Iran Sanctions

Kenneth Katzman
Specialist in Middle Eastern Affairs

The principal objective of international sanctions—to compel Iran to reach an agreement that ensures that its nuclear program can only be used for civilian purposes—has not been achieved to date. However, the international community has imposed progressively strict sanctions on Iran’s key economic sectors, harming Iran’s economy to the point where key Iran leaders may be considering a nuclear compromise. Among the key causes of Iranian leaders’ growing concern:

• Oil exports provide about 70% of Iran’s government revenues and Iran’s oil exports have declined to about 1.25 million barrels as of early 2013—a halving from the 2.5 million barrels per day Iran exported during 2011. The causes of the drop has been a European Union embargo on purchases of Iranian crude oil that took full effect on July 1, 2012 and decisions by several other Iranian oil customers to substantially reduce purchases of Iranian oil in order to comply with a provision of the FY2012 National Defense Authorization Act (P.L. 112-81). To date, 20 countries have been deemed in compliance. 
• The loss of hard currency revenues from oil, coupled with the cut-off of Iran from the international banking system, have caused a collapse in the value of Iran’s currency, the rial. That collapse prompted street demonstrations in October 2012. Other effects include high inflation (over 50% according to many experts), and a sharp drop in industrial production, as well as unintended consequences that include a shortage of some advanced Western-made medicines. 
• Some Iranians, particularly those linked to the government and its hard currency reserves, are finding ways around the sanctions, including: creating front companies, using informal banking exchange mechanisms, cornering the market for some imports, investing in hard assets such as real estate and precious metals, and profiting from the drop in the value of Iran’s currency. 

Among other effects, sanctions may be slowing Iran’s nuclear and missile programs by hampering Iran’s ability to obtain some needed technology from foreign sources. However, Department of Defense and other assessments indicate that sanctions have not stopped Iran from developing some new weaponry with indigenous skills. Iran is also judged not complying with U.N. requirements that it halt any weapons shipments outside its borders, particularly with regard to purported Iranian weapons shipments to help the embattled Assad government in Syria. And, international sanctions do not appear to have altered Iran’s repression of dissent or its efforts to monitor public use of the Internet.

Despite the imposition of what many now consider to be “crippling” sanctions, some in Congress believe that economic pressure on Iran needs to increase. In the 112th Congress, the Iran Threat Reduction and Syria Human Rights Act of 2012 (P.L. 112-158), made sanctionable numerous additional forms of foreign energy dealings with Iran, including shipping crude oil, and enhanced human rights-related provisions of previous Iran-related laws. A provision of the FY2013 National Defense Authorization Act (P.L. 112-239) sanctions transactions with several key sectors of Iran’s economic infrastructure such as energy and shipbuilding, and punishes sales of many material inputs for manufacturing. Because Iran is subject to extensive and overlapping sanctions, some experts believe that almost any additional sanctions conceived would be redundant or of only minor incremental effectiveness. For a broader analysis of policy on Iran, see CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman. .


Date of Report: February 14, 2013
Number of Pages: 86
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Pakistan’s Nuclear Weapons: Proliferation and Security Issues

Paul K. Kerr
Analyst in Nonproliferation

Mary Beth Nikitin
Specialist in Nonproliferation

Pakistan’s nuclear arsenal probably consists of approximately 90-110 nuclear warheads, although it could be larger. Islamabad is producing fissile material, adding to related production facilities, and deploying additional delivery vehicles. These steps could enable Pakistan to undertake both quantitative and qualitative improvements to its nuclear arsenal. Whether and to what extent Pakistan’s current expansion of its nuclear weapons-related facilities is a response to the 2008 U.S.-India nuclear cooperation agreement is unclear. Islamabad does not have a public, detailed nuclear doctrine, but its “minimum credible deterrent” is widely regarded as designed to dissuade India from taking military action against Pakistan.

Pakistan has in recent years taken a number of steps to increase international confidence in the security of its nuclear arsenal. In addition to overhauling nuclear command and control structures since September 11, 2001, Islamabad has implemented new personnel security programs. Moreover, Pakistani and some U.S. officials argue that, since the 2004 revelations about a procurement network run by former Pakistani nuclear official A. Q. Khan, Islamabad has taken a number of steps to improve its nuclear security and to prevent further proliferation of nuclearrelated technologies and materials. A number of important initiatives, such as strengthened export control laws, improved personnel security, and international nuclear security cooperation programs have improved Pakistan’s security situation in recent years.

