Iran - Tips

Iran - Tips

Iran Bureau of Near Eastern Affairs
June 2007

Background Note: Iran

Tourists visit ruins at Persepolis,
near Shiraz, Iran, May 22, 2002. [©
AP Images]

Flag of Iran is three equal horizontal bands of green (top), white, and red;
the national emblem (a stylized representation of the word Allah in the shape
of a tulip, a symbol of martyrdom) in red is centered in the white band;
ALLAH AKBAR (God is Great) in white Arabic script is repeated 11 times along
the bottom edge of the green band and 11 times along the top edge of the red
band.

PROFILE

OFFICIAL NAME:
Islamic Republic of Iran

Geography
Area: 1.6 million sq. km. (636,295 sq. mi., slightly larger than Alaska).
Arable land: 9.78% of the country.
Cities: Capital--Tehran. Other cities--Isfahan, Tabriz, Mashhad, Shiraz,
Yazd, Qom.
Terrain: Desert and mountains.
Climate: Semiarid; subtropical along the Caspian coast.

People
Nationality: Noun and adjective--Iranian(s).
Population (2007): 65.4 million.
Population growth rate (2007 est.): 0.663%.
Ethnic groups: Persians 51%, Azeri 24%, Gilaki and Mazandarani 8%, Kurd 7%,
Arab 3%, Lur 2%, Baloch 2%, Turkmen 2%, other 1%.
Religions: Shi'a Muslim 89%; Sunni Muslim 9%; Zoroastrian, Jewish, Christian,
and Baha'i 2%.
Languages: Persian and Persian dialects 58%, Turkic languages (besides
Turkish) 26%, Kurdish 9%, Luri 2%, Balochi 1%, Arabic 1%, Turkish 1%, other
2%.
Education: Literacy (total population age 15 and over who can read and write,
2003)--79% (male: 86%, female: 73%).
Health (2007 est.): Infant mortality rate--38.2 deaths/1,000 live births.
Life expectancy at birth (2007)--total population: 70.56 yrs.

Government
Type: Islamic republic.
Constitution: Ratified in December 1979, revised 1989.
Branches: Executive--Supreme Leader (head of state), president (head of
government), Council of Ministers, Assembly of Experts, Expediency Council,
Council of Guardians. Legislative--290-member Majles (National Assembly, or
Islamic Consultative Assembly). Judicial--Supreme Court.
Political parties: A number of reform-minded groups achieved considerable
success during elections to the sixth Majles in early 2000. However, many
reformist candidates, including sitting members of the Majles, were
disqualified from participation in the February 2004 elections. As a result,
a new conservative group, the Builders of Islamic Iran, won a majority of the
seats and took a leading position in the seventh Majles.
Administrative subdivisions: 30 provinces.
Suffrage: Universal suffrage. The government is debating raising the voting
age from 15 to 18.

Economy
GDP (purchasing power parity, 2006 est.): $599.2 billion.
GDP (official exchange rate, 2006 est.): $193.5 billion.
GDP real growth rate (2007 est.): 4.6%.
GDP composition by sector (2006): Agriculture 11.2%, industry 41.7%, services
47.1%.
Per capita income (2006 est.): $8,700.
Work force: 24.36 million.
Work force - by occupation (2001 est.): Agriculture 30%, industry 25%,
services 45%.
Unemployment rate (2007 est.): 20%.
Natural resources: Petroleum, natural gas, coal, chromium, copper, iron ore,
lead manganese, zinc, sulfur.
Agriculture: Principal products--wheat, rice, other grains, sugar beets,
fruits, nuts, cotton, dairy products, wool, caviar. Note: Iran is not
self-sufficient in terms of food.
Industry: Types--petroleum, petrochemicals, textiles, cement and building
materials, food processing (particularly sugar refining and vegetable oil
production), metal fabricating (particularly steel and copper), armaments.
Trade (2007 est.): Exports--$56.9 billion: petroleum 80%, chemical and
petrochemical products, carpets, fruits, nuts. Major export partners (2006):
Japan (17.3%), China (11.4%), Italy (6.2%), South Korea (5.2%), South Africa
(5.5%), Turkey (5.7%), Netherlands (4.6%), France (4.1%), Taiwan (4.1%).
Imports--$48.1 billion: industrial raw materials and intermediate goods,
capital goods, foodstuffs and other consumer goods, technical services,
military supplies. Major import partners: Germany (14.2%), U.A.E. (6.7%),
China (8.3%), Italy (7.5%), France (6.2%), South Korea (5.4%), Russia (4.9%).

