U.S. sanctions against Iran

The coercive economic measures the United States has employed against Iran in order to prevent the Islamic republic from engaging in certain actions, most notably supporting terrorism-related activities and developing nuclear power and long-range missiles

The United States of America and the Islamic Republic of Iran have had an adversarial relationship since 1979, when Shah Mohammad Reza Pahlavi was overthrown and his government replaced by a fundamentalist Islamic regime led by Ayatollah Ruhollah Khomeini. In the decades since, the two nations have tangled over a number of contentious issues, including Iran’s nuclear program. The program is in violation of the Nuclear Non-Proliferation Treaty of 1968, which had been signed by the Iranian government. During the 2000s, the administrations of President Bill Clinton (1993–2001), President George W. Bush (2001–9), and President Barack Obama (2009–) sought to impede the program’s further development by restricting US corporations from doing business with Iran and by targeting Iran’s oil and banking industries with punishing economic sanctions. The US government has also asked the United Nations (UN) to enforce harsh sanctions on Iran and has urged other nations to treat it as a pariah state—a nation acting outside of international law.

In the years between the end of World War II (1939–45) and 1979, the United States and Iran maintained a close relationship, in large part because the shah exported large quantities of Iranian oil to the United States. Yet this large natural oil reserve did not benefit the vast majority of Iranians. The shah used his nation’s oil revenues both to enrich his family and close associates and to update and westernize his country. These measures enraged many Iranians, particularly Islamic leaders like Ayatollah Ruhollah Khomeini, who was forced into exile in 1964 following his public condemnations of the shah. In 1978, Shah Reza Pahlavi brutally suppressed public demonstrations and strikes against his regime and imposed martial law in Iran. He did these things while receiving the support of President Jimmy Carter (1977–81), whose administration saw the shah as one of America’s key allies in the Middle East. After the shah was forced into exile in January 1979 and the ayatollah returned from his own exile the following month, relations between the United States and the Islamic leaders taking control in Iran quickly deteriorated. In November 1979, Islamic students seized the US Embassy in Tehran and took American hostages. Their demand: the return of the shah, who was receiving cancer treatment in the United States, to Iran. When the United States refused, the militants held fifty-two of the hostages for 444 days, finally releasing them just minutes after the new US president, Ronald Reagan (1981–89), had been sworn into office on January 20, 1981. By the time of the hostages’ release, Shah Pahlavi had been dead for about six months.

Since that time, the United States has had no formal relations with Iran, has imported no oil from the country, and, more often than not, has maintained strict sanctions on the Islamic Republic. (During President Reagan’s second term, however, in what came to be known as the Iran-Contra Affair, members of his administration illegally sold weapons to Iran, believing that the arms sale would help free US hostages being held by a pro-Iranian group in Lebanon, as well as fund the contras in Nicaragua.) Relations between the two nations eased somewhat following the end of the Iran-Iraq War (1980–88) and the death of the ayatollah in 1989. In 1995, however, the administration of President Bill Clinton again prohibited trade with Iran because of the nation’s efforts to acquire nuclear weapons, its support of terrorist groups, and its desire to thwart the peace process between Israelis and Palestinians. Clinton then followed this executive order by signing the Iran and Libya Sanctions Act (ILSA) of 1996, which imposed sanctions on any company doing business with Iran’s oil industry. The act has since been renewed, though it has not applied to Libya since 2006. (It later became known as the Iran Sanctions Act, or ISA.)

Sanctions under Bush

On September 11, 2001, terrorists associated with the al-Qaeda network overseen by Osama bin Laden hijacked four commercial jetliners and flew them into the World Trade Center in New York City, the Pentagon outside Washington, DC, and a field in Shanksville, Pennsylvania. The attacks—which killed almost three thousand people, destroyed the Trade Center, and severely crippled the Pentagon—refocused US foreign policy toward the prevention of terrorist acts and against the proliferation of weapons of mass destruction (WMDs).

On September 23, 2001, President George W. Bush signed Executive Order 13224, which sought to block the financial support that terrorists received from organizations or governments that had funded them in the past. Included in this group was the Iranian government. In January 2002, Bush further targeted Iran by describing it, Iraq, and North Korea as an “axis of evil,” for trying to acquire WMDs (like long-range missiles) and ignoring international laws and treaties. In September 2003, the International Atomic Energy Agency (IAEA), which is the United Nations’ nuclear watchdog group, asked the Iranian government to prove that it was not developing nuclear weapons. As negotiations between the IAEA and Iran went back and forth, the US government sought to continue to impede the Iranian nuclear program’s development through harsher sanctions. On June 28, 2005, Bush signed Executive Order 13382 to slow Iran’s nuclear program by freezing the assets of entities, groups, and companies helping to develop WMDs for rogue governments. In late October 2007, Bush announced new sanctions on Iran—reported at the time to be the toughest since the United States began imposing them on the Islamic Republic—because he believed that such actions would prevent another war in the Middle East, this time between Israel and Iran. In addition to punishing banks and other Iranian financial institutions, the 2007 sanctions also targeted the Iranian military for the first time, by labeling Iran’s Revolutionary Guard Corps as a distributor of WMDs and the Quds Force as a supporter of terrorism.

