The Iran Sanctions Act, originally called the Iran-Libya Sanctions Act (ILSA), was introduced in 1996 during a tightening of U.S. sanctions on Iran during the Clinton administration acting unilaterally and applying extraterritorial the domestic and national laws regarding sanctioning Iran.

On September 8, 1995, Senator Alfonse D’Amato introduced the “Iran Foreign Oil Sanctions Act” to sanction foreign firms’ exports to Iran of energy technology. A revised version instead sanctioning investment in Iran’s energy sector passed the Senate on December 18, 1995. On December 20, 1995, the Senate passed a version applying the provisions to Libya and then concurred on a Senate version adopted on July 16, 1996. The Iran and Libya Sanctions Act was signed on August 5, 1996.

ISA requires the President to impose at least two sanctions from a list of six sanctions against any person, denied broadly to include individuals and entities even with no U.S. ties whatsoever, that invests $20 million in one year, where the investment "directly and significantly contributed to the enhancement of Iran's ability to develop" its "petroleum resources."

The sanctions (Section 6) are:

1. Denial of Export-Import Bank loans, credits, or credit guarantees for U.S. exports to the sanctioned entity;

2. Denial of licenses for the U.S. export of military or militarily useful technology to the entity;

3. Denial of U.S. bank loans exceeding $10 million in one year to the entity;

4. If the entity is a financial institution, a prohibition on its service as a primary dealer in U.S. government bonds; and/or a prohibition on its serving as a repository for U.S. government funds (each counts as one sanction);

5. Prohibition on U.S. government procurement from the entity; and

6. Restriction on imports from the entity, in

Sanctions may, however, be waived under section 4(c) of ISA against the nationals of "a country that has agreed to undertake" economic sanctions against Iran, or under section 9(c) if the President finds (and reports to Congress) that a waiver "is important to the national interest of the United States."

- ISA and WTO