Iran Sanctions

Publisher Marketing: International sanctions on Iran's key energy and financial sectors harmed Iran's economy and arguably contributed to Iran's acceptance of restrictions on expanding its nuclear program in exchange for modest sanctions relief. The interim nuclear "standstill" agreement (Joint Plan of Action, JPA) began implementation on January 20, 2014, and has been extended twice (until June 30, 2015) to allow time to translate it into a comprehensive nuclear agreement. The economic pressure of sanctions included the following: Iran's oil exports decreased to about 1 million barrels per day (mbd) at the end of 2013-far below the 2.5 million barrels per day Iran exported during 2011. Iran's economy shrank by about 5% in 2013 as Iran's private sector reduced operations and many of its loans became delinquent. Sanctions have constricted Iran's ability to procure equipment for its nuclear and missile programs and to import advanced conventional weaponry. However, the sanctions have not halted Iran's provision of arms to the Assad government in Syria, the Iraqi government, or to other pro-Iranian factions in the Middle East. Nor have sanctions altered Iran's repression of dissent or monitoring of the Internet. The JPA has provided Iran with some sanctions relief, made possible by waivers and suspensions of provisions of several U. S. sanctions laws and executive orders. The core-and the most readily quantifiable component-of the sanctions relief is $700 million per month in access to hard currency from oil sales. Iran is also able to access about $65 million per month in additional hard currency to provide to educational institutions for Iranians studying abroad. The JPA caps Iran's oil exports at 1 mbd but does not cap experts to its oil customers of oil products such as condensates. Iran appears to be increasing exports of condensates to compensate for the limitations on crude oil sales. The JPA suspends sanctions on Iran's auto manufacturing sector and on its sales of petrochemicals, although activity in these sectors does not appear to be producing nearly as much revenue as was estimated. The JPA sanctions relief has halted further economic deterioration but not stimulated any dramatic economic rebound, to date. And, the fall in oil prices since June 2014 has introduced additional uncertainty to Iran's economy. Some assess that Iranian leaders need a comprehensive nuclear deal to achieve the economic improvement demanded by the population. By all accounts, a comprehensive nuclear agreement, if reached, will entail significant easing of U. S. and third country sanctions on Iran-particularly those sanctions that reduced Iran's oil exports and limit its access to the international financial system. The Administration has said that substantial sanctions relief under a comprehensive deal would be provided, but that comprehensive sanctions relief would be stepwise as Iran fulfills the terms of an agreement. Although it might be able to act on its own authority to suspend most sanctions on Iran, the Administration has said it would work with Congress on long-term sanctions relief in the event of a final nuclear deal. Most observers assess that additional U. S. sanctions are likely to be proposed, and perhaps enacted, if negotiations on a comprehensive settlement break down. See also CRS Report RL32048, Iran: U. S. Concerns and Policy Responses, by Kenneth Katzman; CRS Report R43311, Iran: U. S. Economic Sanctions and the Authority to Lift Restrictions, by Dianne E. Rennack; and CRS Report R43492, Achievements of and Outlook for Sanctions on Iran, by Kenneth Katzman.