Economic Sanctions and Nuclear Proliferation

CEU eTD Collection In fulfillmentof partial the E CONOMIC CONOMIC S ANCTIONS A ANCTIONS requirements of for in Policy Master thedegree of inEconomic Arts Central European European UniversityCentral T Department of Economics Supervisor: HE Budapest, Hungary Global Markets Global Submitted to C Nodir Ataev ND ND ASE O ASE 2013 By

Attila Rátfai Attila

UCLEAR UCLEAR F

RAN

P ROLIFERATION :

CEU eTD Collection alone policies areunlikelyalone to shows economy, Iran’s on sanctions the of effect the of analysis the with coupled analysis, historical This Iran. against campaign sanctions the of prospects future sanctions where woes. economic country’s the to contributed collapse. of verge the to it Iran’s pushed not burdened have they have economy, sanctions international the although that is study this of finding major A Iran’s futile. been have goodheadway, made othersthatthey sanctions claim somethat have argue onIran ambitions. While stand as sanctions economic of effectiveness the over debate the has so intensified, have Iran against sanctions As alike. policymakers and economists among sanctions Abstract

Keywords: economy T he impact of internation of impact he can can

stop economic sanctions, proliferation,economic Iran nuclear

and and

ee sd o at ula proliferation nuclear halt to used were Using I ran’s suspected nuclear program are program nuclear suspected ran’s the extent to whi to extent the a case study approach, approach, study case a

stop fr Iran al al economic economic ch the sanctions have influenced the country’s nuclear policy. nuclear country’s the influenced have sanctions the ch om eventually sanctions on Iran’s economy and whether and economy Iran’s on sanctions h peet ok lo nlzs itrcl episodes historical analyzes also work present The this study this i

becoming

currently the subject of vigorous discussion discussion vigorous of subject the currently

and examine - Also, the sanctions have only partiall only have sanctions the Also, ,

alone policies in policies alone based on this analysis this on based

a nuclear a that economic sanctions as stand as sanctions economic that s the impact of the sanctions on sanctions the of impact the power

halting Iran’s nuclear Iran’s halting .

discusses the the discusses economic economic y - CEU eTD Collection Baltabaeva all offering and work thank to like providing for Plaut Steven Prof. to grateful throughout guidance and comments helpful his for Rátfai Attila Prof. First years. two past the during met have I individuals

Acknowledgements y nevr. ial, I Finally, endeavors. my hs hss ol nt ae en osbe ihu te otiuin f h outstanding the of contribution the without possible been have not would thesis This

for

Harold Rhode Harold her love her and support. continued his insight , a ,

and expertise. I am am I expertise. and

retired ih o xrs m hatet rttd t my to gratitude heartfelt my express to wish Pentagon direction

e xpert ii also

deeply indebted indebted deeply on the on and and

of all, all, of reviewing my work my reviewing Middle I wo I uld like to thank my supervisor my thank to like uld East, for reading a draft of my of draft a reading for East, my to my parents for support for parents my to

work. I am also am I work.

. I would particularly would I fiancée

Zarnigora extremely ing

CEU eTD Collection Chapter 5:Economic Sanctions ProgramChapter andIran’s Nuclear Proliferation: 4:Economic Sanctions HistoricalChapter andNuclear Episodes 3:Economic Sanctions EconomyChapter andtheIranian 2:Overview of EconomicChapter SanctionsonIran Framework 1:Theoretical Chapter Introduction C ONTENTS 5.1 Effectiveness of SanctionsonIran: 4.3 Unsuccessful Sanctions Episodes Successful4.2 Partially Episodes Sanctions 4.1 Successful Episodes Sanctions OilIndustry3.2 Iranian Sanctions Under Macroeconomic Indicators3.1 Main byOtherCountries2.4 Sanctions Sanctions onIran2.3 EU Sanctions onIran2.2 UN onIran Sanctions 2.1 US 3.1.5 The cost3.1.5 of sanctions Unemployment3.1.4 depreciation Currency 3.1.3 Inflation 3.1.2 GDP 3.1.1 5.1.2 DelayingIran’s5.1.2 nuclearprogram program StoppingIran’s5.1.1 nuclear

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50 50 49 49 45 43 42 41 35 35 34 33 32 30 30 29 26 25 21 12 10

5 1

CEU eTD Collection References Recommendations Conclusions and 6.3 Close Loopholes 6.3 Close 6.2 Of ontheSame Page6.1 Stay 5.2 Effectiveness of Prospects SanctionsonIran: Future 5.2.7 Length of Length 5.2.7 sanctions Impact ofsanctions5.2.6 oninterest groups inIran Costof5.2.5 compliance for Iran Iran’s towithstand5.2.4 ability sanctions cooperation International 5.2.3 Costof5.2.2 sanctions onIran’s econ extent and Type 5.2.1 ofsanctions Hurting theIranian 5.1.3 economy fer Not Sticks, Only butAlso Carrots

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63 60 60 59 58 56 56 55 54 53 53 53 52 50

CEU eTD Collection HistoricalFigure 14. episodes of econom lease ExportsFigure 13. of oilincluding condensate crude lease ProductionFigure 12. of oilincluding condensate crude UnemploymentFigure 11. rate AverageFigure 10. annual inflatio percentageFigure 9.Annual changes inconstant price GDP GPDFigure Rials 8.Iranian atconstant prices,billionsof sanctionsFigure 7.UN against Iran economicFigure Iran 6.US sanctions against (2011 economicFigure Ir 5.US sanctions against economicFigure Iran 4.US sanctions against (2001 economicFigure Iran 3.US sanctions against (1996 economicFigure Iran 2.US sanctions against (1991 Figure 1.US ofList Figures economic Iran sanctions against (1984

...... n rate, consumern rate, prices

...... ic sanctionsic proliferation nuclear against an (2006 an ...... v

------present) 2010) 2005) 2000) 1995) 1990) ......

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41 38 36 34 32 31 30 22 19 17 16 14 13 12

CEU eTD Collection WMD UNSC NPT NITC NIOC NDAA ITSR ITRA ISA IRISL IRGC ILSA IIANA IAEA CTBT CISAD Abbreviations ofList

......

A ......

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Weapons of massWeapons destruction NationsCouncil United Security Non Tanker Iranian National Company OilCompany Iranian National Defense Aut National TransactionsIranian Regulations andSanctions Iran and Threat Reduction Syria Iran of Iran ShippingIslamic Lines Republic Guard Corps Revolutionary Iranian Sanctions Iran Libya and Act Iran EnergyInternational Atomic Agency Nuclear Comprehensive Iran Comprehensive Sanctions, Divestment and Act Accountability - - Sanctions Act Iraq Non Arms Proliferati

on Treaty

- Proliferation Act Act Proliferation horization Act - Test

Ban Treaty Ban

Human RightsHuman Act vi

CEU eTD Collection target country’s nuclear program country’starget nuclear increasingresultssubstantially by positive potentially yield can sanctions policy. nuclear its change to government its force and country target the in hardships economic create to expected are co is weapons nuclear develop to plans country’s political and underl the and sanctions the of extent the on depending success of degrees varying nuclear the joining from country a stop to sanctions economic of use The weapons. sanct economic 1970, Non the Weapons Nuclear on Treaty the Since proliferation. nuclear obstructing and terrorism, governments, destabilizing aggression, military Despite their time. the become intervention military I NTRODUCTION unty’s economic might and increase the cost of developing such weapons. such developing of cost the increase and might economic unty’s Since World War I, War World Since The reasoning behind imposing economic sanctions in order to stop or at least delay a target a delay least at or stop to order in sanctions economic imposingbehind reasoning The acts of such ofas goals, stopping foreign range policy wide a beusedtofollow Sanctions can diplomacy. international of tool important an are sanctions Economic optimal conditions inthe widespread widespread sanctionscontroversial a tooluse, remain economic policy. of international ,

t is It commonly known as the Non the as known commonly

instrument of foreign policy. foreign of instrument would be be would ions have been occasionally used against countries aspiring to acquire nuclear acquire to aspiring countries against used occasionally been have ions also

sanctions have been used been have sanctions eivd ht s that believed target target o drastic too .

country. r dpoai byot o ftl, cnmc sanctions economic futile, too boycott diplomatic a or ne aig nuclear making ince

simple 1 - protecting human rights, fighting international international fighting rights, human protecting

Proliferation Treaty Proliferation Economic sanctions have sanctions Economic numerous : sanctions can potentially weaken the target the weaken potentially can sanctions :

times times epn i vr csl, economic costly, very is weapons to pursue various pursue to ( NPT the already high c thealreadyhigh ), existed

entered into force in force into entered Economic sanctions Economic

n ae when cases In - Proliferation of of Proliferation

for a very long very a for ying economic ying

club policy go policy ost

has had has s

of the als

a .

CEU eTD Collection important question is whether the sanctions have forced the Iranian regime to change its nuclear its change to regime Iranian the forced have sanctions the whether is question important suggestsabove that the for continue sanctions them. imposing countries the for also but country, target the for only costsnot creates current region the in stability about major a is which Hormuz, of Strait the to next are sector proliferationin race nuclear theregion. and neighbors power, nuclear a becomes Iran program. sanctions economic Council ha Security Nations United the Iran agreement, safeguards that 2005 in concluded Governors of Board (IAEA) Agency recently US the While decades.

economic sanctions imposed against against imposed sanctions economic

The ongoing debate on sanctions against Iran centers on a number of key issues. T issues. key of number a on centers Iran against sanctions on debate ongoing The are sanctions Third, s Second, justify reasons of number A target been has program nuclear Iran’s standoff it has been joined by by joined been has it

First, likely destabili

Iran’

to adversely affect affect adversely to over over ince Iran is Iran ince

there are there are on Iran s nuclear program has sparked has program nuclear s Iran a very long time long very a e h blne f oe i te ide East Middle the in power of balance the ze a been has ’s

nuclear policy nuclear

and Iran’s oil exports oil Iran’s and inherently inherently compelling re compelling the second the the international community international the

the predominant country imposing sanctions against Iran, more more Iran, against sanctions imposing country predominant the the country might become even more aggressive towards its its towards aggressive more even become might country the global closely analyz closely , public and international support for them them supportforinternational and public ,

very costly tools of international policy. Imposing sanctions Imposing policy. international of tools costly very - Iran largest

drags on asons to oil prices. Moreover, prices. oil

have hurt have transit route for oil shipments. T shipments. oil for routetransit

OPEC d with ed 2

ing

usually usually

, world oil pricesrise, worldoil could significantly. closely worldwide worldwide

the economic sanctions against Iran’s nuclear Iran’s against sanctions economic the

oil ordinary citizens in the country. the in citizens ordinary

cause cnmc acin for sanctions economic analyze . producer ( Since the International Atomic Energy Atomic International the Since UNSC s

controversy

Iran is Iran world oil prices to fluctuate. to prices oil world

the economic sanctions onIran. ) , Ti mgt n turn in might This . has

sanctions targeting its energy energy its targeting sanctions situated imposed nt opid ih its with complied not d . There are fears that i that fears are There . herefore

in the Persian Gulf Persian the in might several rounds several oe hn tw than more If ,

wane. unce the current current the

All of the of All

ed to lead he most most he

rtainty If Also, the

of of

o a f

CEU eTD Collection cnmc acin i hlig rns us t bcm a n a become to quest Iran’s halting in sanctions economic develop to efforts country’s target a stop of theoutcomes ofoverview all the with discusses also States United the by imposed been have behi nuclear stand as sanctions economic that is study my of finding related A collapse. of verge the to it pushed not have they economy, Iran. of case proliferation. nuclear halt to used p economy. country’s the on sanctions the of impact the study will I endeavors, nuclear its in made has Iran coun the influenced have Iran against from Iran stop to nuclear power. a becoming able be will sanction economic whether is stage this at answered An sanctions. the by economy Iranian the to caused been has damage economic much how just is question related a country, target the on difficulties any in policy roblem, few have studied the case in great detail ingreatcasehave studied the few roblem, nd economic sanctions. Chapter 2 Chapter sanctions. economic nd T examine will I approach, study case a Using power

he present work is organized as follows. Chapter 1 deals with the theoretical framework theoretical the with deals 1 Chapter follows. as organized is work present he

mat of impact While many scholars have analyzed the economic sanctions imposed against Iran’s nuclear Iran’snuclear theeconomic against sanctions imposed many analyzed scholarsWhile have

. other countries’ other y idns hw that show findings My

a. ic sntos r mat o as plc cag b ifitn economic inflicting by change policy cause to meant are sanctions Since way. the international international the

- ln policies alone

involvement

majo Therefore r

historical historical

try’s nuclear policy. nuclear try’s acin o the on sanctions presents lhuh th although and the United Nations against against Nations United the and nuclear nuclear

, in the sanctions the in I will analyze such historical such analyze will I r unlikely are

sanctions episodes where the underlying goal was to was goal underlying episodes the where sanctions a chronology of chronology a

