Summary
New sanctions were adopted on 9 June 2010 over the objections of Brazil and Turkey. UNSCR 1929 significantly intensified focus on implementation and enforcement of UN sanctions against Iran by (1) establishing a Panel of Experts to monitor implementation; (2) providing authority for states to inspect, seize and dispose of suspicious cargo going to and from Iran (on the high seas by request and with the permission of the vessel’s flag state) or transported by IRISL and Iran Air Cargo; (3) prohibiting bunkering services, such as refueling, from Iranian-owned or -contracted vessels, if illicit cargoes were suspected, and (4) expanding the list of targets by 40 entities and 1 individual linked to Iranian nuclear proliferation. The resolution also imposed an investment ban on any foreign commercial activity involving uranium mining, production or use of nuclear material and technology by Iran, as well as an arms imports embargo on specific weapons.
Since 2010, a number of countries, individually or on a regional basis, have imposed additional restrictions on the Iranian economy more generally, including financial dealings with the Central Bank and on investments in Iran’s oil and gas sectors. The US and the European Union especially (but also Australia, Canada, Japan, Norway, and South Korea) have imposed increasingly stringent and more comprehensive sanctions aimed at the Iranian economy. US extraterritorial sanctions on foreign entities doing business with Iranian oil sector (including refined petroleum products and providing shipping insurance) were adopted, leading to a growing number of international companies deciding not to make new investments in Iran. The US Government exempted countries continuing to import Iranian oil (India, China etc.) in exchange for voluntary agreements to restrain the size of their purchases in 2012.
Additional US measures were passed by the Congress in 2012 to include any energy-related services (insurance, reinsurance, shipping) and other economic infrastructure, and to broaden the purpose of sanctions to human rights. The EU also implemented new sanctions targeting Iranian oil, as well as the Iranian Central Bank to cut Iran off from international financial markets, with the 1 July 2012 ban on oil imports and financial activities (including insurance/reinsurance related to Iranian oil and gas imports) being particularly important. In March 2012, SWIFT (Brussels-based Society of Worldwide Interbank Financial Telecommunications) was ordered to isolate Iran further with the cut-off of Iranian banks from the international electronic banking transfer system.
Non-UN sanctions significantly affected Iran’s oil exports, especially the European ban on underwriting insurance for Iranian oil shipments (EU firms provide insurance for 90% of all tanker shipments) but over time, alternatives arose. The Iranian economy suffered rising inflation (more than 30%), a decline in the value of the Iranian Rial (by 80%), and a tightening of credit that affected a broad range of the Iranian population. While Iranian domestic economic policies (in particular the reduction of consumer subsidies initiated in 2010) played a role, there were growing signs that US and EU sanctions were affecting the economy, as evidenced by a drop in oil revenue, rising prices and a devaluing currency.
The threat of Israeli military strikes against Iranian nuclear facilities widely discussed in early 2012, remained in the background through this period. The assassination of Iranian nuclear scientists, as well as revelations of the Stuxnet and other ongoing computer virus attacks targeted at Iranian nuclear facilities became public during this episode, while retaliatory cyber-attacks against US targets attributed to Iran increased.
New rounds of negotiations between Iran and the E3+3 were held in Kazakhstan in February and April 2013, but they were halted due to the large gap between the negotiating positions. In March 2013, the United States and Iran held a secret meeting in Oman to discuss Iran’s nuclear program. Due to the upcoming elections in Iran, the bilateral channel was left open, but inactive.
The 2013 Iranian elections were held in a context of profound economic crisis. Governmental mismanagement, difficult macroeconomic conditions, and EU and US unilateral economic sanctions all contributed to the economic distress. The political coalition that sustained Ahmadinejad, which had already shown weaknesses in the 2009 elections (before additional EU sanctions were applied), was unable to command widespread support with their two main conservative candidates (nuclear negotiator Saeed Jalili and Mohammad Ghalibaf, the mayor of Tehran). As a result, moderate cleric Hassan Rouhani was unexpectedly elected in the first round with slightly more than 50% of the votes, partly due to the withdrawal of more reformist candidate Mohammad Reza Aref and the support of former presidents Mohammad Khatami and Akbar Hashemi Rafsanjani. His main political platforms included the questioning of the national security state in Iran, its surveillance over students and civil society, and a reorganization of institutions to improve economic planning and management. All candidates publicly supported the nuclear program throughout the campaign, although Rouhani emphasized the need to normalize Iran’s foreign relations.
Purposes
Coerce
Coerce Iran to suspend its nuclear activities, and to comply with IAEA requirements.
Constrain
Constrain Iran’s access to sensitive technologies in support of its nuclear and missile programs. With the shift to more aggressive implementation and enforcement of UN sanctions, constraint became the principal purpose.
Signal
Signal to Iran the costs of non-compliance and signal continued support for non-proliferation norms.
Sanctions type
Mandatory
Ongoing sanctions:
- Individual / entity asset freeze;
- Travel ban;
- Arms exports embargo.
Adjustments to ongoing sanctions:
- Proliferation sensitive goods and technology imports and exports ban (updated list of prohibited items, expanded to include a ban on ballistic missiles related technology / assistance transfer).
Newly imposed sanctions:
- Arms imports embargo (on specific weapons);
- Investment ban (prohibition on Iran acquiring interest in any commercial activity involving uranium mining or production or use of nuclear material and technology).
Conditional
Newly imposed conditional restrictions:
- Bunkering ban (if reasonable grounds for sanctions violation).
Designations
Maximum number of designees during the episode: 43 individuals and 78 entities.
