Expiration of UN Missile Sanctions Has Limited Effect on Iran’s Arms Trade

Publication: Eurasia Daily Monitor Volume: 20 Issue: 183

While much of the world’s attention was focused on the outbreak of the Israel-Hamas war, the UN Security Council’s sanctions on the development and export of Iranian missiles quietly expired on October 18 (Amwaj.media, October 22). The sanctions were part of UN Security Council Resolution 2231, which set the specific terms for the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear program in July 2015. On October 18, the Secretariat of the UN Security Council sent a note to UN members specifying the areas affected by the expiration, including missile tests, the export and import of critical parts for missile production, and sanctions related to confiscating property and freezing assets of certain Iranian individuals and institutions (IRNA, October 19). The Iranian Foreign Ministry issued a statementthat same day: “As of today, there will be no restrictions on the transfer of missile-related items, services, and technology to and from the Islamic Republic of Iran. … Cooperation in all military and defense areas will be carried out, without any restriction, based on the needs and discretion of the Islamic Republic of Iran” (IRNA, October 18). Against the backdrop of Tehran’s support for Moscow’s war against Ukraine and the war in Gaza, the expiration may seem like a ground-breaking development. In reality, some Western countries and international bodies have kept their own sanctions in place, which continue to curtail Iran’s arms imports and exports as well as missile development.

The expiration of missile sanctions does not mean that Iran will be without restrictions from the rest of the world. The United States (State.gov, October 18), the Council of Europe (The Cradle, October 18), France, the United Kingdom, Germany (Al Jazeera, September 14), and Canada (Mirage News, October 19) all announced that, due to Tehran’s violation of its nuclear commitments and sending military aid to Russia, their sanctions on Iran’s missile program will be maintained. The Iranian government strongly criticized this position, describing it as an “illegal and politically unjustifiable act” (IRNA, October 17).

The potential transformative effects that the end of sanctions might have on Iran’s missile capacities and capabilities remain to be seen. In theory, the situation has changed; in reality, not much has. This process resembles the sanctions on Iran’s economic, financial, banking, and commercial activities. While the JCPOA is still in place, the withdrawal of the United States from the agreement on May 18, 2018, led Washington to impose extensive unilateral sanctions on Iran (Ofac.treasury.gov, November 4, 2018). Former US President Donald Trump’s policy of “maximum pressure” has not continued under President Joe Biden, though those sanctions remain in place. The Biden administration has imposed additional sanctions against Iranian institutions in connection with the selling of drones to Russia and various human rights violations (Treasury.gov, September 8, 2022; Radio Free Europe/Radio Liberty, September 27).

Other restrictions continue to hamper Tehran’s ability to work more closely with allies. Iran remains on the “blacklist” of the Financial Action Task Force (FATF), an international money-laundering watchdog. The FATF announced on June 24 that “it had made no changes to its blacklist, which for the moment includes three countries Iran, Myanmar, and North Korea” (Financial Tribune, June 24). SWIFT sanctions prevent money transfers and the opening of a Letter of Credit for exports and imports. Although most of the UN Security Council’s sanctions on Iran have expired, its trade of oil and gas supplies still face serious restrictions from Western sanctions (Ofac.treasury.gov, accessed November 29). Iran has sought to overcome these challenges by expanding trade with its neighbors, removing the US dollar from its banking system (see EDM, December 13, 2022), and strengthening financial relations with Russia and China.

These financial and banking sanctions have significantly hurt Iran’s arms and missile exports. Tehran’s partners are concerned about the effects of Western sanctions and the possible economic punishments that could come from overt cooperation with Iran. In this regard, some countries will continue to act cautiously despite the expiration of the UN sanctions. This may curtail Iran’s arms cooperation with countries such as Russia, China, Syria, and North Korea, though Iran’s drone exports to Moscow will likely continue.

Unsurprisingly, Russia openly welcomed the end of the Iran missile sanctions. Before the expiration of Iran’s missile sanctions, Russian Defense Minister Sergei Shoigu met with Iranian senior military and security officials on September 20 to tour an exhibition of Iranian missiles and drones (Al Jazeera, September 20). On October 17, the Russian Foreign Ministry issued a statement emphasizing that “it would no longer comply with … restrictions on providing Iran with missile technology starting Wednesday [October 18], when they formally expire—despite the stance of the other parties to the Iran nuclear deal” (Ukrainska Pravda, October 17). Moscow’s statement came on the heels of expanded fighting in Gaza and highlights Russia and Iran’s similar position on the conflict.

Since the start of the war in Gaza, Iran has acted more cautiously in cooperating with regional militant groups in the region, especially Hamas. Although Tehran has continued to politically support Hamas, the Iranian government has refused to intervene in the war directly. Lebanese Hezbollah, one of Iran’s most loyal and closest proxy militias in the Middle East, has also refrained from large-scale military attacks on Israel. Tehran has repeatedly emphasized that these groups, including Hamas, are not its proxies and act independently. The Iranian leadership has voiced its preference that the Israel-Hamas war remain limited to Gaza and not extend to Lebanon and Syria (The Times of Israel, November 29).

The expiration of the UN Security Council’s sanctions on Iran’s missile program has yet to foment a significant change in Iranian arms imports and exports. This is largely due to ongoing unilateral sanctions from Western countries and the continuation of stringent financial and banking sanctions. According to unofficial channels, the expiration will not have a long-term effect on Tehran’s support for militant groups in the Middle East. Iran may continue to conduct its arms trade in a more covert manner, as a means of circumventing those sanctions still in place.