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Exportingto Iran

Iran’songoingnuclearprogramhas beencitedto posemostmenacingthreatto thestabilityof theMiddle East andthewordat large.Theprogramhas strainedtheIran relationshipswith theoutsideworld,makingittheforemostenemyof theWest. Theeconomicsanctionsagainst Iran wereimposedafter statesdiscoveredthatIran wassecretlydevelopingnuclearweapons.. Since then,theEU, theUN,andseveralindividualcountrieshaveimposedeconomicsanctionsagainst thecountry,in an attemptto preventher from developingmilitarynuclearcapabilities.On her part,Iran insiststhather nuclearactivitiesare exclusivelypeacefulan assertionthattheglobal nuclearwatchdog wasunableto verify(Connor 1). TheimposedsanctionstargetIran’s keysectors,theenergy,andfinancialsector,hencehavebeeneffectivein cripplingtheeconomyof thecountry(Baker1).This article exemplifies the results of various sanctions againstIran, and how they have forced companies to stop exporting to Iran.

Anti-Nuclearsanctions against Iran

TheUN has imposed four roundsanctionsagainstIran that includesa banon thesupplyof weaponry andnuclear-relatedtechnologies anda freeze of assets of keycompaniesandindividualsthat are in membercountries.Additionally, theUN imposedsanctionblockstheexportation of armsin thecountry.On its part,theEU has restrictedanyexportation of equipmentthat could be assembledandusedinthe enrichmentof Uranium into Iran. Further,theEU has frozenassets of keycompaniesandindividualsthat are believedto be aidingin theenrichmentof Uranium andtheadvancementofthe nuclearprogram(Katzman 21). Further,theEU has bannedalltransactionswith Iranian financialinstitutions,andbanksbannedtheimportation,purchaseortransportationof Iranian naturalgasses andcrudeoil,which are themainsectorsof theeconomy.Thebanontheimportation,useortransportationof Iranian productshas significantly crippledtheIranian economy,consideringthatmorethan twenty percent of Iranian oilexports weredestinedfortheEU market.Further,theEU stoppedtheEU insurancecompaniesto stopinsuringIranian oilshipmentsincreasingriskshencecripplingtheeconomy(Connor 1).

Individualcountriesthat haveimposedsanctionsagainst Iran includeSouth Korea andJapan, whosesanctionsare similarto thoseimposedby theEU. TheUS enforcedsuccessiveroundsof economicsanctionsagainst Iran since 1979 after theinfamousTehran hostagecrisis.The1979 sanctionswereimposedfollowingtheUS Government viewthatIran wassupportinginternationalterrorism, violatedhumanrightsof its citizenry andrefusedto cooperatewith theIAFA. Allthesesanctionsprohibitalmostallformsof tradewith Iran, allowingexceptionsfortradingactivitiesthat are meantto helptheIranian citizenry.Among these includeexportation of agriculturalandmedicalequipments, humanitarianassistancein tradeas welltradein educationalandinformational materialssuchas booksandfilms(Baker 1).

Theinternationalcommunityseemsto haveagreedthatIran should not be allowedto advancemilitarynucleartechnologies andimposedsanctions.Amilitaryexpeditionagainst theIran would be devastating,in mostcasesfailto attainthedesiredresults.Whetherimposedunilaterally ormultilaterally, economicsanctionsare peacefulanddiplomaticstrategiesto imposeeconomicandpoliticalhardshipsfora regime.Theeconomicandpoliticalhardshipsputregimesin wheretheyhaveto choosebetween stoptheinternationallyacceptedviceorfacethecitizensuffer.Economicsanctionshavebeenuniversallyrecognizedandlegitimized since theadoptionof theUN Security Council resolutionin 1737. Assuch,theeconomicsanctionsagainst Iran aremeantto puttheregimein a situationchoosingbetween theadvancementof nuclearweaponsandwatchingthecitizenry suffer&nbsp(Connor1).

TheUS Sanctions to Iran

TheUS is one o thebiggestsupportersof theanti-Iranian sanctions,passingevenmorestringentbillsthat are meantto imposeevenharshersanctions.Additionally, theUS compelledotherinternationalshippingagencies,global insurancecompanies,andcompaniesto terminatetheir dealings with Iranian to cripple theIranian economy.However,theUS processof imposingthesanctionsagainst Iran has hadmanyissues(Connor 1). Priorto 2010, noUS administrationhadimposedfullsanctionsagainst Iran, to giveroomfornegotiations.In2010 and2012, theCongresspassedmanyexecutiveordersthatwereaimedat imposingtheIranian sanctions.However,&nbsptheefficaciesof these orders havebeenseverelyweakeneddue to loopholesandwaiversthat allowedtheUS to delaytheir implementation. Forinstance,theExecutive order13590 wasdelayedmorethan six monthsowingto thefearthatimposingsanctionsontheuseof Iranian crudeoilwould spurtheglobal increasein oilprices(Baker1).

