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Highlights

The 2006 U.S. National Security Strategy stated that the United States faces challenges from Iran, including Iran's proliferation efforts and involvement in international terrorism. To address these concerns, the United States employs a range of tools, including diplomatic pressure, a military presence in the Gulf, and sanctions. A U.S. sanction is a unilateral restriction or condition on economic activity imposed by the United States for reasons of foreign policy or national security. We were asked to review (1) U.S. sanctions targeting Iran and their implementation, (2) reported sanction impacts, and (3) factors limiting sanctions. To conduct the review, we assessed trade and sanction data, information on Iran's economy and energy sector, and U.S. and international reports on Iran, and discussed sanctions with U.S. officials and Iran experts.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress and the Administration need a better understanding of the impact of U.S. sanctions against Iran and the extent to which sanctions are achieving U.S. foreign policy objectives. The Administration needs to take a series of actions to first improve the disparate data collected on Iran sanctions and then establish baseline information for the continuous monitoring and periodic reporting on what U.S. sanctions have achieved. Accordingly, Congress may wish to consider requiring the National Security Council (NSC), in collaboration with the Departments of State, the Treasury, Energy, and Commerce; the intelligence community; and U.S. enforcement agencies to collect, analyze, and improve data on U.S. agencies' actions to enforce sanctions against Iran and complete an overall baseline assessment of the impact and use of U.S. sanctions, including factors that impair or strengthen them. This assessment should collect information, to the extent feasible, from various U.S. agencies and consider factors such as, but not limited to, the following: (1) the number of goods seized, penalties imposed, and convictions obtained under the trade ban (Homeland Security, Treasury, Commerce, Justice); (2) sensitive items diverted to Iran through transshipment points (Commerce and the intelligence community); (3) the extent to which repeat foreign violators of Iran-specific sanctions laws have ended their sales of sensitive items to Iran (State and intelligence community); (4) the amount of assets frozen resulting from financial sanctions (Treasury and the intelligence community); and (5) the extent of delays in foreign investment in Iran's energy sector (State, Energy, and the intelligence community).
Closed - Implemented
Congress has addressed our Matter by passing legislation that places reporting requirements on the Director on National Intelligence.On July 1, 2010, the President signed into law the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. The Conference Report for the bill cited the GAO as asserting that Iran continued to circumvent sanctions and receive sensitive equipment, including some of U.S. origin. In response, Title III: Prevention of Diversion of Certain Goods, Services, and Technologies to Iran of the Act required the Director of National Intelligence to report to the President and Congress, about governments believed to allow the re-export, transshipment, transfer, retransfer, or diversion to Iranians of key goods, services or technologies that could be used for weapons of mass destruction, proliferation or acts of terrorism. The President, upon receipt of the report may designate a country, a Destination of Diversion Concern.
Congress and the Administration need a better understanding of the impact of U.S. sanctions against Iran and the extent to which sanctions are achieving U.S. foreign policy objectives. The Administration needs to take a series of actions to first improve the disparate data collected on Iran sanctions and then establish baseline information for the continuous monitoring and periodic reporting on what U.S. sanctions have achieved. Accordingly, Congress may wish to consider requiring the NSC, in collaboration with the Departments of State, the Treasury, Energy, and Commerce; the intelligence community; and U.S. enforcement agencies to develop a framework for assessing the ongoing impact of U.S. sanctions, taking into account any data gaps that were identified as part of the baseline assessment , and the contribution of multilateral sanctions.
Closed - Implemented
The Department of Treasury continuously collects data and information from all sources, including classified, to identify changes in the Iranian economy by monitoring several essential financial and economic sectors. Treasury assesses the impact of sanctions on Iran and shares its findings with relevant agency and intelligence officials prior to disseminating the information to agency management and policy makers in the form of a quarterly classified report.
Congress and the Administration need a better understanding of the impact of U.S. sanctions against Iran and the extent to which sanctions are achieving U.S. foreign policy objectives. The Administration needs to take a series of actions to first improve the disparate data collected on Iran sanctions and then establish baseline information for the continuous monitoring and periodic reporting on what U.S. sanctions have achieved. Accordingly, Congress may wish to consider requiring the NSC, in collaboration with the Departments of State, the Treasury, Energy, and Commerce; the intelligence community; and U.S. enforcement agencies to report periodically to the Congress on the impact of sanctions against Iran in achieving U.S. foreign policy objectives.
Closed - Implemented
The Department of Treasury continuously collects data and information from all sources, including classified, to identify changes in the Iranian economy by monitoring several essential financial and economic sectors. Treasury assesses the impact of sanctions on Iran and shares its findings with relevant agency and intelligence officials prior to disseminating the information to agency management and policy makers in the form of a quarterly classified report.

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