Since 1979, the US has imposed economic, trade and financial sanctions, with a comprehensive trade ban since 1995 and significant measures to isolate Iran from the international commercial and financial system, by enforcing also secondary sanctions on non-US entities and financial institutions. However, since the mid-2000s, a series of executive orders and specific laws have created a broad and complicated framework of prohibitions and bans, which intensified after 2010 and extended to the energy sector and other key economic sectors. The sanctions against Iran’s financial sector included designations and asset freezes affecting the Iranian Central Bank and commercial banks.
The EU adopted comprehensive economic, trade and some other sanctions against Iran since 2010 by prohibiting the sale, transfer or export of dual-use goods and technology and by imposing restrictions on investments and finance, engagement with Iran’s oil and gas industry, insurance, and transport. These measures were intensified in the following years, with an oil embargo in 2012 and prohibitions on the sale, supply, transfer or export of certain goods, including equipment or technology which could be used in the oil, natural gas and petrochemical industries; the freezing of assets of the Central Bank, of the Iranian national shipping company, and of a number of persons and entities; and significant restrictions in financial services as well as exports and imports.
In 2011, Australia adopted the Autonomous Sanctions Act and the Autonomous Sanctions regulations, which imposed an arms embargo, restrictions on the export or supply of certain goods, prohibitions on engaging with Iran in any “sensitive commercial activity” such as uranium mining or production, supply, sale or manufacture of goods related to Iran’s missile and nuclear weapons technology; provision of financial, technical, brokerage and investment services related to sanctioned goods; and restrictions and travel bans on designated persons or entities.
In July 2010, Canada adopted its own sanctions programme under the Special Economic Measures Act (SEMA) and the Special Economic Measures (Iran) Regulations, imposing broad prohibitions on exports and imports to and from Iran, restrictions on financial transactions, investments, insurance and re-insurance in key economic sectors, including the energy sector, shipping and mining.
Other sanctioning countries have maintained their sanctions and restrictions, including trade bans on certain equipment, as well as asset freezes and travel bans for a number of designated individuals and entities.
The Special Rapporteur received numerous accounts of refusals by foreign financial institutions and businesses to process payments and to deliver goods and services, out of fear of financial, reputational and other consequences. Even after the signing of the JCPOA, there were reports of foreign financial institutions being reluctant to restore ties with Iran and to engage in investments in the country, given the history of hefty financial penalties for alleged breaches of US sanctions.
As with other sanctioned countries, Iran has suffered from the extension of US jurisdiction in international banking transactions, due to the involvement of US correspondent banks or payments in USD, which has not only caused serious disruptions and delays in the provision of basic goods, including food, medicines, medical and other equipment and raw materials, but also has seriously impeded Iran’s engagement in international cooperation, including payments of membership fees to international organisations and associations, access to funding opportunities, and participation of Iranians and Iranian institutions in academic and scientific programmes , cultural and sport activities.
She concludes that the use of unilateral sanctions, secondary sanctions and over-compliance has an overall adverse effect on the broad spectrum of human rights, civil, political, economic, social and cultural, including the right to life and the right to development.
Between 2010 and 2015, Iran exported between 700,000 and 1.4 million barrels per day of crude oil and condensate. With sanctions being lifted following the JCPOA, daily exports reached and topped 2.5 million barrels between May 2016 and May 2018. With the re-imposition of the US sanctions, exports dropped to under 500,000 barrels per day in July 2020. In 2018 and 2019 alone, oil exports declined by 57%, according to official Government figures, leading to significant shortfalls in the annual budget due to the loss of revenue. Between 2019 and 2021, the annual loss from the drop in oil exports is estimated at around US$56 billion.
The estimated annual foreign exchange revenue prior to sanctions, about US$66 billion between 2005 and 2011, fell to US$25 billion during 2019-2021, affecting Government expenditures on development and other projects.
Annual GDP growth averaged 4.6% between 2000 and 2010, but GDP then shrank by an average of 1.7% between 2011 and 2015 as unilateral sanctions intensified. GDP grew by a record 13.6% in 2016, following the JCPOA and the lifting of sanctions, and 3.7% in 2017, while in 2018 and 2019 the economy contracted by 6% and 6.8% respectively.
Inflation has also been affected by the changing environment induced by unilateral sanctions and by the effects of the Iranian currency devaluation due to financial restrictions and foreign assets freezes. Annual inflation between 2000 and 2010 averaged approximately 14.6%, and rose to approximately 23.8% between 2011 and 2015. In 2016 and 2017, it dropped to 7.2% and 8% respectively before rising again to alarming levels after the re-imposition of US sanctions: 18% in 2018, and 39.9% in 2019. Since the re-imposition of sanctions in 2018, general prices in Iran rose 85% and food prices doubled.
