Sanctions against Iran

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Numerous nations and multinational entities impose sanctions against Iran. Sanctions commonly bar nuclear, missile and certain military exports to Iran; investments in oil, gas and petrochemicals; exports of refined petroleum products; business dealings with the Iranian Republican Guard Corps; banking and insurance transactions, including with the Central Bank of Iran; and shipping. The United States imposed sanctions on Iran following the Islamic revolution of 1979, while more recent rounds of sanctions by the U.S. and other entities were motivated by Iran's alleged nuclear weapons program.[1]

Contents

[edit] UN sanctions against Iran

  • United Nations Security Council Resolution 1696 - passed on 31 July 2006. Demanded that Iran suspend all enrichment-related and reprocessing activities, but did not invoke Chapter VII or impose sanctions.
  • United Nations Security Council Resolution 1737 - passed on 23 December 2006. Banned the supply of nuclear-related materials and technology and froze the assets of key individuals and companies related to the program.
  • United Nations Security Council Resolution 1747 - passed on 24 March 2007. Imposed an arms embargo and expanded the freeze on Iranian assets.
  • United Nations Security Council Resolution 1803 - passed on 3 March 2008. Extended the asset freezes and called upon states to monitor the activities of Iranian banks, inspect Iranian ships and aircraft, and to monitor the movement of individuals involved with the program through their territory.
  • United Nations Security Council Resolution 1835 - Passed in 2008.
  • United Nations Security Council Resolution 1929 - passed on 9 June 2010. Banned Iran from participating in any activities related to ballistic missiles, tightened the arms embargo, travel bans on individuals involved with the program, froze the funds and assets of the Iranian Revolutionary Guard and Islamic Republic of Iran Shipping Lines, and recommended that states inspect Iranian cargo, prohibit the servicing of Iranian vessels involved in prohibited activities, prevent the provision of financial services used for sensitive nuclear activities, closely watch Iranian individuals and entities when dealing with them, prohibit the opening of Iranian banks on their territory and prevent Iranian banks from entering into relationship with their banks if it might contribute to the nuclear program, and prevent financial institutions operating in their territory from opening offices and accounts in Iran.

