U.S sanctions against Iran

Context:

• The U.S administration will target Iran through sanctions and will eventually try to undermine the nuclear deal in the long term.

U.S. sanctions against Iran

• US sanctions against Iran refer to economic, trade, scientific and military sanctions against Iran, which have been imposed by the U.S. Office of Foreign Assets Control, or by the international community under U.S. pressure through the United Nations Security Council.
• Currently, the sanctions include an official ban on dealings with Iran by the United States, and a ban on selling aircraft and repair parts to Iranian aviation companies.

Background:

• In 1979, after the U.S. permitted the exiled Shah of Iran to enter the United States for medical treatment, a group of radical students took action in Tehran by seizing the American Embassy and taking hostage the people inside.
• The United States responded and President Carter issued Executive Order 12170 in November 1979 freezing about $12 billion in Iranian assets, including bank deposits, gold and other properties.
• Some assets — Iranian officials say $10 billion, U.S. officials say much less — still remain frozen pending resolution of legal claims arising from the revolution.
• After the invasion of Iran by Iraq, the United States increased sanctions against Iran.
• In 1984, sanctions were approved that prohibit weapons sales and all U.S. assistance to Iran The Iran Sanctions Act (ISA) that is the basis of the current sanctions against Iran is a revised version of the Iran and Libya Sanctions Act (ILSA) that was signed on 5 August 1996 (H.R. 3107, P.L. 104-172).
• The act was renamed in 2006 when the sanctions against Libya were terminated.
• On 31 July 2013, members of the United States House of Representatives voted 400 to 20 in favor of toughened sanctions.

Current issue:

• The U.S. Treasury Department imposed new sanctions on Iran related to its ballistic-missile program.
• The sanctions target seven entities and five individuals for supporting Iran’s military or the Islamic Revolutionary Guard Corps (IRGC). It also targets an Iran-based transnational criminal organization and three associated persons.
• The move comes a day after U.S President certified that Iran was complying with the nuclear agreement it signed with the U.S. and other world powers.
• Presently, the U.S administration will align with Saudi Arabia and Israel and continue to target Iran through sanctions and even try to undermine the nuclear deal in the long term.

Implementation Day:

• On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States), the European Union, and Iran reached a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful.
• October 18, 2015 marked Adoption Day of the JCPOA, the date on which the JCPOA came into effect and participants began taking steps necessary to implement their JCPOA commitments.
• January 16, 2016, marks Implementation Day of the JCPOA. On this historic day, the International Atomic Energy Agency (IAEA) has verified that Iran has implemented its key nuclear-related measures described in the JCPOA, and the Secretary has confirmed the IAEA’s verification.

The Concerns

• As a result of Iran verifiably meeting its nuclear commitments, the United States is today lifting nuclear-related sanctions on Iran, as described in the JCPOA.
• Even if the U.S. certifies that Iran is compliant with the nuclear deal, Tehran is still on notice for its other activities
• While the JCPOA (Joint Comprehensive Plan of Action) was intended to positively contribute to regional and international peace and security but Iran’s other harmful activities are serving to undercut whatever positive contributions to regional and international peace and security were intended to emerge from the JCPOA.
• Moreover, the policy of controlling Iran could backfire as Iran has already established itself as a rising regional power with substantial geopolitical clout.
• Most importantly, to stabilise Iraq, the U.S. needs Iran’s help.
• There won’t be a long-lasting peace deal in Syria without Iran’s participation and cooperation.
• If the U.S. is serious about working towards peace and stability in West Asia, it should reciprocate Iran’s compliance with the nuclear deal.

Signal to Iran:

• The Treasury is of the opinion that the United States cannot and will not tolerate Iran’s provocative and destabilizing behavior.
• Though till now Iran has not made any such deviatory moves but it is prescriptive for the country to not jeopardize its relationship with the U.S.

How Iran’s nuclear deal affects India: While India’s trade with Iran appears to have long-term benefits in the post-sanctions scenario, businessmen are concerned that some areas will be hit hard.

• Firstly, Current bilateral trade between India and Iran is about $14bn (£8.96bn) with the balance of trade in heavily in Tehran’s favor.
• Tehran points out that once sanctions are lifted it will get better offers from other countries, like Turkey. India has now reportedly agreedto finance the entire scheme under a special mechanism.
• India primarily imports oil from Iran, but has been hampered by restrictions placed by global powers.
• Secondly, due to the sanctions, India has been paying Iran in Indian rupees, with the money kept in an Indian account. In fact, the country is yet to release an estimated $6bn in pending oil payments to Iran.
• Although Delhi, is free to import Iranian oil but will have to pay in dollars.
• Thirdly, importing goods or sending shipments to Iran is currently expensive because of high shipping charges. India hopes the removal of sanctions will make it easier for companies to get shipments.

Suggestions:

• The logical next step of the nuclear agreement should have been an overall improvement in relations between the West and Tehran.

Prior U.S governments were able to set a policy for the Iranian government which peacefully enveloped both the countries.