the U.S. Financial System." May 2018. |
| 85. |
Eli Lak, "Iran Sanctions Collapsing Already," Bloomberg News, May 11, 2015. |
| 86. |
Iran Signs Phone, Gas Deals with Syria. Agence France Presse, January 17, 2017. |
| 87. |
Barbara Slavin, "Obama Administration Holds Up Environmental Grants to Iran," Al Monitor, June 23, 2014. |
| 88. |
"Worldwide Threat Assessment of the U.S. Intelligence Community." Testimony before the Senate Select Committee on Intelligence. May 11, 2017. This language was not contained in the 2018 version of the testimony. |
| 89. |
This possibility is examined in detail in: CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by [author name scrubbed] and [author name scrubbed] and CRS In Focus IF10916, Iran: Efforts to Preserve Economic Benefits of the Nuclear Deal, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. |
| 90. |
Speech by National Security Adviser Tom Donilon at the Brookings Institution, November 22, 2011. |
| 91. |
Department of Defense, Annual Report of Military Power of Iran, April 2012. |
| 92. |
Worldwide Threat Assessment of the U.S. Intelligence Community, February 13, 2018. |
| 93. |
Statement from the President on the Reimposition of United States Sanctions with Respect to Iran. August 6, 2018. |
| 94. |
https://en.radiofarda.com/a/iran-rouhani-irgc-demands/29413585.html |
| 95. |
M the President Department of the Treasury. Remarks of Secretary Jacob J. Lew at the Washington Institute for Near East Policy 30th Anniversary Gala. April 29, 2015. |
| 96. |
"Foreign Investors Flock to Iran as U.S. Firms Watch on the Sidelines." Wall Street Journal, March 27, 2017. |
| 97. |
Forecast Says Sharp Drop in Iran's Economic Growth Rate. Radio Farda, September 2, 2018. |
| 98. |
"Why Higher Iran Oil Exports Are Not Roiling Nuclear Deal," Reuters, June 13, 2014. |
| 99. |
CRS conversation with Department of the Treasury officials. July 2015. |
| 100. |
"A Year after Iran Deal, Oil Flows but the Money's Stuck." op. cit. |
| 101. |
Radio Farda, op.cit. |
| 102. |
Testimony of Patrick Clawson before the Senate Banking Committee. January 21, 2015. |
| 103. |
"Iran Reaps Less Cash from Eased Sanctions Than Predicted," op. cit. |
| 104. |
Kevan Harris, "Iran's Political Economy Under and After the Sanctions," Washington Post blogs, April 23, 2015. |
| 105. |
Patrick Clawson testimony, January 21, 2015, op. cit. |
| 106. |
Khajehpour presentation at CSIS, op. cit. |
| 107. |
"Iran Faces Steep Climb to Join Gas Superpowers by 2017," International Oil Daily, April 29, 2014. |
| 108. |
Thomas Erdbrink. "New Iran Battle Brews over Foreign Oil Titans." New York Times, February 1, 2016. |
| 109. |
Information in this section derived from Javier Blas, "Traders Cut Iran Petrol Line," Financial Times, March 8, 2010. |
| 110. |
Thomas Erdbink, "Iran's Aging Airliner Fleet Seen As Faltering Under U.S. Sanctions," July 14, 2012. |
| 111. |
An Iranian letter to the U.N. Security Council submitted July 20, 2015, indicates Iran's view that "reintroduction or reimposition, including through extension, of the sanctions and restrictive measures will constitute significant nonperformance which would relieve Iran from its commitments in whole or in part." Iran Letter to the President of the U.N. Security Council, July 20, 2015, (S/2015/550). |
| 112. |
For more information on the issue of judgments for victims of Iranian terrorism, see CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by [author name scrubbed]. |
| 113. |
Author conversations with experts in Washington, DC, November, 2017, and various press reports. |
| 114. |
See CRS In Focus IF10801, Possible Additional Sanctions on Iran, by [author name scrubbed]. |