PEOPLE
Iran is a pluralistic society. Persians are the largest predominant ethnic
and cultural group in this country, though many are actually of mixed
ancestry. The population of the country has important Turkic elements (e.g.,
Azeris) and Arabs predominate in the southwest. In addition, Iranian citizens
include Kurds, Balochi, Bakhtyari, Lurs, and other smaller minorities, such
as Armenians, Assyrians, Jews, and Brahuis (or Brohi).

The 1979 Islamic revolution and the 1980-88 war with Iraq transformed Iran's
class structure politically, socially, and economically. During this period,
Shia clerics took a more dominant position in politics and nearly all aspects
of Iranian life, both urban and rural. After the fall of the Pahlavi regime
in 1979, much of the urban upper class of prominent merchants,
industrialists, and professionals, favored by the former monarch, the shah,
lost standing and influence to the senior clergy and their supporters. Bazaar
merchants, who were allied with the clergy against the Pahlavi shahs, also
have gained political and economic power since the revolution. The urban
working class has enjoyed somewhat enhanced status and economic mobility,
spurred in part by opportunities provided by revolutionary organizations and
the government bureaucracy. Though the number of clergy holding senior
positions in the parliament and elsewhere in government has declined since
the 1979 revolution, Iran has nevertheless witnessed the rise of a
post-revolutionary elite among lay people who are strongly committed to the
preservation of the Islamic Republic.

Most Iranians are Muslims; 89% belong to the Shi'a branch of Islam, the
official state religion, and about 9% belong to the Sunni branch, which
predominates in neighboring Muslim countries. Non-Muslim minorities include
Zoroastrians, Jews, Baha'is, and Christians.

HISTORY
The ancient nation of Iran, historically known to the West as Persia and once
a major empire in its own right, has been overrun frequently and has had its
territory altered throughout the centuries. Invaded by Arabs, Seljuk Turks,
Mongols, and others--and often caught up in the affairs of larger
powers--Iran has always reasserted its national identity and has developed as
a distinct political and cultural entity.

Archeological findings indicate human activity in Iran during the middle
Paleolithic era, about 100,000 years ago. The sixth millennium B.C. saw a
fairly sophisticated agricultural society and proto-urban population centers.
Many dynasties have ruled Iran, starting with the Achaemenid (559-330 B.C.)
founded by Cyrus the Great. After the conquest of Persia by Alexander the
Great and the Hellenistic period (300-250 B.C.) came the Parthian (250
B.C.-226 A.D.) and the Sassanian (226-651) dynasties.

The seventh century Arab-Muslim conquest of Iran was followed with invasions
by the Seljuk Turks and the Mongols. Iran underwent something of a revival
under the Safavid dynasty (1502-1736), the most prominent figure of which was
Shah Abbas, who expelled the Uzbeks and Ottomans from Persia. The conqueror
Nadir Shah and his successors were followed by the Zand dynasty, founded by
Karim Khan, and later the Qajar (1795-1925) and the Pahlavi dynasties
(1925-1979).

Modern Iranian history began with a nationalist uprising against the Shah in
1905 and the establishment of a limited constitutional monarchy in 1906. The
discovery of oil in 1908 would later become a key factor in Iranian history
and development.

In 1921, Reza Khan, an Iranian officer of the Persian Cossack Brigade, seized
control of the government. In 1925, having ousted the Qajar dynasty, he made
himself Shah and established the Pahlavi dynasty, ruling as Reza Shah for
almost 16 years.

Under Reza Shah's reign, Iran began to modernize and to secularize, and the
central government reasserted its authority over the tribes and provinces.
During World War Two the Allies feared the monarch close relations with Nazi
Germany. In September 1941, following the occupation of western Iran by the
Soviet Union and the United Kingdom, Reza Shah was forced to abdicate. His
son, Mohammad Reza Pahlavi, became Shah and would rule until 1979.

