July 20, 2023
U.S. Sanctions on Iran
Since the Islamic Revolution of 1979, the United States has
efforts to persuade Iran to agree to limit its nuclear
used sanctions of various types as key tools of U.S. policy
activities. The U.N. Security Council, concerned about
toward the government of Iran. The U.S. government uses
Iran’s nuclear program, launched multinational sanctions in
sanctions to deter, constrain, and encourage change in the
mid-2006, requiring member states to prevent trade with
adversarial behavior of the Iranian regime, including its
Iran in goods, services, and technology.
support for international terrorism, nuclear and missile
development programs and proliferation activities,
Congressional action has been critical in the development
destabilizing regional interventions, and human rights
and expansion of U.S. sanctions on Iran. Congress
abuses. Congress has played a leading role in shaping U.S.
authorized sanctions targeting Iran’s proliferation activities
policy, enacting legislation to authorize and oversee
beginning in 1992 and, in 1996, enacted landmark
successive Administrations’ implementation of Iran-related
legislation mandating the first secondary sanctions on Iran
sanctions. U.S. sanctions have adversely affected Iran’s
on foreign firms involved in the development of Iran’s oil
economy but Iranian government behavior remains a threat
resources (Iran has the world’s third largest proven oil
to U.S. interests and those of partners including Israel.
reserves). After the Iranian government’s violent
crackdown on mass protests over its disputed 2009
U.S. sanctions target persons (i.e., entities and individuals)
presidential election, Congress authorized sanctions on
inside or outside Iran whose actions benefit Iran’s
officials responsible for the crackdown and other human
decisionmakers. Primary sanctions seek to restrict
rights abuses. As international concern about Iran’s nuclear
transactions that U.S. persons conduct with certain Iranian
program increased, Congress, beginning in 2010, increased
persons, prescribing civil and criminal penalties for U.S.
the scope of U.S. sanctions, targeting Iran’s oil exports and
persons who violate or evade those restrictions. Secondary
other economic sectors in a bid to deny the Iranian
sanctions seek to restrict transactions that non-U.S. persons
government financial resources and compel it to make
conduct with certain Iranian persons, proscribing penalties
policy changes. In enacting these authorities, Congress
such as blocking U.S.-based assets, prohibiting transactions
mandated that to waive or lift sanctions, the President must
with U.S. persons, limiting use of U.S. financial
certify that Iran is meeting certain conditions, including that
instruments, denying entry into the United States, and
the Iranian government has ceased its support of
prosecuting sanctions violations and evasions.
international terrorism and its proliferation activities.
U.S. sanctions on Iran are arguably the most extensive and
Joint Comprehensive Plan of Action (JCPOA)
comprehensive set of sanctions that the United States
Many experts attribute Iran’s decision to enter into the 2015
maintains on any country. Thousands of persons (Iranian
multilateral agreement known as the JCPOA to the negative
and non-Iranian) have been designated for sanctions related
impact of sanctions on Iran’s economy. As part of the
to Iran. Reflecting the complex legal framework of U.S.
JCPOA, Iran limited its nuclear activities and subjected
sanctions on Iran, many persons have been designated
them to additional international inspections and monitoring
under multiple authorities; designation under multiple
in return for relief from many U.S. and international
authorities generally does not confer additional restrictions
economic sanctions. To implement the United States’
commitments under the JCPOA, the Obama Administration
but may affect how sanctions may be lifted.
revoked sanctions-related executive orders and exercised
Background
the authority to waive or lift sanctions related to Iran’s
nuclear program which the United States had imposed
The 1979 overthrow of the Shah (Iran’s former ruler and a
pursuant to various statutes. U.S. sanctions related to Iran’s
staunch U.S. ally) and establishment of the Islamic
continued support for international terrorism, human rights
Republic initiated decades of animosity between the United
abuses, and missile development remained in place.
States and Iran. Initially imposed to press for the release of
Opponents of the JCPOA questioned Iran’s trustworthiness
U.S. Embassy staff taken as hostages in 1979, U.S.
and criticized the agreement for not addressing those
sanctions in the 1980s and 1990s evolved with the intention
activities; Obama Administration officials argued that
of compelling Iran to cease its support of acts of
dealing with those Iranian activities would be easier in the
international terrorism (including its backing of militants
absence of an Iranian nuclear threat.
linked to the 1983 bombings of the U.S. Embassy and
Multinational Force barracks in Beirut) and its pursuit of
In 2018, citing the limited duration of certain JCPOA
chemical, biological, or nuclear weapons capabilities or
restrictions and Iran’s continued malign activities, the
advanced conventional weapons. After the public revelation
Trump Administration ceased U.S. participation in the
in 2002 of previously undisclosed nuclear facilities in Iran,
JCPOA and reimposed all U.S. sanctions that had been
the United States and allies incorporated sanctions into
eased pursuant to the JCPOA. These and other new
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U.S. Sanctions on Iran
restrictions were part of a “maximum pressure” policy with
Iran’s behavior in different ways. Obama Administration
the stated goal of compelling Iran to negotiate a new and
officials described the 2015 JCPOA as proof of sanctions’
expanded accord. Iran did not seek a new agreement under
effectiveness. After withdrawing from the JCPOA and
the Trump Administration and since 2019 has exceeded
reimposing U.S. sanctions, Trump Administration officials
JCPOA-mandated limits on its nuclear activities.
