Middle East and North Africa

Iran Flag of Iran

Last reviewed: 7 May 2008

Country information


Basic Economic Facts

GDP (2006): $184.5 billion
GDP per capita: $1.715
GDP Growth (2006): 4.7%
Inflation: (est)11.2%
Unemployment: (est) 11%
Major Industries: Oil provides about 80% of export earnings and 50% of government revenue. Other main trading areas are gas, petrochemicals, mining,agriculture, car manufacturing, mineral products, metal fabrication, and food processing Major trading partners (OECD): Germany, Japan, France, Italy, UAE, China, UK, and South Korea.


The UK, France and Germany (the "E3") have been engaged in dialogue with Iran for more than a year to encourage Iran to co-operate fully with the International Atomic Energy Agency (IAEA) and take steps that would assure the international community that its nuclear programme is exclusively for peaceful purposes.

The E3 has argued that these steps must include, crucially, suspension of all uranium enrichment-related and reprocessing activities (low enriched uranium can be used as a fuel for nuclear power reactors; highly enriched uranium can be used as the fissile material for nuclear weapons). The IAEA has adopted by consensus successive resolutions requiring Iran to suspend. We have made clear that we do not dispute Iran's right to a civil nuclear power generation programme, and that provided Iran puts in place and sustains an acceptable suspension, we could negotiate long-term arrangements.

On 15 November 2004, Iran approved an agreement with the E3 about its nuclear programme, in which it agreed to suspend fully all enrichment-related and reprocessing activities and to sustain the suspension while negotiations took place on long-term arrangements which would provide objective guarantees that Iran's nuclear programme is exclusively for peaceful purposes, and lay the groundwork for wider nuclear, economic and technological co-operation.

Paris Agreement - Jack Straw welcomes signature of Nuclear Agreement.

On 5 August 2005, the E3 presented proposals to the Iranian government, as promised in a meeting in Geneva on 25 May 2005 between E3 Foreign Ministers and Hassan Rouhani, the senior Iranian negotiator. The following is a summary of those proposals and is self explanatory.

E3 EU Proposals for a Long term Agreement

Iran's response was to break off the negotiations. It first resumed conversion of uranium ore into the feed material for enrichment centrifuges, uranium hexafluoride or UF6, and then, in February 2006, enrichment. The UK has worked closely with China, Russia and the US, encouraging Iran to reinstate the suspension and return to talks. The measures the IAEA Board and Security Council have asked for would not affect Iran's pursuit of nuclear energy, but Iranian suspension would however give us confidence that Iran is not seeking the know-how to make fissile material for weapons.

In June 2006, Javier Solana on behalf of the E3 and the US, Russia and China (the E3 plus 3) presented Iran with a far-reaching package of E3/EU proposals and said that if Iran were prepared to take the steps required by the IAEA Board, we would hold off further action at the UN Security Council ('suspension for suspension'). Our proposals offered Iran, in a long-term agreement, everything it would need to develop a modern nuclear power industry, such as help building power stations, guaranteed supplies of fuel and cooperation on nuclear research. Iran would also get trade benefits that would stimulate the investment it needs to provide jobs for a growing population. In a genuinely historic decision, the US said it would join any talks and consider, in a final agreement, lifting sanctions on Iran for the first time since 1979 in areas where Iran's needs are most acute, such as civilian aircraft and IT. Iran chose not to pursue the proposals. And rather than suspend enrichment - a legal obligation since the adoption of UN Security Council Resolution (SCR) 1696 on 31 July 2006 - it continued on a bigger scale.


3 proposal June 2006

E3 Proposal

The UN Security Council adopted SCR 1737 on 23 December 2006. The Resolution extended the range of sensitive nuclear activities Iran is legally obliged to suspend, required Iran to give additional access to the IAEA, banned the export of certain goods relevant to sensitive nuclear and missile programmes, imposed an asset freeze on listed entities/individuals and introduces a variety of other targeted sanctions.  The Security Council adopted a further Resolution (1747) on 24 March 2007 , which listed more individuals and entities, including some linked to the Islamic Revolutionary Guard Corps (IRGC), imposed a ban on exports of arms from Iran and placed restrictions on exports to Iran of heavy weapons and related services.

Mohamed El-Baradei, Director General of the IAEA, recently reported that Iran has still not complied with previous SCRs and that the IAEA's knowledge about Iran's nuclear programme was diminishing. On 3 March 2008 the Security Council adopted Resolution 1803 which imposed travel restrictions, and in some cases full travel bans, against named Iranian entities and individuals, called on member states to exercise vigilance on the activities of named Iranian banks, added more dual-use items to embargo lists, and requested member states to inspect cargoes to and from Iran operated by Iran Air Cargo and Iran Shipping Line.

UNSCR 1737

UNSCR 1747

UN Security Council Resolution 1803.

All these Resolutions offer Iran a way out, making clear that the E3 plus 3 endorsed proposals are still on offer, and that if Iran suspends enrichment-related, reprocessing and heavy-water related activities, the Security Council will suspend the sanctions process for as long as Iran maintains its suspension (so called 'double suspension').

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