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All tagged humanitarian trade
The Trump administration is reportedly considering new sanctions targeting several Iranian banks, a move that would cripple the few reliable banking channels for Iranian imports of food and medicine.
INSTEX alone cannot save the JCPOA, the future of which essentially depends on US-Iranian relations. INSTEX can nevertheless help maintain the nuclear agreement until, or even after, diplomatic solutions are found.
A Swiss payment channel touted by the Trump administration as a solution to ease humanitarian trade with Iran under sanctions has so-far failed to process any transactions during Iran’s COVID-19 outbreak.
The Germany foreign ministry has announced that INSTEX, the trade mechanism backed by nine European states to facilitate humanitarian trade with Iran, has completed its first transaction.
For the first time in 60 years, Iran has requested a loan from the International Monetary Fund (IMF), seeking emergency financing to support its efforts to combat COVID-19. If the IMF fails to provide Iran financial assistance that it makes available to countries in similar situations, the fund’s reputation will take a hit, as the fact of effective American control over its operations is laid bare.
The Swiss Humanitarian Trade Arrangement (SHTA), a payment mechanism to enable humanitarian goods to be delivered to Iran, is about to be implemented. On 27 January, an initial payment for the shipment of medicines to Iran was approved in the form of a trial run.
Medicines and foodstuffs are exempted from the U.S. sanctions on Iran, but the prospect of punishment has spooked potential suppliers, and especially foreign banks. Although this problem is easily fixed, President Donald Trump’s administration has been shamefully tardy in doing so.
◢ The Treasury Department has announced that it will operationalize a financial channel to facilitate humanitarian trade with Iran, after privately acknowledging to European officials that recent sanctions imposed on the Central Bank of Iran (CBI) risked encumbering trade in food and medicine. But the new channel may cause more problems than it solves.
◢ Since the year 2000, Iran has about doubled its annual imports of pharmaceutical products from the European Union, reflecting both advances in Iranian healthcare and the growth in Europe-Iran trade ties. But a distortion in the value of trade relative to quantity means that Iran is paying significantly more than the likes of Russia, Turkey, and Pakistan for each kilogram of medication.
◢ Last year, the Swiss government opened negotiations with the Trump administration to ensure that Switzerland’s significant sales of pharmaceutical products and medical devices—technically exempt from U.S. sanctions—could continue unimpeded. But the National Security Council has so far prevented the Swiss effort to ease trade in food and medicine in a remarkable subversion of longstanding U.S. protections for humanitarian trade with Iran.
◢ Data from Eurostat and the Swiss Federal Customs Administration show that European exports of pharmaceutical products to Iran have fallen considerably on a year-on-year basis. While some of Iran’s smaller trade partners have seen export values rise, Iran’s top sources of European pharmaceutical products are seeing exports contract.
◢ On 5 November, the Trump administration’s latest and most significant wave of sanctions against Iran came into effect. The US Treasury has issued a list of more than 700 Specially Designated Nationals (SDNs) and Blocked Persons, which includes roughly 300 entities that did not feature in Obama-era sanctions. The new sanctions impact Iran’s oil and transportation industries and banking sector in important ways.
◢ In an exclusive interview with Bourse & Bazaar, CEO of Iran’s Parsian Bank, which was sanctioned last week by the US Treasury, has described the designation of the bank as a Specially Designated Global Terrorist (SDGT) a “mistake.” The move against one of Iran’s leading private sector banks by has many in Iran’s banking sector worried about the ongoing viability of humanitarian trade.