The combined trade and financial restrictions between 2011 and 2015, and after 2018, coupled with businesses’ over-compliance and general reluctance to engage in any economic activity with the country, have affected foreign direct investment, which dropped to around 1.3 billion USD in 2020, representing only around 0.15% of Iran’s GDP.
The imposed trade and financial restrictions have had a direct impact on Iran’s job market, in particular in sectors directly linked to international markets, and on the lives of Iranians living abroad, actively involved in business activities. The changing environment in the sanctions regimes has resulted in job market instability and insecurity, and heightened risks for employment in the informal economy without access to social protection coverage.
Iran produces around 95% of its medicines and basic vaccines to mitigate the impact of unilateral sanctions, with reportedly good manufacturing and quality assurance systems. However, Iranian pharmaceutical companies have difficulty procuring raw materials and ingredients of necessary quality, with increased costs affecting purchases from abroad.
Reliable sources and interlocutors confirmed the absence of medical supply sustainability since 2011 due to sanctions. Of particular concern is the significant challenges faced in the procurement and delivery of life-saving medicines and medical equipment, produced by foreign companies and destined for the treatment of rare diseases, including certain types of cancer, thalassemia, haemophilia, leukaemia, ichthyosis, multiple sclerosis, epidermolysis bullosa (EB), autism, and certain forms of diabetes.
Although sanctions’ document announce that medicines and medical equipment are not affected due to humanitarian exemptions, their delivery to Iran is severely undermined by the effects of sanctions on finance, trade, shipping and insurance companies, restrictions on international payments, and by foreign businesses’ and suppliers’ over-compliance. These constitute serious impediments to the enjoyment of the right to the highest attainable standard of health by all Iranians.
The Special Rapporteur was informed about significant delays and in some cases the complete denials of shipment by foreign transportation companies due to the reluctance of insurance companies to insure cargoes. The limitations of access to formal trade, payment and delivery channels due to sanctions-related restrictions is a cause of the reported rise in counterfeit medical products, smuggling of expired / expiring medicines with ruinous public health consequences, in particular among vulnerable populations.
In Tehran, the Special Rapporteur visited the specialized center for the treatment of EB patients, a rare skin disorder with a number of other related health complications, which provokes from birth incurable acute suffering and may lead to death. The suffering can only be reduced through the application of bandages produced by a single company in Sweden. She was informed about the challenges that the center has faced in procuring these specialized absorbent silicone dressings due to over-compliance by the Swedish producer.
She received numerous other examples of foreign companies’ reluctance to deliver medicines, medical equipment and the necessary spare parts, including among others plasma-derived drugs, blood bank centrifuges, measuring and quality control equipment, diagnostic devices for prenatal diseases, cardiac and endoscopic equipment, material for producing gloves and catheters, and even ambulances. She was also informed that in some anti-retroviral centers, the machines for tracking immunosuppression and initiating anti-retroviral therapy (CD4 counting) could no longer function because of missing spare parts, with serious procurement delays and increased costs due to unilateral sanctions. Even UNDP-Iran reportedly faced serious problems obtaining pediatric anti-retroviral medicines from a foreign company that refused to sell them.
Besides medicines and medical equipment, international companies and suppliers have been reported to refuse to sell software for managing and monitoring patients’ treatment, such as those required for the management of the dosage of cancer patients’ medication.
Financial restrictions, secondary sanctions and the vagueness, complexity and uncertainty around the determination of the items that are exempted from sanctions and those that could be considered “dual-use” (i.e. for civil and military use) have significantly affected a number of medical disciplines and sectors in Iran, including nuclear medicine and radiopharmacy, with a direct impact on patients receiving such specialized treatment. The Special Rapporteur was further briefed on the designation by the US Treasury Department of the Iranian radioisotope company, due to its affiliation with the Iranian Atomic Energy Organization, and the significant obstacles this company faces in accessing raw materials from abroad for developing radiopharmaceuticals for treating cancer patients both in Iran and outside the country.
The adverse effects of unilateral sanctions on healthcare have been compounded by COVID-19, with Iran being among the most affected countries with more than 131,000 lives lost by the end of 2021.
The re-imposition of unilateral sanctions in 2018 with the corresponding trade and financial restrictions, over-compliance by foreign businesses, traders, and financial institutions have disrupted the procurement of agricultural seeds, fertilizers and equipment for agricultural production. This has led to the use of barter and humanitarian trade mechanisms, which along with inflation and the devaluation of the national currency have triggered a spike in food prices.
