U.S. imposes new sanctions on Iran

Critics say move will hurt aid efforts

The biggest concerns have

been around medicine and

medical devices. — Suzanne

Maloney, researcher

WASHINGTON • The Trump administration imposed new sanctions on Iran’s financial sector Thursday in defiance of European allies who warned that the move could have devastating humanitarian consequences on a country reeling from the coronavirus and a currency crisis.

The measures target the banks not currently subject to secondary sanctions in a step European governments say is likely to diminish channels Iran uses to import humanitarian goods, officials said.

U. S. Treasury Secretary Steven Mnuchin challenged that in a statement, saying the designation of 18 Iranian banks “reflects our commitment to stop illicit access to U. S. dollars” and that “today’s actions will continue to allow for humanitarian transactions.”

The move represents a major pre- election push on a signature Trump administration policy that has succeeded in devastating the Iranian economy while failing to moderate Tehran’s behaviour or limit its nuclear program.

Since Trump withdrew from the Iran nuclear deal in 2018, Tehran now has more than 10 times the amount of enriched uranium allowed under the agreement, according to the United Nations.

Effectively blacklisting the Iranian financial industry was pushed by Israeli officials and the Foundation for Defense of Democracies, a hawkish U. S. non- profit that has advocated for regime change in Iran. The measures subject all financial institutions to penalties for doing business with the 18 Iranian banks, cutting Tehran off from the international financial system.

Some say they hope the move will collapse an economy already squeezed by lost oil sales and a vast array of U.S. sanctions.

The officials, like others, spoke on condition of anonymity.

Opposition to the new sanctions is related to the delivery of humanitarian goods. Last year, Iran imported US$ 1 billion worth of medical goods and grain worth US$3.5 billion.

Britain, France and Germany worr y that Iran’s foreign assets would be de facto frozen, “thus further exacerbating the shortage of foreign currency to pay for humanitarian imports,” a senior European official said.

“The concern has always been that sanctions simply criminalize all financial engagement with Iran,” said Suzanne Maloney, an Iran expert at the Brookings Institution.

“The biggest concerns have been around medicine and medical devices. There have been shortages of basic drugs, such as insulin, and specialized chemotherapy and other life- saving treatments.”

The move is likely to further devalue Iran’s currency, create a liquidity crunch and be viewed in Tehran as a significant escalation, said Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a think tank focused on Iran’s economy.

The Treasury Department said it has issued a general licence allowing for humanitarian transactions.

But European officials have doubted the effectiveness of such moves.

“Even clear humanitarian exceptions could only counteract this to a limited extent,” said the senior European official.

Iranian Foreign Minister Mohammad Javad Zarif tweeted that the “U. S. regime wants to blow up our remaining channels to pay for food & medicine. Iranians WILL survive this latest of cruelties. But conspiring to starve a population is a crime against humanity.”