State & Treasury Say Iran Sanctions Are Having a Trade Impact

December 8, 2010 by Barbara Chaves|Other U.S.

On December 1, 2010, the House Committee on Foreign Affairs held a hearing entitled, “Implementing Tougher Sanctions on Iran: a Progress Report.” The hearing was held to assess whether U.S. and international sanctions against Iran are having their desired impact of persuading Iran to suspend its uranium enrichment program.

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Sanctions Reducing Exports to Iran, Shipping, Foreign Investment, Access to Capital

Under Secretary of State for Political Affairs Burns and Treasury Under Secretary for Terrorism and Financial Intelligence Levey stated that U.S. sanctions have generally been effective. They even noted the following changes since the U.S. enactment of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA¹) in July 2010 and similar, recent moves by the European Union and others:

Reduced shipping & exports to Iran. A number of shipping companies have discontinued services to Iran and several maritime shipping insurers have announced that they will not provide coverage for Iranian-bound vessels. According to the Under Secretary Burns, many companies are even going beyond what is required by sanctions. For example, foreign automakers Daimler, Toyota and Kia have all stopped exporting cars to Iran.
More awareness of deceptive practices in shipping, etc. Under Secretary Levey states that Treasury and other agencies’ efforts to publicize Iran’s deceptive practices have been successful. For example, more are aware of the sanctioned Islamic Republic of Iran Shipping Lines’ (IRISL’s) practices to avoid sanctions such as renaming and repainting ships and changing the nominal ownership of vessels.
Limited access to financial system. Under Secretary Levey states that Iran has become increasingly isolated from the international financial system, with limited access to financial services, making it difficult to conduct commercial transactions of all kinds.
Lost energy investment. The Under Secretary Burns states that according to reliable estimates, Iran may be losing as much as $50-60 billion overall in potential energy investments, along with the critical technology and know-how that comes with them.

(The officials noted that sanctions are not an end in themselves and that the U.S.’ foremost objective is a diplomatic solution to the world’s concerns about the Iranian nuclear program and the broader issues at stake with Iran.)

¹The CISADA, which became Public Law 111-195 on July 1, 2010, amends the Iran Sanctions Act (ISA) to expand the sanctions imposed against Iran. (See ITT’s Online Archives or 06/30/10 and 09/20/10 news, 10063049 and 10092013, for BP summaries. See ITT’s Online Archives or 09/29/10 news, 10092925, for BP summary of an OFAC final rule implementing CISADA to ban Iranian carpets, food and other imports and exports.)