Disputes - international: Iran and Iraq restored diplomatic relations in 1990 but are still trying to work out written agreements settling outstanding disputes from their eight-year war concerning border demarcation, prisoners-of-war, and freedom of navigation and sovereignty over the Shatt al Arab waterway; Iran occupies two islands in the Persian Gulf claimed by the UAE: Lesser Tunb (called Tunb as Sughra in Arabic by UAE and Jazireh-ye Tonb-e Kuchek in Persian by Iran) and Greater Tunb (called Tunb al Kubra in Arabic by UAE and Jazireh-ye Tonb-e Bozorg in Persian by Iran); Iran jointly administers with the UAE an island in the Persian Gulf claimed by the UAE (called Abu Musa in Arabic by UAE and Jazireh-ye Abu Musa in Persian by Iran) - over which Iran has taken steps to exert unilateral control since 1992, including access restrictions and a military build-up on the island; the UAE has garnered significant diplomatic support in the region in protesting these Iranian actions; Caspian Sea boundaries are not yet determined among Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan

Illicit drugs: despite substantial interdiction efforts, Iran remains a key transshipment point for Southwest Asian heroin to Europe; domestic consumption of narcotics remains a persistent problem and Iranian press reports estimate that there are at least 1.2 million drug users in the country