Iran Sanctions: Unpacking Global Pressure & Impact

Hannah Stiedemann 21 Jun 2025

The landscape of international relations is often shaped by complex tools of diplomacy and coercion, and few nations have experienced the breadth and depth of these measures quite like Iran. For decades, a intricate web of international sanctions against Iran has been meticulously woven by a multitude of countries and international bodies, primarily led by the United States. This multifaceted pressure campaign aims to influence Iran's policies, ranging from its nuclear ambitions to its regional activities and human rights record.

Once holding the unenviable title of the most sanctioned country in the world, Iran was only recently surpassed by Russia following its full-scale invasion of Ukraine in February 2022. This long-standing and evolving sanctions regime represents perhaps the most comprehensive effort ever marshaled by the international community to pressure a sovereign nation. Understanding the origins, scope, and impact of these sanctions is crucial for anyone seeking to grasp the dynamics of modern geopolitics and the enduring challenges faced by the Islamic Republic of Iran.

A History of Pressure: The Origins of Sanctions Against Iran
Key Players and Their Approaches to Sanctions
The Breadth of Sanctions: Targeting Iran's Economic Lifelines
Impact and Consequences of Sanctions on Iran
The Nuclear Deal and the Snapback Mechanism
Recent Developments and Evolving Sanctions Triggers
Navigating the Sanctions Landscape for Citizens and Businesses
The Future of International Sanctions Against Iran

A History of Pressure: The Origins of Sanctions Against Iran

The story of international sanctions against Iran is deeply rooted in geopolitical events spanning several decades. The initial significant imposition of restrictions by the United States dates back to 1979, following the dramatic seizure of the U.S. Embassy in Tehran. This pivotal event marked the beginning of a long and complex relationship characterized by mistrust and punitive measures. Since then, the rationale for sanctions has expanded considerably, evolving to address a multitude of concerns held by the international community.

Over the years, these concerns have primarily revolved around Iran's nuclear program, its development and proliferation of ballistic missiles, its alleged support for terrorism, and its human rights record. The comprehensive nature of these measures, often described as a patchwork of sanctions, reflects the diverse priorities and tools employed by different countries. Initially, sanctions were often bilateral, but over time, they became increasingly multilateral, involving coordinated efforts by various global powers and international bodies.

It's important to note that while the United States has consistently been the primary architect and enforcer of these sanctions, other nations and entities have also played crucial roles. This collective approach has aimed to exert maximum pressure on Iran, with the ultimate goal of compelling it to comply with international norms and agreements. The sheer scale and duration of these sanctions have made them a defining feature of Iran's modern history, significantly shaping its economy, foreign policy, and domestic landscape.

Key Players and Their Approaches to Sanctions

The global effort to impose international sanctions against Iran is not a monolithic endeavor. Instead, it involves several key players, each with their own legal authorities, objectives, and methods of implementation. Understanding these distinct approaches is vital to appreciating the complexity and reach of the sanctions regime.

The United States: A Pioneering Force

The United States has been at the forefront of imposing restrictions on activities with Iran since 1979. These restrictions operate under various legal authorities, with the Department of State’s Office of Economic Sanctions Policy and Implementation responsible for enforcing and implementing a number of U.S. sanctions programs that restrict access to the United States. The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers these sanctions and provides extensive guidance on a variety of subjects related to the Iran sanctions. OFAC is a crucial entity, regularly issuing new designations and updates.

U.S. sanctions target the Iranian government and entities involved in nuclear proliferation, terrorism, human rights abuses, and other destabilizing activities. Comprehensive measures include asset freezes, prohibitions on transactions, and restrictions on trade. Key Executive Orders (E.O.) such as 13902, 13846, 13949, 13876, 13871, and 13608 underscore the legal basis for these actions. For instance, E.O. 13902 specifically targets Iran’s financial and petroleum and petrochemical sectors. Recent actions have included sanctioning oil brokers in the United Arab Emirates (UAE) and Hong Kong, as well as entities and vessels involved in the trade of Iranian petroleum and petrochemicals, which generate billions of dollars for the Iranian regime.

