[2] The Act empowers the President to waive sanctions on a case-by-case basis, which is subject to renewal every six months.

[3] In 1995, in response to the Iranian nuclear program and Iranian support for Hezbollah, Hamas, and Palestine Islamic Jihad, that are considered terrorist organizations by the US, President Bill Clinton had issued several executive orders with respect to Iran, including Executive Order 12957 of March 15, 1995, banning U.S. investment in Iran's energy sector, and Executive Order 12959 of May 6, 1995, which banned U.S. trade with and investment in Iran.

Under ISA, unless exempted by the president, all foreign companies that provide investments over $20 million for the development of petroleum resources in Iran will be imposed two out of seven possible sanctions, by the U.S.:[4] ILSA included a five-year sunset clause and was to expire on August 5, 2001.

It was passed by the Senate by unanimous consent on July 31, and was signed into law by President George W. Bush on August 4, 2006.

On September 30, 2006, ILSA was renamed the Iran Sanctions Act (ISA), as it no longer applied to Libya, and extended until December 31, 2011.