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article imageOp-Ed: US sanctions on Iran often block humanitarian aid

By Ken Hanly     Oct 19, 2013 in Politics
Tehran - US sanctions on are designed to cripple the energy sector, imports and exports, and also access to the international financial system. However, the sanctions also cause numerous problems in transactions that do not actually violate the restrictions.
In June this year, a US college student walked into an Apple store in Georgia with her uncle. They were speaking in Farsi. She wanted to buy an iPad. When the clerk found that the language they were speaking was used in Iran, she refused to sell the student the iPad citing the US sanctions. Both the uncle and the student were US citizens of Iranian descent. Of course there is no restriction on selling them iPads.
Iranian-Americans are allowed to send money to elderly parents in Iran, but when they attempt to do so, they frequently cannot find any bank that will wire the funds. The banks are just not willing to take the chance of facing some legal challenges. After the devastating earthquake in Iran 2012. charities trying to send relief funds they had collected to Iran found that dozens of banks refused to wire the funds in spite of the fact that the groups had a license from the US Treasury Department to send the funds.
Pharmaceutical companies that have legal contracts to ship medicines and equipment to Iran nevertheless find that no shipping company wants to accept the goods and no banks want to accept payment for the goods from Iran. The result of all this is that business with Iran depends upon criminal financial arrangements increasing the corruption within Iran and also the wealth of those corrupted while ordinary Iranians suffer.
After the debacle of UN sanctions in Iraq which resulted in the deaths of tens of thousands of Iraqis, the UN passed more focused sanctions on Iran. The UN authorized the seizure of cargo if it were related to Iran's nuclear program, and to freeze bank accounts of those associated with the nuclear program and military.
The US has imposed broader sanctions going back to 1979 when the US-backed Shah was overthrown. These sanctions were unilateral and provoked negative responses in the international community.
In the 1990's the US passed the Iran-Libya sanctions act that tried to punish foreign companies from doing business with Iran. In 1996 the EU brought a case against the US before the WTO that claimed that the US sanctions violated international trade law. The US agreed not to enforce the extra-territorial aspects of their law.
The US sanctions do make allowance for some humanitarian relief. The export of food and medicine to Iran is not sanctioned. However, other aspects of the sanctions make this export difficult.
US aggressively enforced the sanctions even going after prominent international banks such as Barclays that paid $176 million in fines to the US treasury for violating the sanctions. Other banks too paid fines in the hundreds of millions. One can understand why banks are reluctant to be involved with Iran at all.
However, it is not only big banks that are punished for violating the sanctions. The non-profit Association of Tennis Professional paid a penalty of $50,000 for salary payments to an Iranian tennis umpire. The sanctions are often justified by reference to security concerns such as "nuclear weapons". Yet, Sandhill Scientific Inc. was prosecuted for selling $6,700 of medical equipment to Iran. Another US company suffered the same fate for $5,000 in medical sales. Even US officials noted that the sales probably could have qualified for an export license on humanitarian grounds.
The US uses its market power as a lever to force world banking institutions to stop dealing with Iran: Treasury Department officials met with more than 145 banks in over 60 countries to pressure them to cut off dealings with Iran. Faced with the threat of losing access to the U.S. financial system, many foreign banks and businesses unsurprisingly have severed ties with Iran -- not just with the regime or the military, but with all Iranian banks and companies. Much more detail on the US pressures is available here.
Because of the sanctions, the prices of goods in Iran are inflated. The value of the currency drops as well also increasing inflation. Funds from oil exports have decreased and foreign companies such as Hyundai and Peugeot are pulling out of Iran. Unemployment soars as plants close. President Rouhani no doubt hopes that he will be able to negotiate an end to sanctions. Ten US Senators have suggested they would be willing to suspend new sanctions in return to concessions by Iran, however this is hardly likely to be enthuse Iran since the group also reaffirmed that a credible military threat should remain and also current sanctions should be maintained aggressively.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Iran US relations, iran nuclear program, us sanctions on Iran
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