During World War Two, Iran had been a vital link in the Allied supply line
for lend-lease supplies to the Soviet Union. After the war, Soviet troops
stationed in northwestern Iran not only refused to withdraw but backed
revolts that established short-lived, pro-Soviet separatist regimes in the
northern regions of Azerbaijan and Kurdistan. These ended in 1946. The
Azerbaijani revolt crumbled after U.S. and United Nations (UN) pressure
forced a Soviet withdrawal. Iranian forces also suppressed the Kurdish
uprising.

In 1951, the government of nationalist Prime Minister Mohammed Mossadeq
(sometimes spelled Mossadegh) nationalized the British-owned Anglo-Iranian
Oil Company (AIOC). The Shah fled to Rome from Iran before the U.S.-backed
coup against Mossadeq in August 1953, during which pro-Shah army forces
arrested the Prime Minister. The Shah returned soon thereafter. A few years
later, AIOC was renamed British Petroleum, better known today as BP.

In 1961, Iran initiated a series of economic, social, and administrative
reforms that became known as the Shah's White Revolution. The core of this
program was land reform. Modernization and economic growth proceeded at an
unprecedented rate, fueled by Iran's vast petroleum reserves, the
third-largest in the world. However, his autocratic method of rule and
pro-western policies alienated large sectors of the population, including the
Shia clergy.

In 1978, domestic turmoil swept the country as a result of religious and
political opposition to the Shah's rule, including abuses committed by SAVAK,
the hated internal security and intelligence service. In January 1979, the
Shah left Iran; he died abroad several years after.

On February 1, 1979, exiled religious leader Ayatollah Ruhollah Khomeini
returned from France, to assume control of the revolution and established
himself as Supreme Leader of a new, theocratic republic guided by Islamic
principles. Following Khomeini's death on June 3, 1989, the Assembly of
Experts chose the outgoing president of the republic, Ali Khamenei, to be his
successor as Supreme Leader in what proved to be a smooth transition.

In August 1989, Akbar Hashemi-Rafsanjani, the speaker of the Majles, was
elected President by an overwhelming majority. He was re-elected June 1993,
with a more modest majority. Some Western observers attributed the reduced
voter turnout to disenchantment with the deteriorating economy. An
overwhelming majority of Iranians elected Mohammad Khatami-Ardakani as
President in August 1997, hoping he would usher in a new era of freedom and
reform. Khatami had modest successes in broadening the participation of
Iranians in government and politics through initiating popular elections for
local government councils and encouraging the development of civil society.
Many liberal-minded Iranians were disappointed that Khatami did not support
student protesters in 1999, but he was nevertheless re-elected in June 2001.

In February 2004 flawed elections were held for the Seventh Majles in which
many reformists were prohibited from contesting their seats, meaning that a
much more conservative group of parliamentarians easily retook control of the
Majles in May 2004. The next Majles elections are currently slated to take
place on March 14, 2008.

None of the seven candidates in the presidential vote on June 17, 2005
received a majority, resulting in a two-candidate runoff between Tehran mayor
Mahmud Ahmadi-Nejad and former President Akbar Hashemi Rafsanjani on June 24.
Ahmadi-Nejad, winning in the second round with almost 62% of the vote
according to Iranian Government figures, took office in August 2005. The next
presidential elections are scheduled for 2009.

GOVERNMENT
The December 1979 Iranian constitution defines the political, economic, and
social order of the Islamic republic. The document establishes Shi'a Islam of
the Twelver (Jaafari) sect as Iran's official religion. Sunni Islam,
Zoroastrianism, Judaism and Christianity are the only other recognized, legal
minority religions. The country is governed by secular and religious leaders
through governing bodies, whose duties often overlap.

The Supreme Leader holds power for life unless removed by the Assembly of
Experts. He has final say on all domestic, foreign, and security policies for
Iran, though he establishes and supervises those policies in consultation
with the Expediency Council. The Leader is the final arbiter on all
differences or disputes among the various branches of government. He appoints
officials to key positions including the head of judiciary and the 12 members
of the Guardian Council (six directly, six indirectly). He has power to
remove the president and is commander-in-chief of the armed forces.

