The US has launched their toughest sanctions on Iran in recent times. The sanctions are part of a move made by the US to strongarm Iran into surrendering any nuclear capacity. The latest sanctions are part of a process of US disengagement from the 2015 nuclear deal and make up the next phase in part of the US policy towards Iran. The sanctions are timed to coincide with the anniversary of the siege of the US embassy on 4 November 1979.
Steven Mnuchin, US Treasury Secretary, said that Iran,
“will face mounting financial isolation until they fundamentally change their destabilizing behavior.”
US Secretary of State, Mike Pompeo, echoed this saying,
“The Iranian regime has a choice. It can either do an 180-degree turn … and act like a normal country, or it can see its economy crumble.”
The implementation of the sanctions has created hostility in the streets of Tehran as people took to the street of Tehran to protest. Thousands of Iranians were reported shouting “Death to America” in response to the US imposed sanctions.
Oil, prices, food, currency
The US revealed the extent of their newly implemented sanctions, with a number of its targets including blacklisting 70 banks and their subsidiaries, the national airline, and 200 members of the shipping industry and vessels. Some of the banks have been sanctioned for transactions allegedly linked to Iran’s missile program, human rights abuses and terror finance.
A number of international companies have already left Iran, including multinationals Total and Airbus, contributing to Iran’s rapidly rising rate of youth unemployment, that now stands at an estimated 40%. In addition, the value of Iran’s currency – the Iranian Rial – has also dropped drastically with a fall of 70% in value estimated since the US withdrew from the deal.
The measures to cut Iranian oil exports were aimed at hitting Iran hard as oil accounts for 80 percent of Tehran’s tax. Initially the US aimed to completely cut Iranian oil exports off completely from international trade but made the final decision to issue waivers to eight governments exempting them from sanctions on Iranian oil.
As of 5 November, China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey received waivers from the US that meant they could temporarily import Iranian crude oil without facing penalties. From 5 November, ‘all countries and business that buy oil from Iran risk secondary sanctions from the United States, and the administration has vowed to pursue offenders aggressively.’
Iran responded defiantly by launching an air defence military drill and challenging rhetoric. President Rouhani said that his country faces a “war situation”, stating that Iran will “proudly break the unjust sanctions,”
“We must make the Americans understand in clear language that they cannot deal with us with force, pressure and sanctions.”
The European Union has said that it opposes the re-imposed sanctions. The EU’s economic affairs commissioner, Pierre Moscovici, spoke out against the resumption of sanctions.
“The European Union does not approve of it,”
The UK, Germany and France, three of five countries still committed to the nuclear pact, have objected to the sanctions. They have promised to support European firms that do “legitimate business” with Iran and have set up an alternative payment mechanism – or Special Purpose Vehicle (SPV) – that will help companies trade without facing US penalties.
China, a buyer of large quantities of Iranian oil has said it regret the move. China’s Ministry of Foreign Affairs spokesperson, Hu Chunying, criticise the US application of unilateral sanctions and “long arm jurisdiction.” Chunying went on to stress that, “Iran has strictly fulfilled its obligations in the nuclear area in accordance with the Comprehensive Plan so far,”
Despite efforts to impact Iran’s government to change tack, it is sadly the people of Iran that will suffer the negative impact of sanctions the most. In a report of 5 November, Saeed Kamali Dehghan Guardian’s Iran correspondent interviewed a number of Iranians and concludes, ‘Iranians are bracing themselves for a period of economic hardship.’ Akbar Shamsodini, an Iranian businessman in the oil and gas sector who lost his job six months ago said,
“For ordinary people, sanctions mean unemployment, sanctions mean becoming poor, sanctions mean the scarcity of medicine, the rising price of dollar,”
Watch Saeed’s interview with IOHR TV: