US Move Easing Sanctions On Iran Internet May Have Limited Benefit

The United States said Friday it was easing the threat of sanctions over the supply of communications technology to Iran.

In a press briefing alongside a State Department colleague, a senior official in the Treasury’s Office of Foreign Assets Control (OFAC) said the move followed “coordination” over a year and a half with “major US technology companies to understand the issues they face in providing access to personal communication tools for the people in Iran.”

The official said the Treasury had just issued General License D-2, removing from threat of sanctions a general category of services and hardware, and would welcome approaches in specific cases from companies unsure of their position. Under US ‘maximum pressure’ sanctions, any company or individual worldwide has since 2018 faced possible punitive US action for dealings with the Iranian financial sector, while a broader range of anti-Iran sanctions apply to US companies and individuals.

The announcement followed businessman Elon Musk saying he would seek a sanctions exemption to activate for Iran the satellite internet service Starlink provided by the SpaceX company he leads. This enables users to connect direct and circumvent internet blockage by national authorities. Musk apparently reacted to US Secretary of State Antony Blinken saying Washington wanted to “advance internet freedom and the free flow of information” in Iran.

At the press briefing, the Treasury official said that as Starlink was providing “commercial grade” it would need to make a specific application. While the official referred to expanding “authorized exports to Iran…[linked to] exchange of communications over the internet,” neither US official clarified how Iranians might buy the ‘flat user terminal’ required for Starlink satellite access, nor how Iranians would afford a $495 installation fee and $85-a-month subscription given the sharp fall of the rial after four years of ‘maximum pressure.’

While Musk is making a good gesture by trying to provide Starlink services to Iranians, the Islamic Republic will certainly not allow any hardware facilitating unrestricted connection to the Internet into the country.

Founded by Musk in 2002 with the aim of colonizing Mars, SpaceX is a privately-owned, California-based company specialized in space-based communications. Adept at generating publicity especially through Twitter, Musk this summer expanded the availability of Starlink in Ukraine and was applauded by the US for helping Ukrainian military communications in the war against Russia.

‘Cloud-based services’

The Treasury official said at the briefing that the new move would expand access in Iran of “cloud-based” services, including Virtual Personal Networks (VPNs). Provider companies would be advised, the official explained, that their “due diligence obligations” – that is, their risk of being sanctioned – were “manageable.” The official did not explain how Iranians would pay the provider and referred questions as to how quickly companies could “pivot to provide additional services” to those companies.

The State Department official said he or she did not know if anything in the new waiver contravened Iranian law and reaffirmed the US commitment to revive the 2015 Iranian nuclear agreement. The official said US sanctions “rolled out over recent weeks, months, and years…are all just a reminder of the core, really, of our view of the JCPOA, which…was always intended to be nuclear deal to put Iran’s nuclear program into a very-well monitored box.”

Meetings between Iranian and European officials at the United Nations this week, during the General Assembly at which US President Joe Biden and Iranian President Ebrahim Raisi both spoke, apparently failed progress talks to revive the 2015 agreement, the JCPOA (Joint Comprehensive Plan of Action), which limited Iran’s nuclear program and eased international sanctions. Some analysts say the talks await US Congressional elections November 8.