The U.S. Congress has also played a significant role, notably adopting the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA). This act targeted firms investing in Iran’s energy sector or selling refined petroleum to Iran, and foreign banks doing business with designated Iranian banks. The U.S. has also imposed sanctions on the Atomic Energy Organization of Iran and other companies linked to its nuclear program, as well as dozens of banks, including the Central Bank of Iran.

In the absence of diplomatic or consular relations of the United States of America with the Islamic Republic of Iran, the Swiss government, acting through its embassy in Tehran, has served as the protecting power of the USA in Iran since May 21, 1980. This arrangement facilitates communication and assistance for U.S. citizens seeking help.

European Union and United Kingdom: Autonomous Measures

While often coordinating with the U.S., the European Union (EU) and the United Kingdom (UK) also impose their own autonomous sanctions on Iran. These measures are frequently related to human rights abuses and Iran’s nuclear program, reflecting their specific policy priorities. Both the EU and UK already have hundreds of sanctions in place against Iran, demonstrating a long-standing commitment to pressuring the regime.

The EU, for example, agreed to a targeted set of sanctions on Iran, which often include asset freezes and travel bans on individuals and entities deemed responsible for human rights violations or involvement in proliferation activities. Their approach, while aligned with broader international goals, often emphasizes diplomatic engagement alongside punitive measures.

United Nations and International Frameworks

The United Nations Security Council (UNSC) has also adopted resolutions imposing sanctions on Iran, particularly concerning its nuclear program. These UN sanctions are binding on all UN member states. Following the 2015 Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, most international sanctions against Iran were lifted in early 2016, as outlined in UNSC Resolution 2231. This resolution detailed the exact timing for the reimposition of sanctions, stating that all UN member states would enforce sanctions on Iran simultaneously if certain conditions were met – a mechanism often referred to as "snapback."

However, despite the JCPOA, the 2015 agreement did not remove sanctions against Iran completely, and the U.S. later pursued a "maximum pressure" campaign, seeking to restore international sanctions and restrictions on Iran. This highlights the complex interplay between multilateral agreements and unilateral actions by individual states.

Beyond traditional UN sanctions, new international frameworks have emerged. On July 20, 2023, the Council of the European Union established a dedicated framework for sanctions in view of Iran's military support of Russia's war of aggression against Ukraine. The scope of this framework was broadened on May 14, 2024, further reflecting concerns over Iran’s military support of armed groups in the Middle East and Red Sea region and its involvement in drone and missile attacks.

The Breadth of Sanctions: Targeting Iran's Economic Lifelines

The patchwork of international sanctions against Iran is perhaps the most comprehensive sanctions effort ever marshaled by the international community. Organized by different countries with different priorities using different tools, these sanctions have systematically targeted key sectors of the Iranian economy to limit the regime's ability to fund its controversial programs and destabilizing activities.

A primary focus has been Iran's financial sector. Sanctions have targeted dozens of Iranian banks, including the Central Bank of Iran, severely restricting their access to the international financial system. This includes measures against "Iranian shadow banking infrastructure," as highlighted by recent U.S. actions. These financial restrictions aim to cut off the flow of funds that support Iran’s nuclear program, its development and proliferation of provocative ballistic missiles, and its financing of proxy groups.

The petroleum and petrochemical sectors, which are the lifeblood of Iran's economy, have also been subjected to relentless pressure. Sanctions target firms investing in Iran’s energy sector, those selling refined petroleum to Iran, and entities involved in the trade of Iranian oil and petrochemicals. This includes imposing sanctions on oil brokers in the UAE and Hong Kong, and on specific entities and vessels involved in this trade. The objective is clear: to limit the regime’s ability to earn critical energy revenues that could be used to undermine stability in the region and attack U.S. interests or allies, as seen following Iran's direct attacks on Israel.