[edit] Bilateral sanctions against Iran

See also: European Union sanctions against Iran and U.S. sanctions against Iran
  • Australia has imposed financial sanctions and travel bans on individuals and entities involved in Iran's nuclear and missile programs or assist Iran in violating sanctions, and an arms embargo.[2]
  • Canada imposed a ban on dealing in the property of designated Iranian nationals, a complete arms embargo, oil-refining equipment, items that could contribute to the Iranian nuclear program, the establishment of an Iranian financial institution, branch, subsidiary, or office in Canada or a Canadian one in Iran, investment in the Iranian oil and gas sector, relationships with Iranian banks, purchasing debt from the Iranian government, or providing a ship or services to Islamic Republic of Iran Shipping Lines, but allows the Foreign Minister to issue a permit to carry out a specified prohibited activity or transaction.[3]
  • The European Union has imposed restrictions on cooperation with Iran in foreign trade, financial services, energy sectors and technologies, and banned the provision of insurance and reinsurance by insurers in member states to Iran and Iranian-owned companies. On 23 January 2012, the EU agreed to an oil embargo on Iran, effective from July, and to freeze the assets of Iran's central bank.[4] The next month, Iran symbolically pre-empted the embargo by ceasing sales to Britain and France (both countries had already almost eliminated their reliance on Iranian oil, and Europe as a whole had nearly halved its Iranian imports), though some Iranian politicians called for an immediate sales halt to all EU states, so as to hurt countries like Greece, Spain and Italy who were yet to find alternative sources.[5][6]
  • India enacted a ban on the export of all items, materials, equipment, goods, and technology that could contribute to Iran's nuclear program.[7] In 2012, the country said it was against expanding its sanctions.[8] India imports 12 percent of its oil from Iran and cannot do without it,[9] and the country plans to send a "huge delegation" to Iran in mid-March 2012 to further bilateral economic ties.[10][11]
  • Israel banned business with or unauthorized travel to Iran under a law banning ties with enemy states.[12] Israel has also enacted legislation that imposes sanctions on any companies that violate international sanctions.[13] Israel later extended the sanctions by imposing a series of administrative and regulatory measures to prevent Israeli companies from trading with Iran, and announced the establishment of a national directorate to implement the sanctions.[14]
  • Japan imposed a ban on transactions with some Iranian banks, investments with the Iranian energy sector, and asset freezes against individuals and entities involved with Iran's nuclear program.[15] In January 2012, the second biggest customer for Iranian oil announced it would take "concrete steps" to reduce its 10% oil dependency on Iran.[16]
  • South Korea imposed sanctions on 126 Iranian individuals and companies.[17] Japan and South Korea together account for 26% of Iran's oil exports.[18]
  • Switzerland banned the sale of arms and dual-use items to Iran, and of products that could be used in the Iranian oil and gas sector, financing this sector, and restrictions on financial services.[19]
  • The United States has imposed an arms ban and an almost total economic embargo on Iran, which includes sanctions on companies doing business with Iran, a ban on all Iranian-origin imports, sanctions on Iranian financial institutions, and an almost total ban on selling aircraft or repair parts to Iranian aviation companies. A license from the Treasury Department is required to do business with Iran. In June 2011, the United States imposed sanctions against Iran Air and Tidewater Middle East Co. (which runs seven Iranian ports), stating that Iran Air had provided material support to the Iranian Revolutionary Guard Corps (IRGC), which is already subject to UN sanctions, that Tidewater Middle East is owned by the IRGC, and that both have been involved in activities including illegal weapons transportation.[20] The U.S. has also begun to designate a number of senior Iranian officials under the Iranian Human Rights Abuses Sanctions Regulations. On December 14, 2011, the U.S. Department of Treasury designated Hassan Firouzabadi and Abdollah Araqi under this sanctions program. [21] In February 2012 the US froze all property of the Central Bank of Iran and other Iranian financial institutions, as well as that of the Iranian government, within the United States.[22] The American view is that sanctions should target Iran's energy sector that provides about 80% of government revenues, and try to isolate Iran from the international financial system.[23]

[edit] Effects

See also: Smuggling in Iran

U.S. and EU leaders are trying to tighten restrictions on business with Iran, which produced 3.55 million barrels of crude a day in January, 11 percent of OPEC's total, according to data compiled by Bloomberg. Oil sales earned Iran $73 billion in 2010, accounting for about 50 percent of government revenue and 80 percent of exports, the U.S. Energy Department estimates.[24]

“
”
—Bloomberg, 13 February 2012

The sanctions bring difficulties to Iran's $352 billion, oil-dominated economy.[4] Data published by the Iranian Central Bank show a declining trend in the share of Iranian exports from oil-products (2006/2007: 84.9%, 2007/2008: 86.5%, 2008/2009: 85.5%, 2009/2010: 79.8%, 2010/2011 (first three quarters): 78.9%).[25] The sanctions have had a substantial adverse effect on the Iranian nuclear program by making it harder to acquire specialized materials and equipment needed for the program. The social and economic effects of sanctions have also been severe,[26] with even those who doubt their efficacy, such as John Bolton, describing the EU sanctions, in particular, as "tough, even brutal."[27] Iranian foreign minister Ali Akhbar Salehi conceded that the sanctions are having an impact.[28] China has become Iran's largest remaining trading partner.[15]

Sanctions have reduced Iran's access to products needed for the oil and energy sectors, have prompted many oil companies to withdraw from Iran, and have also caused a decline in oil production due to reduced access to technologies needed to improve their efficiency.[citation needed] According to Undersecretary of State William Burns, Iran may be annually losing as much as $60 billion in energy investment.[29] Many international companies have also been reluctant to do business with Iran for fear of losing access to larger Western markets.[citation needed] As well as restricting export markets, the sanctions have reduced Iran's oil income by increasing the costs of repatriating revenues in complicated ways that sidestep the sanctions; Iranian analysts estimate the budget deficit for the 2011/2012 fiscal year, which in Iran ends in late March, at between $30bn to $50bn.[30] The effects of U.S. sanctions include expensive basic goods for Iranian citizens, and an aging and increasingly unsafe civil aircraft fleet. According to the Arms Control Association, the international arms embargo against Iran is slowly reducing Iran's military capabilities, largely due to its dependence on Russian and Chinese military assistance. The only substitute is to find compensatory measures requiring more time and money, and less effective.[31][32] According to at least one analyst (Fareed Zakaria), the market for imports in Iran is dominated by state enterprises and regime-friendly enterprises, because the way to get around the sanctions is smuggling, and smuggling requires strong connections with the regime. This has weakened Iranian civil society and strengthened the state.[33]

