- The United States has had sanctions on Iran for most of the period since the 1979 Islamic revolution, with sanctions becoming broader since 1995 and expanded further since 2005, especially in 2011.
- U.S. sanctions have been controversial on many scores, with vigorous debates about their impact and their negative side effects.
- The extent and timing of U.S. sanctions relief that Iran will receive as part of the final nuclear deal are also matters of controversy.
- Taking a moral stance against human rights abuses in Iran
- Deterring other countries from taking the same nuclear route as Tehran
- Signaling international disapproval
- Delaying and disrupting Tehran’s nuclear and missile programs
- Helping the democratic opposition
- Crippling the country, or at least the government
- Using sanctions as leverage to open fruitful negotiations on the nuclear issue or perhaps on a broader set of issues
- Persuading Iran to halt its uranium enrichment efforts.
- Sanctions on Iran allow much more people-to-people exchange than embargos on Cuba. U.S. restrictions on exports and imports do not cover travel (or travel-related payments), donations of articles intended to relieve human suffering (such as food, clothing and medicine), gifts valued at $100 or less, or "informational materials" defined broadly to include films, posters, photographs, CDs and artwork.
- Some U.S.-Iran trade continues, especially in food. Iran is a large wheat importer; some years, it buys as much as $200 million in U.S. wheat. From 1998 to 2010, Americans could legally buy Iranian handicrafts and foods. U.S. purchases never reached $50 million in a year; the main item was rugs. Some Iranian products faced other restrictions: Caviar was limited by the international agreement for conserving the endangered Caspian sturgeon, and pistachios faced a stiff countervailing duty imposed after California pistachio growers complained about dumping.
- Since the 2008 financial crisis, banks have paid out more than $140 billion to U.S. regulators for a wide variety of infractions from manipulating interest rates to concealing bad mortgages, with U.S. branches of foreign-owned banks paying more than $14 billion in penalties for sanctions violations, primarily with Iran. As a result, many banks have decided to adopt a “derisking” strategy - that is, avoiding altogether transactions that could raise regulatory concerns. The strategy has led many banks to refuse to conduct even permissible business with countries under close regulatory scrutiny, including Iran.
- While Iran has often complained that the United States does not allow Iran Air to buy spare parts for its aging Boeings, in fact, the Bush administration issued a license for such exports. But as of early 2015, Boeing had made exactly one sale for a trivial sum.
- In 1992, before the Clinton administration toughened sanctions, the United States was Iran’s sixth largest source of imports; U.S. exports were $748 million. In 2014, U.S. exports to Iran were $186.5 million.
- The pace and extent of sanctions relief was a major issue in the nuclear talks. Much of the debate was about U.N. and E.U. sanctions. But another important issue was U.S. sanctions relating to financial transactions, which greatly restricted Iranian banks’ access to the global financial system and the Iranian Central Bank’s access to $150 billion of its foreign exchange assets. Those restrictions arguably had the greatest impact on Iran’s economy of any sanctions, unilateral or multilateral. Iran wanted those sanctions lifted quickly and fully; the United States wanted to tie sanctions relief to Iranian actions.
- While the President has the authority to waive or suspend all existing U.S. sanctions, Congress insisted that any relief from sanctions imposed by law (distinct from those imposed by executive order) be delayed until Congress can vote on the final deal. Congress was also interested in how much a nuclear deal would relax U.S. sanctions imposed partly for nuclear reasons, but also partly for other reasons. The Obama administration has made clear that it has no intention of asking Congress to end any legislatively mandated sanctions, arguing that Iran would first have to demonstrate a track record of compliance with its international obligations.
- Even after U.S. sanctions are lifted, banks may still worry about falling afoul of rules against deceptive financial practices in which many Iranian banks engage, such as concealing who is making a payment. Plus New York’s Department of Financial Services and independent-minded prosecutors may go after banks even when the U.S. Treasury Department would not. And it is not clear how confident banks or companies will be that sanctions relief will be permanent. So it is by no means certain how much access Iran will have to major international banks.
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"The Iran Primer"--Book Overview
The world’s most comprehensive website on Iran, “The Primer” brings together 50 experts—Western and Iranian—in concise chapters on politics, economy, military, foreign policy, and the nuclear program. It chronicles events under six U.S. presidents. It also has leader bios, timelines, data on nuclear sites—and context for what lies ahead. Click here for a hardcopy. New articles are added at the top.