Beyond these major sectors, sanctions also extend to other areas deemed critical to Iran's proliferation activities. For instance, the U.S. has imposed sanctions on the Atomic Energy Organization of Iran and other companies it says are linked to Iran's nuclear program. Furthermore, restrictions on trade encompass a wide array of goods and technologies that could contribute to Iran's military capabilities or nuclear ambitions.

The cumulative effect of these measures is to isolate Iran financially and economically, making it exceedingly difficult for the country to conduct international trade, attract foreign investment, and access necessary goods and services. This economic pressure is designed to compel a change in behavior, forcing Iran to reconsider its policies in line with international demands.

Impact and Consequences of Sanctions on Iran

The imposition of extensive international sanctions against Iran has had profound and far-reaching consequences on the country's economy, society, and political landscape. While the precise extent of the impact is often debated, there is a broad consensus that these measures have significantly hampered Iran's economic development and its integration into the global economy.

Economically, sanctions have led to a substantial decline in oil revenues, which are crucial for the Iranian government's budget. This has resulted in currency devaluation, high inflation, and reduced foreign investment. Businesses, both domestic and international, face immense challenges in conducting transactions with Iran due to the risk of secondary sanctions and the difficulty of finding financial channels. This has stifled economic growth, increased unemployment, and made it harder for ordinary Iranians to access essential goods, including medicines and other humanitarian items, despite official exemptions for such trade.

Politically, the sanctions have fueled a complex internal debate within Iran. While some factions advocate for greater engagement with the international community to alleviate economic pressure, others emphasize self-reliance and resistance against external coercion. The sanctions have also been used by the Iranian government to rally nationalistic sentiment and blame external forces for domestic economic woes. However, they have also contributed to public discontent and protests, particularly when economic hardship becomes severe.

On the international stage, sanctions have played a key role in convincing Iran to accept initial restraints on its nuclear program and negotiate over its future. The very existence of these sanctions was a significant leverage point during the negotiations that led to the Joint Comprehensive Plan of Action (JCPOA) in 2015. However, the effectiveness of sanctions in achieving broader behavioral changes remains a subject of ongoing discussion among policymakers and analysts. While they undeniably exert pressure, they do not always lead to the desired outcomes and can sometimes entrench hardline positions within the targeted country.

The Nuclear Deal and the Snapback Mechanism

A pivotal moment in the history of international sanctions against Iran came with the negotiation and signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015. This landmark agreement, reached between Iran and the P5+1 group of world powers (China, France, Germany, Russia, the United Kingdom, and the United States), aimed to ensure that Iran's nuclear program would be exclusively peaceful in exchange for sanctions relief.

Following the agreement, most international sanctions against Iran were lifted in early 2016. This included a significant portion of the sanctions imposed by the United Nations, the European Union, and the United States. The lifting of these sanctions was intended to provide Iran with economic benefits, encouraging its continued adherence to the terms of the nuclear deal. It marked a period of cautious optimism for Iran's reintegration into the global economy.

However, it is crucial to understand that the 2015 agreement did not remove sanctions against Iran completely. Certain U.S. sanctions, particularly those related to human rights, terrorism, and ballistic missile development, remained in place. Furthermore, the JCPOA included a "snapback" mechanism, outlined in UN Security Council Resolution 2231. This mechanism stipulated that if Iran failed to comply with the terms of the deal, all UN member states would enforce sanctions on Iran simultaneously, reactivating the Security Council resolutions and the sanctions they contained at precisely 00:00 GMT on a specified date.

The landscape shifted dramatically in 2018 when the United States, under a new administration, withdrew from the JCPOA and began restoring "maximum pressure" on Iran. This move led to the reimposition of U.S. sanctions that had been lifted under the deal, significantly undermining the economic benefits Iran had gained. The U.S. also sought to trigger the snapback mechanism at the United Nations, arguing that Iran was in non-compliance, although this move faced opposition from other JCPOA signatories who argued that the U.S. had lost its standing to invoke snapback after withdrawing from the deal.