The value of the Iranian rial has plunged since autumn 2011, causing widespread panic among the Iranian public,[30] and fell a further 10% immediately after the imposition of the EU oil embargo.[34] In January 2012, the country raised the interest rate on bank deposits by up to 6 percentage points in order to curtail the rial's depreciation. The rate increase was a setback for Ahmadinejad, who had been using below-inflation rates to provide cheap loans to the poor, though naturally Iranian bankers were delighted by the increase.[30] Not long after, and just a few days after Iran's economic minister declared that "there was no economic justification" for devaluing the currency because Iran's foreign exchange reserves were "not only good, but the extra oil revenues are unprecedented,"[30] the country announced its intention to devalue by about 8.5 percent against the U.S. dollar, set a new exchange rate and vowed to reduce the black market's influence (booming, of course, because of the lack of confidence in the rial).[35]

Sanctions tightened further when major supertanker companies said they would stop loading Iranian cargo. Prior attempts to reduce Iran's oil income failed because many vessels are often managed by companies outside the United States and the EU; however, EU actions in January extended the ban to ship insurance. This insurance ban will affect 95 percent of the tanker fleet because their insurance falls under rules governed by European law. "It's the insurance that's completed the ban on trading with Iran," commented one veteran ship broker.[36] This completion of the trading ban left Iran struggling to find a buyer for nearly a quarter of its annual oil exports.[5] Iran had hoped to sell more to Chinese and Indian refiners, though such attempts seem unlikely to succeed, particularly since China—the single-largest buyer of Iranian crude—has been curtailing its oil imports from Iran down to half their former level.[5]

Another effect of the sanctions, in the form of Iran's retaliatory threat to close the Strait of Hormuz, has led to Iraqi plans to open export routes for its crude via Syria, though Iraq's deputy prime minister for energy affairs doubted Iran would ever attempt a closure.[36]