asserted that the United States’ “maximum pressure”
strategy was effective, citing the deterioration of various
Biden Administration Policy
Iranian economic indicators. They also argued that denying
Biden Administration officials sought to revive the JCPOA,
resources to the Iranian government decreased its ability to
but indirect U.S.-Iran talks broke down in mid-2022 amid a
finance its missile programs, international terrorism, and
violent Iranian government crackdown on nationwide
destabilizing regional interventions, key pillars of Iran’s
protests. Media reports in June 2023 indicated the United
foreign and defense policies. Iran has pursued those
States and Iran had resumed diplomatic engagement aimed
activities amid U.S. sanctions and their economic costs,
at lowering tensions and potentially securing unwritten,
though Iran’s defense budget has fluctuated, sometimes
mutual understandings to manage issues including detained
apparently linked to the economic impact of U.S. sanctions.
U.S. nationals, U.S. sanctions on Iran, and Iran’s nuclear
program. In July 2023, Secretary of State Antony Blinken
Iran’s leaders seek to mitigate the impact of sanctions
said, however, that “there is no agreement in the offing.”
through the development of what Supreme Leader Ali
Any effort by the executive branch to restore the United
Khamenei has termed a “resistance economy.” Khamenei
States’ participation in the JCPOA or a new similar accord
has stated that Iran must reduce its dependence on external
could trigger congressional review pursuant to the Iran
actors and “build the economy from within.” Some in Iran
Nuclear Agreement Review Act of 2015 (INARA, P.L.
who support reducing Iran’s economic linkages with the
114-17). The Biden Administration, meanwhile, has
West also argue that doing so decreases Iran’s susceptibility
designated for sanctions hundreds of entities for their role
to political pressure imposed via economic sanctions. U.S.
in the illicit sale of Iranian oil, human rights abuses related
sanctions may create incentives for Iran to further expand
to the crackdown on protests in Iran, the transfer of Iranian
economic and military ties with China and Russia. China
weaponry to Russia for use in Ukraine, and Iran’s wrongful
remains a major purchaser of Iranian oil, and Russia
detention of U.S. nationals.
reportedly has sought to assist Iran with sanctions evasion.
Current Sanctions Landscape
Issues for Congress
U.S. sanctions on Iran block Iranian government assets in
In the 118th Congress, Members have proposed a number of
the United States, ban nearly all U.S. trade with Iran
Iran-related measures that would create additional sanctions
(except food and agricultural commodities, medicine,
authorities (e.g., the SHIP Act, H.R. 3774/S. 1829, to
medical supplies, and humanitarian-related goods), and
authorize sanctions on ports that offer services to ships
prohibit foreign assistance and arms sales. U.S. law
carrying Iranian oil); others would direct the President to
authorizes sanctions targeting:
designate additional persons under existing sanctions
authorities (e.g., the MAHSA Act, H.R. 589, which would
• Iran’s energy sector, including foreign
direct the President to designate the Supreme Leader and
corporations that invest in it and entities that buy,
other Iranian officials under human rights-related and other
sell, or transport Iranian oil;
authorities). Members may also consider legislation to
•
amend sanctions-related statutory authorities, including to
Iran’s financial sector, including its Central Bank;
remove or otherwise alter the conditions under which the
• Additional sectors of Iran’s economy, including
President may waive or lift sanctions. Members may also
shipping, construction, mining, textiles,
consider revisiting INARA and assessing whether it
automotive, and manufacturing, as well as
encourages or impedes any future agreement with Iran.
entities that conduct transactions with, or otherwise
provide support for, those sectors;
More broadly, Congress could review the extent to which
•
various types of sanctions have furthered U.S. policy goals
Arms trade to or from Iran; and
toward Iran, including by consulting the reports that
• Many components of Iran’s government
Congress has required the executive branch to submit on
(including the Supreme Leader and the Islamic
the implementation and impact of U.S. sanctions. Related
Revolutionary Guard Corps, IRGC), including
questions may concern how, if at all, additional sanctions
entities that conduct transactions with or otherwise
authorities or designations, particularly secondary
support them.
designations, might impact Iranian government behavior
and U.S. relations with third parties. Members may
Beyond humanitarian exemptions, the U.S. Treasury has
consider whether and to what extent other U.S. policy tools,
issued general licenses to authorize otherwise prohibited
perhaps used in combination with sanctions, can counter
transactions for specific purposes, including the provision
various threats posed by Iran.
of telecommunications services and equipment to Iranians
to circumvent their government’s attempts to cut off
Clayton Thomas, Specialist in Middle Eastern Affairs
internet access.
IF12452
Effects of U.S. Sanctions on Iran
Over the past decade, successive Administrations have
characterized the effects, and effectiveness, of sanctions on
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U.S. Sanctions on Iran


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https://crsreports.congress.gov | IF12452 · VERSION 1 · NEW

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