CRS – Iran: U.S. Economic Sanctions and the Authority to Lift Restrictions. Dianne E. Rennack, Specialist in Foreign Policy Legislation. February 4, 2014.

“The regime of economic sanctions against Iran is arguably the most complex the United States and the international community have ever imposed on a rogue state. Iran’s economy was once integrated into world trade, markets, and banking. As relations deteriorated, for the United States starting during Iran’s 1979 revolution and hostage-taking at the U.S. Embassy, and for the larger international community over more recent human rights and nuclear proliferation concerns, this complete economic integration offered seemingly limitless opportunities to impose economic restrictions and create points where pressure could be applied to bring Iran back into conformity with international norms. The June 2013 election of President Hassan Rouhani seems to have created the possibility of an opening between the United States and Iran. The presidents of each nation addressed a fall meeting of the U.N. General Assembly, and spoke directly to one another shortly thereafter—the first direct contact at the top level in 34 years. Diplomatic staff representing the United States, Russia, China, France, Britain (permanent members of the U.N. Security Council), plus Germany (P5+1), met with Iran’s foreign ministry in mid-October 2013 on the heels of that contact. Over November 7-9, 2013, these negotiators drafted an interim deal that would require Iran to limit its nuclear program and, in exchange, require the United States and others to ease economic sanctions affecting Iran’s access to some of its hard currency held abroad. The P5+1 and Iran negotiators agreed to a Joint Plan of Action (JPOA) on November 24, 2013, under which Iran would commit to placing “meaningful limits of its nuclear program,” and the P5+1 states would “provide Iran with limited, targeted, and reversible sanctions relief for a six-month period.” The sudden possibility that the United States may ease financial sector sanctions, and perhaps  commit to an eventual dismantling of the entire panoply of economic restrictions on Iran affecting  aid, trade, shipping, banking, insurance, underwriting, and support in the international financial institutions, arrives at a time when Congress has been considering additional sanctions on Iran. The House adopted H.R. 850, the Nuclear Iran Prevention Act of 2013, on July 31, 2013, by a vote of 400-20. That act would require new economic restrictions on trade in cars manufacturing and extractive industries, further impede financial activities, and place greater demands for sanctions compliance by third countries. In the Senate, H.R. 850 was referred to the Committee on Banking, Housing, and Urban Affairs, and number of other legislative proposals have been referred to committee that might provide the Senate a quick means to assert Congress’s influence if implementation of the JPOA hits a snag or fails outright. The House Committee on Foreign Affairs and Senate Committee on Foreign Relations have held hearings to assess the JPOA and the United States’ diplomatic and economic options.”