United States sanctions against Iran
The United States applies economic, trade, scientific and military sanctions against Iran. U.S. economic sanctions are administered by the U.S. Office of Foreign Assets Control. Currently, the U.S. sanctions against Iran include an embargo on dealings with the country by the U.S., and a ban on selling aircraft and repair parts to Iranian aviation companies.
On 17 May 2018 the European Commission announced its intention to implement the blocking statute of 1996 to declare the US sanctions against Iran null and void in Europe and ban European citizens and companies from complying with them. The Commission also instructed the European Investment Bank to facilitate European companies' investment in Iran.
The first United States sanctions against Iran were imposed by President Carter in November 1979 by Executive Order 12170 after a group of radical students seized the American Embassy and took hostage the people inside in Tehran after the U.S. permitted the exiled Shah of Iran to enter the United States for medical treatment. The Executive Order froze about $12 billion in Iranian assets, including bank deposits, gold and other properties. Some assets—Iranian officials say $10 billion, U.S. officials say much less—still remain frozen pending resolution of legal claims arising from the revolution.
After the invasion of Iran by Iraq, the United States increased sanctions against Iran. In 1984, sanctions were approved to prohibit weapon sales and all U.S. assistance to Iran. The Iran and Libya Sanctions Act (ILSA) was signed on 5 August 1996 (H.R. 3107, P.L. 104-172). ILSA was renamed in 2006 the Iran Sanctions Act (ISA) when the sanctions against Libya were terminated.
The term of President Akbar Hashemi Rafsanjani was marked by some of the toughest sanctions against Iran. In March 1995, President Bill Clinton issued Executive Order 12957 prohibiting U.S. trade in Iran's oil industry. In May 1995, President Clinton issued Executive Order 12959 prohibiting any U.S. trade with Iran. Trade with the United States, which had been growing following the end of the Iran–Iraq War, ended abruptly.
In 1995, the United States Congress passed the Iran and Libya Sanctions Act (ILSA). Under ILSA, all foreign companies that provide investments over $20 million for the development of petroleum resources in Iran will have imposed against them two out of seven possible penalties by the U.S.:
- denial of Export-Import Bank assistance,
- denial of export licenses for exports to the violating company,
- prohibition on loans or credits from U.S. financial institutions of over $10 million in any 12-month period,
- prohibition on designation as a primary dealer for U.S. government debt instruments,
- prohibition on serving as an agent of the United States or as a repository for U.S. government funds,
- denial of U.S. government procurement opportunities (consistent with WTO obligations), and
- a ban on all or some imports of the violating company.
After the election of Iranian reformist President Mohammad Khatami in 1997, President Clinton eased sanctions on Iran. In 2000 the Khatami government managed to reduce the sanctions for some items like pharmaceuticals, medical equipment, caviar and Persian rugs. In the debate in the U.S. Congress on whether ILSA should expire, some legislators argued they hindered bilateral relations, and others argued they would be seen as a concession on an effective program. ILSA was to expire on 5 August 2001, and was renewed by the Congress and signed by President George W. Bush.
In February 2004, during the final year of Khatami's presidency, the U.S. Department of the Treasury ruled against editing or publishing scientific manuscripts from Iran, and stated that U.S. scientists collaborating with Iranians could be prosecuted. In response, the Institute of Electrical and Electronics Engineers (IEEE) temporarily stopped editing manuscripts from Iranian researchers and took steps to clarify the OFAC guidelines concerning its publishing and editing activities. In April 2004 IEEE received a response from OFAC which fully resolved that no licenses were needed for publishing works from Iran and that the entire IEEE publication process including peer review and editing was exempt from restrictions. On the other hand, the American Institute of Physics (AIP), the American Physical Society and the American Association for the Advancement of Science, which publishes Science, refused to comply, saying that the prohibition on publishing goes against freedom of speech.
After being elected president in 2005, President Ahmadinejad lifted the suspension of uranium enrichment that had been agreed with the EU3, and the International Atomic Energy Agency reported Iran's non-compliance with its safeguards agreement to the UN Security Council. The U.S. government then began pushing for UN sanctions against Iran over its nuclear program.