[edit] See also

[edit] References

  1. ^ Ariel Zirulnick (24 February 2011). "Sanction Qaddafi? How 5 nations have reacted to sanctions: Iran". The Christian Science Monitor. http://www.csmonitor.com/World/Global-Issues/2011/0224/Sanction-Qaddafi-How-5-nations-have-reacted-to-sanctions./Iran. Retrieved 13 February 2012. 
  2. ^ Government of Australia, Australia's autonomous sanctions: Iran, July 29, 2010
  3. ^ Government of Canada, Sanctions against Iran, July 26, 2010
  4. ^ a b Ladane Nasseri (12 February 2012). "Iran Won't Yield to Pressure, Foreign Minister Says; Nuclear News Awaited". Bloomberg. http://www.bloomberg.com/news/2012-02-12/iran-won-t-yield-to-pressure-foreign-minister-says-nuclear-news-awaited.html. Retrieved 13 February 2012. 
  5. ^ a b c Javier Blas; Najmeh Bozorgmehr (20 February 2012). "Iran struggles to find new oil customers". The Financial times. http://www.ft.com/cms/s/0/afb3f180-5b0f-11e1-a2b3-00144feabdc0.html. Retrieved 21 February 2012. 
  6. ^ "Iran stops oil sales to British, French companies". Reuters. 19 February 2012. http://www.reuters.com/article/2012/02/19/us-iran-oil-europe-idUSTRE81I07W20120219. Retrieved 19 February 2012. "Iran's top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent . . . by more than a third—or over 300,000 barrels daily. . . . Iran was supplying more than 700,000 barrels per day to the EU plus Turkey in 2011, industry sources said." 
  7. ^ "India imposes more sanctions on Iran". The Hindu. 1 April 2011. http://www.thehindubusinessline.com/industry-and-economy/government-and-policy/article1591852.ece. Retrieved 13 February 2012. 
  8. ^ Sandeep Dikshit (11 February 2012). "India against more sanctions on Iran". The Hindu. http://www.thehindu.com/news/national/article2880316.ece. Retrieved 13 February 2012. 
  9. ^ "India won't cut Iranian oil imports despite US, EU sanctions: Pranab Mukherjee". The Times of India. Reuters. 30 January 2012. http://timesofindia.indiatimes.com/business/india-business/India-wont-cut-Iranian-oil-imports-despite-US-EU-sanctions-Pranab-Mukherjee/articleshow/11682476.cms. Retrieved 13 February 2012. 
  10. ^ "Govt wants more exports to Iran". The Times of India. TNN. 10 February 2012. http://timesofindia.indiatimes.com/business/india-business/Govt-wants-more-exports-to-Iran/articleshow/11831613.cms. Retrieved 13 February 2012. 
  11. ^ "Payment issue with Iran resolved: FIEO". The Economic Times. 2 March 2012. http://economictimes.indiatimes.com/news/economy/foreign-trade/payment-issue-with-iran-resolved-fieo/articleshow/12111037.cms. Retrieved 3 March 2012. 
  12. ^ Attila Somfalvi (30 May 2011). "PM clarifies: Ties with Iran forbidden". Yedioth Ahronoth. http://www.ynetnews.com/articles/0,7340,L-4075924,00.html. Retrieved 13 February 2011. 
  13. ^ France 24, "Israel to 'finally' impose sanctions on Iran", March 3, 2011
  14. ^ Herb Keinon (26 June 2011). "Gov't expands economic sanctions against Iran". The Jerusalem Post. http://www.jpost.com/DiplomacyAndPolitics/Article.aspx?id=226652. Retrieved 13 February 2012. 
  15. ^ a b "Japan imposes new Iran sanctions over nuclear programme". BBC News. 3 September 2010. http://www.bbc.co.uk/news/world-asia-pacific-11173774. Retrieved 13 February 2012. 
  16. ^ "Q&A: Iran sanctions". BBC News. 6 February 2012. http://www.bbc.co.uk/news/world-middle-east-15983302. Retrieved 13 February 2012. 
  17. ^ Choe Sang-Hun (8 September 2010). "South Korea Aims Sanctions at Iran". The New York Times. http://www.nytimes.com/2010/09/09/world/asia/09korea.html. Retrieved 14 February 2012. 
  18. ^ "Japan 'to reduce Iran oil imports'". BBC News. 12 January 2012. http://www.bbc.co.uk/news/world-asia-16523422. Retrieved 13 February 2012. 
  19. ^ "Switzerland brings Iran sanctions in line with EU". Reuters. 19 January 2011. http://www.reuters.com/article/2011/01/19/swiss-iran-idUSLDE70I1I320110119. Retrieved 25 February 2012. 
  20. ^ Daniel Dombey (24 June 2011). "US widens scope of Iran sanctions". The Financial Times. http://www.ft.com/intl/cms/s/0/7341ec48-9deb-11e0-958b-00144feabdc0.html. Retrieved 14 February 2012. 
