US sanctions against Iran have a long history, dating back to 1979. Over the years, these sanctions have been expanded and intensified, targeting various aspects of Iran's commercial and public life, including its nuclear program, human rights violations, and support for militant groups in the region. In addition to the US sanctions, the UN Security Council and the European Union have also imposed their own set of sanctions on Iran, with the aim of limiting its access to international financial markets and technology. While efforts have been made to lift the sanctions, particularly following the signing of the JCPOA in 2015, the US withdrawal from the agreement in 2018 and subsequent reimposition of economic sanctions have had a significant impact on Iran's economy. The sanctions have led to a decline in revenue, a shortage of goods, and higher inflation rates, making it difficult for Iranians to afford basic goods and services.
Specific Sanctions Against Iran
The United States imposes economic, commercial, scientific, and military sanctions against Iran. The Foreign Assets Control Office manages US economic sanctions. The US sanctions against Iran include the ban on the sale of aircraft and repair parts to the embargo and Iranian aviation companies in US relations with the country.
- The first sanction to Iran takes place in 1979. These sanctions are enforced by the Executive Order, which includes approximately $ 12 billion of ice cream in Iranian assets, including bank deposits, gold, and other properties, and a trade embargo.
- The USA's second sanctions were implemented in 1987 due to Iran's actions against the USA and other ships in the Persian Gulf from 1981-1987. Subsequently, the sanctions were expanded in 1995 to include companies dealing with the Iranian government.
- The third sanction was implemented in December 2006, after Iran refused to comply with its decision to stop the uranium enrichment program. The EU brought additional sanctions to Iran in 2007 in response to concerns about Iran's nuclear program and human rights violations. These various sanctions targeted various aspects of Iran's commercial and public life, including oil, gas, petrochemical investments, refined petroleum products exports, and trade agreements with the Iranian Revolutionary Guards.
- The fourth sanction of the USA came into force in November 2018. They aimed to force Iran to significantly change its policies in the region, including support for militant groups in the region and the development of ballistic missiles. New sanctions targeted the Iranian national bank.
In response to concerns over Iran's nuclear program, the international community, through the United Nations Security Council, imposed a series of sanctions on the country. The sanctions were a result of Iran's non-compliance with its security agreement and the International Atomic Energy Agency's authority over Iran's nuclear activities.
However, in 2015, the P5+1 group, which consists of China, France, Russia, the United Kingdom, the United States, and Germany, reached a 10-year temporary agreement with Iran. The agreement outlined a framework that aimed to eliminate most of the sanctions against Iran's nuclear program in exchange for Iran's commitment to limit its nuclear activities and allow inspections by the International Atomic Energy Agency.
On October 18, 2015, the Joint Comprehensive Plan of Action (JCPOA), the final agreement, was adopted. The JCPOA not only addressed concerns over Iran's nuclear program but also included provisions for lifting sanctions on Iran's economy, including the oil and financial sectors. The lifting of these sanctions allowed Iran to re-engage with the global economy and resume trade with other countries.
On January 16, 2016, most UN sanctions against Iran were lifted, signaling the beginning of a new chapter in Iran's relationship with the international community. This was a significant development for investors and entrepreneurs who were eager to re-establish economic ties with Iran and tap into its potential as a large and growing market in the Middle East. As a result, Iran experienced a surge in foreign investment and trade in the years following the lifting of sanctions.
European Union Sanctions
In addition to the US sanctions, the European Union (EU) has also imposed its own set of sanctions on Iran. These sanctions were introduced in 2010 and aimed to put pressure on Iran's nuclear program by restricting trade, financial transactions, and transportation with the country. The EU also imposed travel bans and asset freezes on individuals and entities involved in Iran's nuclear program.
The EU's sanctions on Iran were similar to those imposed by the US, with the aim of limiting Iran's access to international financial markets and technology. However, unlike the US sanctions, the EU sanctions did not include a complete ban on oil imports from Iran. Instead, the EU placed restrictions on the import and transportation of Iranian oil, which had a significant impact on Iran's economy.
Efforts to Lift Sanctions
Since the implementation of the sanctions, there have been efforts to lift them, particularly following the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015. The JCPOA was a landmark agreement between Iran and the P5+1 (the US, UK, France, China, Russia, and Germany) that aimed to limit Iran's nuclear program in exchange for the lifting of economic sanctions.
Under the JCPOA, Iran agreed to reduce its nuclear activities and allow international inspectors to verify its compliance with the agreement. In return, the US and EU lifted their economic sanctions against Iran, allowing the country to resume its oil exports and access to international financial markets.
However, in May 2018, the US withdrew from the JCPOA and reimposed economic sanctions on Iran. This move was widely criticized by the international community, and Iran responded by increasing its nuclear activities, including the production of enriched uranium beyond the limits set by the JCPOA.
Impact of Sanctions on Iran's Economy
The sanctions have had a significant impact on Iran's economy, particularly on its oil exports. Iran is heavily reliant on oil exports, and the sanctions have made it difficult for the country to sell its oil on the international market. This has led to a decline in revenue for the country, which has had a knock-on effect on its ability to import goods and access to foreign currency.
The sanctions have also led to a shortage of goods in Iran, particularly in the healthcare sector. Iran has been unable to import medicines and medical equipment, which has resulted in a crisis in the healthcare system. In addition, the sanctions have led to higher inflation rates, making it difficult for Iranians to afford basic goods and services.
Furthermore, the sanctions have had an impact on Iran's ability to invest in its infrastructure and develop its economy. The lack of foreign investment has hindered Iran's ability to modernize its economy and create jobs, which has led to high levels of unemployment, particularly among young people.