The constitution stipulates that the Assembly of Experts, which currently
consists of the 86 popularly-elected clerics elected to 8-year terms, chooses
the Supreme Leader based on jurisprudent qualifications and commitment to the
principles of the revolution. The Assembly of Experts reviews his performance
periodically and has the power to depose and replace him. Pragmatic
conservative candidates generally polled better than their hardline
conservative opponents during the December 15, 2006 elections to the Assembly
of Experts. (Turnout for this vote, which coincided with municipal council
elections, was quite high, topping 60%.) Citizens will not vote for
representatives to the Assembly again until 2014.

The Council of Guardians consists of 12 persons. The Supreme Leader appoints
the six religious members of the Council of Guardians while the Iranian
parliament, the Majles, selects the six lay members from candidates
recommended by the judiciary, which is in turn selected by the Supreme
Leader. The non-clerics play a role only in determining whether legislation
before the Majles conforms to Iran's constitution. The religious members, on
the other hand, take part in all deliberations, considering all bills for
conformity to Islamic principles. The Council of Guardians can veto any law.
This body also certifies the competence of candidates for the presidency, the
Assembly of Experts, and the Majles.

The president of the Islamic Republic of Iran is elected by universal
suffrage to a 4-year term. The president supervises the affairs of the
executive branch, appointing and supervising the Council of Ministers
(members of the cabinet), coordinating government decisions, and selecting
government policies to be placed before the National Assembly.

The Majles, or National Assembly, consists of 290 members elected to 4-year
terms. The members of the legislature are elected by direct and secret ballot
from among the candidates approved by the Council of Guardians.

In 1988, Ayatollah Khomeini created the Council for Expediency, which
resolves legislative issues on which the Majles and the Council of Guardians
fail to reach an agreement. Since 1989, it has been used to advise the
national religious leader on matters of national policy as well. It is
composed of the president, the speaker of the Majles, the judiciary chief,
the clerical members of the Council of Guardians, and other members appointed
by the Supreme Leader for 3-year terms. Cabinet members and Majles committee
chairs also serve as temporary members when issues under their jurisdictions
are considered. In 2005, it was announced that the Expediency Council, which
now has over 40 members, would have responsibility for general supervision of
the system, though that has not resulted in any noticeable change in this
institution's day-to-day authority or operations.

Judicial authority is constitutionally vested in the Supreme Court and the
four-member High Council of the Judiciary; these are two separate groups with
overlapping responsibilities and have one head. Together, they are
responsible for supervising the enforcement of all laws and for establishing
judicial and legal policies.

Iran has two military forces. The national military is charged with defending
Iran's borders, while the Islamic Revolutionary Guard Corps (IRGC) is charged
mainly with maintaining internal security.

Iran has 30 provinces managed by an appointed governor general. The provinces
are further divided into counties, districts, and villages. Sixty percent of
eligible voters took part in the first ever municipal and local council
elections in 1999, though a lower percentage went to the polls in the second
round in 2003. Turnout during the December 15, 2006 elections, during which
citizens also elected Assembly of Expert representatives, was over 60%. The
local councils select mayors.

Principal Government Officials
Leader of the Islamic Revolution--Ali Hosseini-Khamenei
President--Mahmud Ahmadi-Nejad
First Vice President--Parviz Davudi
Foreign Minister--Manouchehr Mottaki
Ambassador to the United Nations--Mohammad Javad Zarif

POLITICAL CONDITIONS
Iran's post-revolution difficulties have included an 8-year war with Iraq,
internal political struggles and unrest, and economic disorder. The early
days of the regime were characterized by severe human rights violations and
political turmoil, including the seizure of the U.S. Embassy compound and its
occupants on 4 November 1979, by Iranian student militants. Iranian
authorities released the 52 hostages only after 444 days of captivity.

By mid-1982, the clergy had won a succession of post-Revolution power
struggles that eliminated first the center of the political spectrum and then
the leftists, including the communist Tudeh party and the cult-like
Mujahedin-e Khalq Organization (MEK or MKO). Assassinations, throwing acid in
the faces of women who refused to wear the veil, and other acts of violence
punctuated this period. There has been some moderation of excesses since the
early days of the revolution, and the country experienced a partial "thaw" in
terms of political and social freedoms during the tenure of former president
Khatami, but serious problems remained. The administration of President
Ahmadi-Nejad has witnessed a crackdown on Iranian civil society, continued
human rights violations, and worsening constraints on press freedom and civil
liberties.

