OPINION: US eases critical Iran sanctions

The recent relief has come about quietly so as to avoid media spotlight, writes Dr. Majid Rafizadeh

Dr. Majid Rafizadeh

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The harsh rhetoric of Iran’s hardliners toward the United States and other “rivals” of Tehran has not moderated. Nevertheless, the Obama administration continues to soften its stance toward the Islamic Republic.

The White House decided to continue with new rounds of critical sanctions relief in order to appease Iran’s Supreme Leader, Ayatollah Ali Khamenei, who has been lashing out at the US in his speeches.

The recent relief has come about quietly, through measures issued by the Treasury Department, so as to avoid national and international media spotlight. The updated measures will have significant impact on the activities of Iran’s Revolutionary Guard Corps (IRGC) and Iranian banks.

Figures on sanction list are free

According to the Treasury’s website, one of the new guidelines in easing sanctions is that “it is not necessarily sanctionable for a non-US person to engage in transactions with an entity that is not on the SDN List but that is minority owned, or that is controlled in whole or in part, by an Iranian or Iran-related person on the SDN List”.

Previously, Western companies were prohibited from doing business with Iranian politicians or generals who were on sanctions list for breaking international law or UN resolutions.

Nevertheless, this change allows Western firms to conduct business with any Iranian company even if it is owned by individuals who are on the sanctions list. This is definitely great news for the IRGC leaders as it will empower them financially and ease their global business dealings.

The sanction relief against Iranian banks remove a robust mechanism that was in place to monitor the country’s compliance with UN resolutions in areas such as ballistic missiles and nuclear materials

Dr. Majid Rafizadeh

Iran can also use US currency

Moderates and hardliners have been criticizing the US for its unilateral sanctions, regarding the use of US currency (dollar) in dealings with Iran. Finally, the Obama administration is allowing Iran to use the American dollar in its foreign business dealings.

According to the recently updated website of the Treasury Department “Foreign financial institutions, including foreign-incorporated subsidiaries of US financial institutions, may process transactions denominated in US dollars or maintain US dollar-denominated accounts that involve Iran or persons ordinarily resident in Iran, or in which there is an interest of a person whose property and interests in property are blocked solely pursuant to Executive Order 13599 and section 560.211 of the ITSR, including NIOC, the CBI, and other individuals and entities that meet the definition of the government of Iran or an Iranian financial institution, provided that such transactions or account activities do not involve, directly or indirectly, the United States financial system or any United States person, and do not involve any person on the SDN List”.

This is also great news for Iranian officials across the political spectrum. Ayatollah Akbar Hashemi Rafsanjani, the chairman of the Expediency Council, pointed out that the US Treasury’s action would further facilitate Iran’s banking transactions. More specifically, the new sanctions relief will assist Iranian leaders who have accumulated wealth through corruption, to secure their wealth by sending their money to offshore banks.

Banks off the hook

Furthermore, Obama administration is said to have secretly agreed to remove United Nations sanctions on several Iranian banks including Bank Sepah and Sepah International. These banks have long been sanctioned by the United Nations due to their illegal activities in missile financing and skirting UN security resolutions regarding the arms embargo.

The sanction relief against Iranian banks remove a robust mechanism that was in place to monitor the country’s compliance with UN resolutions in areas such as ballistic missiles and nuclear materials. Last month, the Treasury Department also granted licenses to the aviation corporations, Airbus and Boeing. This would allow the IRGC to update its military and aircraft capabilities.

Although four rounds of UN Security Council’s sanctions against Iran were lifted and Iran gained additional revenues, Khamenei continued to play hardball to get the US unilateral sanctions lifted. Khamenei’s agenda, implemented by Rowhani and Zarif, has paid off very well. Even though both Democrats and Republicans have been critical of the Obama administration for the ongoing appeasement policies, their criticism is not likely to alter the trend.

The new sanctions relief implemented by the Obama administration will not do anything to benefit the Iranian people, but rather will further empower the IRGC stranglehold as well as facilitate alleged illicit activities conducted by Iranian banks and politicians.

Dr. Majid Rafizadeh, an Iranian-American political scientist and Harvard University scholar, is president of the International American Council. Rafizadeh serves on the board of Harvard International Review at Harvard University. He is also a member of the Gulf project at Columbia University. Rafizadeh served as a senior fellow at Nonviolence International Organization based in Washington DC. He has been a recipient of several scholarships and fellowship including from Oxford University, Annenberg University, University of California Santa Barbara, and Fulbright Teaching program. He served as ambassador for the National Iranian-American Council based in Washington DC, conducted research at Woodrow Wilson International Center for Scholars, and taught at University of California Santa Barbara through Fulbright Teaching Scholarship. He can be reached at Dr.rafizadeh@fas.harvard.edu, @Dr_Rafizadeh.

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