3 in light of historicalepisodessanctionsofwhere inlight

weapons. Chapter 5 Chapter weapons. itrainl acin hv bree Iran’s burdened have sanctions international e h etn t wih h eooi sanctions economic the which to extent the other

rna economy Iranian to Before establishing how much progress much how establishing Before

stop Iran from from Iran stop

campaign against Iran. Chapter 3 deals deals 3 Chapter Iran. against campaign motn qeto ta n that question important uclear power. Finally, Finally, power. uclear

important

discusses cases Iran’s nuclear program. nuclear Iran’s . economic Chapter 4 presents an an presents 4 Chapter eventually

before discussingthebefore

the success of of success the

sanctions that sanctions h ls part last the

becoming

es o be to eeds eventually were the

It a

CEU eTD Collection on how to make thesanctions tomake on how onIran and work present the of conclusions main the summarizes more effective. 4

offers recommendations to policymakers policymakers to recommendations offers

CEU eTD Collection economic exchangeeconomic placed some behavior inorderto change “re as sanctions economic defines (2005) Marinov example, For sanctions. economic of definitions econometric offered have scholars some recently More 36). (p. propaganda sanction restrictions orfinan trade onnormal pla taken have would that relations to refer they “customary” By 2). (p. relations” financial or trade customary of withdrawal, of threat or withdrawal, inspired government deliberate, “the as sanctions often are who (1990), Elliott and Schott, Hufbauer,different ways. in sanctions defined economic have scholarssanction.Different economic small of number choices policy a only are there since tool policy international popular a remain sanctions economic concerns, these Despite objectives. policy various successfulachieving in moderately be cansanctions economic that economists Many tools. policy foreign as sanctions economic of effectiveness the about community scientific the in disagreement objectives policy however, immemorial. C HAPTER e f hr hd o be ay acin. n te wrs te rgr eooi sntos as sanctions economic regard they words, other In sanctions. any been not had there if ce Baldwin (1985) has offered a broader definition of economic sanctions. He views economic views He sanctions. economic of definition broader a offered has (1985) Baldwin econ analyzing While often are sanctions though Even sin diplomacy international of tools as used been have sanctions Economic a pr o saerf aog ih te nncnmcisrmns uh s ilmc and diplomacy as such instruments noneconomic other with along statecraft of part as s

economic sanctions economic 1:

istorically sanctions were usually accompanie usually were sanctions istorically T .

HEORETICAL mc sanctions omic have been used been have

available believe sanctions are not effective foreign policy tools. Others hol Others tools. policy foreign effective not are sanctions believe F RAMEWORK cial relations amongcial countries.

in regulati used in contemporary international relations, there is much is there relations, international contemporary in used eadd s uhrte o sntos dfn economic define sanctions, on authorities as regarded

it is important to establish just what constitutes an an constitutes what just establish to important is it as stand as 5

ng affairs. international

- alone policies to follow a varie a follow to policies alone d y

in a country” (p. country” in a 15). by military action. military by

strictions on customary on strictions In recent history recent In

ty of foreign of ty e time ce d ,

CEU eTD Collection relations in response to target countries’ undesirable trade policies. countries’relations policies. inresponse undesirabletrade totarget policy. apartheid its over Africa th is grounds moral on based imposed sanctions of example ideologi or moral for used be can sanctions economic Second, countries. well the threaten policies country’s target a when imposed are First, goals. general three pursue to used are sanctions (1992), Lowenberg and Kaempfer of to credit its lower thereby country, target the in goods Wh activities. financial its hindering by or imports, its restricting by exports, country’s target the limiting by country “target” its to suffering cause to try may so, do to threatening or sanctions impose to going is that country the country, book influential their in sanctions economic of types three trade preferential lifting existingsanctions, having relations and country, target the to aid economic giving as such measures, positive be also can Sanctions negative. together international. or domestic either be can behavior This behavior. undesirable some in engages that country a against imposed inflict

costs on costs Economic sanctions are used to pursue a variety of foreign policy objectives. policy foreign of variety a pursue to used are sanctions Economic sanctions. economic of types different are There All or

of it y niiul nations individual by

and by by and

h aoe eiiin rva te an ups o eooi sntos nml, to namely, sanctions, economic of purpose main the reveal definitions above the a target country in to order to order to in country target a revenues making . Financial sanctions intend to hurt the target county by increasi by county the sanctions target intendtohurt . Financial In addition In conducting transactionsconducting import

. ial, acin cn e sd n rd plc ad commercial and policy trade in used be can sanctions Finally, It is also worth noting that economic sanctions are not always not are sanctions economic that noting worth also is It

limitations are used to reduce the target country’s exports and and exports country’s target the reduce to used are limitations , sanctions can sanctions , ile export change its change

restrictions are enacted to deny access to important important to access deny to enacted are restrictions 6

difficult

imposed

po Hufbauer et al. (1990) distinguish between between distinguish (1990) al. et Hufbauer Economic Sanctions Reconsidered Sanctions Economic licy . e international sanctions against South against sanctions international e

. with the target.with Economic sanctions are most often most are sanctions Economic either -

en o scrt o te sender the of security or being

by groups of countries acting acting countries of groups by a raos A common A reasons. cal

According to According . A “sender” A ng the costng the

sanctions sanctions CEU eTD Collection complicates complicates determine to sufficient not is Thus,it 49). (p. time)” of lapse mere the or action military as such factors other to opposed (as sanctions by made success to extent Hufbau this from stemming and, sanctions of d easy. a Therefore,always not is outcomes the t sanctions economic by so this to According (1992). country target the in groups interests influencing through outcomes political affect also can usua the to addition in that, argued have Lowenberg and Kaempfer Th it. within Economi Oegg to signal pursue to used be

usual economic effectsusual economic of these sanctions. (2007) to which thepolicy which to er et al. (2007) point out that the that out point (2007) al. et er cnmc acin ae sal ue t pru pltcl ol ad esrn political measuring and goals political pursue to used usually are sanctions Economic simple. is work to expected are sanctions economic which through mechanism The quite satisfied whatever punishment with a sta like criminal of purposes basic law three the and sanctions for motives the between parallels The so punish to imposed usually are sanctions While c sanctions c te countries other ht portion what — measuring the of sanctions. impact compare compare is to punish, to deter, to rehabilitate to deter, to punish, to tes that incarcerate, may find their hopes of rehabilitation unrealized, but they may be be may they but unrealized, rehabilitation of hopes their find may incarcerate, that tes n un is turn in

other - called public choice approach to analyzing sanctions, the signals communicated signals thesanctions, analyzing to approach choice public called are expected to expected are the o various interests groups within target countries are are countries target within groups interests various o

related related f h pltcl ucm cn e trbtd o h sntos Ti further This sanctions. the to attributed be can outcome political the of

motives sanctions behind tothe aims oflaw: criminal that certain actions actions certain that result expected

sought by the sender country was in fact achieved and the and factachieved in was thesendercountry by sought objectives. o force to inflict costs on the target country target the on costs inflict economic impact, the political outcome of the sanctions. sanctions. the of outcome political the impact, economic success istinction should be made between the economic betweenthe made be istinctionshould T just he use of sanctions might also serve to send a warning a send to serve also might sanctions of use he

will not be tolerated. tolerated. be not will h tre cutys leaders country’s target the —

measure the outcome of sanctions. We also have have also We sanctions.of outcome the measure 7 are unmistakable. Countries that impose sanctions, sanctions, impose that Countries unmistakable. are

nd deterrence are accomplished are nd deterrence

of a sanctions episode sanctions a of me undesirable behavior, they might they behavior, undesirable me l market mechanisms, sanctions mechanisms, market l Hufbau and has really two parts: “the parts: two really has

to change change to create political pressure political create r Sht, lit, and Elliott, Schott, er, at least as least at

(p. 7).

important hi policy their

contribution impacts also to as .

CEU eTD Collection sanction program. nuclear Iran’s e the about disagreement much is there that surprising few a economy. s economic the on depends effort sanctions more be will sanctions the country, cooperation financia and internationalof theextent on sanctionsdependseffort of a efficacy Also,the targeted.being country trade more has and larger is them imposing country the when work to likely most are Sanctions sanctions. of use the through sought being goal policy foreign of ( al. et Hufbauer ofthe in34percent extent they studied. cases some to least at successful were sanctions that concluded and episodes sanctions 200 over analyzed ( Oegg and Elliott, Schott, Hufbauer, changes. policy partial least at produce can sanctions 1992 Lowenberg, & (Kaempfer tools policy foreign effective inflict not do sanctions economic since that claiming economists, Many cases. specific in or general in either work, sanctions whether about economists among consensus little be to seems There policy. foreign in sanctions economic anctions are going to be most effective when effective most be to going are anctions industries ie te eae bu te fetvns o eooi sntos n eea, t s not is it general, in sanctions economic of effectiveness the about debate the Given g of number a on depend will episode sanctions a of effectiveness The th examines that emerged has literature of body significant A s against Iran can be effective, t effective, be can Iran against s

n example of a of example n n acinn te agt country target the sanctioning in . 2007) 2007)

point out that the success of a sanctions episode largely depends on the type the on depends largely episode sanctions a of success the that out point vn though Even

weak economy would be one that one be would economy weak large costs on the target countries, believe that sanctions are not are sanctions that believe countries, target the on costs large iey o ae h itne effects. intended the have to likely there is little consensus among economists about whether whether about economists among consensus little is there he

United States, the States, United and political and

, among other things, other among , Mri, 1992) (Martin, 8

conditions in the target country. target the in conditions fcc o uig acin wt rset to respect with sanctions using of fficacy , p. 3 p. , United Nations, the European Union, European the Nations, United is not diversified and relies heavily on heavily relies and diversified not is . If many countries join the sender sender the join countries many If . ). However, others contend that contend others However, ).

the target country has a weak a has country target the efciees f using of effectiveness e Also , the outcome of a a of outcome the , lvrg ta the than leverage l nrl factors. eneral Generally, 2007)

CEU eTD Collection next level. unprecedented an reached programs. missile and nuclear its halt to country the against several and

chapter .

other niiul onre hv imposed have countries individual Th is can be clearly seen in the in seen clearly be can is

nraigy stringent increasingly

h lvl f acin o Ia has Iran on sanctions of level The historical overview historical economic sanctions sanctions economic

presented in the in presented

CEU eTD Collection inthecasethis ofnuclear process notcontrollable bombs. is nuclear of process the Also, plants. power nuclear do than material fissile enriched more significantly require bombs nuclear that is difference main The 1 Al and Hamas, Hezbollah, as such organizations terrorist for support Iran’s of because sanctions than other reasons power. to comes government hostile less possibly new, a until enough long programs nuclear its delaying least at or halting of hope the non scientificprowess showwould offand Iran’s military tothe restthe world. of Iran’s for reasons ideological are the region. in power bargaining Iran’s increase would weapons nuclear Having 2007). al., et (Hufbauer in dominance Iran bring will weapon nuclear a having that believe to seem leaders levels.to veryhigh has country to failed repeatedly The purposes. peaceful for entirely not are activities its that signs serious are there purposespeaceful official an C

At this point it is useful to distinguish the difference between nuclear reactors and nuclear bombs. nuclear and reactors nuclear between difference the distinguish to useful is it point this At HAPTER - compliance with its NPT saf NPT its with compliance Second, Iran feels uneasy about the fact that Israel possesses nuclear weapons. weapons. nuclear possesses Israel that fact the about uneasy feels Iran Second, The reasoning behind the economic sanctions against Iran is to reprimand the country for country the reprimand to is Iran against sanctions economic the behind reasoning The Iran hr ae nme o raos o Ia’ dsr t ji te ula cu. is, Iranian First, club. nuclear the join to desire Iran’s for reasons of number a are There

party to the Non the to party 2: is believed to have been developing nuclear weapons for more than three decades. three than more for weapons nuclear developing been have to believed is

O . VERVIEW OF

1 Despite the country’s claims that its nuclear program is for civilian purposes only, civilian Despite country’sfor program the thatits claims is nuclear

comply with the with comply its

quest to develop nuclear weapons. Many countries have imposed unilateral unilateral imposed have countries Many weapons. nuclear develop to quest

- Proliferation Treaty Proliferation

desire eguards agreement and impair the country’s economic capability in capability economic country’s the impair and agreement eguards E CONOMIC

requirements of the IAEA IAEA ofrequirementsthe

S anctions have have anctions to become a nuclear power. Having such advanced weapons weapons advanced such Having power. nuclear a become to S 10 , Iran has the right to to right the has Iran , ANCTIONS

also fission in nuclear reactors is controllable, but controllable, is reactors nuclear in fission been inflicted against Iran for a a for Iran against inflicted been

ON and has continued to enrich enrich to continuedhas and

I RAN have nucle have

ar programs for programs ar the Finally, t Finally, Middle East Middle number of of number uranium here As -

CEU eTD Collection other shortly by finish will I Finally, a present will I Nations, United the from data from period the dividing research, own my and al. et Hufbauer sanctions these review to Si Iran. community been not have time. long very a for relations antagonistic had have countries Western countries. of outcome allies its and US The country. po the changing However, US. the towards particularly West, the towards hostile Mahmoud generally Iran been has of Ahmadinejad President current The country. the of regime political the changing namely, countriesAlso, many have al Bashar of regime sanc to subjected been has Iran recently Also, Qaeda. individual countries.individual nce the US and UN have imposed a very large number of sanctions on Iran, it will be useful be will it Iran, on sanctions of number large very a imposed have UN and US the nce Below I will present a chronology of key events in the history of economic sanctions against against sanctions economic of history the in events key of chronology a present will I Below two The program. nuclear Iran’s against campaign sanctions the leading been has US The W t is sancti its ith

in its efforts the upcoming the overly overly iia rgm o Ia hs o be a epii ga o te acin aant the against sanctions the of goal explicit an been not has Iran of regime litical

- Assad in Syria Syria in Assad amicable either amicable n aant Iran, against ons

to hamper Iran’s attempts to join the nuclear club Iran’s hamper tojointhenuclear attemptsto the

sanctioned y raig them breaking by Iranian presidential elections presidential Iranian mid

discussing sanctions against Iran by the European Union and certain and Union European the by Iran against sanctions discussing em o be to seem - 1980s until now into equal five equal into now until 1980s which . In recent years recent In .

