US Congressional Research Service
US sanctions on Iran already ban most U.S trade , block Iran government’s assets in the U.S. and prohibit U.S. foreign assistance and arms sales as per the Congressional Research Service . A large number of people and companies Iranian as well as foreign have been the subject of sanctions . Deviating from its earlier approach the US is currently persuading the European Union (EU) and other western allies to impose multilateral sanctions on Tehran as U.S. actions designated certain individuals ,entities , affiliates and subsidiaries linked to the ballistic missile production procuring on behalf of Iran’s defense industrial complex .US sanctions this month targeted 16 people and 2 entities linked to the production of Iranian unmanned aerial vehicles (UAV or drones) .
US Treasury Sanctions on Procurement Networks
The US State Department in a novel move levied travel restrictions on Iran’s Foreign Minister whenever he attends meetings at the United Nations in New York and also restricting the ministers movement to within a two-bloc radius of the UN headquarter district. On a broad plane the United States is imposing sanctions on procurement networks operating from Iran, Türkiye, Oman and Germany involved in obtaining arsenal for Iran’s Islamic Revolutionary Guard Corps, Aerospace Force Self Sufficiency Jihad Organization, Ministry of Defense and Armed Forces Logistics , Iran Centrifuge Technology Company and other U.S.-sanctioned entities comprising Iran’s military-industrial complex.
Legislation Tied to Ukraine & Taiwan
The United States intends to employ all its financial resources to expose and disrupt the networks it believes are supporting Iran’s proliferation of weapons with the motive of destabilising the Middle East and enabling Russia to remain engaged in the Black Sea conflict .
US Targeted Sanctions
Stringent new sanctions on Iranian crude passed the U.S. House of Representatives this month and will likely become law . Attached to the legislation is a package of aid for Ukraine, Israel and Taiwan. Whereas previous sanctions focused on Iranian vessels and exporters the amended rules aim for foreign refiners that procure the crude , in this case Chinese .The new sanctions aim for foreign bankers, shipowners and seaports facilitating illicit trade . The United States additionally imposed fresh sanctions on 16 individuals and 2 entities associated with Iran’s drone program .The individuals designated include executives of an engine manufacturer that supplies Iran’s Shahad-131 drones alongwith corporates which service engines of drones for Iranian proxy forces in the Middle East conflict . The US Treasury Department shared that it was penalising 5 companies associated with Iran’s steel industry and 3 subsidiaries of an Iranian automakers .
EU Role in Sanctions
Fresh sanctions actively involving the United States and its European allies aim to severe supplies to Iran’s missile and drone program and attempt to disrupt Iran’s military supply chain and its funding sources .The US is pressing into action the myriad of US Treasury’s economic and financial tools to degrade and disrupt Iran’s drone and missile fleet operational ability including its unmanned aerial vehicle program . Succumbing to US pressure the EU is actively considering a new sanctions package of its own.
Enforcement Regime of Sanctions & Oil Price
Sanctions take a toll if the enforcement regime is effective .The US has a disincentive to take a strict line as coming down hard on Iranian crude exports would reduce the global oil supply thereby increasing energy prices and encouraging inflationary tendencies. The legislation will enable the US administration to permit 180-day waivers at its discretion when it considers as “vital to the national interests of the United States.” In the context of permissive enforcement trends China’s independent refiners are likely to continue purchase of Iranian discount cargoes of crude imported ostensibly under the guise of Malaysian or United Emirates crude.
Sanctions Sinister China Clause
The Bill which is soon to be an instrument of legislation includes specific measures imposing sanctions on ;
1)Foreign port owners or operators who allow sanctioned Iranian tankers to dock or transfer oil;
2)Shipowners or operators who engage in a Ship to Ship transfer
3) Refinery owners or operators who purchase or process Iranian oil
4) And family members
Any ships found involved in handling Iranian crude cargoes could be banned from berthing at American ports for 2 years which would serve as a potential deterrent to casual shipping lines or owners for ships touching ports in the United States of America. A separate clause would expand financial sanctions to Chinese banking institutions that facilitate Iranian crude trade .This time around the US is going beyond its jurisdiction for transactions outside the U.S. financial system. In a first the assessment of each China sponsored financial institution would be annual and time bound.
Author Nadir Mumtaz
Credit/Sources;
https://ofac.treasury.gov/sanctions-programs-and-country-information/iran-sanctions
https://www.aljazeera.com/news/2024/4/18/us-imposes-new-sanctions-on-iran-after-attack-on-israel
https://www.reuters.com/world/what-are-us-sanctions-iran-how-can-washington-impose-more-2024-04-16/
https://edition.cnn.com/2024/04/18/politics/us-sanctions-iran/index.html
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