Iran and US Sanctions
The history of U.S sanctions over Iran dates back to early 1950s when Britain and America boycotted Iranian oil. The 1950s boycott was as result of the nationalization British Iran’s oil company. The result of the boycott adversely affected the Iran economy and eventually led to the deposition and Mosaddeq who the president by then. In 1979, during the Iran revolution, United States government backed a coup in Iran and the exiled Shah was re-installed as the president. As a result, a group of students seized the American embassy in Tehran and this lead to the U.S freezing approximately 12 billion dollars in Iran assets. These included bank deposits and other properties, which up-to-date remain legal cases, which have yet to be resolved (associated Press).
In 1984, Iraq, which by then was under the rule Saddam Hussein, attacked Iran and the United States intensified sanctions against Iran. The sanctions were extended to deny Iran any international loan from major international donors. Iran was also prohibited from purchase of weapons or any military assistance. These sanctions were because of bombing of United States in Lebanon in 1983 where Iran was seen as a major sponsor to the bombing. In fact, Ronald Reagan who was the president of the United States during this period, declared Iran as a major sponsor of international terrorism. By august 1986, United States banned export of spare parts to Iran and this was seen a major blow because relied on U.S for aircraft spare parts.
In 1992, there was a growing about Iran manufacturing of weapons of mass destruction. As a result, in October the same year the Iran- Iraq Arms proliferation Act was passed by the congress after CIA established that Iran had allocated more than 2 billion dollars for developing weapons of mass destruction. The worst sanctions against were later passed during the period when Bill Clinton served as the U.S president. During this period the soviet Union had collapsed and therefore America being the only super-power could take greater political risk to protect human rights violations and international terrorism especially development of weapons of mass destruction in Iran. On the other hand, Clinton administration preferred sanctions instead of military action as way to tame the growing insecurity threat from Iran. As a result, in March 1995, President Clinton banned US contribution to oil development in Iran through an executive order. He also issued a total trade embargo against Iran and declared Iran as extra-ordinary threat to international security. The executive order had major extra-territorial effects on Iran since it affected other countries. For instance, Germany under pressure from the United States government gave up the plans to sell a nuclear reactor to Iran. The trade and investment embargo against are seen one of the reasons why Iran –Iraq war ended abruptly. This could be so, because the two warring countries could have been unable to continue with war after being denied military and financial support. Later in 1996, the congress passed the Iran-Libya sanctions Act (ILSA) that put more pressure even to the other foreign companies investing in Iran. The Act stated that any foreign company investing more than 20 million U.S dollars for oil development in Iran was to suffer at least two of seven possible sanctions (Liang). According to Wright (p.104) the seven possible sanctions included,
• The companies were to be denied the assistance of Export-Import Bank. • Any company that violated these rules was to be denied export license • Any violating company was to be denied access to loans in the American financial institutions. • Violating companies were also to be denied access to U.S government debt instrument. • Violating companies were to loose an opportunity to act as an agent for U.S government funds....