Iran I will present a brief overview of overview brief a present will I the

has massively cracked down on protesters in the country. the in protesters on down cracked massively has for rights itshuman record. poor

oty ocre aot rns ula ambitions. nuclear Iran’s about concerned mostly

S s eivd to believed is US up 11 c into smaller smaller into hronol

t tions because of its alleged support for the the for support alleged its of because tions he US has has US he

og could change the country the change could of y Iran’s relations with European nations European with relationsIran’s ie spans time UN e pursuing be - year periods. Then periods. year been joined by by joined been sanctions

key US sanctions events by events sanctions US key Relying . .

nte ipii goal, implicit another

rounds

the international international the ’s relations with with relations ’s n h wr of work the on ,

relying on the on relying

gis Iran. against The

CEU eTD Collection export Iraq that known became it after Iraq and Iran to chemicals certain ofexports embargoed US the 1984, In it. against sanctions stricter imposed and terrorism supporting countries of list its to Iran added US Source: Figure releaseachieving the significant a had sanctions the and crisis the during sanctions financial and trade imposed the USThe US. the ofPresident as inauguration Ronald Reagan’s of day onthe 1981 January in negotiations released long After failed. but hostages the rescue to attempted administration Carter The days. 444 for hostageAmericans 53 kept students, mostlyIranians, radical time crisis hostage first the for Iran against sanctions economic imposed States United The 2.1 US S had had licenses

After 1 Case StudiesCase Economic in andTerrorism Sanctions . US economic sanctions against Iran (1984 . USeconomic use anctions d chemical weapons against Iran. That same year the US government stopped granting granting stopped government US the year same That Iran. against weapons chemical d

the which lasted from November 1979 until January 1981. January until 1979 November from lasted which for shipmentsof

1983

of on bombing of a US marine US a of bombing the ho

Iran

st ages (Hufbaueretal.,ages 2007).

aircraft and repair parts to Iran. partstoIran. repair aircraft and 12 base

by Hufbauer etal., Hufbauer by 2012. in - 1990) Beirut in which over 200 people died, the died, people 200 over which in Beirut

During the crisis a crisis the During

hostages were finally finally were hostages

during the Iran Iran the during

impact in impact group of group

CEU eTD Collection program. After successfully obstructing Iran’s attempts to buy enr buy to attempts Iran’s obstructing successfully After program. provision and goods the toIran. ofexport It also ceased The Iran. to 1990 of Act Sanctions Iraq the of restrictions the Source: Figure to Iran exp banned also president The oil. Iranian on embargo total a announced Reagan Ronald President Iran, from imports oil on ban total a for called which Representatives of t in attacks

that could beusedthat could forpurposes. military n the In the adopted In US the 1992, Iran mine of threat the reduce to Iran to gear diving scuba exporting prohibited US the 1987, In 2 Case StudiesCase Economic in andTerrorism Sanctions . US economic sanctions against Iran (1991 US economic he Persian Gulf. Following the passage of a 1987 resolution in the US Senate and House and Senate US the in resolution 1987 a of passage the Following Gulf. Persian he mid - 90, h U satd o ae oe n mr maue t hl Ia’ nuclear Iran’s halt to measures more and more take to started US the 1990s, - IraqNon Arms

by by Hufbauer -

1995) import bankfi - Proliferation Act Act Proliferation

IIANA et al., 2012. iched uranium from Kazakhstan from uranium iched nancing toIran.

banned exporting military military exporting banned orts of 14 types of goods of types 14 of orts (IIANA)

which extendedwhich

CEU eTD Collection Source: Figure well. as Libya include to modified The was act sanctions the after Shortly million. imposed. $40 was limit specified be would sanctions which above industries gas and oil Iranian the in investment close to came 1995 compa limittoforeign established a which 1995 of Act OilSanctions theIran Foreign approved As stopped. be would Iran with trade indirect and direct in part taking from companies US prohibited which 1995 in order executive an issued Clinton President might. numerous in 94 te S and l tae ih h cuty n 199 in country the with trade all banned US the 1994,

3 Case StudiesCase Economic in andTerrorism Sanctions . US economic sanc US economic economic sanctions economic oil developme oil nt tions against Iran (1996 targeting Iran’s key energy sector energy key Iran’s targeting projects in Iran. Later that year the president announced that both that announced president the year that Later Iran. in projects 14

by by Hufbauer - 2000) 5.

ic ta tm t time that Since

to weaken the country’s economic economic country’s the weaken to et al., 2012.

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. In 2000, the US US the 2000, In . Russia has often often has Russia mi in later, year A mid In there p from Russian and North Korea North and Russian from p after - pn oIa. h c losopd Am stopped also act The Iran. to apons 1996, ,

h Hue f ersnaie passed Representatives of House the the

North Korea to develop missiles.North todevelop Korea h U Hue f ersnaie pse te rn n Lba acin bill. sanctions Libya and Iran the passed Representatives of House US the Iran and Libya Sa Libya and Iran eign firms. eign right to impose sanctions on countries and organizations helping Iran to to Iran helping organizations and countries on sanctions impose to right enacted nemnd S sanctions US undermined ten d - 97 Peiet lno issued Clinton President 1997, Russian companies companies Russian

sanctions It

reduced the limit of investment by foreign companies above companies foreign by investment of limit the reduced nctions Act (ILSA). Act nctions .

s, T against the country the against

he US US he Iran

15 In mid In w that

ent ahead with its missile and nuclear programs nuclear and missile its with ahead ent continued to impose to continued against

assisted Iran develop its missile missile its develop Iran assisted - erican aid to firms in other countries that countries other in firms to aid erican 1998

Snt vrin f the of version Senate a

rn I ery 99 te ht House White the 1999, early In Iran. The Iran and Libya Sanctions Act was Act Sanctions Libya and Iran The

n xctv odr ht b that order executive an the two houses of the US Congress US the of houses two the under the Arms Export Control Act Control Export Arms the under

more and more and more The ILSA authorized ILSA The

same export and nuclear and bill

ne re anned sanctions licenses

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and

In June 2006, the US Treasure Department froze the assets of four Chinese companies for companies Chinese four of assets the froze Department Treasure US the 2006, June In the renewed Congress US the 2001, In 4

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remains the largest economy economy largest the remains ’ s ballistic s

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by by

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CEU eTD Collection Accountability and Divestment Act of 2010 (CISADA) was passed. was (CISADA) 2010 of Act Divestment and Accountability Iran’ against sanctions Chinese a sanctioned US weapons selling businessman materials toIran. for previously the 2008, of April In Act. Nonproliferation Syria and Korea, North san imposed US the 2008, October In banks. the month US through funds transferring that from ISIL carrier maritime Iranian the blocked Department Treasure Later program. nuclear Iran’s supporting entities of list the into included were state Iranian the of behalf on transactions Source: Figure

n al 21, h U Snt pse legisla passed Senate US the 2010, early In 2007 of beginning the At 5 Case StudiesCase Economic in andTerrorism Sanctions . US economic sanctions against I US economic gsln sples O Jl 1 te opeesv Ia Sanctions, Iran Comprehensive the 1, July On suppliers. gasoline s ,

h Tesr Dprmn bokd S ak fo handling from banks US blocked Department Treasure the - owned Bank Sepah. In August 2008 August In Sepah. Bank owned ctions against thirteen foreigners for violating the Iran, the violating for foreigners thirteen against ctions ran (2006 17

by by in nbig rsdn Oaa t Obama President enabling tion Hufbauer - 2010)

et al., 2012. CISADA extended the date on date the extended CISADA

, five organizations five , o impose impose o

CEU eTD Collection economic life. It is involved in Iran’s nuclear program and helps the Iranian government suppress government pro Iranian the helps and program nuclear Iran’s in involved is It life. economic Guards. Revolutionary the simply or threats. external and internal 2 reduction their reducing for NDAA the established r to encouraged were oil Iranian US. the in accounts opening from Iran of Bank Central the with business do that Def (NDAA). National the signed Obama President 2011, of day last the On activities. its in IRGC the assisting for sanctioned was Mahan, airline, Iranian another 2011, the helping for sanctioned was Co. East Middle Tide operator port and air Iranian the later month A products. petroleum other and gasoline toUSsanctions.subjected Corps fir mining and engineering Iranian to links with companies four and commander Iranian an against sanctions imposed Department Treasure century. the of turn the at alleviated been had which carpets and pistachios 2004 and 2001 in before, s will Act Sanctions Iran the which

The IRGC is a branch of the armed forces of Iran that was established to protect the country from from country the protect to established was that Iran offorces armed the of branch a is IRGC The - de mocracy supporters in Iran. See, for example, supporters (2013). for Iran.mocracy example, Katzman in See, (IRGC) n a 21, ee eeg cmais ee acin b te S o splig rn with Iran supplying for US the by sanctions were companies energy seven 2011, May In is to enough sanctions Iran. new specified against of theact 1045 Section

by the NDAA. the by 2

and the shipping company shipping the and be exempted from exempted the sanctions.be .

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So far twenty countries have have countries twenty far So The

oil o

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The IRGC plays an important role in Iran’s political and and political Iran’s in role important an plays IRGC The tion is also called called also is tion ms. At the end of 2010, 2010, of end the At ms. the

December 31, December I slamic Republic of Iran Shipping Lines (IRISL) were were (IRISL) Lines Shipping Iran of Republic slamic purchases 18 IRGC

been exempted been move weapons in the region. In October In region. the in weapons move

to the Iranian Revolutionary Guards (IRG Guards Revolutionary Iranian the 2016. T 2016. e eepin from exemptions get ne Au ense the Iranian Revolutionary Guard Revolutionary Iranian the he ISA he

The act banned banned The act

from sanctions specified in specified sanctions from hrzto At o 2012 for Act thorization had

In October 2010, the 2010, October In

been renewed been - oil goods such as such goods oil

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water twice ) CEU eTD Collection This time the sanctions targeted Iran’s energy sector and financial institutions that carry out business out carry institutionsthat financial and sector energy Iran’s targeted sanctions the Thistime April for Tejarat Bank Iranian the sanctioned Department Treasury US the later days Ten Iran. with business startingperiod July 2012 from Source: Figure rvdn srie t ette ivle i Ia’ ncer n msie rgas A te n of end the At programs. missile and nuclear Iran’s in involved entities to services providing ,

the US Presidentthe US approvedfurtheron buyers sanctions of oil. Iranian

President Obama approved sanctions against Iran under CISADA under Iran against sanctions approved Obama President doing for companies energy foreign three sanctioning US the with started 2012 year The 6 Case Studies in Economic Sanctions and Terrorism and Sanctions Economic in Studies Case . US economic sanctions against Iran (2011 US economic

by by - present) Hufbauer

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a t the end of July 2012 July of end the t .

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h Iain rnatos n Sntos euain (ITSR) Regulations Sanctions and Transactions Iranian the r Dprmn mne h IS, this ITSR, the amended Department ury the ITSA, currently there are are there currently ITSA, the

ee lo acind o providing for sanctioned also were ies with Iran. The act also significantly strengthened sanctions against against sanctions strengthened significantly also act The Iran. with ies . .

