Washington Tightens the Screws:
An overview of nonproliferation statutes and executive orders related to Iran
November 2006
As the U.N. Security Council debates how to sanction Iran for its nuclear violations, it is worth recalling the breadth of U.S. laws restricting trade with and punishing proliferation to Iran. These restrictions are an important part of any U.S. strategy to contain Iran’s efforts to build mass destruction weapons and to limit its support for international terrorism. They might also serve as a menu of options for how other countries could affect Iranian behavior.
U.S. restrictions on general trade and investment with Iran were successively
tightened via executive orders in 1987, in 1995 and in 1997, culminating in
the near total embargo that exists today. Steps were also taken to target proliferation
in general, mostly via amendments to the Arms Export Control Act in the 1990s.
These efforts have been supplemented by laws that target proliferation to Iran
specifically, such as the Iran-Iraq Nonproliferation Act and the statute passed
in 2000 as the Iran Nonproliferation Act. Most recently, in October 2006, the
Iran Freedom Support Act (IFSA) amended a 1996 statute to include strong penalties
for proliferation to Iran. IFSA also builds on a more recent movement to block
Iran from raising funds for proliferation by expanding an anti-terrorism money
laundering statute to allow its use against entities involved in proliferation.
This document serves as a reference to the U.S. laws that establish the trade
and investment embargo and that punish those who proliferate to Iran. Wherever
possible, it presents under a single entry information on authorities that
have been superseded or consolidated.
1979: Executive Order 12170
Declares a national emergency during the hostage crisis and blocks property
interests linked to the government of Iran. The emergency has been renewed
annually since that time.
1981: Algiers Accords
Trade restrictions are relaxed with the signing of an agreement to release
the hostages and to create an Iran-U.S. Claims Tribunal in the Hague.
1984: Iran designated as a state sponsor of terrorism
Countries so designated by the Secretary of State are subject to restrictions
on U.S. foreign assistance, to a ban on U.S. defense exports and sales, to
controls over U.S. exports of dual use items, and to various financial and
other restrictions. The State Sponsors of Terrorism list currently includes
Cuba, Iran, North Korea, Sudan and Syria.
1987: Executive Order 12613
Bans imports of Iranian goods and services, because of Iran’s support
for terrorism and its military action against neutral shipping in the Persian
Gulf. The import ban and other restrictions on U.S. trade with Iran are administered
by the Treasury Department through the Iranian Transaction Regulations.
1990 et seq.: Missile
proliferation sanctions
of the
Arms Export Control Act
Authorizes sanctions against foreign entities (or U.S. entities acting illegally)
and any successor entities that knowingly transfer, conspire or attempt to
transfer, or facilitate the transfer of missile technology to countries that
are not members of the Missile Technology Control Regime (MTCR). Sanctions
for MTCR category I transfers include a ban on U.S. government contracts
and on purchases of U.S. Munitions List items for at least two years. Sanctions
for MTCR category II transfers include a two year ban on U.S. government
contracts relating to missiles and a ban on purchases of missile-related
technology. A sanctioned foreign entity may also be barred from selling its
goods in the United States for at least two years, if its activities “substantially
contributed” to missile development in a non-MTCR country.
1991: Chemical or biological weapons proliferation sanctions
of the Arms Export
Control Act
Authorizes sanctions against foreign persons who knowingly and materially contribute
to the use, development, production, acquisition or stockpiling of chemical
or biological weapons by certain countries or entities. Sanctions must be applied
for at least one year and include a ban on contracts with the U.S. government
and a prohibition on imports to the United States. Sanctions are also applicable
to any successor or affiliate, as well parents who knowingly assist in the
proliferation activities.
1992: Iran-Iraq Nonproliferation Act
Authorizes the President to sanction persons or countries that knowingly and
materially contribute to efforts by Iran or Iraq to acquire weapons of mass
destruction and advanced conventional weapons. Mandatory sanctions against
persons include a ban on U.S. government contracts and on buying or selling
goods that require a U.S. export license. Foreign countries are barred from
receiving U.S. government assistance, from purchasing items on the U.S. Munitions
List, and are suspended from military and dual-use technical cooperation
agreements with the United States. Also prohibits military and commercial
arms sales and exports of controlled dual-use and nuclear goods to Iran.
Sanctions are also applicable to any successor, parent or subsidiary.
1994 et seq.: Nuclear proliferation sanctions
of the Arms Export Control Act
Prohibits economic assistance to countries which provide or receive nuclear
enrichment goods or technology outside multilateral auspices; to countries
which provide or receive nuclear reprocessing goods or technology; and to
non-nuclear weapon states that receive illegal U.S. exports intended to make
a material contribution to building a nuclear weapon. Also bans U.S. financial
assistance, and military and dual-use exports, to countries knowingly involved
in helping a non-nuclear weapon state make or use a nuclear weapon.
1994: Nuclear Proliferation Prevention Act
Prohibits U.S. government procurement from entities found to have materially
contributed (through exports) to the efforts of another entity or non-nuclear
weapon state to acquire a nuclear weapon or unsafeguarded special nuclear
material. Sanctions are also applicable to any successor entity, as well
as parents, subsidiaries or affiliates knowingly assisting in the proliferation
activities.
