The Future of the Internet? How U.S. Sanctions Undermine Internet Freedom in Iran

In April 2022, the United States and 60 global partners signed the Declaration for the Future of the Internet, a commitment to promote and protect openness, inclusivity, and privacy in the global internet. This declaration comes at a critical juncture in the internet’s development. An open and connected internet with a healthy information environment is critical for a functioning democracy, but many nations are increasingly tightening control of the internet and their broader domestic information environment. While promoting internet freedom across the globe has been a stated U.S. policy since 2010, other U.S. policies undermine this goal. 

In the case of Iran, the broad and complicated U.S. sanctions regime has greatly reduced the openness of the Iranian internet by restricting Iranian citizens’ access to communication tools and information while facilitating the development of a government-controlled domestic internet. To promote an open internet in Iran, the United States must both clarify and simplify its sanctions policies.

Sanctioning the Internet

Iran has faced U.S. sanctions since the 1979 Iranian revolution. In the 1990s these sanctions expanded considerably when President Clinton signed Executive Order 12959 prohibiting the exportation of “any goods or technology (including technical data or other information)” to Iran. Given their broad scope, these sanctions ultimately encompassed nearly everything developed in the computer age and included a prohibition on the provision of internet access.

However, following the 2009 “Green Revolution'' in Iran (sparked by a purported rigged election), the United States realized these sanctions were subverting its broader goal of weakening the Iranian government. The Green Revolution, also dubbed as the “Twitter Revolution,” was characterized by the use of mobile phones and social media by protestors to organize. By restricting Iranian citizens’ access to information and communication tools, the United States impeded their ability to mobilize against their government. In response, the United States updated its sanctions regime to allow the exportation of key information and communications technology (“ICT”) to Iran, including social media, instant messaging apps, and even mobile phones and computers.

The Devil in the Details

While this deliberate carve-out in the sanctions regime demonstrates the United States’ intention to promote internet freedom, in many ways the implementation of sanctions undermines this goal. The sheer complexity of the sanctions regime restrains the Iranian internet as many companies lack the ability to navigate the restrictions and simply avoid the Iranian market altogether. Concerns of unintentionally violating sanctions are compounded by the high penalties that stem from seemingly trivial violations. For example, the United States fined the Swiss ICT firm SITA over $7 million for utilizing U.S.-based servers to run a lost-baggage program for Iranian airlines. Further, even when a company decides to operate in Iran despite the risks, they face significant barriers. While the U.S. government maintains a licensing process to grant companies permission to operate in sanctioned countries, the process can be prohibitively difficult. For instance, it took the internet hosting platform Github over two years to receive a license to operate in Iran.

The highly unstable nature of these sanctions also discourages IT companies from operating in Iran. For example, after the Trump Administration shifted the United States’ Iran policy by pulling out of the Joint Comprehensive Plan of Action (“JCPOA”) and implementing the “Maximum Pressure” campaign, major tech companies such as Google and Amazon stopped providing their services to Iranians altogether despite it being legal for them to do so. It simply is not worth the risk for companies to invest in operations in Iran when those operations may be deemed illegal in the near future.

The National Information Network

While having access to fewer foreign online services is certainly detrimental to the openness of the Iranian internet, the primary reason U.S. sanctions are so harmful is that they facilitate the growth of the National Information Network (“NIN”), Iran’s government-controlled domestic internet. While the Iranian regime first announced plans for the NIN in 2005, recent U.S. sanctions are driving its growth by compelling Iranians to use the NIN. For instance, after web hosting companies such as DigitalOcean and GoDaddy withdrew from Iran due to the “Maximum Pressure” campaign, many Iranian companies were forced to use domestic infrastructure services under the NIN. 

The NIN is not only detrimental to internet freedom due to the surveillance and censorship powers it affords the Iranian government, but also because it simplifies the internet shutdowns that have become increasingly common during periods of unrest. As foreign ICT companies withdraw from Iran and a larger percentage of the digital economy moves onto the NIN, the economic cost of government-imposed internet blackouts diminishes. This is reflected in the increasing severity of internet blackouts —  in 2019 Iranian authorities shut down the internet for one week, the longest blackout to date. To make matters worse, the exodus of Western internet services limits the ability of Iranians to circumvent internet restrictions with tools such as VPNs.

Selective Pressure

Millions of Iranians access the global internet despite sanctions and domestic restrictions, utilizing, for example, encrypted chat apps such as WhatsApp and Telegram and social media sites such as Instagram, Twitter, and YouTube. To preserve the Iranian people’s access to these services, the United States must refine the implementation of its sanctions program. A clear and impactful improvement would be to streamline the licensing process. Given the rapid pace of technological development, particularly in the ICT sector, a two year licensing process denies average Iranians access to key emerging technologies. For instance, it is incredibly common for businesses and individuals to leverage cloud computing to lower costs and increase security. However, given the relative novelty of this technology, companies are prohibited from providing Iranians with cloud computing services because no specific allowance has yet to be made and no licenses have been granted. 

Most critically, the overall sanctions program must be both clear and consistent to reduce the operational risk faced by ICT companies where possible. A primary purpose of sanctions is to coerce the target into altering their behavior. However, to be effective, this requires that the country imposing sanctions has the ability to easily reverse them. Even when the United States has made specific allowances in their sanctions program, private companies have not provided newly authorized services due to the instability and ambiguity of the sanctions. This undermines the effectiveness of the entire sanctions program — targets will be less likely to alter their behavior if they do not believe they will actually receive tangible benefits for doing so. By making the sanctions explicitly clear and even engaging with private companies to elucidate what is allowed, the United States will not only back up its advocacy for global internet freedom, but will strengthen the effectiveness of its overall sanctions program towards Iran.