On March 14, 2013, 14, March o s jurisdiction” (Ryan, et al., 2013). 2013). al., et (Ryan, jurisdiction” s r, the ISA requires ISA the r, 20 Bimeh Markazi Bimeh

banks. the Treasury Department sanctioned Department Treasury the ttl of total a

time and and the imposition of at least at of imposition the

ih ohr opne bsd n the in based companies other eight prohibiting foreign entities that are are that entities foreign prohibiting -

nuac services insurance Central Insurance of Iran and and Iran of Insurance Central o h ISA the to eae te rn Transactions Iran the renamed wle sanctions twelve

opne b bnig any banning by companies Including Th . Te euain also regulations The . e

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the sanctions sanctions the the reinforced out out National Impire of the the of Kish A. CEU eTD Collection Iran’s nuclear programIran’s was nuclear insisted and threats” and force of language “the to yield not would he said Ahmadinejad Mahmoud President Iranian 1696, Resolution to response In 31). July 2006, Council, Security Nations United a reprocessing and enrichment uranium its stop and IAEA the of requirements the with comply Iran that demanded resolution The 2006. 31, July on 1696 Resolution i with complied not Iran that 2005 in concluded Governors BoardAgencyof Energy Atomic International the After 2.2 of theITRA, theIran Threat implementation first the was order The sanctioned. be would companies US of subsidiaries foreign which under conditions the specified and 9 October on signed was 13628, order, executive final Compa Oil Iranian National the with cooperated PresidentOrderOn July 30, Executive Obamasigned 13622 s 13608 Order Executive signed Obama President 1, May On abuses. out carryto government Iranian the by used being not were products their that sure make to companied human its for the Iran targeted of order Government This signed. was 13606 Order Executive 22, April On institutions. financial 13599 clarifying and anctions against Syria and Iran. The order also closed some of the loopholes in US sanctions laws. sanctions US in loopholes the of some closed also order The Iran. and Syria against anctions UN ,

which blocked the property of the Government of Iran, the country’s central bank and other and bank central country’s the Iran, of Government the of property the blocked which The United Nations Security Council has imposed several sanctions against Iran since 2006. since Iran against sanctions several imposed has Council Security Nations United The of course the During S anctions the sanctions against Iran. On February 5, Presiden 5, February On Iran. against sanctions ts safeguards agreement, the UNSC the agreement, safeguards ts

Iran for peaceful purposes (“Iran defiant on nuclear deadline,” 2006). purposesonnuclear for defiant (“Iran peaceful

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ihs abuses. rights 21 ny (NIOC) a (NIOC) ny

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which targetedwhich parties thatsignificantly several nd Naftiran Intertrad Naftiran nd t Obama signed Executive Order Executive signed Obama t ctivities ctivities

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had CEU eTD Collection enrich uranium for peaceful purposes. Manouchehr Mottak, who was then the Minister of Foreign of Minister the then was who Mottak, Manouchehr purposes. peaceful for uranium enrich sanctions, the rejected Iran 24). March 2007, Council, Security Nations establishe were that freezes asset the strengthened and country the to sales arms on ban a put It Iran. on sanctions economic stringent more imposed 1747 Resolution 2007. 24, March on 1747 Resolution Council Security Nations United of passage ( iota” an Iran of nation the damage cannot you that know yourself You Iran. of nation the with friendship sorr am “I saying as quoted was Ahmadinejad President enrichment nuclear its stop to days 60 given was Iran program. enrichment country’s the in involved were that companies and individuals of assets 23). December 2006, Council, Security Iran. to materials and technology nuclear of supply the Nations prohibited 1737 Resolution United (The country the against sanctions Nation United Source: Figure “

Ahmadinejad Iran disregarded Iran the to led program enrichment uranium its halt to failure Iran’s 7 the United Nations.the United . UN sanctions against Iran sanctionsUN s Security Council Resol Council Security s ,”

2006, December 24)

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ution 1737 on December 23, 2006, 23, December on 1737 ution

and .

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CEU eTD Collection drse Ia’ ncer rga. n diin o efimn te ie rvos r previous five the reaffirming to addition In program. nuclear Iran’s that resolution addressed Council Security sixth the was This Iran. against sanctions the extended further Iran new approves (“UN uranium purposes resolution,” 2008). its peaceful for halt were not claimed would it it which stated programs and enrichment resolution the dismissed again yet Iran sanctions. obli its with complying not and activities nuclear its stop to failing of accused was Iran 27). September 2008, Council, Security Nations (United resolutions four previous the outlinedin were that Council Security the of demands It unanimously Resolution27,2008. wasadopted 1835. Resolution 1835 onSeptember resolution. bythe didnotabide and clai again once Iran 3). March 2008, Council, Security Nations (United Iran” in domiciled banks all with territories their in institutions financial ofactivities the over vigilance exercise “to countries all on called also Council The activities. nuclear Iran’s in involved organizations thirteen and individuals of assets the freezing expanded further enrichment nuclear its halt Iran that demanded the inItaly at over taken end of March2007. the example, For 1737. Resolution with compliance countrie Several 2007). Council”, (“Security demands” legitimate and legal their from retreat to nation Iranian the coerce to weak too far are threats other or sanctions economic Ira of Affairs n J On Council Security Nations United by succeeded was 1803 Resolution Council Security UNSC the 2008, 3, March On n 9 21, h Uie Ntos euiy oni aotd eouin 99 which 1929 Resolution adopted Council Security Nations United the 2010, 9, une , ad Te ol ms know must world “The said n,

adopted Security Council Resolution 1803 which once again once which 1803 Resolution Council Security adopted ain. oee, eouin 85 i nt moe new impose not did 1835 Resolution However, gations. med that its nuclear program was for peaceful purposes peaceful for was program nuclear its that med

— activities 23 n i does it and

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reiterated thereiterated - enrichment esolutions, esolutions,

CEU eTD Collection and and resolutions would services program. these that suspect to reason was there if financial services with parties Iranian providing from institutions financial ban to urged also were states believe to reason was there if banks Iranian with relationships into entering their from refrain in and banks territories Iranian of branches of opening the ban to states on called Council Security The governmen urged also Council Security The the of assets The Iran. to warships and missiles, aircraft, military activi that demanded and delay without IAEA the of Agreement Safeguards the with comply to Iran on called out carrying prohibits which of thesanctions.implementation the monitor to experts of panel a created also It Iran. on sanctions new imposed 1929 Resolution the none ta i wud irgr te e sanctions new the disregard would it that announced t i es related to ballistic missiles. The new sanctions also banned selling weapons such as tanks, as such weapons selling banned also sanctions new The missiles. ballistic to related es

Iranian response was the same as before: the country dismissed the new round of sa of round new the dismissed country the before: as same the was response Iranian Nations Council, Security June9). 2010, (United met been have resolutions these m of objectives the that and determines Council Security nuclear its of support in sensitive of technologies development Iran’s constrain to also and IAEA, the of requirements the with and (2008) 1803 and (2007) 1747 (2006), 1737 (2006), 1696 resolutions with comply to Iran adopting by decisions its to effect give to “Determined t of all with comply to Iran encourage to expresseddetermination its Council Security The Nuclear Comprehensive the ratify to Iran urged resolution The ht hs atvte cud oeo cnrbt t poieain ciiis n rn Member Iran. in activities proliferation to contribute somehow could activities these that country refrain from further reprocessing uranium. Iran was pr was Iran uranium. reprocessing further from refrain country

. Resolution 1929 statedthewas: 1929 that Security. Resolution Council

any nuclear explosions, whether for military or civilian purposes. It also also purposes.It civilian or military for whether explosions, nuclear any

ts to inspect all cargo going to and coming from Iran. Iran. from coming and to going cargo all inspect to ts

issile programmes, until such time as the the as time such until programmes, issile I rato t Rslto 1929, Resolution to reaction In .

IRGC and t and IRGC appropriate measures to persuade to measures appropriate

contribute to Iran’s nuclear nuclear Iran’s to contribute ohibited from e from ohibited - Test he he - a Treaty Ban IRISL were frozen. were ngaging in ngaging

(CTBT) nctions he he

CEU eTD Collection become almost as extensivebecome assanctions. US In noticeably. changed has Iran sanctioning on stance The EU Sanctions2.3 onIran reportsubmitted.the final been has notyet findi its with mandate its of termination the to prior days 30 than later no Committee the to report “final a submit to panel the requested resolution The 2013. 9, July until panel expert the of mandate the W 2012. 7, June on adopted was 2049 Resolution monitorssanctions on IranThe resolution against untilJune9,2012. called that panel expert the of mandate the extended it Instead, sanctions. new impose not did resolution handkerchief 2010) should thrown thedustbin”which be in (“Ahmadinejad”, used a like are issue you resolutions the that message a powers] [world the of one Ahmadineja Presidentsanctions. new the becauseof policy its change not would Iran that stated Nations, United the to Iran of ambassador the Khazaee, Mohammad ngs and recommendations” (United Nations Security Council, 2012, June 7). As of May 2013, May of As 7). June 2012, Council, Security Nations (United recommendations” and ngs uoen no iiily poe ipsn uiaea sntos gis Ia. oee, EU However, Iran. against sanctions unilateral imposing opposed initially Union European European recent most The resolution (2010)”and 1929 June9). 2011, Council, (UnitedNations Security the of implementation the (200 1737 resolution by imposedmeasures on disposal their at information any supplying by particular in established the Committee with thePanel pursuant (2006)and to1737 ofExperts, resolution inter other and bodies Nations United relevant States, “all adopted UNSC The

countries have inflicted joint sanctions against Iran through the European Union. European the through Iran against sanctions joint inflicted have countries NC r UNSC United Nations Security Council Resolution 1984 on 1984 Resolution Council Security Nations United

slto o Ia, aey Uie Ntos euiy Council Security Nations United namely, Iran, on esolution

25 6), resolution 1747 (2007), resolution 1803 (2008), 1803 resolution (2007), 1747 resolution 6), ith this resolution the Security Council extended Council Security the resolution this ith

recent .

years se pris t oprt fully cooperate to parties, ested d was quoted as saying “I gave “I saying as quoted was d ,

acin o Ia have Iran on sanctions

June 9, 2011. This 2011. 9, June

CEU eTD Collection 3 Mahm assanctions. US extensive be sanctions from freezestotrade sanctions. asset program. nuclear Iran’s condemningsanctions unilateral Kingdom United the and Switzerland, Korea, South Japan, France, Croatia, c Iranagainst throughNationsCouncil United Security the level. unprecedented sanctions economic international however, 2006, Since cooperation. 2.4 onIranianoil. embargo an This Iran’s hasreduced oil significantly purchases. oil their for paying when difficulties new SWIFT Brussels the led decision The country. the in banks other some and Iran of Bank Central the with data exchange to services communication financial of provision

ertain individual countries have also imposed economic sanctions against Iran. Australia, Canada, Australia, Iran. against sanctions economic imposed also have countries individual ertain SWIFT stands for Society for Worldwide Interbank Financial TelecommunicationSWIFT Interbankfor Financial stands Worldwide Society n aln fr oge sanctions. tougher for calling en

Sanctions b o 3 vr s Ever Iran. sanctioning for support of levels different shown have countries Different to advocate ardent most the been US the While international of lack a by undermined were US the of sanctions economic the 2006, Until ud

n ac 21, h E passed EU the 2012, March In to sto to Ahmadinejad ne h Ilmc revolution Islamic the ince p providing services to certain Iranian banks. As a result, buyers of Iranian oil faced faced oil Iranian of buyers result, a As banks. Iranian certain to services providing p y Othery C As

became president of Iran in 2005, tensions between Iran and Israel have Israel and Iran between tensions 2005, in Iran of president became

China and and RussiaChina icse aoe t above, discussed ountries

aa ad ot Kra ae moe sntos al sanctions imposed have Korea South and Japan

oni Dcso 21/5/FP hc bne the banned which 2012/152/CFSP Decision Council , however, f 99 Ia hs en otl twrs Israel. towards hostile been has Iran 1979, of e nentoa cmuiy a ipsd sanctions imposed has community international he

Effective from July 1, 2012, the EU announced EU the 2012, 1, July from Effective

have shown limited only have support. T .

use sanctions to influence Iran’ influence to sanctions use hese countr hese - based electronic payment provider payment electronic based

exports.

ies have used a whole range ofrange whole a used have ies against Iran have reached an an reached have Iran against

— l hv imposed have all .