Sanctions under Obama

In March 2008, the United Nations Security Council, which is the main UN body that enforces international peace, placed additional economic sanctions on Iran, in the hopes of forcing the Iranian government to comply with IAEA requests. In May, the IAEA announced that Iran was still hiding facts about its nuclear program. As sanctions seemed to be having little effect, the international community, most notably the European Union (EU), offered Iran trade incentives to curtain its nuclear program. By September, with incentives having produced no results, the UN Security Council again resolved to demand that Iran stop developing its nuclear program. However, the council did not add new sanctions, as Russia, one of the Security Council’s five permanent members with veto power, declared it would not support new sanctions.

In November 2008, Barack Obama, who had offered an unconditional dialogue with Iran, was elected US president. The overture, however, did not produce tangible results. Before long, Ayatollah Ali Khamenei, who had replaced the Ayatollah Khomeini upon his death in 1989, was claiming that President Obama was pursuing a similar path as his presidential predecessors.

In May 2009, the US Department of State reported that Iran had become the “most active state sponsor of terrorism” in the world. In late 2009, the Iranian government began testing long-range missiles capable of hitting Israel or US bases in the Persian Gulf. The government also continued to enrich uranium for its nuclear reactors, despite an IAEA condemnation against such actions in November 2009. In reaction, the Obama administration tried to ratchet up the pressure on Iran through a series of executive orders between 2010 and 2012.

Impact

Time and again in the 2000s, the United States sought to impede Iran’s nuclear enrichment program through economic and trade sanctions. During the following decade, the Obama administration continued these efforts through more sanctions. Executive orders imposed sanctions on eight Iranian officials responsible for human rights abuses; increased the penalties established under the Iran Sanctions Act on entities working with Iran; imposed sanctions on individuals associated with the Iranian petrochemical and energy industries; blocked the property of the Iranian government and its financial institutions; blocked the property of individuals associated with human rights abuses and prevented their entry into the United States; and suspended entry into the United States of anyone evading Iranian sanctions, among other actions. Additionally, the National Defense Authorization Act of 2012 contains a section that specifically imposes US sanctions against the Central Bank of Iran, which is the main place where the nation’s oil revenue profits are cleared.

The United States has also urged international bodies like the European Union and the United Nations to aid in its efforts against Iran, fearing that a nuclear-powered Iran would be a threat to the Middle East, one of the more politically unstable regions of the world. The US government believes that Iran is a particular threat to Israel, which the Iranian regime considers to be an illegitimate nation. Some international observers have thought that the cumulative effect of the sanctions was beginning to have an impact on the Iranian economy after the 2000s, particularly as more nations have added their own economic sanctions to those imposed by the United States and the United Nations. In July 2012, for example, the European Union instituted a boycott of Iranian oil. With fewer and fewer markets to sell to, the theory behind the boycott is that Iranians will have little choice but to bow to international pressure and stop their uranium enrichment and missile programs. Also in 2012, Canada broke off diplomatic relations with Iran over the latter’s nuclear program; the European Union targeted Iranian banks, trade, and gas imports with further sanctions; and the rial, Iran’s currency, lost some 80 percent of its value against the US dollar since heavy international sanctions went into effect against the Islamic Republic in 2011. Yet, whether the sanctions imposed on Iran by the United States—as well as the ones imposed by the United Nations and other organizations like the European Union—ends the threat of the Iranian government’s nuclear program, has remained to be seen.

Bibliography

Abrahamian, Ervand. A History of Modern Iran. Cambridge: Cambridge UP, 2008. Print. Presents a history of Iran during the twentieth century, covering such important events as the discovery of oil in Iran, the fall of the shah, the Iranian Revolution, and the nation’s nuclear program.

Fitzpatrick, Mark. The Iranian Nuclear Crisis: Avoiding Worst-Case Outcomes. Oxford: Intl. Inst. for Strategic Studies, 2008. Print. The author, a veteran US diplomat who specialized in nuclear non-proliferation, analyzes the status of the Iranian nuclear program in historical context and looks at the ways in which Western efforts at deterrence have succeeded and failed.

Satrapi, Marjane. The Complete Persepolis. New York: Pantheon, 2007. Print. This single volume collects Satrapi’s critically-acclaimed comic strip memoir detailing her coming-of-age during the Iranian Revolution in Tehran, Iran.

Wagner, Heather Lehr. The Iranian Revolution. New York: Chelsea, 2010. Print. Intended for high school students, this volume provides a complete overview of modern Iran, from the lead-up to the Iranian Revolution through modern-day relations between the Islamic Republic and the West.

Wright, Robin B., ed. The Iran Primer: Power, Politics, and US Policy. Washington, DC: US Inst. of Peace, 2010. Print. Wright, a respected journalist and foreign policy analyst who had written for a wide variety of publications, collects analyses from some fifty experts to present a detailed yet easy-to-read overview of Iran and its relations with the United States.