US to apply new sanctions aimed at crushing Iranian economy

US Secretray of State Mike Pompeo declared a 'snapback' of UN sanctions on Iran last month

Credit: Reuters

The United States is expected to impose new sanctions on Iran on Thursday aimed at shutting Tehran out of the global financial sector and forcing it to renegotiate a nuclear deal.

The sanctions will target the remaining  Iranian banks not already subject to secondary sanctions and penalise any foreign, non-Iranian financial institutions doing business with them, officials said, with the aim of denying Tehran legal avenues for earning revenue.

The Washington Post first reported on the US plan, which experts say could hinder Iran’s ability to buy food and medicine, despite the possibility of exemptions for humanitarian goods. 

The plan is the latest intensification of the US “maximum pressure” campaign on Iran, as the administration of President Donald Trump seeks a foreign policy win ahead of November presidential elections by forcing Iran to renegotiate the nuclear agreement Mr Trump quit in May 2018. 

Following the unilateral US withdrawal, Iran progressively abandoned many of the restrictions of the 2015 agreement. Last month, the United States declared a “snapback” of United Nations sanctions on Iran, though this was disputed by almost every other UN Security Council member.

Q&A | The 2015 Iran nuclear deal

Opponents of sanctions, including European governments, say they will have severe humanitarian consequences, and could block food and medicine imports as the country suffers from a spiralling coronavirus epidemic.

Amid a collapsing economy, Iran is battling the worst outbreak in the Middle East, with the health ministry reporting a record 4,392 new cases in the past 24 hours on Thursday. 

Iranian officials say existing sanctions already hinder access to humanitarian goods and endanger millions of lives. 

“Contrary to US claims, humanitarian goods and services are affected by the cruel sanctions,” Mohammad Zareyian told the United Nations General Assembly Third Committee on Wednesday. 

“Financial institutions fear US vengeance, which is why the financial channels created to facilitate transactions for humanitarian commodities have had no tangible results,” said Iran’s representative to the committee, which deals with human rights, in remarks published by Iran’s semi-official Fars News agency.

Far from forcing Iran back to the negotiating table, US sanctions are likely to strengthen Iranian leaders opposed to compromise, some now fear.

“This really isn’t about getting Iran to negotiate. That ship has sailed,” said Chris Murphy, a Democrat Senator from Connecticut. “Now the primary impact of these sanctions will likely be assuring the most anti-American, hardest line candidate wins the Iranian presidential election next year.”