  21. ^ OFAC Targets Two Iranians for SDN Designations, Sanction Law, December 14, 2011
  22. ^ Jackie Calmes; Rick Gladstone (6 February 2012). "Obama Imposes Freeze on Iran Property in U.S.". The New York Times. http://www.nytimes.com/2012/02/07/world/middleeast/white-house-moves-to-tighten-sanctions-on-iran.html. Retrieved 13 February 2012. 
  23. ^ Kenneth Katzman (3 February 2011). "Summary". Iran Sanctions. Congressional Research Service. http://fpc.state.gov/documents/organization/156527.pdf. Retrieved 13 February 2012. 
  24. ^ Isaac Arnsdorf (13 February 2012). "Iran Sanctions Tighten as Shippers Stop Loading". Bloomberg. http://www.bloomberg.com/news/2012-02-13/iran-sanctions-tightening-as-osg-to-frontline-halt-shipping-nation-s-crude.html. Retrieved 13 February 2012. 
  25. ^ Iranian National Bank. "Economic Trends No 62, Third Quarter 1389 (2010/2011), Balance of Payments, p.16". http://www.cbi.ir/page/7961.aspx. 
  26. ^ Editorial (17 February 2012). "Time to test Iran's nuclear intentions". The Financial Times. http://www.ft.com/cms/s/0/b1851c66-596e-11e1-abf1-00144feabdc0.html. Retrieved 19 February 2012. "Ratcheted-up sanctions, including an imminent oil embargo and the obstruction of Iran's ability to finance its trade, are having a big impact on the Iranian economy." 
  27. ^ John R. Bolton (26 January 2012). "Don't Let Iran Benefit From EU Financial Crisis". Bloomberg. http://www.bloomberg.com/news/2012-01-26/don-t-let-iran-benefit-from-eu-financial-crisis-john-r-bolton.html. Retrieved 27 January 2012. "[S]unny propaganda about the impact of economic sanctions on Iran is emanating from the Obama administration . . . however, there are only two possible outcomes: Either Iran gets nuclear weapons or it doesn't. To ensure that it doesn't, the only viable option is to break Iran's weapons program militarily." 
  28. ^ Rick Gladstone (20 December 2011). "Iran Admits Western Sanctions Are Inflicting Damage". The New York Times. http://www.nytimes.com/2011/12/20/world/middleeast/iran-admits-western-sanctions-are-inflicting-damage.html. Retrieved 13 February 2012. 
  29. ^ Flavia Krause-Jackson (1 December 2010). "Sanctions Cost Iran $60 Billion in Oil Investments, Burns Says". Bloomberg. http://www.bloomberg.com/news/2010-12-01/sanctions-cost-iran-60-billion-in-oil-investments-burns-says.html. Retrieved 13 February 2012. 
  30. ^ a b c d Najmeh Bozorgmehr (25 January 2012). "Iran raises interest rate on bank deposits". The Financial Times. http://www.ft.com/cms/s/0/e14a9e1e-4760-11e1-b847-00144feabdc0.html. Retrieved 27 January 2012. 
  31. ^ "The UN Sanctions' Impact on Iran's Military". Issue Brief - Volume 1, Number 7. Arms Control Association. 11 June 2010. http://www.armscontrol.org/issuebriefs/iransanctionseffectonmilitary. Retrieved 13 February 2012. 
  32. ^ "Toward a Negotiated Solution - Solving the Iranian Nuclear Puzzle Briefing Series". Arms Control Association. 20 January 2011. http://www.armscontrol.org/events/IranNegotiatedSolution. Retrieved 13 February 2012. 
  33. ^ Fareed Zakaria (26 October 2011). "To deal with Iran's nuclear future, go back to 2008". The Washington Post. http://www.washingtonpost.com/opinions/to-deal-with-irans-nuclear-future-go-back-to-2008/2011/10/26/gIQADQyEKM_story.html. Retrieved 27 January 2012. 
  34. ^ "Iran's rial drops 10 percent as EU bans oil imports". Al Arabiya. Reuters. 23 January 2012. http://www.alarabiya.net/articles/2012/01/23/190110.html. Retrieved 27 January 2012. 
  35. ^ Ladane Nasseri (26 January 2012). "Iran Central Bank Will Devalue Rial 8.5% Against Dollar as Sanctions Bite". Bloomberg. http://www.bloomberg.com/news/2012-01-26/iran-central-bank-will-devalue-rial-8-5-against-dollar-as-sanctions-bite.html. Retrieved 26 January 2012. 
  36. ^ a b Kadhim Ajrash; Nayla Razzouk (12 February 2012). "Iraq Opens Offshore Oil Facility to Boost Export Capacity in Persian Gulf". Bloomberg. http://www.bloomberg.com/news/2012-02-12/iraq-opens-offshore-oil-facility-to-boost-export-capacity-1-.html. Retrieved 13 February 2012. 

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