In June 2005, President George W. Bush issued Executive Order 13382 freezing the assets of individuals connected with Iran's nuclear program. In June 2007, the U.S. state of Florida enacted a boycott on companies trading with Iran and Sudan, while New Jersey's state legislature was considering similar action.
On June 24, 2010, the United States Senate and House of Representatives passed the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), which President Obama signed into law July 1, 2010. The CISADA greatly enhanced restrictions in Iran. Such restrictions included the rescission of the authorization for Iranian-origin imports for articles such as rugs, pistachios, and caviar. In response, President Obama issued Executive Order 13553 in September 2010 and Executive Order 13574 in May 2011, and Executive Order 13590 in November 2011.
Iranian financial institutions are barred from directly accessing the U.S. financial system, but they are permitted to do so indirectly through banks in other countries. In September 2006, the U.S. government imposed sanctions on Bank Saderat Iran, barring it from dealing with U.S. financial institutions, even indirectly. The move was announced by Stuart Levey, the undersecretary for treasury, who accused the major state-owned bank in Iran of transferring funds for certain groups, including Hezbollah. Levey said that since 2001 a Hezbollah-controlled organization had received 50 million U.S. dollars directly from Iran through Bank Saderat. He said the U.S. government will also persuade European banks and financial institutions not to deal with Iran. As of November 2007, the following Iranian banks were prohibited from transferring money to or from United States banks:
- Bank Sepah
- Bank Saderat Iran
- Bank Melli Iran
- Bank Kargoshaee (aka Kargosa’i Bank)
- Arian Bank (aka Aryan Bank)
In other words, these banks were placed on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals List (SDN List). The SDN List is a directory of entities and individuals who have been prohibited from accessing the U.S. financial system. Although difficult there are ways to carry out an OFAC SDN List removal.
As of early 2008, the targeted banks, such as Bank Mellat, had been able to replace banking relationships with a few large sanction-compliant banks with relationships with a larger number of smaller non-compliant banks. The total assets frozen in Britain under the EU (European Union) and UN sanctions against Iran are approximately 976,110,000 pounds ($1.64 billion). In 2008, the US Treasury ordered Citigroup Inc. to freeze over $2 billion held for Iran in Citigroup accounts.
For individuals and small businesses, these banking restrictions have created a large opportunity for the hawala market, which allows Iranians to transfer money to and from foreign countries using an underground unregulated exchange system. In June 2010, in the case United States v. Banki, the use of the hawala method of currency transfer led to a criminal conviction against a U.S. citizen of Iranian origin. Banki was sentenced to two and a half years in federal prison, however, on the Federal Sentencing Guidelines, this type of offense could result in imprisonment of up to 20 years.
The United States imposed additional financial sanctions against Iran, effective 1 July 2013. An administration official explained that according to the new Executive Order "significant transactions in the rial will expose anyone to sanctions," and predicted “it should cause banks and exchanges to dump their rial holdings.”This took place as Iran's president-elect Hassan Rouhani was scheduled to take office from August 3, 2013.
On 3 August 2013, Hassan Rouhani was elected as Iran’s next president.
Sanctions against third partiesEdit
In 2014, American authorities put a $5 million bounty on Chinese businessman Li Fangwei, whom they alleged to have been instrumental in evading sanctions against Iran's missile programs.
In 2014, French bank BNP Paribas agreed to pay an $8.9 billion fine, the largest ever for violating U.S. sanctions at that time. Germany's Commerzbank, France's Credit Agricole and Swiss UBS have also been fined. French President François Hollande said: "When the (European) Commission goes after Google or digital giants which do not pay the taxes they should in Europe, America takes offence. And yet, they quite shamelessly demand 8 billion from BNP or 5 billion from Deutsche Bank."
In April 2018, the U.S. Justice Department joined the U.S. Treasury Department's Office of Foreign Assets Control, or OFAC, and the Department of Commerce to investigate possible violations of U.S. sanctions against Iran by China's Huawei. The U.S. inquiry stems from an earlier sanctions-violation probe that ultimately led to penalties against another Chinese technology company, ZTE Corporation. Huawei's deputy chair and CFO Meng Wanzhou, daughter of the company's founder Ren Zhengfei, was arrested in Canada on December 1, 2018 based on an extradition request by U.S. authorities.
