The Iran Sanctions Act of 1996 (ISA) is a United States federal law that imposes economic penalties on foreign companies for certain business dealings with Iran. Originally enacted on August 5, 1996, as the Iran and Libya Sanctions Act (ILSA), it was a response to concerns that Iran was using oil revenues to finance international terrorism and develop weapons of mass destruction. The Act was renamed the Iran Sanctions Act on September 30, 2006, after sanctions against Libya were terminated in 2004.
The ISA is a type of secondary sanction, meaning it targets non-U.S. entities for their activities with Iran, rather than directly regulating U.S. persons. Its key mechanism is to empower the U.S. President to impose at least two out of a list of possible sanctions on foreign companies that make an investment of $20 million or more that significantly contributes to the development of Iran's petroleum resources. These penalties can include denial of U.S. Export-Import Bank assistance or prohibition on loans from U.S. financial institutions.
The ISA connects to a broader framework of U.S. sanctions, notably being amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), which expanded the President's authority to punish companies aiding Iran's energy sector. The Act has been repeatedly extended, most recently for ten years on December 1, 2016. In August 2026, lawmakers amended a bill to extend the ISA further through 2031.