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Tuesday 20th March 2018

Tough Sanctions to Curb Tehran's Influence


Selim Zayed - 7Dnews Cairo

Wed, 07 Nov 2018 17:46 GMT

A hundred and eighty days have passed since the US administration announced its withdrawal from the 2015 Nuclear Deal, a decision that shook the Iranian regime to the core. Nevertheless, with the second batch of sanctions coming into effect on November 5th, 2018, Iran has been given a knockout blow that may bring it to its knees, eventually leading to its "entire downfall", according to 7Dnews analysts.

Since the announcement of the US sanctions, which basically target the country's oil sector and are considered the toughest since 1979, Iran - the third largest oil exporter in the world - has been living its worst ever nightmare.

"The Iran sanctions have gone into effect, the strongest sanctions the USA has ever issued," said President Trump after signing an executive order re-imposing the latest batch of sanctions on Iran.

The new sanctions, although opposed by some European allies, are designed to target key sectors of the Islamic Republic's economy, such as the banking and industrial sectors, but above all, the oil industry, which is Iran's main source of foreign currency. The sanctions list can be summarised as follows:

•    The Iranian government's access to US dollars
•    Iran's import of gold and other precious metals
•    Iran's import of graphite, aluminium, iron, charcoal and computer programs needed in industry
•    Monetary exchange in Iranian Rial
•    Financial activities related to Iran’s sovereign debt
•    Automotive sector, ports logistics, ship building and maritime transport sectors
•    Monetary transactions related to Iran's oil and foreign firms' transactions with the Central Bank of Iran

Washington, however, has granted exemptions to eight countries, allowing them to temporarily buy Iranian oil, but must deposit the money in an escrow account. Tehran can spend the money only on limited humanitarian items.

In an exclusive interview with 7Dnews, Tarek Diab, an expert in international relations and Middle East affairs, said that the strength of these sanctions can be estimated according to their effects on Iran.

The first of these is the direct impact on the Iranian economy, which is very obvious from the deteriorating economic conditions in the Islamic Republic and the ongoing public protests.

The Iranian economy has been witnessing a severe decline since Washington's withdrawal from the 2015 Nuclear Deal. With the imposition of the first batch of sanctions against the Islamic Republic, Iran's currency has plunged sharply. The economic crisis sparked waves of sporadic public protests over rising prices, unemployment, and lack of public services. "These sanctions have aimed a mortal blow to the Iranian economy and its access to the US dollars," Diab said.

The second impact is on the Islamic Republic's political decisions. "In fact, the sanctions primarily aim at forcing Iran to dramatically alter its hostile policy in the region which appears in many of the volatile issues related to Yemen, Syria, Iraq and Lebanon," Diab added.

A few hours after the second batch came into force, US Secretary of State Mike Pompeo announced the US Treasury Department had blacklisted some 700 individuals and entities in the shipping, aviation, banking and oil sectors.

"Iran's crude oil exports have fallen to one million bpd (barrels per day), which will soon stifle the country's main income," Pompeo said. He added that the SWIFT banking network also suspended the services of the Iranian banks on the US sanctions list, which would isolate Iran from the world monetary system.

Four nightmare scenarios ahead of Iran

The second set of sanctions has put Tehran in a tight corner similar to that of 2012, when Iran was brought to the negotiating table to enter into an agreement with Washington and the European Union in a bid to put an end to its economic collapse.

On the same day in November 1979, President Jimmy Carter's administration froze Iranian assets in response to the Hostage Crisis in which 52 American diplomats and citizens were held hostage in the US embassy in Tehran.

The US continued to put more pressure on Iran in the late 1990s and early 21st century under the administrations of Clinton and Bush.

When President Barak Obama assumed office, he found a good opportunity in those sanctions to deter Iran and force it to limit its nuclear activities and grant access to international inspectors, something which Iran refused to comply with.

Diab told 7Dnews that one of the expected scenarios is that Iran will reluctantly accept to go back to the negotiating table as it did in 2013. Until this happens, Trump will seek to rally Europe behind him to put inescapable pressure on Tehran.

The first scenario is the most desirable for the US administration as it will put an end to the potential threat in Iran's possession of nuclear weapons and its ballistic missile programme. In this context, the US sanctions aim at forcing the Islamic Republic to change its "malign activities" and policies in the region, according to Pompeo.

In a statement to 7Dnews, Mohamed Hamed, an expert in international relations, pointed out that the second scenario ahead of Tehran is to turn to international courts, the United Nations and its European partners. Hamed, however, sees that this will not be of any avail due to Iran's recent terrorist activities in Europe.

"The US administration fully intends to curb Iran's influence that destabilizes the region and to bring its terrorist activities to a halt," Hamed said.

The third scenario, described by Hamed as "disastrous", is adapting to the US sanctions. "However, it's unlikely that Iran will adapt to such tough sanctions when the public anger has already been on the rise since the end of the last year due to the crumbling economic conditions."

The fourth scenario, and the most likely to happen, is that Iran will try to smuggle its oil out of the country via ghost ships or fake companies. "This scenario, though, won't last long before being discovered," Hamed said.

The question that now poses itself is what scenario Iran will choose in order to face these tough sanctions, dubbed as the "strongest" ever imposed by the United States against Iran.

Middle East