According to the Iranian Chamber of Commerce, Industries, Mines and Agriculture, the re-imposition of sanctions in 2018 have jeopardised the country’s food security by disrupting the supply of at least 10 million tonnes of agricultural imports, including among others the supply of livestock inputs, oil seeds and cooking oil, which constitutes a clear violation of the right to food in terms of access and adequacy.
These developments have had a serious impact on the average total costs for Iranian households, in particular in towns, which, according to official data, rose by 64% between 2017 and 2019, leading to dietary changes and lower food consumption. Food insecurity rates among the population have soared, reaching 60% in certain regions. The COVID-19 outbreak has exacerbated these trends with households forced to spend in 2020 an estimated 41.4% more than in 2019, for buying the same products. Humanitarian organizations reported that the cost of the food basket increased more than 3.4 times between 2018 and 2022.
Unilateral sanctions have reduced the Government’s capacity to maintain and improve essential infrastructure and to engage in important development projects to improve peoples’ lives, especially in remote and rural areas. Disruptions in processing payments and foreign businesses’ refusal to accept foreign currency guarantees issued by Iranian banks due to sanctions have seriously affected Iran’s engagement in international partnerships for such projects, including the development and modernization of industries, power plants and electrical grids, water supply system, public transportation and the network of roads, educational and health facilities.
Hydropower, irrigation and water supply projects have been suspended amid the dearth of foreign funds due to unilateral sanctions and the impossibility to attract investments and new technologies for necessary upgrades in key industrial sectors, such as oil refineries, gas fields, power plants, pipelines and power grids, with serious adverse effects on the daily lives of people and heightened risks for serious environmental hazards. Similar concerns have been raised in the development and maintenance of land and air transport infrastructure.
The withdrawal of foreign donors and the interruption of contracts have hampered several critical dam construction projects and the supply of foreign industrial items, chemicals and technology for water and wastewater treatment.
In the energy sector, dozens of foreign companies have invested in projects for developing and upgrading Iran’s oil and gas fields. Almost all the contracts signed in 2015, following the JCPOA agreement, were terminated with the re-imposition of unilateral sanctions in 2018.
The electric power industry has faced difficulties in procuring equipment and raw materials, electronic and control equipment, relays and material for the production of certain equipment, including turbines, compressors and others. Such equipment is critical to secure reliable power supplies and prevent outages like those in 2021. The lost funding from the termination of investment contracts in the electricity sector since 2018 is estimated to exceed US$6 billion.
Numerous projects to build COVID-19 facilities and hospitals, some for cancer research and treatment, have been discontinued.
Sanctions have also prevented the Government from accessing resources and equipment for disaster preparedness, response and recovery interventions. Iran is a natural disaster-prone country experiencing a variety of often devastating disasters. More than 80,000 people reportedly died in the last 30 years as a result of extreme floods, extreme temperatures, droughts and earthquakes.
The Special Rapporteur was also briefed about difficulties in ensuring maintenance and upgrading for civil aviation fleets, mainly due to the obstacles in procuring spare parts, new technologies and software, as well as planes. This has been further exacerbated by the 2019 US Treasury Department OFAC Iran-Related Civil Aviation Industry Advisory. Foreign aircraft manufacturers have either terminated their contracts or only partially fulfilled them due to the sanctions and over-compliance, and have discontinued after-sales service and support, endangering thus the security of civil aviation and human lives. Similar challenges are affecting the Iranian automobile industry.
The above factors directly affect economic and social rights of Iranians, including the right to live in a favorable environment, access to clean water, freedom from poverty, the right to development and even the right to life, seriously undermining the achievement of the Sustainable Development Goals.
The Special Rapporteur notes with concern the negative impact of unilateral sanctions on academia. She was presented evidence of reluctance or refusals by international academic institutions and scholars to collaborate with their Iranian counterparts, impossibility to pay contributions to international professional associations, termination of foreign grants for academic exchanges and research, travel constraints, exclusion of Iranian scholars from editorial boards abroad, summary rejections of Iranian academic submissions and articles by foreign journals and publishers on the ground of nationality, obstacles in accessing foreign online academic, technological and medical databases and libraries.
Some Iranian academics, doctors and parliamentarians have been unable to attend online sessions of international organizations, conferences and workshops due to the lack of access for Iranians to the online platforms. The Special Rapporteur underlines that unilateral sanctions limit Iranians’ access to information, negatively affecting the right to education, academic freedoms, cultural rights, and the prohibition of discrimination.