Likewisein 2012 and2013, theUS grantedcountriessuchas Japan andotherEU memberstheexceptionof terminatingtradewith theEU. Thepunitivesanctionsagainst Iran wereadoptedin 2010, prohibitingcompanieswithin theUS from exportinggoodsto Iran, orimportinganyIran manufacturedgoodsto theUS directlyorthrough othercountries(Katzman 36). TheUS citizenry andcorporate wascompelledby theexecutiveordersto terminatealltradingrelationswith Iran, prohibitingexportation orimportationfrom Iran. Further,thecitizenswereprohibitedfrom offeringengineeringservicesto Iranian industriesorprovidingthemoderntechnologies,andthatmay be usedto advancenuclearweaponry (Connor 1).

Thecitizenry andcorporate werebannedfrom investingin Iranian gasandoilsectors,petroleumindustryoranyotherIranian sectorthat would promotethedevelopmentof Iranian economicinfrastructure.Thefinancialinstitutionswerebannedfrom servicingtheaccountsof Iranian individuals,privateorpublicorganizations,issuecreditto them, grantloansorallowthem to makedeposits.Further,theUS financialinstitutionswereforcedstopdepositingin Iranian financialinstitutionsortakepartin anytransactionthat would becarriedvia theIranian financialinstitutionsorthatinvolvedIranian capital(Connor 1).

TheUS sanctionsagainst Iran wereimplementedwith strictness andwerequitestricton countriesthat failedto heedto thedirectives of thesanctionsandcontinuedtradingwith Iran. Foreignindividualsandcompaniesareprohibitedfrom re-exporting American goodsinto Iran butwith someexceptions,orotherwisefacerestrictionsin their tradewith theUS. Traderestrictionson countriesandindividualsthat refusedto severtradingrelationswith Iran.Thisimpliedthattheindividualsandcountriescould not actas intermediaries,insurers orguarantorsof tradedealsbetween Iran representativesandcitizensfrom othercountries.TheIran sanctionscompelUS companiesandindividualsto terminatetradingrelationswith countriesthat areknownorsuspectedto re-export to Iran, orthoseexpectedto manufactureotherproductsthat are to besoldto Iran. Theonlyexceptionbeing theexportation of low-qualitygoodsandobsoletetechnologies similar to those exported to developing countries(Baker 1).

AmongtheActs that has empoweredtheUS officialsto imposetheIransanctionsaretheIran andLibya Sanctions Act of 1996. TheAct empoweredtheexecutivetotakeactionsagainst countriesthat investedmorethan twenty million US dollarsduring a twelve monthperiodin thedevelopmentof Iranian oilandgasfields.However,there existedunanimityamong themaintradingpartnersof theUS about theimplementation of theUS sanctions.Additionally, theUS tradingpartnersare unableto ensurethattheprivatesectorwill not usetheopportunityandcontinuehavingeconomiccooperationwith Iran. On theJuly of 2010, theComprehensive Iran Sanctions, Accountability,andDivestment Act (CISADA) of 2010 wereenactedto restrictinvestmentsthat may empowerIran to advanceits militarynucleartechnologies. TheCISADA 2010 extendedtheterritorialreachof the2006 sanctionandexpressly providesthepenaltiesfortheindividualsandcorporate that contravenestheAct.Otherthan thepolicies,there existslobbyinggroupssuchas theUnited against Uranium (UANI) initiativethat compelscompaniesthat tradedirectlyorindirectlywith Iran to terminatealltradingrelations(Reardon 67). Further,UANI compelscorporate to forcetheir subsidiaries to stopallbusinessdealings with Iran orwith countriesthat are likelyto re-export to Iran. Theserequirementsare to be enforcedevenin caseswherethecompanyis in compliancewith allpoliciesandregulationsthat governtradingandsanctionsin theUS. TheUANI website featurestheIranian Business Registry,detailingthebusinessesthat havebusinessdealings with Iran. Thegroupseeksto buildpressureby shamingcompaniesthat stillhavetradingrelationswith Iran, providingconcreteevidenceof suchcases.Theevidenceshowshowcompaniesfailto comply withsanctionsagainst Iran becauseof thesubterfugeof thecountry,increasingthe pressureofthecompanyto cutsuchties(Baker 1).