1994 et seq.: Executive Order 12938
Consolidates and supersedes previous Executive Orders regarding proliferation.
Gives the Secretaries of State and Commerce the power to control exports
that help countries “develop, produce, stockpile, deliver, or use” mass
destruction weapons and their means of delivery, and authorizes penalties
against foreign entities for mass destruction weapon and missile proliferation.
Penalized foreign persons are barred from selling their goods in the United
States and to the U.S. government, and from receiving U.S. assistance. Foreign
countries that acquire or use chemical or biological weapons are barred from
receiving U.S. assistance and U.S. defense and national security-sensitive
goods, and are restricted from receiving U.S. exports and from selling their
goods in the United States.
E.O. 12938 superseded and revoked the 1990 Executive Order 12735, which declared the proliferation of chemical and biological weapons a national emergency. That Order provided the authority to sanction foreign persons for contributing to chemical and biological weapons proliferation and foreign countries that have used, prepared to use, or developed such weapon. E.O. 12938 was itself amended and expanded in 1998 by E.O. 13094, which clarified that foreign entities would be penalized for proliferation of all mass destruction weapons or missiles, and added a ban on U.S. government assistance to such entities.
1996: Iran Sanctions Act
Initially aimed at preventing Iran from using petroleum resources to fund its
unconventional weapon programs and support of terrorism. Authorizes sanctions
on entities (and successors) that, “with actual knowledge,” invest
over $20 million a year in the development of Iran’s petroleum resources,
and on entities (and successors) that knowingly make a material contribution
to Iran’s ability to acquire or develop mass destruction weapons or
destabilizing amounts or types of conventional weapons. Barring certain exceptions,
the President is required to impose two of six penalties on the sanctioned
entity. Penalties include the denial of any exports from the United States
that require U.S. government review or an export license, a ban on U.S. government
procurement, limits on loan assistance from U.S. financial institutions,
and restrictions on imports to the United States.
This Act was first passed in 1996 as the Iran and Libya Sanctions Act (ILSA) and was amended and extended in 2001. In 2006, the Act was extended until December 31, 2011, and was amended, among other things, to remove its application to Libya and to apply proliferation-related sanctions to Iran.
1997: Executive Order 13059
Consolidates and clarifies Executive Orders 12957 and 12959 to confirm that
virtually all (with exceptions for some existing licenses ) trade and investment
activities with Iran by U.S. entities, wherever located, are prohibited.
This includes indirect sales, sales through third countries and reexports
to Iran. These restrictions on U.S. trade with Iran are administered by the
Treasury Department through the Iranian Transaction Regulations.
E.O. 12957, published in early 1995, barred U.S. companies from developing petroleum resources in Iran. The Order declared a national emergency with respect to Iran pursuant to the International Emergency Economic Powers Act; the emergency has been renewed annually since then. Shortly thereafter, E.O. 12959 barred virtually all U.S. trade with and investment in Iran, as well as the reexport of U.S. goods to Iran through third nations. Restrictions in these three Executive Orders were also codified by the Iran Freedom Support Act in 2006.
2000 et seq.: Iran, North Korea, and Syria Nonproliferation Act
Authorizes sanctions on foreign entities that knowingly traffic to or from
Iran, North Korea or Syria in goods, services, or technology that materially
contributes to those countries' development of nuclear, biological, or chemical
weapons, or ballistic or cruise missiles. Sanctions include a ban on U.S.
government assistance, on the sale of U.S. Munitions List items, and on U.S.
government procurement, the denial of U.S. dual-use exports that require
a license and the suspension of all such existing licenses. Sanctions on
an entity are also applicable to any successor, subsidiary or subunit entity.
This Act was first passed as the Iran Nonproliferation Act of 2000, and included a prohibition on “extraordinary payments” to Russia associated with the International Space Station unless Russia demonstrated “a sustained commitment to seek out and prevent the transfer” of weapons of mass destruction related goods, services or technology to Iran. The Act’s application was extended to Syria through the Iran Nonproliferation Amendments Act of 2005, which also authorized penalties against proliferators from the countries identified in the statute, loosened requirements to allow for U.S. payments to the Russian space agency and broadened the Act’s penalties to also apply to foreign governments. The Act was broadened to include North Korea in 2006.
2005: Executive Order 13382
Blocks the assets of persons who engaged in or attempted to engage in activities
that made a material contribution, or that posed a risk of materially contributing
to the proliferation of mass destruction weapons and their means of delivery.
Also blocks the assets of agents and subsidiaries and those who aid such “blocked” persons.
U.S. persons are prohibited from dealing with any of these “blocked” persons.
2006: Iran Freedom Support Act
Renames the Iran and Libya Sanctions Act of 1996 as the Iran Sanctions Act
of 1996, and extends it until 2011. Codifies restrictions on U.S. trade and
investment in Iran imposed through Executive Orders 12957, 12959 and 13059.
Amends an anti-terrorism money laundering statute to allow its use against
entities involved in the proliferation of weapons of mass destruction.