US fails to shield humanitarian trade with Iran
European countries seeking to preserve the Iran nuclear deal in the face of resumed US sanctions are urging the Donald Trump administration to clarify how they can continue to legally provide food, medicine and medical devices to Iran.
Humanitarian trade is supposed to be exempt from the sanctions, which came back into full effect on Nov. 5. But with European banks reluctant to finance any transactions with Iran for fear of jeopardizing their much more lucrative US business, it remains unclear how crucial items will continue to flow to the Iranian people.
Asked if he could offer any guidance to the Europeans, a sanctions expert at the State Department declined to comment. Other administration officials have privately suggested that they are reluctant to “whitelist” any Iranian financial institution — even a private bank that has never been designated as connected to terrorism.
Already, some Iranians are having difficulty finding life-saving medications in the market. One Iranian charity told the Christian Science Monitor that it has run out of four imported drugs used to treat cancer in children and is having difficulty receiving monetary donations from Europe.
During a previous period of sanctions before the conclusion of the 2015 Joint Comprehensive Plan of Action (JCPOA), Iranians also complained of shortages of vital medicines. However, banking and other sanctions at that time had broader international support because they had a clear goal: negotiations and a nuclear agreement. This time, US action is unilateral and the other parties to the JCPOA are trying to convince Iran to continue to comply with restrictions on its nuclear program absent the economic benefits it was promised.
Anticipating the resumed sanctions, US humanitarian trade with Iran is already down 40% under the Trump presidency compared to the situation that existed under the Barack Obama administration.
Ellie Geranmayeh, a senior fellow and deputy head of the Middle East program at the European Council on Foreign Relations, told Al-Monitor that the European Union was seeking “to ensure that at least a specified bank in Europe can handle payment transactions for humanitarian-related goods. They are pressing the US on this issue, including to ensure that there is not a broad sanctioning of Iranian private banks that are the counterparts for many European companies exporting humanitarian goods to Iran.”
Another possibility is that European companies could use a new Special Purpose Vehicle (SPV) that the EU is creating to facilitate Europe-Iran trade. While the details of how this mechanism will work have not been disclosed, it could function as a sort of clearinghouse for bartering Iran’s oil for humanitarian goods.
Geranmayeh said such a barter arrangement “is not the ideal choice — neither for Iran nor European companies. But as an urgent bridging solution, it might be that the SPV is used in this way.”
“This should be a proactive effort on the part of the Trump administration,” Suzanne Maloney of the Brookings Institution told an audience Oct. 30 at the Carnegie Endowment for International Peace. She noted that there were “vulnerable children” and others “who suffer from diseases and need US-origin drugs.”
“Europe refuses to allow the US to be the trade policeman of the world,” said Bruno Le Maire, economy minister, in an interview in Brussels. The spat over the Iran sanctions showed the need for the EU to “affirm our independence”.
The planned mechanism would allow companies to do business with Iran while financial payments remained centralised in Europe, he said.