The Special Rapporteur further learned about the negative impact of current unilateral sanctions on consular services and diplomatic relations. Iranian diplomats abroad are prevented from opening bank accounts, transferring money between Iran and the country where they are posted, receiving their salaries and effecting basic financial transactions, such as booking hotel rooms and travel tickets, and paying school fees and other daily life expenses. UN personnel in Iran and foreign diplomatic missions in Tehran and their staffs have experienced difficulties in paying salaries and covering school fees.
Women’s entrepreneurship, which the Government has supported and encouraged in recent years in different economic sectors, has also been impacted.
Despite Government efforts to address the medical, rehabilitation and socio-economic needs of persons with disabilities, through the establishment of daily rehabilitation training centers, the provision of rehabilitation devices, nursing services, grants for vocational training, as well as the establishment of occupational centers, the dedicated state budget is a fraction of what is needed to effectively respond to these needs.
Iran hosts more than 5 million migrants and refugees, most of them of Afghans in dire need of humanitarian assistance, with around 80 per cent of them being undocumented. The economic impact of sanctions, the restrictions on financial transactions and delivery, and donors’ reported reduced interest – compounded by the pandemic – have adversely affected the Government’s capacity to protect and humanitarian actors’ ability to implement projects, including provision of basic goods, and construction of schools and health centers.
The Special Rapporteur notes with concern the extension, in March 2022, by the US Government, for one more year, of the 1995 state of national emergency with respect to Iran with reference to the “threat to national security, foreign policy, and economy of the United States.” This decision is not compatible with the applicable norms of international law, including the principles of the UN Charter and the requirements under article 4 of the International Covenant on Civil and Political Rights (ICCPR) that has been reflected in a number of communications from the Special Rapporteur. Further, the same applies to the list of sanctions extended, renewed or updated by other countries against Iran, including the UK, Canada, Australia and the EU.
The Special Rapporteur has repeatedly stated that under international law unilateral measures without or beyond authorization of the UN Security Council may only be taken if they do not violate international obligations of states (retortions) or if their wrongfulness can be excluded as countermeasures taken in accordance with standards of the law of international responsibility: to be applied against states for violations of international legal norms, to aim to restore the fulfillment of international obligations, to be proportional to the breach occurred, to be necessary, and to not violate peremptory norms of international law and fundamental human rights.
Unilateral sanctions against Iran do not conform to a broad number of international legal norms and principles, are introduced to apply pressure on a state, cannot be justified as countermeasures under the law of international responsibility, and therefore can be qualified as unilateral coercive measures repeatedly condemned in resolutions of the UN Human Rights Council and the UN General Assembly. She also notes and welcomes the submission of the case on the violation of the 1955 Treaty of Amity.
States are required to contribute to creating an international environment that enables the respect, protection and fulfilment of all human rights, and they must take all necessary measures, including diplomatic and foreign relations, to promote and help create this environment. Clearly, the imposition of comprehensive unilateral sanctions and secondary sanctions, the freezing of foreign assets and the significant obstacles to the performance of Iran’s consular functions, do not per se contribute to such an enabling environment. Moreover, obstacles to diplomatic, consular and special missions, as well as to consular and diplomatic functions and operations, constitute a clear violation of the relevant provisions of the Vienna conventions on diplomatic and consular relations and fundamental principles of international law.
In addition, the application of extraterritorial jurisdiction to nationals and companies of third states for engaging in economic or other relations with Iranian public institutions, nationals and companies or for dealing with Iranian products; the use of national currencies as a means to expand national jurisdiction and as financial and political leverage in this regard; and the imposition of secondary sanctions and alleged threats to third parties, as well as maximum pressure campaigns, are illegal under international law and increase the risks of over-compliance.
The Special Rapporteur is also concerned that existing unilateral sanctions as a punitive action violate, at the very least, obligations arising from universal and regional human rights instruments, many with a peremptory character, including procedural guarantees, access to justice and presumption of innocence.
Iran has been experiencing a panoply of economic and other sanctions for over 40 years, coupled with secondary sanctions, over-compliance and de-risking policies which have been substantially affecting the country’s economy, humanitarian situation and people’s lives, including with regard to access to basic goods, services and infrastructure. Almost all the Special Rapporteur’s interlocutors, both governmental and non-governmental, have qualified these measures as a form of “economic warfare” with serious adverse effects on the lives of millions of Iranians inside and outside the country.
Unilateral sanctions, secondary sanctions and over-compliance have a clear macro-economic impact and affect Iran’s key economic sectors, leading to reduced Government revenues and thus affecting the Government’s planning and implementation of economic, development and social policies.
