U.S. Increases Sanctions on Iran, Calls for Greater International Effort

November 23, 2011

On November 21, 2011, President Obama signed Executive Order 13590 in response to Iran’s security threat and continuing violation of international obligations through its nuclear program. Along with the U.S. Department of State and the U.S. Department of the Treasury, the President’s Executive Order (EO) reflects the new actions and additions to existing policies toward Iran. EO 13590 creates sanctions on Iran’s petrochemical industry and expands existing sanctions on Iranian oil and gas business. In addition to earlier sanctions on large-scale exploration investment, the Executive Order includes goods, services, technology, and support for the development of Iranian petroleum resources, under the scope of sanctions. Sanctions would be triggered by single transactions with a minimum market value of $1 million or a series of transactions from an entity that sum to a minimum of $5 million over a 12-month period. Goods, services, technology, and support that significantly influence production of petrochemical products in Iran would trigger sanctions if a single transaction has a fair market value of at least $250,000 or several transactions from an entity with a total fair market value of at least $1 million in a 12-month period. Since the petrochemical sector in Iran is a key source of export revenues, the U.S. will strongly encourage other nations to find alternative petrochemical product suppliers.

An action by the U.S. Department of the Treasury formally identifies the Islamic Republic of Iran as a jurisdiction of “primary money laundering concern” under section 311 of the USA PATRIOT Act. This marks the entire banking sector –both private Iranian banks (all branches and subsidiaries, even those outside of Iran) and the Iranian Central Bank—as risky. The deceptive conduct by financial or other state-owned entities, Iran’s role in terrorism, and its proliferation of weapons of mass destruction drove the United States, United Kingdom, and Canada to isolate the Iranian financial sector. The U.S. Department of State designated several companies and individuals, under the Executive Order 13382 signed in 2005, as participants in Iran’s nuclear program. EO 13382 freezes the assets (under U.S. jurisdiction) of the Nuclear Reactors Fuel Company, Noor Afzar Gostar Company, and many other designated entities, and prohibits U.S. citizens from engaging in transactions with them. Other international authorities are expected to impose aggressive measures on Iran until the nation agrees to negotiate its nuclear program.   

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