U.S. Points Further Sanctions Towards Iranian Banks

WASHINGTON – The Trump administration imposed a new round of economic sanctions on the Iranian financial sector on Thursday as Washington attempts to increase pressure on Tehran in the weeks leading up to the presidential election.

The measure provides for fines against 18 Iranian banks and comes days before a United Nations arms embargo against the country expires. The action could effectively exclude Iran from the global financial system and make its already crumbling economy further crater.

It was the United States’ latest round of sanctions against Iran following the Trump administration’s attempt last month to unilaterally restore international economic fines that much of the rest of the world refused to enforce.

Critics said the new sanctions are unlikely to achieve the Trump administration’s goal of forcing Iran back into negotiations – both to curtail its nuclear program and end its hostilities in the Middle East – and keep the United States away from key European allies distance.

“Our campaign for maximum economic pressure will continue until Iran is ready to conclude a full-scale negotiation to address the regime’s malicious behavior,” Secretary of State Mike Pompeo said in a statement. “Our sanctions are against the regime and its corrupt officials who have used the wealth of the Iranian people to advance a radical, revolutionary cause that has caused untold suffering in the Middle East and beyond.”

Last month, the Trump administration said it had re-imposed United Nations sanctions on Iran over violent objections from American allies in order to maintain a global arms embargo beyond the October 18 expiration date.

However, the European Union has its own arms embargo against Iran, which will not expire until 2023. Officials in the UK, France and Germany opposed support for wider international sanctions in hopes of maintaining an agreement to cap Tehran’s since stalled nuclear program, and the United States pulled out of business in 2018.

Critics of the American sanctions announced on Thursday said they could deter investment in Iran and potentially prevent humanitarian aid from flowing into the country, where over 27,000 people have died from the coronavirus pandemic.

“The Iranians will survive this recent atrocity,” Iranian Foreign Minister Javad Zarif said on Twitter, adding: “Guilty parties and facilitators – who block our money – will be brought to justice.”

Several experts say the Treasury Department has identified exceptions to sanctions for humanitarian aid transactions by issuing exemptions and written assurances telling financial institutions or companies involved in humanitarian aid that they will not be penalized. Treasury Secretary Steven T. Mnuchin said Thursday’s sanctions “would continue to allow humanitarian transactions in support of the Iranian people”.

But the sanctions will most likely weaken the Iranian currency, the rial, and further constrain Iranian foreign exchange reserves. Previous sanctions banned most commercial sales and restricted Iranian oil trade.

Updated

Oct. 8, 2020, 5:38 p.m. ET

“That really depletes Iran’s financial oxygen,” said Mark Dubowitz, executive director of the Foundation for the Defense of Democracies, a think tank in Washington.

In the run-up to the November 3 elections, Mr Trump tried to portray a tough stance on Iran. As a foreign policy achievement, it promoted its unilateral exit from a 2015 nuclear deal that was signed during the Obama administration.

“These sanctions are messaging sanctions,” said Daniel Fried, who was the State Department’s sanctions policy coordinator in the Obama administration. “The news seems less to Iran and more to American voters.”

But if Joseph R. Biden Jr., the Democratic candidate, defeats Mr Trump next month, the sanctions imposed on Thursday could hamper the new administration’s efforts to roll back the United States’ ties with Iran, experts said.

“If Joe is elected, he will have to do research into these actions,” said Richard Nephew, senior fellow at the Brookings Institution. “It’s another argument that needs to be made. It’s another topic of conversation hardliners can use. “

Lara Jakes contributed to the coverage.

Comments are closed.