By Michael Jones (email@example.com)
The Islamic Republic of Iran has seen a lot of attention lately. The recent election of moderate Hassan Rouhani to the Iranian presidency surprised the world, and his conciliatory gestures towards the West appeared to mark a shift in Tehran’s traditional approach towards the international community. However, at the same time, ongoing tensions over Iran’s nuclear program and participation in the Syrian Civil War have provided less desirable attention. While negotiations have been restarted under Rouhani’s administration, both the West and Iran remain apprehensive as to the geopolitical consequences that may result if their side does not get what they want out of a potential nuclear deal. Iran has both its economy and international prestige riding on the outcome of these talks, meaning that it will have to deal with being the center of the world’s attention for the time being – whether it likes it or not.
With all this talk of Iran in the news, it seems appropriate to reflect on the U.S.’s well-known sanctions and embargoes against this conservative Muslim country. Prior to 1979, the U.S. had a very close relationship with Iran, which was marked by strong economic ties and overall cooperation. However, after the Iranian Revolution and the infamous Iranian Hostage Crisis of the same year, tensions flared up against Iran’s new government and some $12 billion of Iranian assets was frozen. Further trade regulations would later occur. President Reagan implemented an embargo on most Iranian-made goods, President Clinton prohibited trade in the oil industry and eventually just put a blanket ban on trade as a whole, and President Obama filled in loopholes in the sanctions to prohibit certain foodstuffs from being exported. Additionally, the UN Security Council would impose further restrictions due to the development of Iran’s nuclear program.
The current status of the Iranian embargo is the following. In terms of imports, there is still a general prohibition on importing goods that originate from Iran, with some minor exceptions for gifts with a total value of less than $100 and certain personal effects. Exports are a similar case: with the exception of certain low-value gifts, licensed agricultural products, and specific medicines, there is a general ban on exporting any goods to Iran unless you have an OFAC license. Additionally, it is also illegal to export any good when you are aware that the end user is in Iran – exporters should be careful to screen their clients in advance. The U.S. treasury also outlines some additional sanctions, such as a ban on participating in Iran’s petroleum trade as well as its banking system.
The sanctions against Iran are very comprehensive, and fines for breaking them can be very high. If you are interested in doing business with clients in Iran, please contact TSI Global Consulting at 210-757-0618 for a consultation.
The next blog entry in this series will likely be the last before I move on to another topic, so please leave a comment or email me if there is a specific country that you would like an embargo profile on. Please check back soon for more trade related blogs from TSI.