The designation of all Iranian banks and a long list of companies and nationals active in different economic sectors, including the pharmaceutical and food industries, have undermined national efforts toward economic self-sufficiency as a response to the sanctions-induced socio-economic pressures, and have led to reduced state revenue, growing poverty, exacerbated existing socio-economic inequalities, and insufficient resources aimed at guaranteeing the basic needs of low-income people and other vulnerable groups, including people suffering from rare or severe diseases, persons with disabilities, older persons, migrants and refugees, women-led households and children.
While recognizing the existence of OFAC general licenses providing for the possibility to procure and deliver with some exemptions medical and agricultural goods to Iran, in practice humanitarian exemptions for food and medicine appeared to be ineffective and nearly non-existent due to the real or alleged fear of secondary sanctions, civil and criminal charges, reported “advice” not to do any business in Iran, impossibility, complexity, uncertainty and length of bank payments and good deliveries, which affects the whole scope of human rights of the people of the Islamic republic of Iran.
Unilateral sanctions, secondary sanctions and over-compliance have also prevented the Government from investing resources to develop and maintain essential infrastructure including hospitals, schools, agriculture, housing, energy and electricity infrastructure, roads, civil aviation, commercial ships and many others, and to maintain the necessary level of readiness for natural disaster response and recovery. Of particular concern is the unavailability, due to trade and financial restrictions, of new technologies, hardware and spare parts for the maintenance and upgrade of the country’s critical infrastructure, with a devastating impact on the lives of Iranians and with heightened environmental risks.
Preventing Iran from participating in international cooperation by impeding its ability to pay membership fees to international organizations and associations, as well as by imposing restrictions on Iranian and foreign diplomatic missions’ operations, hampers Iran from international cooperation and prevents the fulfilment of the right to development, in accordance with the Sustainable Development Agenda.
The use of unilateral sanctions, secondary sanctions and over-compliance has an overall adverse effect on the broad spectrum of human rights, civil and political, economic, social and cultural, including the right to life and right to development. It concerns all people in Iran, including refugees, as well as Iranians living abroad, who all those who are dependent on critical goods and services.
While welcoming the Government’s efforts to mitigate the negative impact of unilateral sanctions in different areas, especially for the most vulnerable, the Special Rapporteur notes that this should not be used as a ground to legitimize the use of unilateral sanctions.
The Special Rapporteur urges all stakeholders to stop using the rhetoric of sanctions as a political instrument or a means to get economic advantages, and to engage in dialogue to settle any disputes in accordance with international law norms and principles, while assessing, preventing and monitoring the humanitarian impact.
She calls on sanctioning States:
(a) to lift all unilateral measures against Iran, Iranian nationals and companies, as being imposed without the authorization of the UN Security Council and whose use cannot be justified as retortions or countermeasures in accordance with international law.
(b) to remove especially all restrictions on trade, financial payments and delivery of food, medicines and medical equipment, water, sanitation, communication and transportation, spare parts, seeds, fertilizers as well as goods and services for the maintenance and development of critical infrastructure, which are essential for the enjoyment of human rights by Iranians.
(c) to ensure that the Islamic Republic of Iran is able to pay assessed and voluntary contributions to international organizations and that Iranian diplomatic, consular and special missions, as well as their staffs, are provided with all necessary means and facilities to perform their consular and diplomatic functions in full conformity with the principle of sovereign equality of states and the Vienna conventions on diplomatic and consular relations and special missions
(d) to unfreeze assets of the Iranian Central Bank in accordance with customary norms of international law on the immunity of state property, to enable the Government to implement socio-economic policies to benefit Iranians, in particular those most in need.
The Special Rapporteur urges the U.S. Government to cease the state of national emergency regarding Iran, which is incompatible with the norms of the ICCPR, to fully implement provisions of the Order of the International Court of Justice of 3 October 2018 and to bring national legislation into accordance with international law, including human rights law, refugee law and the law of international responsibility.
The Special Rapporteur invites the UN system to engage with her in developing a conceptual framework for mechanisms of compensation, remedy and redress for victims of human rights violations due to UCMs.
While welcoming Iranian efforts to accommodate the growing number of Afghan refugees, besides lifting of unilateral sanctions, which will enhance the Government’s capability to provide necessary services and care to refugees, I call on the international community to provide Iran with additional substantial assistance to be allocated for refugees.
The Special Rapporteur calls on UN agencies and programmes, and human rights mechanisms, including Special Procedures, to pay due attention to the impact of unilateral coercive measures while examining the situation in Iran.