However, instability in Pakistan has called the extent and durability of these reforms into question. Some observers fear radical takeover of a government that possesses a nuclear bomb, or proliferation by radical sympathizers within Pakistan’s nuclear complex in case of a breakdown of controls. While U.S. and Pakistani officials continue to express confidence in controls over Pakistan’s nuclear weapons, continued instability in the country could impact these safeguards. For a broader discussion, see CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt.


Date of Report: February 13, 2013
Number of Pages: 32
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Bahrain: Reform, Security, and U.S. Policy

Kenneth Katzman
Specialist in Middle Eastern Affairs

The uprising that began in Bahrain on February 14, 2011, at the outbreak of the uprisings that swept several Middle Eastern leaders from power, has not come close to toppling the regime but has defied resolution. The crisis has demonstrated that the grievances of the Shiite majority over the distribution of power and economic opportunities were not satisfied by reform efforts instituted since 1999. The bulk of the Shiite majority in Bahrain says it demands a constitutional monarchy in which an elected parliament produces the government, but many in the Sunni minority government of the Al Khalifa family believe the Shiites want outright rule.

In March 2011, Bahrain’s government rejected U.S. advice by inviting direct security assistance from other Gulf Cooperation Council countries, declaring a state of emergency, forcefully suppressing demonstrations, and arresting dissident leaders and pro-opposition health care workers. Although the state of emergency ended on June 1, 2011, a “national dialogue” held in July 2011 reached consensus on only a few modest political reforms. Hopes for resolution were raised by a pivotal report by a government-appointed “Independent Commission of Inquiry” (BICI) on the unrest, released November 23, 2011, which was critical of the government’s actions against the unrest. The government asserts it implemented most of the 26 BICI recommendations, but outside human rights groups assessed that overall implementation was modest and incomplete. Adding to the deadlock, neighboring Saudi Arabia continued to back hardline Al Khalifa officials that oppose compromise, and experts feared that the unrest could evolve into violent insurgency. That concern increased as some hardline oppositionists began using or making bombs and other weaponry as of late 2012. In January 2013, the perception within the government and the opposition that the political system could split apart entirely caused both sides to accept a restart of the earlier political dialogue; it convened on February 10, 2013. The two sides remain far apart, but the new dialogue could produce some additional modest reforms and potentially represent incremental progress toward a solution to the crisis.

The Obama Administration has not called for an end to the Al Khalifa regime, but it has criticized the regime’s human rights abuses, urged it to undertake further political reform, and advanced ideas to narrow government-opposition differences. The U.S. criticism has angered some Al Khalifa officials but it has also been insufficient for human rights activists who assert that the United States is downplaying regime abuses because of U.S. dependence on the security relationship with Bahrain. Bahrain has provided key support for U.S. interests—particularly the containment of Iran—by hosting U.S. naval headquarters for the Gulf for over 60 years. The United States signed a formal defense pact with Bahrain in 1991 and has designated Bahrain a “major non-NATO ally,” entitling it to sales of sophisticated U.S. weapons systems. Partly to address criticism from human rights advocates and some Members of Congress, the Administration put on hold a proposed sale of armored vehicles and anti-tank weapons. However, in mid-May 2012 the Administration announced a resumption of other arms sales to Bahrain that it can potentially use to protect itself and support any military effort against Iran. Consumed by its own crisis, Bahrain has joined with but deferred to other GCC powers to resolve uprisings in Libya, Syria, and Yemen.

Fueling Shiite unrest is the fact that Bahrain is poorer than most of the other Persian Gulf monarchies. In 2004, the United States and Bahrain signed a free trade agreement (FTA); legislation implementing it was signed January 11, 2006 (P.L. 109-169). The unrest has further strained Bahrain’s economy.


Date of Report: February 12, 2013
Number of Pages: 40
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The Arab Spring and the Conflict in the Middle East and North Africa: A Compendium

Going on two years have passed since Mohammed Bouazizi, a young Tunisian fruit seller, set himself on fire to protest the difficult economic condit ions he faced and the humiliat ion he experienced at the hands of local police. Bouazizi’s protest was personal, but it resonated with millions of people across Tunisia and the Middle East who identified with his suffering and his defiance.