s policies, s Israel has Israel ot as most

Since CEU eTD Collection impact of the sanctions on the Iranian economy, the country is undoubtedly experiencing economic experiencing undoubtedly is country the economy, Iranian the on sanctions the of impact communityof theinternational sanctioningIran in for ambitions. its nuclear nuclear their scrap to leaders Iran’s t recently supportMore usedtostopwere terrorism. Iranianfor thefirstWhile sanctions theimposed country against were the hostage crisis, they torespond to later oilfromcrude Iran. to However, safegua be to deserving ideal sacred “a as sovereignty regarded traditionally has country The nation. independent any on n support sanctioning Iran. for plant power nuclear first its government have against sanctions unilateral imposing opposed generally has Moscow has ch to government Iranian the forcing in alone sanctions economic of 2012). Iran,” on Sanctions (“Oil outcome unlikely an not is states two the betweenclash a that believe Some further. even risen ot help solve the issue of Iran’ of issue the solve help ot been

en es rtcl f rns ula porm than program nuclear Iran’s of critical less been Even though some though Even 1980s. early the since Iran against sanctions economic imposed has US the summarize, To against sanctions of use the opposed generally has China condemn often have India and China, Russia,

actively advocated for taking

has get exemptionsfromget actually

rded”

cooperated with Iran in the nuclear energy sector. energy nuclear the in Iran with cooperated The countries’ failure to ful to failure countries’

at at (Shen, 2008, p. 97). p. 2008, (Shen, Israel s nuclear program. China China program. nuclear s Bushehr. Bushehr. US sanctions, both countries have tried to reduce theirimportsofreduce to tried have countries both sanctions, US program i

more government oe eety hwvr Mso hs ie lukewarm given has Moscow however, recently, More

drastic measures to halt Iran’s nuclear ambitions.drastic measures to Iran’s halt nuclear . Since . 27

ly cooperate in sanctioning Iran has blunted the blunted has Iran sanctioning in cooperate ly

China and India continue to import Iranian oil. Iranian import to continue India and China remains largely skeptical about skeptical largely remains the ed the use of economic sanctions against Iran. against sanctions economic of use the ed mid historically historically - 2000s, the US has enjoyed the support the enjoyed has US the 2000s, their he US has US enacted sanctionshe toforce

Iran US has opposed putting pressure pressure putting opposed has

ange its nuclear policy. Israel policy. nuclear its ange , n country any counterparts claiming that sanctions will will sanctions that claiming

Russia helped Iran build Iran helped Russia

Russia . the effectiveness the . The Russian Russian The n leaders n

CEU eTD Collection issue chapter. is addressed the next in ple the by economic hardships. An

important thora of economic sanctions that have been imposed against the country. the against imposed been have that sanctions economic of thora usin s ut o mc dmg hs en nlce o te Iranian the on inflicted been has damage much how just is question

This CEU eTD Collection economy, there is much disagreement about disagreement much is there economy, is there While years. causality, sanctionsdisentangle contributed undoubtedly difficulties. have toIran’s economic inflicted have and costly more program nuclear Iranian the made have sanctions the problem, nuclear its pursuing still is Iran and organizations terrorist supporting from Iran stopped not have sanctions economic Although nonperforming estimated an Currently Honduras Guyana, 2012. in surveyed 176 the of out 133 the was Iran corruption, fighting and exposing to dedicated growth. to subsidies (Hooglund, 2008) of 2007). Bailén, & centrally Kramarenko, (Jbili, economy market free a a to panned from transition of process the undergoing economy an is, that economy, transition C HAPTER light industry h industry light Economic sanctions by the West against Iran have reached reached have Iran against West the by sanctions Economic i years, recent In controls Administrative inefficiencies. with rife is Iran of economy The as economy Iranian the classified have Fund Monetary International the at Scholars have strained the state purse. Nepotism and rampant corruption remain a serious obstacle serious a remain corruption rampant and Nepotism purse. state the strained have 3: Accor

E (Amuzegar, 2013) . CONOMIC as been privatized, the Government of Iran s Iran of Government the privatized, been as

ig o rnprny nentoa, n needn nnrft organization nonprofit independent an International, Transparency to ding , Kazakhstan, and Russia. and Kazakhstan, , a

eea cnessta te acin aepae udno h Iranian the on burden a placed have sanctions the that consensus general

18 percent of all all of percent 18 very high very ntern S ANCTIONSAND THE ational .

The same position was position same The

costs on the Iranian economy at large. Although it is difficult to difficult is it Although large. at economy Iranian the on costs acin hv eaebtd Iran’ exacerbated have sanctions assets

The banking system of Iran also has many problems. many has also Iran of system banking The just how much of the of much how just 29

in in

h country’s the I RANIAN

occupied by such countries such by occupied till manages manages till rd

least corrupt country in the world world the in country corrupt least E

ba CONOMY country’s economic difficulties economic country’s unprecedented levels in recent recent in levels unprecedented n Even though a large portion large a though Even ig syst king eooi problems economic s most of heavy industry industry heavy of most

em are said to be be to said are em

and and

as Com as generous

oros, a - . CEU eTD Collection years 2011 throughyears 2011 are 2015 estimates IMF bythe Source Figure 3.1.1 pronounced overestimated. be not should 2013 corruption widespread problems economic Iran’s that note to important isIt particularly hard. Iranianeconomy the hit has 2012 in EU and US the by sanctions The strengthening of time. long a for economy of its sanctions impact on feltthe Iranhardships. has 3.1 sanctions Iran against s to attributed be can Main M

Billions of Iranian Rials ). GDP 100,000 200,000 300,000 400,000 500,000 600,000

: World Economic Outlook database Outlook Economic World : T The recent sanctions against Iran have undoubtedly contributed to the to contributed undoubtedly have Iran against sanctions recent The 8 he he . Iranian GPD at consta GPD at Iranian 0

contribution

acroeconomic 1980 1981 1982 can eventually can 1983 anctions

within the country itself country the within

1984 and partial only been has problems economic country’s the to sanctions of 1985 1986

. I tl, the Still, ndicators

1987 C

1988 mounting the whether on views opposing are there onsequently, nt prices, billions ofIraniannt r prices, billions

are first and foremost a result of economic mismanagement and mismanagement economic ofresult a foremost and first are GDP at constant prices

1989 force thecountry its nuclear policy. tochange 1990

1991 significant

. 1992

Note 1993

30 1994 (Hufbauer & Schott, 2006 Schott, & (Hufbauer . : Latest actual data are from 2010. Figures for the for Figures 2010. from are data actual Latest :

1995 1996 very been has 2012 in sanctions of tightening 1997 1998 1999 2000 2001 ials 2002

2003 2004 2005 ;

2006 Katzman, 2007 country’s economic country’s 2008

2009 2010 2013 2011 2012 ; Plaut, ; 2013 2014 2015

CEU eTD Collection years 2011 throughyears 2011 are 2015 estimates IMF bythe Source Figure by 2013 1994 3.03 by expanded GDP when 2011 estimat IMF to According Therefore, Bank offer IMF indicators for similareconomic World Iran. and their generating while data national Iranian on rely also Bank World the and OECD t by provided data official the county, the for data economic ev that is reason The salt. of pinch a with taken be should thus and Iran of Bank Central the from taken usually are Outlook 2011 the years IMF.The for values 1980

1.09 and 1.9 and 1.09

Percent Change 9 Figure in seen be can as , by by to - - - 20 15 10 10 15 20 25 : World Economic Outlook database Outlook Economic World : - 5 0 5

A major effect of the recent toughening of sanctions was to cause Iran’s GDP to contract. contract. to GDP Iran’s cause to was sanctions of toughening recent the of effect major A 8 Figure 9

2015. The data were taken from the the from taken were data The 2015. 1.25 . Annual percentage changes in constant pricepercentage changesin constant GDP Annual 1980

1981 percent. 8 percent, 8 percent, respectively.

1982 shows Iranian GDP at constant prices, expressed in billions of Iranian rials from rials Iranian of billions in expressed prices, constant at GDP Iranian shows 1983

1984 The economy is expected to bounce back and back bounce to expected is economy The 1985 1986 of source sole the been traditionally has bank central Iranian the though en es, Iranian GDP declined by 1.88 by declined GDP Iranian es, 1987 1988 . The IMF forecasts that the Iranian economy will will economy Iranian the that forecasts IMF The . 1989 -

2015 are estimates by the IMF. The data in the World Economic Economic theWorld IMF. Thein data estimates are bythe 2015

1990 since contracted has GDP Iranian time first the is This percent. Annual Annual GDP growth 1991 1992

. 1993

Note

1994 2013 April 1995 31 . : Latest : 1996

1997 1998 Worl

actual data are from 2010. Figures for the for Figures 2010. from are data actual 1999 2000

d Economic Outlook database of the of database Outlook Economic d percent in 2012, in sharp contras sharp in 2012, in percent 2001 best. at questionable is bank he

2002 2003

2004 2015 and 2014 in slightly grow 2005

2006 2007 2008 2009 contract again contract 2010 2011

2012 indicators. 2013

2014 The t to t

2015 in

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likely cause of rising prices rising of cause likely Percent change Inflation 10 20 30 40 50 60 : World Economic Outlook database Outlook Economic World : 0 Both t In to subjected was Iran When Iran. in inflation exacerbated also have sanctions Economic 10

through are 2015 estimates IMF bythe Average annual inflationrate, annual consumerpricesAverage

he fall of 2012, Iranian inflation reached hyperinflation levels. Using market Using levels. hyperinflation reached inflation Iranian 2012, of fall he 1980

(2013)

the imposition of sanctions and the cancellation of government subsidies government of cancellation the and sanctions of imposition the 1981

1982 1983 s Ti smr than more is This . -

dig for the first time in the late 1970s, ave 1970s, late the in time first the for

. As a result, the Iranian government has largely abolished subsidies and plans and subsidies abolished largely has government Iranian the result, a As . 1984

1985 it inflation rates. 1986

1987 Inflation, average consumer prices 1988

in Iran in 1989 1990 1991

three 1992 The Government of Iran has subsidized basic foodstuffs, basic subsidized has Iran of Government The 1993 .

Note 1994 times high times 1995 32 . : 1996

Latest actual data are from 2011. Figures for the for Figures 2011. from are data actual Latest 1997 had hs subsidies These 1998

rta te IM the than er 1999 oaie n hg ifain ae. n 1995, In rates. inflation high and volatile 2000 rage annual inflation rates were already were rates inflation annual rage

2001 2002 2003 2004 have have

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based data, based 2012 have been have

2013 percent. 2014 2015

CEU eTD Collection (Plaut, 2013) (Plaut, was reported tobe39,000 dollar tooneUS markets. unofficial in traders money arrest to threatened and crowds the dispersed quickly government Iranian The Tehran. in demonstrations one of value unofficial the collapse: total a escaped barely in turn cause of value the in fall The 2012. in sanctions of tightening rial. Iranian the of depreciation scale 3.1.3 50 between 2012). Iran,” on sanctions reports press to according However, 2013) 29.8%,” hits rate (“Inflation 20 April to 21 March from period ea ( unemployment and worsened inflation Iranian to rly 2013. The Statistics Center of Iran reported that Iran’s inflation rate was 29.8 percent in the in percent 29.8 was rate inflation Iran’s that reported Iran of Center Statistics The 2013. rly elc te wt tree subsidies. targeted with them replace US US Currency d ,

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analysts

the currency to fall even further.the currency even tofall epreciation

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significantly in 2012. 2012. in significantly (Katzman, 2013) hand go In April 2013 April In arket value of the rial has declined significantly since the since significantly declined has rial the of value arket oee, h cnelto o gvrmn subsidies government of cancellation the However,

Nikou 33 uh hi much

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Percent of total labor force Unemployment rn has Iran 10 12 14 16 18

: World Economic Outlook database Outlook Economic World : 0 2 4 6 8 (Lakshmanan &Nasseri, 2011) (Lakshmanan h gvrmn o Iran of government The 11

The government has also threatened to arrest to threatened also has government The .

through are 2015 estimates IMF bythe Unemployment rateUnemployment 1990 ted more problems as they are are they as problems more ted

1991 ufrd rm double from suffered 1992 1993

1994

1995 percent 12.34 from slightly 1996

1997 rial. the defend to try to measures taken has Unemployment rate

1998 these - . ii uepomn rts n eet er. codn t the to According years. recent in rates unemployment digit 1999

. figures &Hosseinian, (Tait, George 2012; 2012).

determined rather arbitrarily. Iranian officials have been have officials Iranian arbitrarily. rather determined . 2000

Note remain 2001 arbitrage generate ratesto unofficial and theofficial n 34 . A . . : 2002

Latest actual data are from 2010. Figures for the for Figures 2010. from are data actual Latest

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2004 unofficial 2005

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O country the and devastating been not has Iran on sanctions economic the of effect Thus,the of costs the Calculating to According In the period period the In

(2012) il was found for the first time first the for found was il Oil Under S Oil Industry developed a developeda .

hs amount This anctions As mr n poue surplus producer and umer hn both than Katzman

rm 06 until 2006 from Hufbauer et al et Hufbauer model to estimate the welfare loss of sanctions on a target country using countrytarget a on sanctionslossof the welfare to estimate model illion. illion.

