‘A crime against humanity’: Iran blasts latest US sanctions imposed as Tehran fights third wave of coronavirus

Washington has placed fresh restrictions on Iran’s banks

Iranian women use ATM machines in Tehran. US president Donald Trump’s administration has imposed sweeping sanctions on Iran’s banking sector, taking a major new step aimed at crippling its arch-rival’s economy weeks ahead of US elections (AFP/Getty)

Iran has denounced as “state terrorism” and “crimes against humanity” a set of draconian new restrictions imposed by the United States on much of the country’s banking sector, a move designed to punish the nation just as its outbreak of coronavirus reached record levels of death and infection.

The administration of President Donald Trump, goaded by hardline idealogues in Washington, placed restrictions on almost all of Iran’s banks on Thursday, including those that have never been accused of moving money for weapons or connected to the hardline Revolutionary Guard.  

The move comes just weeks before US elections in which Mr Trump is struggling to fend off a challenge by former vice president Joe Biden, and ahead of an anticipated debate next week expected to focus on foreign policy.  

“Our sanctions are directed at the regime and its corrupt officials that have used the wealth of the Iranian people to fuel a radical, revolutionary cause that has brought untold suffering across the Middle East and beyond,” US secretary of state Mike Pompeo said in a statement.  

The sanctions come as Iran grapples with what alarmed public health officials are describing as a third wave of the coronavirus pandemic, with daily new infections reaching record levels and upwards of 230 people a day dying of Covid-19. Iran is the Middle East country most afflicted with the pandemic, and Iranian hospitals are so overwhelmed that on Friday they barred all non-emergency visits.  

Mohammad Javad Zarif, Iran’s foreign minister, called the new sanctions a “crime against humanity” while the country’s envoy to the United Nations, Majid Takht-Ravanchi, described them as “state terrorism and economic and medical terrorism, which are carried out through unilateral coercive measures”.  

The new sanctions punish any entity doing business with 18 Iranian banks. In public statements, US officials did not cite what rules if any the banks had breached, but Treasury secretary Steve Mnuchin insisted the restrictions were necessary “to stop illicit access to US dollars”, and would continue “until Iran stops its support of terrorist activities and ends its nuclear programmes”.

Experts say the banks under scrutiny are those long considered uninvolved in the financing of terrorism, money laundering or arms procurement.  

“Designations are being made without evidence of specific wrongdoing,” said Esfandyar Batmanghelidj, a specialist on Iranian economic matters who runs the website Bourse & Bazaar. “It’s not clear what these sanctions are intended to achieve beyond this idea of creating uncertainty and additional barriers and making the operation of routine trade with Iran more difficult.”

Mr Mnuchin said the US would “continue to allow for humanitarian transactions to support the Iranian people,” but did not specify what mechanism would allow for such trade. A Swiss conduit established for humanitarian purchases by Iran has been up and running for months but has barely been used.  

That may lead to devastating impacts on Iranian citizens

Lawrence Ward, a partner at law firm Dorsey & Whitney

The US in the past has punished firms for selling medical equipment to Iran. In 2012 prosecutors pursued and fined Colorado-based Sandhill Scientific $126,000 for selling $6,700 worth of medical supplies that wound up in Iran.

Experts say the blanket ban on Iranian banks will make any purchase of pharmaceuticals, medical supplies and food more difficult, complicated and expensive.

“That may lead to devastating impacts on Iranian citizens,” said Lawrence Ward, a partner at the international law firm Dorsey & Whitney. “Without ‘buy-in’ to these latest sanctions from European and Asian financial institutions, these sanctions will likely have little impact on the Iranian government – the target of the sanctions.”

Mr Zarif was in Beijing on Friday, likely discussing the impact of the sanctions with China, which is a major Iranian trade partner.

Mr Trump has made reversing US outreach to Iran under his predecessor Barack Obama a signature foreign policy goal. Critics say his policies are shaped by a narrow group of pro-Israel operatives and Iranian exiles who have long sought to topple the regime in Tehran, even at the cost of increasing the suffering of Iranian civilians and damaging alliances with longtime partners. The United Kingdom, France and Germany have opposed the US policy.  

In recent weeks much of the world, including all four other permanent members of the UN Security Council, rejected a US attempt to extend an embargo on Iran set to expire on 18 October. Mr Ward says the fresh sanctions force key American partners in Europe and Asia, including Japan and South Korea, into a corner and “may only serve to further alienate the United States from those allies”.