Oct 29, 2019, 12:06 PM
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News Code: 83534210
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US new sanctions mechanism; a tool to increase pressure on Iranian people

The US has announced a new mechanism for exporting humanitarian goods to Iran. But this mechanism will have another deterring effect on trade with Iran in these areas.

The US Treasury and State Departments have announced new mechanisms for humanitarian trade with Iran. In a joint statement issued by the two Departments on Friday countries and companies that intend to trade in authorized areas with Iran should, in accordance with the regulations of the US Office of Foreign Assets Control (OFAC), disclose all information related to these transactions. The statement underscored that the new mechanism would help the international community deal with Iran more vigilantly in humanitarian trade.

However, US Special Representative for Iran Brian Hook claimed Friday that the new mechanism would allow foreign governments, financial institutions and private companies to legally trade with the Iranian people.

The US Treasury has claimed to authorize some legitimate business measures aimed at protecting the Iranian people, although the department has announced the continuation of sanctions.

According to the Under Secretary of the Treasury for Terrorism and Financial Intelligence, Sigal Mandelker, with the implementation of this new mechanism, there will be no money and no income for Iran.

According to the statement, the Financial Crimes Enforcement Network of the Islamic Republic of Iran is among countries with major money laundering concerns and has enacted rules known as type 5-specific measures against the Islamic Republic of Iran.

The US Treasury's Financial Crimes Enforcement Network with launching a new mechanism for facilitating humanitarian trade with Iran has set up new rules to protect the US financial system against destructive financial activities, citing Article 311 of the Patriot Act approved in 2011. The Financial Crimes Enforcement Network is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.

But Iranian foreign minister, Mohammad Javad Zarif, wrote on his Twitter account: "Contrary to its deceptive claims, the new US regulations will aggravate #EconomicTerrorism on ordinary Iranians.

He added: "@SecPompeo voiced his delusion that 'Iranian people must bow to the US if they want to eat'."

"Now, @USTreasury is targeting not merely food but also our imports of medicine," he noted.

A way to stop trade with Europe

Al-Monitor wrote in a report that a number of former US government sanctions experts have said that the recently announced humanitarian transparency mechanism will probably be a means of gathering information about new sanctions rather than facilitating food and drug purchases by Iran.

Brian Atwell, a former adviser to Barack Obama and a former Treasury Department foreign affairs official, wrote on his Twitter page that this will not help humanitarian assistance and will probably make matters worse. They (Americans) seem to be trying to get Europe to put pressure on Iran.

In his opinion, this action has a significant impact on the few individuals and companies, especially European countries, that are still exporting these humanitarian items to Iran. The move is directly in line with EU blocking status and could endanger European companies trying to use the mechanism.

Atwell has said that the current US government's move is more to get information than to help the Iranian people. Many foreign banks are unable to provide such information. The former Obama adviser believes that such a decision would hinder Europeans from trading with Iran, which they intended to trade with Iran within the framework of INSTEX.

Today's real story from the US Treasury Department is the decision to execute Paragraph 311, says Tylor Coulis‏ , a lawyer specializing in sanctions law. Paragraph 311 is a legal obligation applied by an American financial institution to evaluate foreign banks that have accounts with Iran. They send out questionnaires to their respective financial institutions to see if there is an account by Iran-related entities in these financial institutions, and if so, they will suspend or terminate this account.

The American lawyer said that Swiss banks have said that if the findings of paragraph 311 were implemented, they would block accounts with Iranian banks for humanitarian trading.

Meanwhile, the US has re-sanctioned Iran's central bank as a counter-terrorism measure. The new central bank sanctions have also changed the nature of the deal with Iran's central bank by changing the category of sanctions from nuclear to counter-terrorism. Previously, humanitarian items such as medicines, food and agricultural products were excluded from the sanction. But with a sanction with the name of combating terrorism, it is likely that the central bank will no longer be exempt.

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