(2013), the Iranian the (2013), is economic fiil figures official negligible This is about 1 to 3 percent of the Iranian GDP in the in GDP Iranian the of percent 3 to 1 about Thisis against Iran against . point out point . anctions i 2012 n Iran n

combination of economic mismanagement and, at least to least at and, mismanagement economic of combination sanctions on a target country remains a major challenge challenge major a remains country target a on sanctions , the US, US, the , oprd to compared

in 1908 in created an an created . , “few studies go beyond anecdotal accounts of the of accounts anecdotal beyond go studies “few ,

35 and According to their estimates, in the period from from period the in estimates, their to According

unemployment

M estimates. IMF . Until the Islamic R Islamic the Until . UN

The country has resorted to providing its providing to resorted has country The average welfare loss of about $80 million million $80 about of loss welfare average 2013 ad EU and , h Iain GD Iranian the , p. 101 p. , (Hedges, 2013) (Hedges,

rate was rate

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- 2012

CEU eTD Collection 1970s (“Oil sanctions on Iran,” 2012). The country has not reached such high levels of production of levels high such reached not has country The 2012). Iran,” on sanctions (“Oil 1970s TheEnergy Information U.S. Source: Administration. Figure ofof theIran revenue countr sender the industry oil Iran’s sanctioning By country. 2012). Iran,” on sanctions Therefore, (“Oil earnings government total of percent 50 around and e revenue Iranian of percent 80 about up make exports oil crude Unit, Intelligence Economist the three countriesOnly have world. the in reserves oil proven all of percent nine about to amounts This 2013). (“Iran,” reserves post The control. revolution constitution bans foreign partie orprivate its under production oil brought and companies foreign towards approach

Thousand barrels per day 4,500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 500 Iran’s oil production reached record high levels of about 6 million barrels per day inthemid day 6millionbarrelsabout per of recordhighlevels reached Iran’s oil production to According for of revenue. government share account thebiggest Iran’s gasexports oil and 12 ih n siae 14 ilo bres crety rn a te ol’ fut largest fourth world’s the has Iran currently barrels, billion 154 estimated an With 0

. Production of crude oil including lease condensate crudeProduction of oilincluding lease Iran’s 1980 1981

1982 energy

1983 Production crude of oil and lease condensate ian government ian 1984

sector

1985 namely, moreVenezuela, reservesand Saudi oil thanIran, Canada. Arabia, 1986

1987 1988 has

1989 en mjrtre o rcn eooi sntos gis the against sanctions economic recent of target major a been . 1990 1991 1992 1993

36 1994

1995 s from resources. Iran’s owning natural

1996 1997

1998 source main the undermine to intend ies 1999 2000 2001 2002 2003 2004

2005 2006 2007 2008 2009 2010

2011

2012 xport

oil

- -

CEU eTD Collection lease separation facilities” separation lease hydroc of primarily 4 being is capacity tanker NITC’s of amount significant a that estimated been has “It oil. excess the 13 Figure in of level lowest the Thisis percent decline. 39 a day, per barrels million 1.5 about to decreased condensate and oil crude of exports Iranian 2012, In more. even fell duringthesame 2percent by period although c production in fall thisMostof 2012. in day barrelsmillion per 3.37 to in 2011 day per barrels million producti condensate and oil Total condensate. oil and oil crude of production expor and produce to ability country’s about4millionfaltered at barrels perday. producti oil 2007, Iranian to 2006 From 2005. in day per barrels million 4.14 of peak a reaching until gradually rose and down slowed production in growth the recovery, rapid initial this After 1993. in day per barrels 12 Figure in seen be thesubsequentIslamic Iran of1979and revolution 1980s the In then. since ever

an be directly attributed to sanctions (“Oil sanctions on Iran,” 2012; “Iran,” 2013). “Iran,” 2012; Iran,” on sanctions (“Oil sanctions to attributed directly be an h US Eeg Ifrain diitain eie lae odnae s “itr consisting “mixture a as condensate lease defines Administration Information Energy U.S. The While 2012 in Iran against sanctions of toughening The condensate lease and oil Iran’s 1988, in ended war the After

Iran’s oil production fell by 17 percent in 2012, total worldwide oil production actually rose oilproductionactually total worldwide in2012, 17percent fell by Iran’s oil production . Since Iranian oil exports fell more than production, the country is reportedly storing reportedly is country the production, than more fell exports oil Iranian Since .

Iran’s production of oil fell by about 17 percent from in 2011 in from percent 17 about by fell oil of production Iran’s on declined to 3.91 million barrels per day. From 2008 until 2011, production 2011, until 2008 From day. per barrels million 3.91 to declined on arbons heavier than pentanes that is recovered as a liquid from natural gas in gas natural from liquid a as recovered is that pentanes than heavier arbons . Production increased from 2.24 million ba million 2.24 from increased Production .

(“Lease,” n.d.). (“Lease,” ,

Iranian oil production remained remained production oil Iranian ( “Sanctions red“Sanctions

t oil. The new sanctions caused caused sanctions new The oil. t

37 -

Iraq War. Iraq War. uced Iran’ uced has has had a significant negative effect on the on effect negative significant a had

s oilexports revenues” and oil exports since 1986, as can be see be can as 1986, since exports oil rrels per day in 1988 to 3.54 million 3.54 to 1988 in day per rrels at low levels largely because of the of because largely levels low at 4

production rose rapi rose production sap eln in decline sharp a - 2012, its exports of oil of exports its 2012, n el rm 4 from fell on

Interestingly, , 2013). dly, as can as dly,

the .05 n

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Thousdand barrels per day

1,000 1,500 2,000 2,500 3,000 : 500

Iran is located in the Persian Gulf next to to next Gulf Persian the in located is Iran in insurers major prohibited sanctions the of some Since rise substantially. This can be attributed to “the sluggish performance of the global economy,“the sluggish performance oftheglobal Thisrise beattributed to can substantially. 13 The Energy Information U.S. Administration 0

. Exports ofcondensate oilincluding crude Exports lease g Iranian oil g Iranian very problematic. 1986

1987 2012, Iran,” on sanctions (“Oil sanctions to owing exported be cannot that oil rplus 1988

1989 Exports of crude oil and lease condensate 1990 herefore

s a ’s 1991

iiy o xot “i sntos n rn” 02 “rn” 03. In 2013). “Iran,” 2012; Iran,” on sanctions (“Oil export to bility 1992 - , 1993

5 ecn fol akrsimnsi h wrd te sanctio the world, the in shipments tanker oil of percent 95 uncertainty about Iran’s oil exports causes world oil prices to to prices oil world causes exports oil Iran’s about uncertainty 1994

1995 1996 1997 38

1998 the Strait of Hormuz, which is a major tr major a is which Hormuz, of Strait the . 1999 2000 2001

2002

Europe 2003 2004

lubs (P&I clubs) in Europe in clubs) (P&I lubs 2005

from providing insurance providing from 2006

2007 2008 2009 2010 2011 2012 ansit ansit ns

CEU eTD Collection sector has in programsdevelopment oil stopped cases some in and delayed also have sanctions their The disinvesting. are stopped others and have Iran in sectors operations gas and oil country’s the in involved were that companies Western from companies international discouraged have sector oil Iranian of its gas.Still, gassectorwith targeted has sanctions also been years. inrecent large in participatingfrom citizens has US The equipme exporting industries.gas and oil Iran’s in reven oil export net Iran’s exports, falling to Due 2012. in lower much was $95figure corresponding the 2011, in of billion revenues export oil generated country the While Iran. for revenue falling meant exports 15). p. 2012, 2008 of crisis financial the fromrecovery patchy a only makingis which (Hufbauer et al., 2012, p. 2012, (Hufbauer etal., 96). cumula billion, $50 was forward going be to appear that those v the between difference the that so sanctions by problemscreated financing sanctionsto orto due delayed or cancelledbeen have deals those 2010 in $202006 in year per of billion average an from dropped sector energy Iranian the in investments major Reported the targeting sanctions economic international and environment investment poor The investment reduce significantly to been has sanctions international of impact major Another been substantial:been also also ic h fl in fall the Since - ue amountedue in $65billion toabout 2012. 11, though some of that could be due to delays in reporting. In addition, several of several addition, In reporting. in delays to due be could that of some though 11, enacted sanctions that ban companies that are owned or managed by American by managed or owned are that companies ban that sanctions enacted nt and technology that can be used to explore, produce, and refine oil and gas. and oil refine and produce, explore, to used be can that technology and nt

- Both the US and EU have enacted sanctions that significantly restrict significantly that sanctions enacted have EU and US the Both Iranian exports did not cau not did exports Iranian 09 (though highly variable from year to year) to j to year) to year from variable highly (though 09 - scale investment projects in Iran. in investmentprojectsscale

Iran (“Iran,” 2013). (“Iran,” Iran 39

The decline in i in decline The se w se le f el rpre ad h vle of value the and reported deals of alue rd i piet ie steeply, rise to price oil orld Iran is not a not is Iran tively, over the period 2006 period the over tively, netn i Ia. lot all Almost Iran. in investing - 09 (“Oil sanctions on Iran,”on (“Oilsanctions 09 nvestment in Iran’s energy Iran’s in nvestment

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E E PISODES CONOMIC onre fo acquiring from countries case studies case role in preventing nuclear weapons development weaponsdevelopment nuclear in preventing role

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rlfrto Tet in Treaty Proliferation sites. be

. willingness to cooperate with the IAEA, it IAEA, the with cooperate to willingness of ic aot 93 t 1993, about Since The country agreed to cooperate with the with cooperate to agreed country The limited. Being a socialist country, North country, socialist a Being limited. North Korea North against on the one hand, hand, one the on Up to now t now to Up

n h mid the In carried out nuclear tests nuclear out carried The country has con has country The

e Pakistan in the late 1970s. late the in Pakistan - ih h IAEA the with

grade le grade A Economic sanctions against sanctions Economic

is so underdeveloped that underdeveloped so is year later the later year he country he 1985 - he US US he 90, ot Korea North 1990s, vels. and .

fe yas of years After

Despite civilian nuclear civilian Japan, Japan, has Korea North

has government n fr the for and ducted two ducted imposed imposed

received the US the in 1998 1998 in - the reliant The The

US ,

CEU eTD Collection becoming nuclear was not was nuclear becoming I patchy. best at and considerationinternal diplomacy involving outcome. their to chapter this in discussed weapons nuclear developing South Korea Russia. and China from opposition by thwarted were Korea North on sanctions stricter limited only between relations trading nuclear. becoming however, phase, decade, of 2002 and sanctionsword bythe impose the poorest and of one is Korean North though Even UN. and US, the Japan, from aid food of amounts significant

positive sanctions such as such sanctions positive The analysis above shows that the record of economic sanction in stopping proliferation is is proliferation stopping in sanction economic of record the that shows above analysis The summarize, To the because impact limited a had Korea North on sanctions the that noted be should It 1993 phases: two into Korea North on campaign sanctions the divide al. et Hufbauer the authors argue that the that argue authors the -

2006 nuclear weapons because of the sensitive nature of the issue. the of nature sensitive the of because weapons nuclear , on the other hand, , ontheother international

(Hufbauer n least developed courtiers off cut thecountry developed was least and was an obvious failure obvious an was

almost It is difficult to garner all relevant all garner to difficult is It

sanctions ,

all of the cases in which sanctions were successfuls sanctionsin inwhich were thecases of all economic sanctions cannotsanctions economic

the country and its trading partners were n were partners trading its and country the et al. et cooperation in sanctioning North Korea. Korea. North sanctioning in cooperation an an food and energy aid, energy and food . d onit,thecountry acquiring succeeded in

overriding goal of the target countries. target the of goal overriding , Case 93 Case , t s motn t rieae ht n l o te acin episodes sanctions the of all in that reiterate to important is It

showe have

first phase first s

of the target countries also of thetarget

had various degrees of success in preventing countries from from countries preventing in success of degrees various had d general support.

- in terms of policy outcome policy of terms in 1, 2008) 1, can be can 47 . Since the Since .

delayed the country’s nuclear program for about a a about for program nuclear country’s the delayed

information be regarded as the single force that contributedthat singleforce the as regarded be

regarded as a moderate success. The second The success. moderate a as regarded

initial initial

played about any s any about sanctions

since the country succeeded in succeeded country the since even more even South Korea and Taiwan tried Taiwan and Korea South ot very large. Also, there was there Also, large. very ot h U atmt t impose to attempts US The

a nuclear weapons. In all of the cases p cases the of all In role , which mostly which , ingle sanctions episode episode sanctions ingle . topping proliferation,topping

from

the rest ofthe rest Japan and Japan

consisted consisted olitical olitical - 1994 CEU eTD Collection thecase in effective Iran on sanctions stringent increasingly analyses. useful out carry can we cases particular about known is what seems been tohave sanction the by halted was program nuclear Iraq’s although Finally, technology. oil key importance utmost of being as nuclear becoming regard not did but programs nuclear civilian their to flavor military a add to In short, In classifying sanctions episodes as successes or f or successes as episodes sanctions classifying

only temporary.only of Iran

are are .

