Full Steam Ahead on Iran Sanctions

New American sanctions were leveled against Iran this week. On Tuesday, the U.S. Treasury Department announced that Tehran’s “Basic Resistance Force” — an affiliate of the IRGC — together with 22 connected financial entities are now “specially designated global terrorists.” The decision freezes these elements’ assets and blocks Americans from doing business with them. In its language, moreover — stressing the vast expanse of Basij involvement in the Iranian economy — the designation is expected to exercise a further “chill effect” on companies worldwide that might be pondering business with any Iranian entity.
The move comes ahead of substantial sanctions, which are slated to go into effect after November 4, on Iran’s petroleum industry The move would bring unprecedented financial pressure to bear on the country’s government of clerics. Discussions have also been underway about the possibility of pressuring the international financial messaging service “Swift” to cease its relationship with Iran, through which most international financial transactions with the country occur. The measure is controversial due to potential unintended consequences on international markets and companies which pressure on Swift could bring. President Trump’s National Security Adviser, John Bolton, says that pressure on Swift would be “worth the risk,” whereas the Treasury Department has not responded directly to questions about his own position on the matter.
A report in the New York Times noted that in order to cut off all Iranian oil exports as planned, the White House is counting on Saudi Arabia to maintain the flow of oil without a spike in prices, as well as join in a policy of containing Iran in the Gulf.
In the meantime, however, further Congressional actions against Iran and its proxies have been proceeding apace. On October 11, Congress unanimously approved the Hezbollah International Financing Prevention Amendments Act. The bill would see mandatory sanctions imposed on a range of Hezbollah entities and activities, including its banking institutions, fundraising ventures, “foreign relations development,” and its media empire. It would also facilitate the targeting of Hezbollah cooperation with international drug cartels for purposes of money laundering and other activities.
What has been the impact of these efforts? At a recent appearance at the Center for the National Interest in Washington, Patrick Clawson, Director of Research at the Washington Institute for Near East Policy, said he “happen[s] to agree with the Supreme Leader [Ayatollah Khamenei] … [that] the basic problems facing Iran’s economy are internal, and not due to sanctions.” The Rouhani administration has failed in its promise to achieve economic growth for the country, he said — a problem which, combined with rampant corruption and graft, has exacerbated tensions between the state and its population. As the Iranian economy tumbles, he argued, the Trump Administration is poised to take credit for an outcome which might have happened anyway.