Across the region, people took to the streets, calling for political and economic reform. They expressed frustration with high unemployment, deteriorating living conditions, and a lack of economic opportunity. They called for transparency and accountability from their governments and a greater say in the decisions affecting their lives. They stood up and demanded basic rights in a region long dominated by authoritarian governments.

Nobody could have predicted what the spark for large-scale demonstrations would be or how quickly and widely these demonstrations would spread, but the seeds of discontent were evident across the region in growing labor strikes, protests over socio-economic conditions, and public outcries over regime brutality and corruption. Adding fuel to the fire, citizens feared that shifts in leadership might not lead to real change, as leaders seemed intent on hand-picking their successors.

This Compendium examines in detail so-called “Arab Spring” and other conflict-related developments in the countries of Afghanistan, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Palestine, Saudi Arabia, Syria, Tunisia, and Yemen.

Updated 8-Feb-2013

Date of Report: February 8, 2013
Number of Pages: 646
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Afghanistan: Post-Taliban Governance, Security, and U.S. Policy

Kenneth Katzman
Specialist in Middle Eastern Affairs

The United States and its partner countries are gradually reducing military involvement in Afghanistan as the end of the formal international security mission approaches by the end of 2014. Under an agreement between President Obama and Afghan President Karzai announced January 11, 2013, Afghan forces will assume the security lead nationwide in the spring of 2013 and U.S. forces will move to a support role. The number of U.S. forces in Afghanistan, which peaked at about 100,000 in June 2011, has been reduced to a “pre-surge” level of 66,000 as of September 20, 2012, and a further draw down schedule is to be announced by mid-2013. Subsequently, the size of the U.S. force that will remain in Afghanistan after 2014 will be announced, pursuant to a bilateral security agreement between the United States and Afghanistan that is under negotiation pursuant to a May 1, 2012, U.S.-Afghan Strategic Partnership Agreement. U.S. military recommendations for the post-2014 force reportedly range from 3,000 to 20,000 U.S. forces, likely performing missions that include combat against high-value targets as well as training for the Afghanistan National Security Forces (ANSF). U.S. partners are likely to contribute a still unspecified number of forces for these missions. Still, fearing instability after 2014, some key ethnic and political faction leaders are preparing to revive their militia forces should the international drawdown lead to a major Taliban push to retake power.

The Administration remains concerned that Afghan stability after 2014 is at risk from weak and corrupt Afghan governance and insurgent safe haven in Pakistan. Among other efforts to promote effective and transparent Afghan governance, U.S. officials are pushing for substantial election reform to ensure that the next presidential election, scheduled for April 2014, will be not experience the fraud of the elections in 2009 and 2010. An unexpected potential benefit to stability could come from a negotiated settlement between the Afghan government and the Taliban and other insurgent groups. Negotiations have proceeded sporadically since early 2010 and a formal negotiation process stalled in early 2012. However, informal discussions have continued and, by the end of 2012, began to evolve into discussions of specific proposals to settle the conflict. Afghanistan’s minorities and women’s groups worry about a potential settlement, fearing it might produce compromises with the Taliban that erode human rights and ethnic powersharing.

To promote long-term growth and prevent a severe economic downturn as international donors scale back their involvement in Afghanistan, U.S. officials also hope to draw on Afghanistan’s vast mineral and agricultural resources. Several major privately funded mining, agricultural, and even energy development programs have begun or are beginning. U.S. officials also seek greater Afghanistan integration into regional trade and investment patterns. Persuading Afghanistan’s neighbors to support Afghanistan’s stability instead of their own particular interests has been a focus of U.S. policy since 2009, but with mixed success.

Even if these economic efforts succeed, Afghanistan will likely remain dependent on foreign aid indefinitely. Through the end of FY2012, the United States has provided nearly $83 billion in assistance to Afghanistan since the fall of the Taliban, of which about $51 billion has been to equip and train Afghan forces. During FY2001-FY2012, the Afghan intervention has cost about $557 billion, including all costs. About $9.7 billion in economic aid and $82 billion in additional U.S. military costs are requested for FY2013. As announced in the context of the July 8, 2012, Tokyo donors’ conference, Administration economic aid requests for Afghanistan are likely to continue at current levels through at least FY2017. See CRS Report RS21922, Afghanistan: Politics, Elections, and Government Performance, by Kenneth Katzman.


Date of Report: February 8, 2013
Number of Pages: 92
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