Libya’s

the subject

president s ula policy nuclear ’s s

of the next chapter. of chapter. thenext Gadd 48

afi was more concerned about gaining access to access gaining about concerned more was afi

and whether economic sanctions can can sanctions economic whether and

ailures can be contested. Still, given Still, contested. be can ailures What has been the impact of impact the been has What s , the effect the , be be CEU eTD Collection prevent Iran from becoming a nuclearprevent Iranpower. from a becoming Afterwards an program, nuclear Iran’s delaying in sanctions of success the (2) program, nuclear Iran’s stopping in sanctions of success the section examined being are goals which upon depends sanctions international and U.S. of Effectiveness on 5.1 ofSanctions Iran discuss they whether about findings my capability. nuclear acquiring from Iran prevent to sanctions using of effectiveness effective acqui countries. target the of goal overriding an not was weapons nuclear developing successes, as classified be can that cases the of all In weapons. stand as sanctions that shows proliferation against sanctions of episodes historical of 4 Chapter in examination The collapse. of verge the to it pushed not have they economy, country’s the burdened have sanctions C HAPTER ring nuclear capability

As the Middle East specialist Kenneth Katzman (2012) put it, “ it, put (2012) Katzman Kenneth specialist East Middle the As will I 4, and 3 Chapters in analysis the on Based Iran on sanctions international the of 3 Chapter in analysis The I will discuss the effectiveness of the economic sanctions on Iran against three criteria: (1) criteria: three against Iran on sanctions economic the of effectiveness the discuss will I

in the case of Iran. To do this, I will will I this, do To Iran. of case the in , in the next next the in , 5:

E CONOMIC - whether ln plce rrl succeed rarely policies alone have section, I section,

been effectivebeen d (3) the succes the (3) d , but were not determined to achieve this notdetermined, butwere objective. toachieve

economic sanctions economic S ANCTIONSAND

will discuss the future prospects of using economic sanctions to sanctions economic using of prospects future the discuss will so far s of sanctions i sanctions of s nta, hs countries these Instead,

. :

Track Record

49 can sals ciei aant which against criteria establish n rvnig onre fo dvlpn nuclear developing from countries preventing in I

RAN

be effective in effective be ’ S argue whether economic sanctions can be can sanctions economic whether argue n inflicting costs on the Iranian economy. Iranian the on costs inflicting n N UCLEAR

chang

briefly P Assessing the effectiveness the Assessing ROGRAM

ing hw that shows entertained entertained

Iran’s behavior, I will will I behavior, Iran’s

will I Before presenting presenting Before ” (p. 41). (p. ”

lhuh the although vlae the evaluate h ie of idea the

In this In CEU eTD Collection preventing Iran from developing nuclear weapons, they will will they weapons, nuclear developing from Iran preventing been have sanctions international 5.1.3 Hurting of thenumber increasing its centrifuges. 2013) IAEA, the of Governors of continues and program nuclear its it continue facilitiesnuclear inIran ma with under to attributed be can slowdown thisof part slowed been restricting also has program Iranian The program. nuclear Iranian been have sanctions 5.1.2 DelayingIran’snuclear program resolutions.UNSC effective a 46). p. 2013, (Katzman, purposes” peaceful purely to development nuclear its Iran of Government Iran’s 5.1.1 Stopping nuclear program gainst this criterion, it is it criterion, this gainst hn esrd gis te uodnt ga o hrig h Iain cnm, the economy, Iranian the hurting of goal subordinate the against measured When t program, Iranian the delayed have sanctions the though Even criterion the against measured When overriding The

o far so Iran’s access to access Iran’s s nuclear and missile programs. Recent Recent programs. missile and nuclear s t , he

s rn a nt bnoe is ula program nuclear its abandoned not has Iran as Iran

fairly to cooperate with the IAEA and the UN Security Council and Council Security UN the and IAEA the with cooperate ian ups o te cnmc acin aant rn a be frig the forcing been has Iran against sanctions economic the of purpose clear

successful. The sanctions are believed to have increased the costs of the of costs the increased have to believed are sanctions The successful. key technology and equipment and technology key

economy

that the international economic sanctions against Iran have not been been not have Iran against sanctions economic international the that licious software2012). (Hufbauer,etal., somewhat t . o enrich uranium to high levels levels high to uranium enrich o

n eray 03 i ws eotd ht rn a significantly was Iran that reported was it 2013, February In

successful. of delaying Iran’s nuclear program, the international international the program, nuclear Iran’s delaying of - 50 the IAEA reports IAEA

- table tactics such as attacking as such tactics table Even if sanctions will not be successful in successful be not will sanctions if Even needed for enriching uranium enriching for needed have had some success in punishing the punishing in success some had have state

n hs o cmle wt the with complied not has and (Director General of the Board Board the of General (Director

that

he country is determined to to determined is country he

Iran has been been has Iran on y h sanctions the by down the computers ofcomputers the hn measured When “verifiably limit “verifiably . expa However, However, nding CEU eTD Collection countries. It would be be would It countries. Republic exert to had target. the sanction to countries important other of support the get major alternative seek to countries sender the in firms force up give to have countries sanctioning the target the sanctions financial of effect the mitigate 2013). (Katzman, to order in arrangements barter using increasingly Irani of origin the hide Iran help that companies against sanctions enacted and Iran to belong that vessels of group large a identified US the cargo but origin, their the insuring to resorted have oil Iranian the of buyers Major 2012). Iran,” on sanctions sector energy toadjust. time time,Iran ample long has had very overestimated. be not should and partial only difficulti additional created have and problems economic numerous Iran’s exacerbated have sanctions the shows, 3 country mselves. Initially the National Iranian Oil Company even tried to disguise its tankers and hide and tankers its disguise to tried even Company Oil Iranian National the Initially mselves. supplier of important goods. Finally, an active sender might incur substantial costs trying to to trying costs substantial incur might sender active an Finally, goods. important of supplier It is generally very difficult to numerica to difficult very generally is It i point this At fin to trying been has Iran for its failure to comply with its international nuclear obligations nuclear international its with comply to failure its for .

countr . Iran and its partners partners its and Iran . si gnificant y

, but also on the sender countries. sender the on also but , es. However, the contribution of the sanctions to Iran’s economic woes has been been has woes economic Iran’s to sanctions the of contribution the However, es. t is also important to note that economic sanctions impose costs not only on only not costs impose sanctions economic that note to important also is t very challenging challenging very

fot t la te nentoa sntos campaign sanctions international the lead to efforts wy t crusrb the circumscribe to ways d have have to calculate the economic economic the calculate to come up with alternative ways of exporting its oil (“Oil (“Oil oil its exporting of ways alternative with up come profitable Moreover, s Moreover, l l y 51

estimate the costs of sanctions on the sanctioning the on sanctions of costs the estimate

For t rade relations rade source a start, sanctions have an opportunity cost: opportunity an have sanctions start, a ince the sanctions have dragged on for a for on dragged have sanctions the ince an tankers. Iran and its buyers are are buyers its and Iran tankers. an s of supply if the target country is a is country target the if supply of s

international costs of the sanctions on the US the on sanctions the of costs with with In the case of Iran, t Iran, of case the In . the target the As the analysis in Chapter in analysis the As

sanctions

gis te Islamic the against . Also, sanctions Also,

he US has US he gis its against also also CEU eTD Collection discuss the within groups interest important on by created hardships economy used, sanctions the of extent and type nuclear its over community international sanctions onIran. 3 Chapters of analysis the on Relying about debate heated is there Currently program. weapons nuclear its scrap to Iran forcing namely, goal, main 5.2 somewhat ifchange pricestosuddenly world oil were surge. business lucrative many foregone have and oil of sources alternative for look to had have countries sender the while Thus, 2006 since sanctions UN and EU, US, of case the in the and incurred has sender), to loss (major 4 to of case the in countries the of estimate judgmental countries sending other and Effectiveness on Future ofSanctions Iran: Prospects The that indicatesfar so analysis My , (3)

future prospectsfuture of using economic a “modest loss” both in the case of US sanctions in the period fr period the in sanctions US of case the in both loss” “modest a rset fr using for prospects international cooperation while imposing while cooperation international whether whether

the sanctions Iran. According to them, on a judgmental index from 1 (net gain to sender) to gain (net 1 from index judgmental a on them, to According Iran.

opportunities sanctions economic and political and economic the Iranian case gets a score of 3. In other words, the sanctioning party sanctioning the words, other In 3. of score a gets case Iranian the

(The Iran Project, 2012) Project, Iran (The can

, economic economic (5) Iran

be effective in coercing Iran to stop its nuclear program. program. nuclear its stop to Iran coercing in effective be

wi the costs of of costs the the n 4 I will I 4, and

, and and ,

h rn te hv nt nurd ao css Ti would This costs. major incurred not have they Iran, th (2) program economic sanctions economic h css nlce b te acin o the on sanctions the by inflicted costs the

sanctions Iran of against inlight these criteria sanctions (7) 52

the length of the sanctions the of length the costs

depend compliance ics te oeta efciees economic effectiveness potential the discuss Sil ubure al. et Hufbauer Still, . the

that have been have that o ore rn o oprt wt the with cooperate to Iran coerce to sanctions,

on a variety of factors, such as such factors, of variety a on

(Hufbauer, et al., 2012, pp. 106 pp. 2012, al., et (Hufbauer,

on Iran on for Iran

(4) Iran’s (4)

have not accomplished theiraccomplished not have , incurred by the sanctioning the by incurred (6) the effect of sanctions sanctions of effect the have offered a rough, a offered have

ability to weather the weather to ability regime om 1980 until 2005 2005 until 1980 om .

Below I will will I Below .

Iranian Iranian the

- 107) (1) . CEU eTD Collection economic sanctions had only a limited impact on the Iranian economy Iranian the on impact limited a only had sanctions economic program 1980 early the From 5. signs has economy adjusting thattheIranian already been of impact the mitigate to adapt will Iran on, drags regime sanctions current of collapse of Iran driventotheverge has theeconomy notbeen pressureIran. However, on economy. on sanctions 5.2.2 Cost Iran’seconomy of This ofsanctions meansthe impact bedisastrous onIran not will for oil. Iranian on embargo universal a be will there that unlikely is it oil, Iranian of imports their reduced have countries most though sanctions. sanctions. financial 5.2.1 Typ 2. 3 International estate(Katzman, real 2013) I Affluent goods. industrial sanctions. and minerals, goods, of effects non increasing sharply currency, Iran’s political of value the in fall the and economic the tradersmechanismstrade. Iranian exchange using are informal from banking benefitting and, mitigate to ways Government found has Iran in discussedwas As and export, import, namely, sanctions, of types broad three all to subjected been has Iran The extent of intern of extent The

and its support for terrorism, there was little international cooperation with the US and US the with cooperation international little was there terrorism, for support its and e and extente and of sanctions China, India, and Russia have sho have Russia and India, China, T he tightening of international sanctions in 2012 has put put has 2012 in sanctions international of tightening he oee, o al onre hv son ul oprto t ipeet these implement to cooperation full shown have countries all not However, - cooperation linked entities are creating front companies and making increas making and companies front creating are entities linked s until about 2005 2005 about until s C ational cooperation in sanctioning in cooperation ational hapter

. Iran will find alternative markets for its exports relatively easily. relatively exports its for markets alternative find will Iran

, the economic sanctions against Iran have have Iransanctions against economic the , hn h U ld the led US the when

wn only a modest support for for support modest a only wn 53

ranians are investing in investing are ranians

to the sanctions:

Iran has changed greatly over time. over greatly changed has Iran fot t snto Ia’ nuclear Iran’s sanction to efforts - its oil exports such as agricultural as such exports oil

and consequently n consequently and economy.

pronounced a the sanctions. There are There sanctions. the sanctioning strained the Iranian Iranian the strained hard assets such as as such assets hard

ed use of barter of use ed

Iran. Even Even Iran. economic o impact o . As the

CEU eTD Collection h cute ae agl a eut f nenl cnmc mismanagement. economic internal of result a largely are counties the apart falling not is Iran of economy the unemployment, was economy its eve weapon nuclear a tested successfully Pakistan crippled. severely is economy its if even succeed eventually will it resources, financial some has and power nuclear a become to determined well a block cannot to sanctions 5.2.4 Iran’sability withstand withthat North cooperating Iran mightbe Korea on publications like countries ex its for markets alternative find will exception. an be to going not is country target the of partners trading major all of cooperation approval. and about concerned more are countries These Iran. against sanctions stringent impose to reluctant been have They sanctions. using of efficacy the about skeptical increasingly lik countries the joined EU The efforts UNand increased. have US economy. theIranian toisolate 20 Since policies. Iran’s on

their own economic relationstheir owneconomic Iran. with As was discussed in the previous chapter, historical analysis shows that economic sanctions economic that shows analysis historical chapter, previous the in discussed was As M Iran, sanctioning on cooperation international significant is there currently though Even ost of the UN sanctions on Iran had to be watered down to get get to down watered be to had Iran on sanctions UN the of ost Past experience shows that shows experience Past

China e reported that Iran was planning on selling oil to North Korea. There are also repor also are There Korea. North to oil selling on planning was Iran that reported North Korea Korea North dsrse” Hfae e a. 2007). al., et (Hufbauer “distressed” - endowed count endowed India, ,

are 6 international 06, and Russia have shown only lukewarm support and are growing growing are and support lukewarm only shown have Russia and

Since o Since on t rmi a e al o Ia. n pi 21, eea news several 2013, April In Iran. of ally key a remain to going ry from acquiring nuclear weapons. In fact, if a country is firmly firmly is country a if fact, In weapons. nuclear acquiring from ry ports relatively easily and will remain well remain will and easily relatively ports in any sanctions episode sanctions any in il is a fungible commodity a commodity fungible a is il

oprto i sntoig Iran sanctioning in cooperation 54

nuclear

ept fa Despite .

