The Trump administration’s policy of crippling Iran economically through “Maximum Pressure” is exacerbating the novel coronavirus outbreak in one of the epicenters of the global pandemic, according to sanctions experts.
With Iran experiencing at least 1,284 deaths and over 18,000 reported cases as of Wednesday, Tehran’s public health infrastructure is under its own kind of maximum pressure. Iran has identified urgent needs for face masks, ventilators, test kits, x-ray machines, and other supplies.
While U.S. sanctions formally exempt humanitarian supplies, sanctions-watchers say the reality is more complex. The breadth of the Maximum Pressure sanctions is extensive enough to dissuade firms, foreign governments, and banks from participating in the transfer of life-saving medical supplies, for fear of incurring secondary or third-degree sanctions from Washington. Reports of medical shortages followed very shortly after the Trump administration reimposed sanctions in 2018, long before a global medical crisis arrived.
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That crisis creates an urgent moral context around Maximum Pressure. The administration’s intent is to transform Iran’s behavior—or, as critics believe, topple the Islamic Republic. But a pandemic searching for host bodies doesn’t discriminate between regime decision-makers and those average Iranians they rule. Nor can Iran’s health needs in a global pandemic be separated from America’s or the world’s.
“We are not safe in any place until everyone all over the world is safe,” Paul Anatharajah Tambyah, the president of the Asia-Pacific Society of Clinical Microbiology and Infection, told the Wall Street Journal about a new wave of COVID-19 cases in east Asia.
“You have to facilitate these medical goods. Anyone who argues otherwise, or does otherwise, is a sociopath or a moron,” said Jarrett Blanc, a former State Department official who monitored Iran’s compliance with the nuclear deal that the Trump administration abandoned. “The U.S. should be busting its ass to make sure permissible medical exports are available to Iran. It’s in our self-interest.”
In October, the Trump administration established a channel, through Switzerland, to ease payments for Iran’s importation of food, medicine, and other humanitarian supplies. That operation began in late January, coincidentally around the time the World Health Organization declared COVID-19 a global public health emergency. “A big part of our Iran strategy from the very beginning is standing with the Iranian people instead of standing with the regime,” the State Department’s Iran special representative, Brian Hook, said at the time.
Asked about the sanctions’ impact on the Iranian coronavirus outbreak, a Treasury Department official said the administration “encourage[s] companies to use the recently established humanitarian channel in Switzerland.”
But those who follow the Iran sanctions closely say that the Swiss channel isn’t going to be sufficient. Sanctions make it difficult for Iran to access its foreign currency reserves held in banks in countries that purchased Iranian oil. “You can have a channel, but no foreign currency to pay through it,” said Esfandyar Batmanghelidj of Bourse & Bazaar, which tracks the Iranian economy.
“The Swiss channel is a good development, but because it funnels payments through a single Swiss bank, BCP [Banque de Commerce et de Placements], it isn't useful to companies that don't maintain accounts at that bank. Moreover, the Swiss channel has probably the most onerous due diligence and disclosure requirements of any payment channel ever created for Iran. So setting up to work through the channel, though possible, isn't going to cut it at this time of emergency,” Batmanghelidj explained.
Coronavirus has not convinced the Trump administration to relax Maximum Pressure. Nor has quiet prodding from the British government, first reported by The Guardian. On Tuesday, Secretary of State Mike Pompeo announced new sanctions on Iranian nuclear scientists and third-country businesses said to be trading in Iranian petrochemicals. Pompeo highlighted the Swiss channel as an example of U.S. concern for Iranians’ health and offered humanitarian assistance. As he put it, “The Wuhan virus is a killer, and the Iranian regime is an accomplice.”
On Wednesday, Pompeo announced that Iran agreed to furlough for medical reasons an American in its custody. Michael White, a U.S. Navy veteran, was arrested in July 2018 while visiting the Iranian city of Mashad and in March 2019 was sentenced to 10 years in prison for “insulting the country’s top leader and posting a private photograph publicly.” Pompeo called on the regime to release three other prisoners: Morad Tahbaz, Baquer Namazi, and Siamak Namazi, as well as the long-held Robert Levinson.
The expansion of sanctions under Maximum Pressure also increases potential liability for violation. Maximum Pressure, Blanc observed, tacitly contends that ever-greater elements of the Iranian economy are adjuncts of the Islamic Revolutionary Guards Corps—including dozens of banks—something that deters outsiders from exporting goods with a humanitarian component like medical supplies. Parsian Bank, a favored avenue for humanitarian trade with Europe, was sanctioned in October 2018. “Banks are so terrified by the sanctions that they don’t want to do anything with Iran,” a former French ambassador to the U.S. observed that month.
“There’s no specific detail and the lack of guidance [prevents] foreign companies from helping Iran,” said Brian Mulier, a sanctions expert with the Bird and Bird law firm in the Netherlands.
It didn’t take long before Maximum Pressure, created in 2018 when President Trump abandoned the Iran nuclear deal, deprived Iran of medical equipment, regardless of the humanitarian exemptions. CNN reported the following year that imported medicines and medical instruments had tripled in value as Iran’s currency dropped. “We have the procedures, but we don't have the instruments,” an Iranian doctor told the network. Last year, Human Rights Watch warned that Iranian shortages in everything from epilepsy drugs to chemotherapy could be traced back to the sanctions, writing, “whether intentional or not, [the sanctions] pose a serious threat to Iranians’ right to health and access to essential medicines.”
Last week, with COVID-19 ravaging Iran, the regime—for the first time in its 40-year history—asked the International Monetary Fund for a $5 billion loan. The request creates a test case for the Trump administration. With the U.S. having undisputed influence over the fund, any decision to block the loan will show the administration’s “commitment to destabilizing Iran is greater than dealing with this crisis,” Blanc said.
Representatives for the Treasury and State departments did not answer The Daily Beast’s repeated questions about whether the administration intends to oppose the IMF loan. Observers expect that if the administration doesn’t object to the loan, Treasury will push to structure it through European banks where Iran holds accounts, giving the U.S. the ability to see where the money goes.
The Iranian-American author Hooman Majd considered it ominous that the administration hasn’t stated it will permit the loan to go through. “Maximum Pressure is working but at what cost? It’s helping to kill a lot of Iranians,” Majd said. “Do we want to be responsible for that, as Americans?”
“It really is immoral,” he continued. “If we’re asking our own people to take care of our fellow human beings by not going to restaurants, not going to movies, and by suspending our lives, can’t we suspend the sanctions, even if you don’t want to lift them?”