The Islamic Republican Party (IRP) was Iran's sole political party until its
dissolution in 1987. Iran now has a variety of groups engaged in political
activity; some are oriented along ideological lines or based on an identity
group, others are more akin to professional political parties seeking members
and recommending candidates for office. Some have been active participants in
the Revolution's political life while others reject the state. Conservatives
consistently thwarted the efforts of reformists during the Khatami era and
have consolidated their control on power since the flawed elections for the
seventh Majles in 2004 and president Ahmadi-Nejad's victory in 2005.

The Iranian Government has faced armed opposition from a number of groups,
including the MEK (which the U.S. Government added to its list of Foreign
Terrorist Organizations in 1999), the People's Fedayeen, and the Kurdish
Democratic Party of Iran (KDPI).

ECONOMY
Pre-revolutionary Iran's economic development was rapid. Traditionally an
agricultural society, by the 1970s Iran had achieved significant
industrialization and economic modernization. However, the pace of growth had
slowed dramatically by 1978, just before the Islamic revolution. Since the
fall of the shah, economic recovery has proven elusive thanks to a
combination of factors, including fluctuations in the global energy market.
Economic activity was severely disrupted additionally by years of upheaval
and uncertainty surrounding the revolution and the introduction of statist
economic policies. These conditions were worsened by the war with Iraq and
the decline in world oil prices beginning in late 1985. After the war with
Iraq ended, the situation began to improve: Iran's GDP grew for two years
running, partly from an oil windfall in 1990, and there was a substantial
increase in imports. However, Iran had suffered a brain drain throughout the
previous decade and wartime policies had resulted in a demographic explosion.

A decrease in oil revenues in 1991 and growing external debt dampened
optimism for recovery. In March 1989, the government instituted a new 5-year
plan for economic development, which loosened state control and allowed Iran
to seek greater latitude in accessing foreign capital. Mismanagement and
inefficient bureaucracy, as well as political and ideological infighting,
hampered the formulation and execution of a consolidated economic policy, and
the Iran fell short of the plan's goals while economic inequality was
aggravated. Today, Iran's economy is a mixture of central planning, state
ownership of oil and other large enterprises, village agriculture, and
small-scale private trading and service ventures. Former President Khatami
followed the market reform plans of his predecessor, President Rafsanjani,
and indicated that he would pursue diversification of Iran's oil-reliant
economy, although he made little progress toward that goal. High inflation
and expansive public transfer programs, as well as powerful
economic-political vested interests created obstacles for rapid reform.

During the 2005 election campaign, President Ahmadi-Nejad promised to
redistribute oil revenues to the impoverished, fund large infrastructure
projects, and privatize Iranian state enterprises. He has been criticized
within Iran for not carrying through on many of his promises. While
establishment of the Imam Reza fund for cheap loans to youth has been
popular, a law increasing the minimum was revoked because of the huge strain
on employers. The "Shares of Justice" program--distributing shares of
state-owned enterprises to the poor--faces a number of potential problems.

Unemployment was estimated to be 20% for 2007, according to the International
Monetary Fund. Unemployment, a major problem even before the revolution, has
many causes, including population growth, high minimum wage level and other
restrictive labor policies. Farmers and peasants enjoyed a psychological
boost from the attention given them by the Islamic regime but hardly appear
to be better off in economic terms. The government has made progress on rural
development, including electrification and road building, but Iran still
faces inefficiencies related to agricultural land usage which are politically
difficult to reconcile. Agriculture also has suffered from shortages of
capital, raw materials, and equipment, problems dating back to the 1980-1988
war with Iraq. (See Foreign Relations below.)

Although Islam guarantees the right to private ownership, banks and some
industries--including the petroleum, transportation, utilities, and mining
sectors--were nationalized after the revolution under Marxist-influenced
economic policies. Starting under President Rafsanjani, Iran has pursued some
privatization through its nascent equities markets. However, the industrial
sector remains plagued by low labor productivity and shortages of raw
materials and spare parts, and is uncompetitive against foreign imports.

Increases in the price of oil starting in 2003 have increased state revenue
enormously and permitted a much larger degree of spending on social programs
than previously anticipated. However, this has not eased economic hardships
such as high unemployment and inflation. The proportion of the economy
devoted to the development of weapons of mass destruction and military
spending overall remains a contentious issue with leading Western nations.