Potential scope
Potential scope of impact
UN sanctions can have some non-discriminating impact on the general population, since they include arms embargoes, diplomatic sanctions, and/or restrictions on the conduct of particular activities or the export of specific commodities.
Implementation
Sanctions Committee in place, Panel of Experts created. Designation criteria were specified and targets designated. Enforcement authorities specified.
Effectiveness
Coercion
Policy outcome
Nuclear negotiations continued but demonstrated little progress until after the June elections. Iran had conceded on the fuel swap issue in its agreement with Brazil and Turkey (May 2010), accepting the idea that enrichment could be done by others; negotiations with P5+1 were restarted in 2012 and IAEA visits took place, but little progress was made while Iranian nuclear activities continued.
Sanctions contribution
Concessions were largely a product of diplomatic initiatives. Enhanced implementation of the sanctions took place during this episode, but the link between increased sanctions enforcement and change of behavior in return for negotiations was unclear. Although UN sanctions were used to legitimate non-UN sanctions, they were secondary to the petroleum and financial sectors, including the Central Bank, and not the primary source of escalating pressure on the Iranian economy. The political decline of the coalition sustaining Ahmadinejad as well as the election results cannot be directly attributed to UN sanctions.
Constraint
Policy outcome
PoE reports argued that sanctions were slowing Iranian procurement of some critical items required for its nuclear program, but that further development in the program has continued (June 2012, 2013); enhanced sanctions enforcement (inspections, seizures, export controls, etc.) appear to have forced changes of Iranian procurement strategies and design choices, the effect of which was to increase costs and delay nuclear activities.
Sanctions contribution
The creation of PoE enhanced enforcement capability and PoE’s June 2012 report noted the interdiction of critical items needed for the Iranian nuclear capability, slowing its development; other instruments (cyber sabotage, targeted assassinations, and general economic sanctions from the US and the EU also contributed to constraint.
Signaling
Policy outcome
P5 agreement to put in place a stronger monitoring and enforcement capability sent a strong signal to Iran and underscored the importance of the non-proliferation norm at the beginning of the episode. But the non-unanimous vote, with opposition from Brazil and Turkey, and lack of support for further measures somewhat diluted the degree of stigmatization at the outset, and illustrated the contested nature of norms about enrichment and reprocessing. The broader economic measures imposed by the US/EU since 2011 decreased the clarity of the UN signal (as illustrated by MS concerns about implementation of UN sanctions in the June 2012 PoE report).
Sanctions contribution
Greater monitoring, implementation, and enforcement of UN sanctions signaled to Iran a willingness to reinforce the non-proliferation norm. Reduced clarity of the signal resulted primarily from confusion between UN measures and more stringent non-UN sanctions on the Central Bank and oil. Stigmatization of Iran took place largely due to the government’s own actions, including the violent repression of peaceful protests and the questionable organization of the 2009 elections.
Overall
Unintended consequences
Increase in corruption and criminality, harmful effects on neighboring states, increase in international regulatory capacity in different issue domains, increase in international enforcement capacity in different issue domains, humanitarian consequences, human rights implications for sending states, decline in the credibility and/or legitimacy of UN Security Council, widespread harmful economic consequences.
UN sanctions resolutions guide
Substantive
Existing sanctions
- Imposes UNSCR 1803 travel ban on new designees (Annex C, D, and E of UNSCR 1737, Annex I of UNSCR 1747, Annex I of UNSCR 1803, and Annex I and II present UNSCR) and specifies case-by-case exemptions for humanitarian, religious, and other approved purposes.
- Imposes UNSCR 1737 financial asset freeze on new designees (Annex I), including Islamic Revolutionary Guard Corps – IRGC (Annex II), Islamic Republic of Iran Shipping Lines – IRISL (Annex III), and those engaged in sanctions evasion or violation.
- Decides that UNSCR 1737 referred S/2006/814 list of items is superseded by lists of items in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7/Part 2 and any further items determined by MS to contribute to Iran’s enrichment-related, reprocessing, or heavy water-related activities, or to the development of nuclear weapon delivery systems, and UNSCR 1737 referred S/2006/815 list of items is superseded by list of items in S/2010/263.
New sanctions
- Imposes investment ban on any foreign commercial activity involving uranium mining, production or use of nuclear material and technology listed in INFCIRC/254.Rev.9/Part 1 (especially heavy water, uranium enrichment, and reprocessing activities, and nuclear ballistic missiles capabilities) by Iran, its nationals, and entities under its jurisdiction.
- Imposes arms imports embargo to Iran on specific weapons (battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined by the UN Register of Conventional Arms, or related materiel), including provision of related training, resources, services, advice or assistance.
- Imposes ban on transfer of technology or technical assistance to Iran related to ballistic missiles, including launch and delivery.
Conditional sanctions measures
- Imposes ban on provision of bunkering, such as fuel or supplies, or other services to Iranian-owned or contracted vessels, if reasonable grounds for sanctions violation and specifies humanitarian and inspection, seizure, and disposal exemption.
Enhanced implementation measures
- Calls for inspection of cargo to and from Iran if reasonable grounds for sanctions violation.
- Authorizes all MS to seize and dispose of items in sanctions violation.
- Decides on intensification of sanctions implementation.
Recommended additional measures
- Requires MS to exercise vigilance when doing business with entities incorporated in Iran or subject to Iran’s jurisdiction, including IRGC and IRISL, if reasonable grounds for sanctions violation or contribution to activities subject to sanctions.
- Calls upon MS to exercise vigilance and restraint over supply, sale, transfer, provision, manufacture and use of arms and related materiel not subject to arms imports embargo to Iran.
