The State Department has issued its first sanctions under the Iran Sanctions Act (“ISA”). The sanctions are aimed at cutting off foreign investment in Iran’s energy sector in an effort to persuade Iran to institute limits on its nuclear program. The Secretary of State determined that Naftiran Intertrade Company (“NICO”), a Swiss energy affiliate of the Iranian National Oil Company, had engaged in a sanctionable investment under the ISA. The sanctions prevent NICO from receiving loans greater than $10 million from a U.S. bank and prohibit it from receiving certain benefits from the U.S. government. The sanctions could also make other companies leery of doing business with NICO, fearing that they could also be hit with penalties. Notably, the U.S. did not sanction Russian and Chinese companies engaged in similar activities, likely to prevent potential diplomatic fallout. The U.S. granted waivers to four large European energy companies after those companies agreed to cut back on their Iranian trade. Coupled with the Administration’s expressed intention to increase the pressure on Iran to cease development of nuclear weapons, State’s new sanctions are a stern warning to companies doing business, directly or indirectly, with Iran.