Bowingto theincreasedpublicpressure,theIngersoll-Rand PLC joineda listof publicheldcompaniesthat agreedto terminatethesaleof their productsto theIranian customers.Thiswasdespite thefactthatthesalewasin compliancewith theUS tradepoliciesthat restricted exportation to Iran. Thecompany,togetherwith its internationalsubsidiaries effectivelystoppedacceptingordersforallproducts,partsandcomponentsthat are knownorsuspectedto bedirectlyandindirectlydestinedforIran. In 2009, anothercompany,General Electric signedan agreementwith United Against Nuclear (UANI), a lobbying initiativethat pressurizes companiesto stoptheir dealings with Iran (Katzman 46). ThesignedaffidavitincludedtheIran Business deal,in which thecompanyagreedthattogetherwith all its subsidiaries, thecompanywill not engageIran in anybusinessdealsnorprovidegoodsorservicesto thecountry.Theonlyexceptionto thedirective wasthehumanitariangoodsandservicesandtradingtiesinvolvinginformational contents suchas themediacontents. Accordingto theaffidavit,thehumanitarianandinformativegoodsandserviceswill be channeledthrough reputablecharityorganizationsuntil theinternationalcommunitygetssatisfiedthatthecountrywasnolongera statesponsorof terrorism. In addition,theUANI pressurized theCaterpillar Companyto restrictits internationalsubsidiaries from acceptingordersanddistributingthecaterpillar brandedproductsto Iran, orin countriesthat are likelyto re-export theproductsinto Iran. Thiswasdespite themanagementviewthatthesalesto Iran amounted to lessthan a fifth of one percent of Caterpillar salesglobally in 2009, andthatthesaleswerenot qualitatively orquantitatively materialin anyway(Katzman 45).Further,themanagementwasof theviewthateventhosesaleswerein complianceto theUS exportcontrolandeconomicsanctionlaws.Morerecently,US auditfirms, PricewaterhouseCoopers, KPMG andErnst &ampYoung severedalltradingrelationswith Iran, owingto theincreasedpressurefrom UANI. Othercompaniesthat haveannouncedtheir likelihoodof severingtheir relationswith Iran includeHuntsman andSiemens, with giantcompaniessuchas Daimler willingto selltheminoritysharein theIranian Engine maker(Connor 1).

Additionally,UANI has influencedcompaniesoutside theUS soilsto cuttheir tradingrelationswith Iran, among them, theMalaysian stateoilcompany.TheMalaysian state-ownedcompanycutoff shipmentsof gasolineto Iran, a movethat wasalsoadoptedby theRoyal Dutch Shell Company, Trafigura, Glencore,andVitol. Conversely, theUAE has alsobowedto publicpressureandimposedeconomicsanctionsagainst Iran. In 2010, theUAE imposeda sanctionagainst Iran, frozebankaccountsof keycompaniesandindividualsin theUS. ThebordercontrolbecamestricterandtheRas al-Khaimah freetradewasofficiallystopped,shipsdeliveringpetrol to theIRI arestrictlyscrutinized.Additionally, theportsof Jebel Ali,andFujairah closedfortheIranian cargoships(Reardon 69).Thepressureto severtradingtiescomesnot justfrom theUANI butalsofrom theUS Congress.TheCongresshas institutedpolicyregulationmeantto forcecompaniessevertradingrelationswith Iran, extendingbeyond thefinancialandenergysectorsto includemanufacturing,insuringandotherserviceindustries.TheCongress has limitedtheabilityof thegovernmentto tradewith companiesthat havetradingrelationswith Iran in businessesthat contributeto Iran abilityto advancenucleartechnology (Katzman 66). However,thesanctionsdonot enjoyfullglobal supporthenceIran is believedto continueadvancingits militarytechnology. Countriessuchas Russian andChina havemaintainedtradingtieswith thecountry.Recently,UK-basedcompaniessuchas theFinancial Frontier Inc is setto visitTehran to assessbusinessopportunitiesin theMiddle East others includetheCharlemagne Capital groupthat hopesto investin Iranian security(Connor 1).

Conclusion

Fromtheaforementioned,theglobal communityhas agreedthattheongoingnuclearadvancementprogramin theIran posesa securitythreatto Iran andtheworldat large.Theprogramhas ledto thedeteriorating relationshipsbetween thecountryandtheWestern world,leadingtotheimpositionof economicsanctionsagainst themajorsectorsintheIranian economy.Thesesanctionswereintroducedby theEU, theUS andsinglyby otherstatecountries.Initially,thesanctionstargeted thefinancialsectorandtheenergysectors,restrictinginvestmentsin industriesthat leadto theadvancementof thenuclearenergyin thecountry.Impositionof theIran sanctionby theUS has beenan ongoingprocess,startingwith theenactmentof theIran andLibya Act 1996. In 2010, theCISADA wasenactedto givemorepowerto theUS executivein enforcingthesanction.Thesanctionshavenowevolvedto banthetradingtieswith countriesthat are likelyto re-export to Iran. Thesanctionnowcoverstheinsurancesector,manufacturingandotherserviceindustries.Otherthan theacts,theUANI has forcedmanyUS companiesto severtradingtieswith Iran, includingGeneral Electric, theIngersoll-Rand PLC, andCaterpillar among others.

Workscited

BakerPeter, Companies Feeling More Pressure to Cut Iran Ties. TheNew York Times.2010.http://www.nytimes.com/2010/04/24/world/middleeast/24sanctions.html?_r=0

Connor,Michael. FacingPressure,Companies Agree to Halt Sales to Iran.The Magazine of Corporate Responsibility2010.Retrievedfromhttp://business-ethics.com/2010/03/10/2250-facing-pressure-companies-agree-to-halt-sales-to-iran/

Katzman,Kenneth. Iran:U. S. Concerns and Policy Responses.DIANE Publishing: 2010. Print

Reardon,Robert J. Containing Iran: Strategies for Addressing the IranianNuclear Challenge. , 2012. Print.