This report focuses on the United States' relationship with Iran and how the Obama Administration is handling prior administration's economic sanctions against Iran. The Obama Administration's policy approach toward Iran has contrasted with the Bush Administration's by attempting to couple the imposition of sanctions to an active and direct U.S. effort to negotiate with Iran on the nuclear issue. That approach was not initially altered because of the Iranian dispute over its June 12, 2009, elections. However, with subsequent negotiations yielding no firm Iranian agreement to compromise, since early 2010 the Administration has focused on achieving the imposition of additional U.N., U.S., and allied country sanctions whose cumulative effect would be to compel it to accept a nuclear bargain.

International Atomic Energy Agency (IAEA) inspections since 2003 have revealed almost two decades' worth of undeclared nuclear activities in Iran, including uranium enrichment and plutonium separation efforts. The Security Council called upon Iran to take steps requested of it by the IAEA Board in February -- resuspend enrichment and reprocessing, reconsider construction of its heavy water reactor, ratify and implement the Additional Protocol, and implement transparency measures. Iran has continued enrichment activities and failed to meet the Security Council's request.