Earnings from Iranian oil exports, projected at $57-$87 billion for
2007-2008, are placed into the Oil Stabilization Fund (OSF), originally
designed as a Treasury safety net if oil prices dropped below $20/barrel. In
practice, the government has drawn upon the OSF to cover overexpenditures.
Iran relies on oil for 80% of its export revenue, and 40% of total revenues.
(Note: Iran's refining capacity is limited, and Tehran is a net gasoline
importer, spending $2.6 billion for foreign gas in 2005.)

FOREIGN RELATIONS
Khomeini's revolutionary regime initiated sharp changes from the foreign
policy pursued by the Shah, particularly in reversing the country's
orientation toward the West. In the Middle East, Iran's only significant ally
has been Syria, but Iran has made strides in improving relations with its
Gulf neighbors, particularly Saudi Arabia.

Iran's foreign relations are based on sometimes competing objectives. Iran's
pragmatic foreign policy goals include, not surprisingly, protecting itself
from external threats and building trade ties. Iran has additionally been
accused, however, of trying to export its fundamentalist revolution to other
countries, sometimes supporting terrorist organizations, and its vehement
anti-U.S. and anti-Israel stances are well-known. Senior Iranian officials
directed Hezbollah to carry out the bombing of the Asociación Mutual
Israelita Argentina (AMIA, the Argentine Israelite Mutual Association)
building in Buenos Aires on July 18, 1994, killing 85 people and wounding
scores of others. Out of the eight individuals indicted by the Government of
Argentina in October 2006, the Interpol Executive Committee has recommended
the issuance of Red Notices (international arrest warrants) against six: five
former or current Iranian officials and one Lebanese Hezbollah leader.

In September 1980, during the U.S. hostage crisis, Iraq invaded Iran to take
control of the waterway between the two countries, the Shatt al-Arab,
although the conflict's underlying causes included each nation's overt desire
for the overthrow of the other's government. Iran defended itself and
demanded the withdrawal of Iraqi troops from Iranian territory and the return
to the status quo ante for the Shatt al-Arab as established under the 1975
Algiers Agreement signed by Iraq and Iran. Khomeini's government turned down
an Iraqi cease-fire proposal in 1982, making a new demand for Saddam
Hussein's removal as well. After eight punishing years of war, in July 1988,
Iran at last agreed to UN Security Council Resolution 598 and the cease-fire
was implemented on August 20, 1988. Neither nation had made any real gains in
the war.

Iran's relations with many of its Arab neighbors have been strained by
Iranian attempts to spread its Islamic revolution, a strictly ideological
goal. In 1981, Iran supported a plot to overthrow the Bahrain Government. In
1983, Iran expressed support for Shi'ites who bombed Western embassies in
Kuwait, and in 1987, Iranian pilgrims rioted during the hajj (pilgrimage) in
Mecca, Saudi Arabia. Nations with strong fundamentalist movements, such as
Egypt and Algeria, also mistrust Iran. Iran backs Hezbollah (in Lebanon),
Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of
Palestine-General Command, all of which are violently opposed to the
Arab-Israeli peace process. In contrast, while relations with west European
nations have been uneven, they have been driven primarily by pragmatic goals
of trade and security. Iran has accepted stronger commercial ties but largely
declined to deliver on key European political concerns such as human rights
and weapons of mass destruction (WMD) acquisition efforts, particularly in
the nuclear field, where the International Atomic Energy Agency (IAEA) has
been strongly critical of Iran.

An IAEA report in November 2003 provided evidence that Iran, a signatory to
the Nuclear Non-Proliferation Treaty (NPT), had concealed secret nuclear
activities for 18 years. Under international pressure, Iran signed the
Additional Protocol to the Safeguards Agreement on December 18, 2003,
agreeing to suspend all uranium-enrichment and reprocessing activities
voluntarily, as well as cooperate fully with the International Atomic Energy
Agency (IAEA) in resolving questions regarding Iran's nuclear program. In
June 2004, the IAEA rebuked Iran for failing to fully cooperate with an
inquiry into its nuclear activities, and in November 2004, Iran agreed to
suspend most of its uranium enrichment under a deal with the EU. That promise
did not last, however, and since then concerns over Iran's nuclear activities
have increased.

