Iran Sanctions (name redacted) Specialist in Middle Eastern Affairs June 7, 2017 Congressional Research Service 7-.... www.crs.gov RS20871 Iran Sanctions Summary A multilateral nuclear accord (Joint Comprehensive Plan of Action, or JCPOA), finalized on July 14, 2015, provides Iran broad relief from U.S., U.N., and multilateral sanctions on Iran’s civilian economic sectors. On January 16, 2016, upon the International Atomic Energy Agency (IAEA) certification that Iran had complied with the stipulated nuclear dismantlement commitments, U.S. Administration waivers of relevant sanctions laws took effect, relevant Executive Orders (E.O.s) were revoked, and corresponding U.N. and EU sanctions were lifted (“Implementation Day”). Remaining in place are those secondary sanctions (sanctions on foreign firms) that have been imposed because of Iran’s support for terrorism, its human rights abuses, its interference in specified countries in the region, and its missile and advanced conventional weapons programs. Also remaining in place are U.S. and most EU sanctions on the Islamic Revolutionary Guard Corps (IRGC), its sanctioned sub-units, commanders, and affiliates. A general ban on U.S. trade with and investment in Iran, including regulations barring transactions between U.S. and Iranian banks, remains in place. Under U.N. Security Council Resolution 2231, most U.N. sanctions terminated as of Implementation Day, but some U.N. restrictions on Iran’s development of nuclear-capable ballistic missiles and its importation or exportation of arms remain in place for several years. Iran was able to develop its nuclear and missile programs and to assist pro-Iranian regional groups and governments even when strict sanctions were in place. Still, the relief from sanctions on Iran’s most vital sectors has returned Iran’s economy to growth and enabled Iran to potentially expand its weapons programs and increase its regional influence. As part of a shift to assertively counter Iran’s regional activities and strategic weapons programs, the Trump Administration has designated for sanctions additional missile and IRGC-Qods Force entities. The Administration asserts its steps do not conflict with U.S. commitments under the JCPOA and the Administration has continued to implement the agreement, including renewing waivers of sanctions laws suspended in accordance with the JCPOA. However, the Administration has announced an Iran policy review and, were the Administration to decide to end U.S. participation in the JCPOA, it could revoke waivers, decline to renew waivers, or sign new sanctions legislation or issue Executive Orders that breach the JCPOA. Some Iran sanctions legislation has advanced in the 115th Congress, such as S. 722. The reimposition of many or all U.S. sanctions would undoubtedly harm Iran’s economy. Iran’s economy shrank by 9% in the two years that ended in March 2014, before stabilizing since 2015 as a result of modest sanctions relief under an interim nuclear agreement. Iran achieved about 7% growth in 2016. Sanctions caused Iran’s crude oil exports to fall from about 2.5 million barrels per day (mbd) in 2011 to about 1.1 mbd by mid-2013, and sanctions relief has enabled the exports to recover to nearly pre-sanctions levels. Sanctions also made inaccessible more than $120 billion in Iranian reserves held in banks abroad, and sanctions relief has enabled Iran to regain access to those funds and Iran’s banks to reintegrate into the international financial system. Foreign energy firms have begun making new investments in Iran’s energy sector. Nuclear negotiations and sanctions relief helped Iran’s President, Hassan Rouhani politically and he was able to defeat a strong hardliner rival in the May 19, 2017, presidential election. See also CRS Report R43333, Iran Nuclear Agreement, by (name redacted) and (name redacted); and CRS Report R43311, Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions, by (name redacted) . Congressional Research Service Iran Sanctions Contents Overview and Objectives ................................................................................................................ 1 Blocked Iranian Property and Assets ............................................................................................... 1 Executive Order 13599 Impounding Iran-Owned Assets .......................................................... 3 Sanctions for Iran’s Support for Terrorism and Destabilizing Regional Activities ......................... 3 Sanctions Triggered by Terrorism List Designation: Ban on U.S. Aid, Arms Sales, Dual-Use Exports, and Certain Programs for Iran ................................................................. 3 Exception for U.S. Humanitarian Aid ................................................................................. 4 Executive Order 13224 Sanctioning Terrorism-Supporting Entities ......................................... 5 Executive Orders Sanctioning Iran’s Involvement in Iraq and Syria ........................................ 5 Ban on U.S. Trade and Investment with Iran .................................................................................. 6 What U.S.-Iran Trade Is Allowed or Prohibited? ...................................................................... 6 Application to Foreign Subsidiaries of U.S. Firms ................................................................... 9 Sanctions on Iran’s Energy Sector ................................................................................................... 9 The Iran Sanctions Act, Amendments, and Its Applications ................................................... 10 Key Sanctions “Triggers” Under ISA ............................................................................... 10 Mandate and Time Frame to Investigate ISA Violations .................................................. 15 Interpretations and Implementation of ISA and Related Laws ......................................... 17 Oil Export Sanctions: Section 1245 of the FY2012 NDAA Sanctioning Transactions with Iran’s Central Bank ...................................................................................................... 20 Implementation: Exemptions Issued ................................................................................. 21 Foreign Exchange Reserves “Lock Up” Provision of ITRSHRA ..................................... 21 Weapons of Mass Destruction, Missile, and Conventional Arms Sanctions ................................. 23 Iran-Iraq Arms Nonproliferation Act and Iraq Sanctions Act ................................................. 23 Anti-Terrorism and Effective Death Penalty Act of 1996 ....................................................... 24 Proliferation-Related Provision of the Iran Sanctions Act ...................................................... 24 Iran-North Korea-Syria Nonproliferation Act ......................................................................... 24 Executive Order 13382 on Proliferation-Supporting Entities ................................................. 25 Foreign Aid Restrictions for Suppliers of Iran ........................................................................ 26 Sanctions on “Countries of Diversion Concern” ..................................................................... 27 Financial/Banking Sanctions ......................................................................................................... 27 Targeted Financial Measures ................................................................................................... 27 Settlements Paid by Banks for Illicit Iran-Related Transactions ...................................... 27 Ban on Iranian Access to the U.S. Financial System ........................................................ 28 CISADA: Sanctioning Foreign Banks That Conduct Transactions with Sanctioned Iranian Banks ....................................................................................................................... 29 Implementation of Section 104: Sanctions Imposed ......................................................... 29 Iran Designated a Money-Laundering Jurisdiction/FATF ....................................................... 30 Divestment/State-Level Sanctions ................................................................................................. 30 Sanctions and Sanctions Exemptions to Support Democratic Change/Civil Society in Iran ........ 31 Expanding Internet and Communications Freedoms .............................................................. 31 Countering Censorship of the Internet: CISADA, E.O. 13606, and E.O. 13628 .............. 31 Laws and Actions to Promote Internet Communications by Iranians ............................... 32 Measures to Sanction Human Rights Abuses and Promote the Opposition ............................ 33 U.N. Sanctions ............................................................................................................................... 34 Congressional Research Service Iran Sanctions Sanctions Relief under Nuclear Deals since 2014 .................................................................. 35 Sanctions Eased by the JPA .............................................................................................. 36 Sanctions Easing Under the JCPOA ................................................................................. 37 U.S. Sanctions that Remain in Place ................................................................................. 38 International