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U.S. President Donald Trump announced on Wednesday that the United States would immediately impose "punishing" additional sanctions on Iran, a day after Iran fired missiles on two Iraqi bases with American personnel in retaliation for the U.S. killing of top Iranian general Qassem Soleimani.
"These sanctions will remain until Iran changes its behavior," Trump said during a televised speech from the White House.
But with Iran already under a crippling sanctions regime that costs it billions of dollars a year, the question is, what additional penalties can the administration impose on Tehran?
"Well, that's a very good question because every sector of the Iranian economy is very thoroughly sanctioned right now," said Kenneth Katzman, the lead Iran analyst at the nonpartisan Congressional Research Service. "So I think experts including myself are wondering what more can be done, because really there is not a lot of ground to plow beyond what's already been done."
IIranian natural gas exports, currently exempt from sanctions, could potentially be targeted, but that would hurt buyers such as U.S. ally Turkey, Katzman said.
Longtime proponents of sanctions on Iran remain bullish on additional penalties.
"There are additional levers the U.S. has, particularly as it relates to assets of the Supreme Leader [Ayatollah Ali Khamenei] and of the Islamic Revolutionary Guard Corps," said Annie Fixler, an analyst at the Foundation for Defense of Democracies, a conservative think tank that has long advocated for punishing sanctions on the Iranian regime. "Targeting those assets in particular would put the regime under additional pressure while sparing the Iranian people."
The White House did not provide any details on the president's announcement. A Treasury Department spokesperson said she had no information on whether any additional sanctions were under consideration.
Since the 1979 Islamic Revolution, U.S. administrations have turned to a broad array of sanctions to try to drive change in Iranian behavior. These restrictions have included "primary sanctions" such as a ban on direct trade between the U.S. and Iran and "secondary sanctions" such as restrictions on foreign companies doing business with Iran. In recent years, sanctions on Iran have sometimes been referred to as "nuclear-related sanctions" and "non-nuclear sanctions."
Non-nuclear sanctions
These sanctions date back to the early days of the Islamic Republic and were imposed well before the emergence of an Iranian nuclear threat in 2010. They include a ban on U.S. trade with Iran as well as penalties related to Iran's support for terrorism and efforts to acquire advanced missile technologies. These remain in place. The restrictions also include a ban on foreign companies conducting business with Iran in U.S. dollars.
Nuclear sanctions
These sanctions were imposed during the 2006-15 period amid Western concern that Iran was developing a nuclear weapons program. The sanctions helped reduce Iranian oil exports by half, impeded Iranian banks from doing business with the outside world, and cut off Iran's access to between $100 billion and $150 billion of assets held abroad. Supporters say the sanctions helped bring Iran to the negotiating table.
2015 nuclear deal and sanctions relief
In 2015, Iran agreed to halt its nuclear program in exchange for broad international sanctions relief. As part of the agreement, the U.S. lifted sanctions on Iranian individuals as well as the oil, banking and shipping sectors. It also lifted nearly all restrictions on Iran's access to the international financial system, allowing the $100 billion to $150 billion in assets to flow back into Iranian coffers. Trump denounced that provision of the nuclear deal negotiated by the Obama administration, saying the money was used to promote Iran's terrorist activities. However, sanctions related to Iran's ballistic missile sector and a weapons export and import ban remained in place.
Reimposition of sanctions
In November 2018, six months after withdrawing from the Iran nuclear deal, the Trump administration announced what it called the largest sanctions action against Iran, reimposing penalties that had been lifted or waived as part of the 2015 nuclear agreement as well as imposing additional restrictions. More than 700 individuals, entities, aircraft and vessels were targeted. The action was part of the administration's "maximum pressure" policy intended to force Iran into renegotiating the nuclear deal.
According to the Congressional Research Service, reimposition of the sanctions has pushed the Iranian economy into recession, sparking unrest around the country. In addition, while direct European sanctions on Iran remain lifted, the threat of U.S. sanctions has reduced the volume of business between Iran and Europe.
Yet the sanctions have failed to change Iran's behavior, Katzman said, noting that the Iranian regime continues to support proxies and allies in the Middle East.
"Iran has shown an ability to continue to conduct high levels of these activities even in the face of very stiff sanctions," Katzman said. "So I don't think any additional sanctions would change that in any material way."