By targeting finance and trade in its activation of the first stage of sanctions against Iran on August 7, the Trump administration is taking a well-targeted approach and will deliver a huge blow to Iran’s currency and national economy. Yet the sanctions lack both a moral and a legal theory basis, Han Jianwei, an associate professor at the Middle East Studies Institute of Shanghai International Studies University wrote in
The Beijing News.
In spite of the unusual strength of the sanctions, the US is unilaterally breaching the Iran nuclear deal which Iran has not gone against, depriving the sanctions of any moral and legal basis. The international community is overwhelming in its disapproval of the sanctions, Han said, and the EU, China and Russia have all pledged to uphold the deal. The UK, France and Germany are exploring financial channels to guarantee connections with Iran’s central bank.
But Han also cautioned that there are no effective measures to counter the sanctions, especially secondary sanctions on firms that do business with Iran. The US dollar and the American financial system are excessively relied on in the settlement of international bulk commodity trade at present, a situation that is hard to change overnight. Although the EU is taking measures to minimize the harm done to European businesses in Iran, many of them are withdrawing, he noted.
Han predicts that Iran will more likely trade oil for goods, or settle with major oil buyers in its own currency to shy away from the sanctions. The country is also researching a financial system independent of the US dollar. Given that such a system takes time to build, it is important for Iran, the EU and other related countries to build a mechanism to bypass the sanctions before the US imposes the second round of sanctions.
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