After the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA or Iran nuclear deal), the United States has imposed several new non-nuclear sanctions against Iran, some of which are being condemned by Iran as a violation of the deal. In July 2017, most Congressional Democrats and Republicans voted in favor of the Countering America's Adversaries Through Sanctions Act (CAATSA) that grouped together sanctions against Iran, Russia and North Korea. The United States has been considering new penalties, which reportedly seek to punish several companies and individuals from Iran.
These treasury and other arms of the government, both under Obama and Trump, have basically weakened the JCPOA extensively, which has kept a lot of the sanctions regime intact. In August 2018 the Trump administration reimposed the sanctions and warned that anyone doing business with Iran will not be able to do business with the United States. However, the US will be granting waivers to certain countries. For example, Iraq was granted a waiver that would allow the country to continue purchasing gas, energy and food products from Iran on the condition that the purchases were not paid for in US dollars.
In 2018, the United Nations International Court of Justice (ICJ) "ordered" the United States to stop the sanctions. The decision was unanimous, and was based on the 1955 U.S.-Iran "Friendship Treaty" that was signed with the government overthrown by the 1979 Islamic Revolution. In response, United States withdrew from two international agreements.
In October 2018, Reuters reported that American J.P. Morgan Chase Bank "agreed to pay $5.3 million to settle allegations it violated Cuban Assets Control Regulations, Iranian sanctions and Weapons of Mass Destruction sanctions 87 times, the U.S. Treasury said".
In April 2019 the U.S. threatened to sanction countries continuing to buy oil from Iran after an initial six-month waiver announced in November expired.
Sanctions against IRGCEdit
On 24 June 2019,Trump targeted eight senior commanders of the navy, aerospace and ground forces components of IRGC with sanctions.
Sanctions against Space AgencyEdit
Sanctions on education CoursesEdit
Effects and criticismEdit
According to an Iranian journalist, the effects of sanctions in Iran include expensive basic goods and an aging and increasingly unsafe aircraft fleet. "According to reports from Iranian news agencies, 17 planes have crashed over the past 25 years, killing approximately 1,500 people."
The U.S. forbids aircraft manufacturer Boeing to sell aircraft to Iranian aviation companies. However, there are some authorizations for the export of civil aviation parts to Iran when those items are required for the safety of commercial aircraft. An analysis by The Jerusalem Post found that a third of the 117 Iranian planes designated by the U.S. had experienced accidents or crashes.
A 2005 report, presented at the 36th session of the International Civil Aviation Organization, reported that the U.S. sanctions had endangered the safety of civil aviation in Iran because it prevented Iran from acquiring parts and support essential for aviation safety. It also stated that the sanctions were contrary to article 44 of the Chicago convention (to which the US is a member). The ICAO report said aviation safety affects human lives and human rights, stands above political differences, and that the assembly should bring international public pressure on the United States to lift the sanctions against Iran.
The European Union had been critical of most of the U.S. trade sanctions against Iran. Some EU member states have criticized ILSA as a "double standard" in U.S. foreign policy, in which the United States vigorously worked against the Arab League boycott of Israel while at the same time promoted a worldwide boycott of Iran. The EU member states had threatened formal counter-action in the World Trade Organization.
According to a study by Akbar E. Torbat, "overall, the sanctions' economic effect" on Iran "has been significant, while its political effect has been minimal."
According to the U.S. National Foreign Trade Council, in the medium-term, lifting US sanctions and liberalizing Iran's economic regime would increase Iran's total trade annually by as much as $61 billion (at the 2005 world oil price of $50/bbl), adding 32 percent to Iran's GDP. In the oil-and-gas sector, output and exports would expand by 25-to-50 percent (adding 3 percent to world crude oil production).
Iran could reduce the world price of crude petroleum by 10 percent, saving the United States annually between $38 billion (at the 2005 world oil price of $50/bbl) and $76 billion (at the proximate 2008 world oil price of $100/bbl). Opening Iran’s market place to foreign investment could also be a boon to competitive US multinational firms operating in a variety of manufacturing and service sectors.
