Today, the United States is taking further action to increase pressure on Iran for its failure to meet its international obligations with regard to its nuclear program. A key element of our strategy focuses on Iran’s oil and gas production capacity, which — as UN Security Council Resolution 1929 recognized — Iran uses to fund its proliferation activities as well as to mask procurement for the importation of dual-use items. As part of that strategy, the State Department is sanctioning Belarusneft, a state-owned Belarusian energy company, under the Iran Sanctions Act (ISA) of 1996 as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, for its involvement in the Iranian petroleum sector.
In a thorough review, the Department confirmed that Belarusneft entered into a $500 million contract with the NaftIran Intertrade Company in 2007 for the development of the Jofeir oilfield in Iran. The ISA requires that sanctions be imposed on companies that make certain investments over $20 million.
This action on Belarusneft is another application of U.S. sanctions on Iran. In September, 2010, the State Department announced sanctions on the NaftIran Intertrade Company and the Department has applied the “Special Rule” in CISADA to persuade five major multinational energy companies to pledge to end their investments in Iran and provide assurances not to undertake new energy-related activity in Iran that may be sanctionable. The companies are: Total of France, Statoil of Norway, ENI of Italy, Royal Dutch Shell of the Netherlands, and INPEX of Japan.
Since President Barack Obama signed CISADA into law on July 1, 2010, Iran’s ability to attract new investment to develop its oil and natural gas resources, and to produce or import refined petroleum products, has been severely limited. The State Department’s direct engagement with companies and governments to enforce CISADA is raising the pressure on the Government of Iran. In the past year, many foreign companies have abandoned their energy-related projects in Iran or have stopped shipping refined petroleum to Iran. This is an appropriate response to Iran’s longstanding use of its oil and gas sector to facilitate its proliferation activities and thereby its noncompliance with its nuclear obligations.