On June 6, 2006, China, France, Germany, Russia, the United States, and
United Kingdom offered Iran a substantial package of economic cooperation and
assistance. Tehran, however, was first required to come into compliance with
International Atomic Energy Agency (IAEA) guidelines on its nuclear program,
suspending its uranium enrichment program. On July 31, the UN Security
Council adopted resolution 1696 on the Iranian nuclear question, requiring
Iran to suspend all activities related to enrichment and reprocessing,
including research and development, as demanded by the IAEA, or else face
possible sanctions. Tehran defied the UN Security Council (UNSC) deadline of
August 31, leading to the passage of UNSC Resolution 1636 in December 2006
and, as Iran continued to balk, Resolution 1747 in March 2007.

Iran sparked an international controversy when its forces seized and held
hostage 15 British sailors and marines, conducting routine anti-smuggling
operations in Iraqi territorial waters under UN mandate, on March 23, 2007.
Tehran released the U.K. service members on April 6.

Iran maintains regular diplomatic and commercial relations with Russia and
the former Soviet republics. Both Iran and Russia believe they have important
national interests at stake in developments in Central Asia and the
Transcaucasus, particularly regarding energy resources from the Caspian Sea.
Russian and other sales of military equipment and technology to Iran concern
Iran's neighbors and the United States. Washington is also concerned about
Russian assistance in building at nuclear facility at Bushehr.

Iran spends about 3.3% of its GDP on its military. Iran's military consists
of both a national military held over from the shah's government and the
IRGC, each with its own ground, naval and air braches. The Iran-Iraq war took
a heavy toll on these military forces. Iran is trying to modernize its
military, including ballistic missile programs, and acquire weapons of mass
destruction; it does not yet have, but continues to seek, nuclear
capabilities.

U.S.-IRANIAN RELATIONS
On November 4, 1979, militant Iranian students occupied the American Embassy
in Tehran with the support of Ayatollah Khomeini. Fifty-two Americans were
held hostage for 444 days. On April 7, 1980, the United States broke
diplomatic relations with Iran, and on April 24, 1981, the Swiss Government
assumed representation of U.S. interests in Tehran. Iranian interests in the
United States are represented by the Government of Pakistan. The Islamic
Republic of Iran does not have its own embassy in Washington, though it does
have a permanent mission to the United Nations in New York City.

In accordance with the Algiers declaration of January 20, 1981, the Iran-U.S.
Claims Tribunal (located in The Hague, Netherlands) was established for the
purpose of handling claims of U.S. nationals against Iran and of Iranian
nationals against the United States. U.S. contact with Iran through The Hague
covers only legal matters.

The U.S. Government, by Executive Orders issued by the President as well as
by Congressional legislation, prohibits most trade with Iran. Some sanctions
were imposed on Iran because Tehran is a state sponsor of terrorism, others
because of the nuclear proliferation issues, and still more for human rights
violations, including infringement of religious freedom. The commercial
relations that do exist between the two countries consist mainly of Iranian
purchases of food and medical products and U.S. imports of carpets and food.
Some sanctions were temporarily waived in the wake of the devastating Bam
earthquake of December 2003. U.S. officials and relief workers actively
assisted in relief and reconstruction efforts.

There are serious obstacles to improved relations between the two countries.
As a state sponsor of terrorism, Iran remains an impediment to international
efforts to locate and prosecute terrorists. Recent attempts by Iran to form
loose alliances with anti-U.S. governments in the Western Hemisphere, such as
the Venezuelan Government, has further heightened concern about Iran's
support for terrorism and nuclear ambitions. Operation Iraqi Freedom removed
the Iranian Government's greatest security threat, but officially Iran
remained neutral about U.S. policy, sometimes strongly condemning American
policies and actions in Iraq. Iran has cultural ties to elements of the
populations of both Iraq and Afghanistan. It has made some positive
contributions to stability in both countries, but other actions have had the
opposite effect. It remains to be seen whether Tehran will ultimately be a
constructive force in the reconstruction of its two neighbors or not.