In 2009, there was discussion in the U.S. of implementing "crippling sanctions" against Iran, such as the Iran Refined Petroleum Sanctions Act of 2009, "if diplomatic overture did not show signs of success by the autumn". Professor Hamid Dabashi, of Columbia University, said in August 2009 that this was likely to bring "catastrophic humanitarian consequences", while enriching and strengthening the "security and military apparatus" of "the Pasdaran and the Basij," and having absolutely no support from "any major or even minor opposition leader" in Iran. According to Bloomberg News, Boeing and Exxon have said that new Iran sanctions would cost $25 billion in U.S. exports.
It has also been argued the sanctions have had the counter effect of protecting Iran in some ways, for example the 2007 imposition of U.S. sanctions against Iranian financial institutions to a high degree made Iran immune to the then emerging global recession. Iranian officials argued that the sanctions created new business opportunities for Iranian companies to develop in order to fill the gap left by foreign contractors. According to U.S. officials, Iran may lose up to $60 billion in energy investments due to global sanctions.
On 18 January 2012 Russian Foreign Minister Sergey Lavrov warned that sanctions are aimed at strangling the economy of Iran and would create much discontent toward Western nations, and potentially provoke a negative recourse.
On 13 August 2018 Iran Supreme leader, Ayatollah Ali Khamenei, said that "mismanagement" harmed Iran more than U.S. sanctions did. "More than the sanctions, economic mismanagement (by the government) is putting pressure on ordinary Iranians ... I do not call it betrayal but a huge mistake in management," Khamenei was quoted as saying.
On 22 August 2018, United Nations Special Rapporteur Idriss Jazairy described the sanctions against Iran as "unjust and harmful". "The reimposition of sanctions against Iran after the unilateral withdrawal of the United States from the Iran nuclear deal, which had been unanimously adopted by the Security Council with the support of the US itself, lays bare the illegitimacy of this action," said Jazairy. According to Jazairy, "chilling effect" caused by the "ambiguity" of recently reimposed sanctions, would lead to "silent deaths in hospitals".
According to Pakistan's Prime Minister Imran Khan, U.S. sanctions against Iran are affecting neighboring Pakistan. He stated that "The last thing the Muslim World needs is another conflict. The Trump administration is moving towards that direction."
On 5 May 2019, White House announced the United States has stationed an aircraft carrier strike group and Air Force bombers to the Middle East for “troubling and escalatory signs and warnings” connected to Iran. Mr. Bolton said the purpose of the action is sending a message to the Iranian regime that any attack on US interests or on those of our allies by Iran will be faced with our unremitting response. Also, he declared in the statement, we are not looking for war with Iran but ready to repel to any attack, whether by proxy, the Islamic Revolutionary Guards Corps or regular Iranian forces.
On 19 May 2019, Trump threatens Iran and said in his twitter post "If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again," 
Impact on overseas studentsEdit
As of December 2018, US sanctions were reportedly affecting hundreds of Iranian university students in the UK, preventing them from being able to readily pay their tuition fees and forcing them to choose between abandoning their studies or using dangerous means to transfer funds.
In December 2010 it was reported that the U.S. Treasury Department's Office of Foreign Assets Control had approved nearly 10,000 exceptions to U.S. sanctions rules worldwide over the preceding decade by issuing special licenses for American companies.
European and U.S. sanctions do not affect Iran's electricity exports, which creates a loophole for Iran's natural gas reserves.
- Sanctions against Iran
- Iran and Libya Sanctions Act of 1996
- Iran Freedom and Support Act of 2006
- Iran Sanctions Enhancement Act of 2007 (never passed)
- Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
- National Defense Authorization Act for Fiscal Year 2012
- Countering America's Adversaries Through Sanctions Act
- Chicago's Persian heritage crisis
- Iran–United States relations
- Anti-Iranian sentiment
- Foreign direct investment in Iran
- Economy of Iran
- Instrument in Support of Trade Exchanges
- Iran and weapons of mass destruction
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