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A History Of U.S. Sanctions Against Iran

Newest Round Brings Apparent Results

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A History Of U.S. Sanctions Against Iran

U.S. Treasury Secretary Timothy Geithner and Chinese Premier Wen Jiabao before a meeting in Beijing, China, on January 11. 2012. Timothy Geithner visited China and Japan to discuss U.S. sanctions on Iran with government officials.

Photo by Andy Wong - Pool / Getty Images
Updated May 15, 2013

On December 31, 2011, U.S. President Barack Obama tightened American sanctions on business with Iran. The sanctions are intended to deprive the Iranian nuclear program of the funding it needs to continue.

While the United States has had some sort of sanction levied against Iran for most of 30 years, few of them have levered Iran into compliance with international rules regarding terrorism or nuclear energy. By early 2012, however, evidence appears to be mounting that sanctions -- both by the U.S. and its global allies -- are hurting Iran.

Most of the current sanctions cut into Iran's oil exports, which account for 85% of the country's export revenue. Iran's repeated threats to close the Strait of Hormuz (itself a vital oil conduit) to international use indicates that Iran is kicking at global oil usage to relieve pressure on its own oil industry.

Carter Years

In November 1979, Islamic radicals captured 52 Americans at the U.S. Embassy in Tehran and held them hostage for 444 days. U.S. President Jimmy Carter tried unsuccessfully to free them, including authorizing a military rescue attempt. Iranians did not free the hostages until just after Ronald Reagan replaced Carter as president on January 20, 1981.

In the midst of the crisis, in 1980, the United States broke diplomatic relations with Iran. It has never been restored.

The U.S. also levied its first round of sanctions against Iran during the crisis. In 1980, Carter banned imports of Iranian oil, froze some $12 billion in Iranian assets in the U.S., and later banned all U.S. trade with and travel to Iran. The U.S. lifted the embargoes after Iran released the hostages.

Sanctions Under Reagan

In 1983, the Reagan Administration declared Iran a state sponsor of terrorism. As such the U.S. opposed international loans to Iran.

When Iran began threatening traffic through the Persian Gulf and Strait of Hormuz in 1987, Reagan authorized naval escorts for civilian ships, and he signed a new embargo against Iranian imports.

The United States also banned the sale of "dual use" items to Iran. Dual-use items are civilian goods with the possibility of military adaptation.

The Clinton Years

In 1995, with Iran still labeled a state sponsor of terrorism and amid widespread fear Iran was pursuing weapons of mass destruction, President Bill Clinton expanded U.S. sanctions against Iran. He prohibited all American involvement with the Iranian petroleum industry. In 1997 he banned all American investment in Iran as well as what little U.S. trade remained with the country. Clinton also encouraged other countries to do the same.

Sanctions Under George W. Bush

Under President George W. Bush, the United States repeatedly froze the assets of people, groups, or businesses identified as helping Iran sponsor terrorism, destabilize Iraq, or work on weapons programs. The U.S. also froze the assets of foreign entities believed to be helping Iran in those areas.

The United States under Bush also banned so-called "U-turn" financial transfers involving Iran. According to the U.S. Treasury Department, a U-turn transfer involve Iran but "originate and end with non-Iranian foreign banks."

Obama's Sanctions of Iran

President Barack Obama has been strident with Iranian sanctions. In 2010, he banned some imports of Iranian foodstuffs and carpets. Congress also allowed Obama to tighten Iranian sanctions with the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA). Importantly, Obama can encourage non-U.S. petroleum firms to halt the sale of gasoline to Iran. Iran, which has poor refineries, imports nearly one-third of its gasoline.

The CISADA can also prohibit foreign entities from using American banks if they do business with Iran.

In May 2011, the Obama Administration sanctioned Venezuela's nationalized oil company for trading with Iran. Venezuela and Iran are close allies. Iranian President Mahmoud Ahmadinejad traveled to Venezuela in early January 2012 to meet with President Hugo Chavez, in part, about the sanctions.

In June 2011, the Treasury Department announced new sanctions against Iran's Revolutionary Guard (already named in other sanctions), the Basij Resistance Force, and Iranian law enforcement entities.

Obama ended 2011 by signing a defense funding bill that will allow the U.S. to cease dealing with financial institutions that do business with Iran's central bank. The bill's sanctions will take effect between February and June 2012. Obama has the power to waive aspects of the bill if implementation will hurt the U.S. economy. Limiting access to Iranian oil could drive up gasoline prices.

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