The U.S. Government defines its areas of objectionable Iranian behavior as
the following:


*Iran's efforts to acquire nuclear weapons and other weapons of mass
destruction;
*Its support for and involvement in international terrorism;
*Its support for violent opposition to the Middle East peace process, as
well as its harmful activities particularly in Lebanon, as well as in
Iraq, Afghanistan, and elsewhere in the region; and
*Its dismal human rights record and lack of respect for its own people.

The United States has held discussions with Iranian representatives on
particular issues of concern over the years. U.S. and Iranian envoys
cooperated during operations to overthrow the Taliban in 2001 and during the
Bonn Conference in 2002 that established a broad-based government for the
Afghan people under President Karzai. The Secretary of State, her Iranian
counterpart, and others met at talks on Iraq in Sharm El Sheikh, Egypt, on
May 3, 2007. The American and Iranian ambassadors to Iraq took part in
face-to-face discussions in Baghdad, with Iraqi officials in attendance, on
May 28, 2007. The United States believes, however, that normal relations are
impossible until Iran's policies change.

Nevertheless, the U.S. State Department is supporting efforts to further the
cause of democracy in Iran. In fiscal year (FY) 2006, the U.S. Congress
allocated approximately $66 million to promote free media, personal freedom,
and a better understanding of western values and culture. As part of these
efforts, the Department supports efforts to develop civil society in Iran and
exchange programs that bring Iranian students, athletes, professionals and
others to the United States.

The Secretary of State has stated that Iranian agreement to abide by UNSC
Resolutions 1696 and 1747, calling for Tehran to suspend uranium enrichment
and comply with its international nuclear obligations, could lead to the
direct negotiations between American and Iranian government officials, not
only on Iran's nuclear case but on a wide range of issues.

In May 2007, the Iranian Government charged and in some cases imprisoned a
handful of innocent Iranian-American scholars, civil society actors, and
journalists, accused by the regime of jeopardizing the security of the state.
The international community, academic institutions, non-governmental
organizations (NGOs) and private citizens have joined the U.S. Government in
calling for the release of the detained dual nationals, as well as Iranian
cooperation in the case of missing retired FBI agent Robert Levinson, last
reported on Kish Island, Iran, on March 8, 2007.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans
traveling and residing abroad through Consular Information Sheets, Public
Announcements, and Travel Warnings. Consular Information Sheets exist for all
countries and include information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime, political
disturbances, and the addresses of the U.S. embassies and consulates abroad.
Public Announcements are issued to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas that
pose significant risks to the security of American travelers. Travel Warnings
are issued when the State Department recommends that Americans avoid travel
to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad
should regularly monitor the Department's Bureau of Consular Affairs Internet
web site at http://www.travel.state.gov, where the current Worldwide Caution,
Public Announcements, and Travel Warnings can be found. Consular Affairs
Publications, which contain information on obtaining passports and planning a
safe trip abroad, are also available at http://www.travel.state.gov. For
additional information on international travel, see http://www.usa.gov/
Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S citizens who traveling or residing
abroad to register via the State Department's travel registration website or
at the nearest U.S. embassy or consulate abroad. Registration will make your
presence and whereabouts known in case it is necessary to contact you in an
emergency and will enable you to receive up-to-date information on security
conditions.

Emergency information concerning Americans traveling abroad may be obtained
by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular
toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of
State's single, centralized public contact center for U.S. passport
information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service
representatives and operators for TDD/TTY are available Monday-Friday, 7:00
a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for
Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP
(877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the
most recent health advisories, immunization recommendations or requirements,
and advice on food and drinking water safety for regions and countries. A
booklet entitled "Health Information for International Travel" (HHS
publication number CDC-95-8280) is available from the U.S. Government
Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://
www.state.gov, the Department of State web site provides timely, global
access to official U.S. foreign policy information, including Background
Notes and daily press briefings along with the directory of key officers of
Foreign Service posts and more. The Overseas Security Advisory Council (OSAC)
provides security information and regional news that impact U.S. companies
working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market
information offered by the federal government and provides trade leads, free
export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides
authoritative economic, business, and international trade information from
the Federal government. The site includes current and historical
trade-related releases, international market research, trade opportunities,
and country analysis and provides access to the National Trade Data Bank. ***********************************************************
See http://www.state.gov/r/pa/bgn/ for all Background notes
************************************************************
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