Moreover, the current economic woes of woes economic current the Moreover,

issues (Katzman (Kaempfer & Lowenberg, 1992) Lowenberg, & (Kaempfer it is very difficult to a to difficult very is it ln eprs rsn inflation rising exports, lling nd is universally demanded, Iran demanded, universally is nd

h nw edrhp that leadership new The , 2013)

security - financed. financed. usa n China’s and Russia

has .

chieve the full the chieve

in the region region the in substantially Moreover, n though n . Iran.

and ts

CEU eTD Collection much longer. much longer. towards power, to comes Ahmadinejad like hardliner program nuclear Iran’s on theelections,wins reformistcandidate a If West. Ahmadin nation” our on impact any have not will enemies our by Iran on imposed Sanctions ... rulers their in believes nation Iranian “The stated Khamenei enemies.” rhetoric. leaders Iranian from clear is This high. too being as countries Western and US the of demands the 1999 (Drezner, relations international countries. sanctioning compliance5.2.5 Cost of problemscountry’s (Plaut, 2013). economic inc becoming are Iranians come s

to power in June in power to The outcome of the upcoming presidential elections might change Iran’s stance towards the towards stance Iran’s change might elections presidential upcoming the of outcome The 3to4months foiltheplots… inthenext will of and ill will nation Iranian the that know should They … moves. desperate its they that prevent imagine they to and move speedy nation Iranian the against sanctions heaviest the imposed have they Today, the of demands the with complying of costs reputational the about worried clearly is Iran Western countries and and countries Western ejad said: ejad rna laes rqety ee t sntoig etr cutis as countries Western sanctioning to refer frequently leaders Iranian

hl gvn a giving While

Independent nations are usually concerned about their reputation in in reputation their about concerned usually are nations Independent will be forced to take measures to solve the country’s economic problems. economic country’s the solve to measures take to forced be will reasingly aware that the Iranian government is responsible for most of the the of most for responsible is government Iranian the that aware reasingly

for Iran for and care less about the costs of giving of costs the about less care and televise the current stalemate over the country’s nuclear program could last last could program nuclear country’s the over stalemate current the d speech in early 2012, 2012, early in speech d

; Hufbauer et al., 2007 al., et Hufbauer ;

rn s iey o otne o ae hsie attitude hostile a have to continue to likely is Iran

55 can impede the Iranian nation(‘ Iranian the impede can he might take a more cooperative approach in talksin cooperativeapproachmore a take might he

“hmni” 2012). (“Khamenei,” ). rns urm Lae Aaolh Ali Ayatollah Leader Supreme Iran’s Iran views Iran - wishers in to pressure to

(“Ahmadinejad,” 2013). 2013). (“Ahmadinejad,” the costs of conceding to conceding of costs the

In overcome all sanctions all overcome May s progress) by such by progress) s ei” n “Iran’s and “evil” . If a conservative a If .

03 President 2013,

’ CEU eTD Collection higher chance of success if they are imposed at full force instead of incrementally (2007). Thus, it Thus, (2007). incrementally of instead force full at imposed are they if success of chance higher a have usually sanctions al., et Hufbauer to According sanctions. the of effects the mitigate to adjust ti long very sanctions a forto subjected been has sanctions of 5.2.7 Length nationalism. Iranian increased su public undermined short In sanctions. the by somewhat hurt been had livelihoods Iranian’s said percent 29 Another deal. great country’s program respondents said respondents the of percent 63 not?” or capabilities, power nuclear its develop to continue should Iran think you do Iran, against sanctions program nuclear country’s the support public theory choice public the regime, the change potentially could that groups interests no are there where regime authoritarian p to lead interest on Iran 5.2.6 Impact sanctions of groupsin opinion about opinion about The duration of sanctions also influences the outcome of a sanctions campaign. Since Iran Since campaign. sanctions a of outcome the influences also sanctions of duration The Irania of majority the poll, same the to According poll Gallup recent a to According also can sanctions hardships, economic creating to addition in 1, Chapter in discussed As ,

or not olicy change through influencing interest groups in the target country. Since Iran has an has Iran Since country. target the in groups interest influencing through change olicy despite their negative negative their despite economy: economy: refused to answer or said or answer to refused .

56 percent of the respondents said the sanctions had hurt Iranians hurt had sanctions the said respondents the ofpercent 56 the program.country’s nuclear pport for Iran’s nuc Iran’s for pport probably

impact does not does

on the Iranian economy, the international sanctions have not have sanctions international the economy, Iranian the on they did no did they

lear program lear which interviewed 1,000 1,000 interviewed which Yui, 2013) (Younis, apply to apply ‘ yes me, the country has had enough time to structurally to time enough had has country the me, 56 ’

and only 17 percent said percent 17 only and t know know t

Iran.

On the contrary, the sanctions seem to have have to seem sanctions the contrary, the On

However, However, ns We akd Gvn the “Given asked When . whether Iran should continue its nuclear nuclear its continue should Iran whether believe Iranians

it is important to discussto important is it that

the sanctions have hurt the hurt have sanctions the , the majority of majority the ‘ no’;

19 percent percent 19

’ livelihoods a livelihoods ’ cl o the of scale Iranians Iranians Iranian Iranian of the of

CEU eTD Collection potentially part h too as countries sanctioning the of requirements the with complying of cost the views and power nuclear a become to determined is country The great. not are effective providing incremental, Iran remain with lit was there initially multilateral I against Sanctions country. generate particular a sanctioning on to cooperation effort and time much takes it that however, true, is It 168). maximum (p. “with impact” imposed been had Iran on sanctions if effective more much been have would , I will offer policy recommendations on how the effectiveness of the sanctions on Iran on sanctions the of effectiveness the how on recommendations policy offer will I , h aayi aoe hw ta te ds ht h itrainl acin o Ia wl be will Iran on sanctions international the that odds the that shows above analysis The

enhanced.

l itrainl oprto. hrfr, acin aant rn r lkl to likely are Iran against sanctions Therefore, cooperation. international tle sufficient 57

time toadjust

structurally ran have evolved slowly because slowly evolved have ran igh. .

In the next, concluding next, the In can be can CEU eTD Collection Iran’s thecountry’seconomi have they exacerbated expected.Rather, many a only success.sanctions had as limited economy have The theIranian sanctionsnot devastated have show the countryprogress that isactivities. making inits enrichment nuclear Iran’s in used computers this even the on effect enrichmentcountry’s nuclear program. no have will they claimed have and sanctions the disregarded have Ahmadinejad Iran’ Council. Security an IAEA the of demands with comply to willingness no shown has Iran of Government had futile. been have they that claimothers headway, good made have Iransanctions on that argue some While as sanctions economic of effectiveness the over has thedebate intensified, so have Iran against As sanctions economists alike. policymakers and can C ONCLUSIONSAND

stop I stop no success in achieving the achieving in success no

economic problems haseconomic been F However, t that shows chapters previous the in analyses The T nly i aheig h sbriae ol f nlcig cost inflicting of goal subordinate the achieving in inally, he impact of internation of impact he outcome cannot be be cannot outcome ran’s suspected nuclear program are program nuclear suspected ran’s the sanctions the Spee edr ytla Ai hmni n Pres and Khamenei Ali Ayatollah Leader Supreme s R ECOMMENDATIONS

trbtd to attributed have ir

program al sanctions on Iran’s economy and whether and economy Iran’s on sanctions al

core goal, goal, core the widespread the widespread inefficiencies withineconomic the country. been fairly been

have stand

h sntos ln. oet atc, uh s attacking as such tactics, Covert alone. sanctions the namely

currently the subject of vigorous discussion among among discussion vigorous of subject the currently

58 success also played a role. M role. a played also -

alone policies in halting Iran’s nuclear ambitions. nuclear Iran’s halting in policies alone

, stopping Iran’s nuclear program. nuclear Iran’s stopping , ful

in d in he US and international sanctions have sanctions international and US he elaying Iran’s nuclear program. nuclear Iran’s elaying

s c problems. The main culprit inculprit main problems.The c

oreover, oreover, n h Iain cnm, the economy, Iranian the on recent recent econ dn Mahmoud ident omic sanctions omic IAEA reports IAEA o far, So d the UN the d

Still

the , CEU eTD Collection uaiain mat f h sntos n ke pbi spot o sntos rm aig the it make to waning, measures take should from countries sanctioning sanctions for support public keep and sanctions the of impact humanitarian of because Iran. sanctioning appearing stopped be should thus and Iran against campaign sanctions the of effectiveness the undermines seriously (Katzman, technology” WMD and weapons acquiring from imposing stricter sanctions. resolve should officials government US Iran, India, differences withChina, against campaign sanctions the leading been has US the Since Russia. and China of approval the get to down watered be to had have resolutions partner trading important by them for shown support lackluster 6.1 refer fr cooperation induce to used be could that action military of threat the and propaganda, diplomacy, as such tools complementary discuss Since effective. more Stay on the Same Page

only ay NGO Many As Iran on sanctions the make to how on recommendations policy three offer will I Below

In fact, there are serious concerns that “China may be refusing or failing to prevent Iran Iran prevent to failing or refusing be may “China that concerns serious are there fact, In without

to thenotnecessarilyother caseofIranmay cases. and apply in note h sntos Ti mgt rd pbi spot o sntoig rn T rdc the reduce To Iran. sanctioning for support public erode might This sanctions. the onre sol resolve should countries the international efforts. international the d

delay. hogot t throughout, s

in my work I have focu have I work my in r rprig that reporting are

Generally speaking, Generally

and and e mat f h sntos n rn a be udrie b the by undermined been has Iran on sanctions the of impact he

Russia

their To pre To om

currently in order to elicit more cooperation from more cooperation these elicit countriesin orderto on

a Iran differences s the sanctions regime regime sanctions the s vent this from further undermining the sanctions, the sanctions, the undermining further from this vent sed only on the use the on only sed

59 over its over hr i a eiu sotg o mdcns n Iran in medicines of shortage serious a is there

possible n mk a coord a make and

nuclear program. nuclear 201

to ship essential essential ship to of , . 40 p. 3, s on Iran on

economic f rn Ms o te UNSC the of Most Iran. of

ntd fot o sanction to effort inated These recommendations These ) Sc non Such . drags on, fault lines are lines fault on, drags sanctions, I will I sanctions, medicines to Iran. Iran. to medicines - compliance not CEU eTD Collection setting upsuch entities. inc To 2013). (Katzman, oil its sell to places other and Europe in companies front establish to trying been has country The sanctions. 6.3 helping and sector,energyits develop county assistingthe economic carrotsaid,more Iran giving oftheform take could These program. nuclear its over cooperation more for exchange in carrots Iran offering Therefore, more. even risen have Iran for compliance sanctionsimposed been sofar.the negative that have to added be could sanctions positive leaders, Iranian of minds the in cost this reduce To high. too chapter, measures positive 6.2 theshortagesreportedly are make to be would goal this toward step important An Close Loopholes Offer process, carrot (p. nota 169). beco not do carrots that ensure to needed are Sticks targets. from cooperation inducing of means a as incentives positive offer to and negotiate to prepared be also must policymakers US instrument. alone But As 2007 Since negative. always not are sanctions Economic Iran views the costs of complying with the demands of the sa the of demands the with complying of costs the views Iran N discussed in cases such as Iran, involving natio Iran, suchin cases involving as the country with its ot

Only ,

such ,

ay oe acin hv be ipsd gis Ia ad h css of costs the and Iran against imposed been have sanctions more many

n hpe 5, Chapter in S

ticks as

giving giving largely caused difficultielargely by me simply rewards for bad behavior, but negations themselves are a a are themselves negations but behavior, bad for rewards simply me , C butAlso

civilian nu civilian economic rease the efficacy of the sanctions, Iran should be banned be should Iran sanctions, the of efficacy the rease

rn a be fnig as o icmet h ipc o the of impact the circumvent to ways finding been has Iran clear programs. arrots aid to the target country. target the to aid nal security nal sanctionsgoals, seldom stand workas a 60

Hufbauer et al. wrote etal. inHufbauer 2007: sdsusd n Chapter in discussed As s in financing (Katzman,s 2013). infinancing

o tee s n vn str even an is there now aig o such for paying As discussed in the previous the in discussed As nctioning countries as being as countries nctioning

shipments

, t 1,

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