Sanctioned Countries: Iran

Sanctions Against Iran: What You Need To Know

Numerous governments have imposed sanctions against Iran over the past several decades. Iran sanctions measures entail a variety of economic restrictions and have broadly been imposed in response to the Iranian government’s involvement in incidents of international terrorism, its involvement in human rights violations, and to its development of nuclear weapons. 

US Sanctions Against Iran

The United States initially imposed sanctions against Iran in 1979 following the Iranian Revolution and the seizure of the American Embassy in Tehran in which US diplomats were held hostage. While those original sanctions were lifted in 1981, new sanctions were imposed throughout the 1980s by the Carter and Reagan administrations in response to Iran’s actions in the Persian Gulf and its support for militant groups associated with terrorist activities. 

In 1995 President Clinton expanded the US’ Iran sanctions program, banning all US trade with the country. The tough new measures came in response to Iran’s nuclear program and to the Iranian government’s support for Hezbollah, Hamas, and Palestine Islamic Jihad – groups designated by the US as terrorist organizations.

UN Sanctions on Iran

The United Nations imposed sanctions against Iran in 2006 after the International Atomic Energy Agency (IAEA) found that Iran’s government had failed to comply with nuclear weapon non-proliferation agreements. The sanctions introduced embargoes on materials used in the development of nuclear weapons. The UN strengthened those sanctions measures in 2007 and 2008. 

In 2010, the UN aligned with the US Iran sanctions program by targeting Iran’s oil and financial services sectors with new sanctions measures. 

EU Sanctions Against Iran

In addition to compliance with the UN sanctions regime, the European Union has pursued its own sanctions against Iran in response to the Iranian government’s nuclear program and its human rights violations. 

In 2007, the EU imposed sanctions that froze the assets of individuals associated with Iran’s nuclear weapons program. In 2010, the EU strengthened those measures, aligning with the US program by prohibiting trade with all Iranian banks and financial institutions, and restricting trade with a range of Iranian industrial sectors including oil, gas, and petrochemicals. In 2012, the EU introduced a new oil and petrochemical product embargo on Iran and froze assets relating to Iran’s central bank.

Easing of Iranian Sanctions

On April 2nd, 2015, the P5+1 (the five permanent UN Security Council nations plus Germany) reached a provisional agreement with Iran regarding its nuclear weapons program. Known as the Joint Comprehensive Plan of Action (JCPOA), the agreement essentially created a framework for lifting the majority of sanctions against Iran in return for various limits on Iran’s nuclear programs that would last for at least 10 years.

Following the agreement, most international sanctions against Iran were lifted in early 2016. The easing of sanctions made it easier for international investors and entrepreneurs to do business in Iran, and allowed Iranian businesses to re-engage with the global financial system. 

The 2015 agreement did not remove sanctions against Iran completely. Under the current sanctions climate, businesses must continue to conduct the proper research and receive legal advice prior to establishing business relationships with Iranian entities.

Sanctions Against Iran – Recent Activity

On April 2nd, 2015, the P5+1 (the five permanent UN Security Council nations plus Germany) reached a provisional agreement with Iran regarding its nuclear weapons program. Known as the Joint Comprehensive Plan of Action (JCPOA), the agreement essentially created a framework for lifting the majority of sanctions against Iran in return for various limits on Iran’s nuclear programs that would last for at least 10 years.

After criticizing the 2015 deal as ‘one-sided’, the Trump administration withdrew the US from the JCPOA in May 2018. Later that year, the US government re-introduced sanctions against Iran in order to encourage the Iranian government to alter its Middle East policy and to halt its development of ballistic missiles. 

In early 2021, President Biden raised the possibility of lifting US sanctions if Iran achieved compliance with the terms of the JCPOA. The Iranian government previously stated that it would only return to the JCPOA if the US first lifted all sanctions. 

In June 2021, the US dropped some sanctions against Iran, in what the Biden administration described as a “good faith approach” to the ongoing negotiations. The move followed concerns that the sanctions imposed against Iran would exacerbate the health crisis caused by the coronavirus pandemic and hamper the Iranian government’s efforts to acquire and distribute Covid-19 vaccines. 

For up-to-date information on Iran sanctions, visit the following regulator websites:

• OFAC Sanctions
• HM Treasury Sanctions
• EU Sanctions

Iran Sanctions Screening

Given the potential for reputational damage and financial penalties, banks, financial institutions, and obligated entities that deal with customers in Iran must be aware of their sanctions compliance responsibilities. In order to ensure that your business operates in compliance with Iran sanctions, explore our sanctions screening solution, designed to provide real time sanctions data, and configurable to your risk appetite with state-of-the-art machine learning technology.