The JCPOA and its subsequent unraveling highlight the complex and often contentious nature of international agreements and the challenges of maintaining a unified approach to sanctions. The debate over the deal's effectiveness and the legitimacy of the snapback mechanism continues to shape discussions about Iran's nuclear program and the future of sanctions.

Recent Developments and Evolving Sanctions Triggers

The dynamics of international sanctions against Iran are constantly evolving, driven by new geopolitical events and Iran's changing regional and global roles. Recent years have seen new justifications and frameworks for imposing additional pressure on Tehran, moving beyond the traditional focus on the nuclear program.

One significant development is the establishment of a dedicated framework for sanctions by the Council of the European Union on July 20, 2023. This framework was specifically created in view of Iran's military support of Russia's war of aggression against Ukraine. This marked a new dimension to EU sanctions, directly linking Iran's actions in a distant conflict to punitive measures. The scope of this framework was further broadened on May 14, 2024, to encompass Iran’s military support of armed groups in the Middle East and Red Sea region, and its involvement in drone and missile attacks. This expansion reflects growing international concern over Iran's role in regional instability and its provision of advanced military technology to non-state actors.

The United States has also continued to expand its sanctions in response to recent events. Following Iran's direct assault on Israel on a Saturday, and its second direct attack on Israel in October 2023, Washington intensified financial pressure. The U.S. expanded sanctions on Iran’s petroleum and petrochemical sectors. This action was explicitly taken to limit the Iranian regime’s ability to earn critical energy revenues, which the U.S. asserts are used to undermine stability in the region and attack U.S. interests and allies. This demonstrates a proactive approach to using sanctions as a direct response to perceived aggressive actions by Iran.

The latest moves by various international actors underscore that the rationale for sanctions against Iran is diversifying. While nuclear proliferation remains a core concern, Iran's military assistance to Russia, its support for armed groups in the Middle East, and its direct actions against regional adversaries are increasingly becoming significant triggers for new rounds of punitive measures. This ongoing adaptation of sanctions frameworks reflects a global commitment to addressing Iran's multifaceted challenges to international security and stability.

Navigating the Sanctions Landscape for Citizens and Businesses

The complex and ever-changing nature of international sanctions against Iran presents significant challenges for individuals and entities seeking to understand and comply with the regulations. For U.S. citizens, navigating this landscape can be particularly daunting, especially given the absence of direct diplomatic relations between the United States and Iran.

If you are a U.S. citizen seeking assistance in Iran, the Swiss government, acting through its embassy in Tehran, has served as the protecting power of the USA in Iran since May 21, 1980. This means that for consular services and assistance, U.S. citizens would typically contact the Swiss Embassy in Tehran. This arrangement is crucial for providing support in a country where direct U.S. diplomatic presence is lacking.

For businesses, especially those with international operations, understanding the nuances of Iran sanctions is paramount to avoid severe penalties. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is the primary body providing guidance on a variety of subjects related to the Iran sanctions. OFAC's website offers detailed regulations, general licenses, and frequently asked questions (FAQs) that explain what activities are restricted, what licenses might be available, and who is targeted by sanctions. Compliance involves rigorous due diligence, screening of parties involved in transactions, and careful assessment of the goods and services being exchanged.

The risk of secondary sanctions is a major concern for non-U.S. entities. These sanctions can target foreign companies that engage in certain activities with Iran, even if those activities are not prohibited under their own national laws. For example, foreign banks doing business with designated Iranian banks or firms investing in Iran’s energy sector could face U.S. penalties, including restrictions on their access to the U.S. financial system. This extraterritorial reach of U.S. sanctions compels global companies to adhere to U.S. regulations to avoid being cut off from the world's largest economy.

Given the complexity, many businesses and individuals engage legal counsel specializing in sanctions law to ensure compliance. The consequences of non-compliance can be severe, ranging from hefty fines to imprisonment and reputational damage. Therefore, staying informed about the latest sanctions updates and seeking expert advice is not merely advisable but often a necessity for anyone operating in or around the Iranian economic sphere.

The Future of International Sanctions Against Iran

The future of international sanctions against Iran remains uncertain and highly dependent on a confluence of factors, including Iran's internal political developments, its regional behavior, the trajectory of its nuclear program, and the broader geopolitical landscape. The existing "patchwork" of sanctions, organized by different countries with different priorities using different tools, is a testament to the enduring challenges of achieving a unified international approach.

One key determinant will be the ongoing efforts to revive or replace the Joint Comprehensive Plan of Action (JCPOA). While the U.S. withdrew from the deal and reimposed "maximum pressure," other signatories have expressed a desire for a return to mutual compliance. Any future agreement on Iran's nuclear program would likely involve significant adjustments to the sanctions regime, potentially leading to the lifting of some restrictions in exchange for verifiable limitations on Iran's nuclear activities. However, the path to such an agreement is fraught with difficulties, given the deep mistrust between parties and the expanded scope of Iran's nuclear program since the U.S. withdrawal.

Beyond the nuclear issue, Iran's regional conduct and its support for various armed groups will continue to be a significant factor. The recent expansion of EU and U.S. sanctions due to Iran's military support for Russia and its actions in the Middle East and Red Sea region indicates a growing international consensus that these activities warrant punitive measures. Should Iran continue or escalate these actions, it is highly probable that new rounds of sanctions, targeting specific individuals, entities, and sectors, will be imposed.

Human rights abuses within Iran also remain a persistent concern for Western powers, particularly the EU and UK, who impose autonomous sanctions on this basis. Continued crackdowns on dissent or widespread human rights violations could trigger further targeted sanctions, impacting specific officials and institutions.

Ultimately, the effectiveness of sanctions in compelling Iran to change its policies is a complex question. While sanctions undeniably impose economic costs and limit the regime's resources, they have not always led to the desired political outcomes. The Iranian government has shown a remarkable ability to adapt and find ways to circumvent restrictions, often through illicit networks and shadow banking infrastructure. The ongoing debate among international policymakers revolves around whether more pressure or more engagement is the most effective path forward. The global community will continue to grapple with this intricate balance, ensuring that sanctions remain a prominent, albeit evolving, tool in the diplomatic arsenal concerning Iran.

The comprehensive measures, including asset freezes, prohibitions on transactions, and restrictions on trade, will likely remain a key component of international policy towards Iran for the foreseeable future, as nations seek to pressure Iran to comply with international norms and agreements.

Conclusion

The story of international sanctions against Iran is a multifaceted narrative of geopolitical pressure, economic hardship, and diplomatic maneuvering. From their origins in the aftermath of the 1979 revolution to their current comprehensive scope, these sanctions have been a defining feature of Iran's engagement with the world. They have targeted the nation's financial, petroleum, and petrochemical sectors, its nuclear program, and its support for regional proxies, all while aiming to compel a change in behavior.

While the 2015 nuclear deal offered a brief respite, the reimposition of U.S. "maximum pressure" and new sanctions frameworks addressing Iran's military support for Russia and regional destabilization have ensured that the pressure remains intense. The sheer scale of these measures, making Iran one of the most sanctioned countries globally, underscores the international community's deep concerns.

Understanding this complex web of restrictions is crucial for anyone interested in global affairs, international trade, or the future of the Middle East. The impact on Iran's economy and society is undeniable, yet the political outcomes remain a subject of ongoing debate. As the world continues to grapple with Iran's role on the global stage, the intricate dance of sanctions and diplomacy will undoubtedly continue to shape the narrative.

What are your thoughts on the effectiveness of these sanctions? Do you believe they achieve their intended goals, or do they create unintended consequences? Share your perspective in the comments below, and if you found this article insightful, please consider sharing it with others who might benefit from understanding this critical geopolitical issue. For more in-depth analyses of global affairs, explore other articles on our site.

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International Relations - MA - Postgraduate courses - University of Kent

WTA’s International Manufacturers Roundtable

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Iran Sanctions: Unpacking Global Pressure & Impact

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