By Shahriar Kia
The Iranian regime is under intense international and domestic pressure. From the very moment that U.S. President Donald Trump announced that the United States would be exiting the 2015 nuclear deal, or the Joint Comprehensive Plan of Action (JCPOA) as it is formally known, the effects were noticeable. Many foreign enterprises pulled out of their business dealings with Iran, eager to avoid getting caught in the crosshairs of U.S. sanctions. Furthermore, the value of the country’s national currency – the Rial – started to plummet.
On the domestic front, the Iranian regime has been feeling the pressure from the people who are making their calls for regime change loud and clear.
The regime is in a very weak position but it is trying its hardest to portray the opposite. The sanctions that came into effect several months ago were a major blow to the economy, but the ones that took effect last week are having even more of an impact.
Economic embargos are tightening and the Iranian regime is finding it very difficult to keep up with its rhetoric about the international sanctions being ineffective.
On 7th August, the European Commission updated the “Blocking Statute” that was put in place to keep the nuclear deal functional after the United States exited it. It essentially tries to stop European companies from leaving Iran because of the sanctions. Any companies that do leave will be financially penalised.
Iran said last week that the European Union must take action following the SWIFT measures that were put in place. Fars news agency wrote: “If the EU doesn’t respond to SWIFT’s measures, it shows that the Blocking Statute that the union has activated to sustain the JCPOA is ineffective.”
The “Blocking Statute” is a rather controversial measure because companies being prudent about not getting mixed up with sanctions that were put in place because of Iran’s involvement with terrorist, extremist, nuclear and other belligerent activities are being forced to keep their business in Iran.
However, there is a solution for the enterprises that want to respect the sanctions. They can say that “commercial viability” is their reason for pulling out of Iran.
Furthermore, major European companies have received multi-million dollar fines from the United States for business dealings with embargoed countries, so many are still wary of the Blocking Statute.
It has also been reported that the Central Bank of Iraq has called on all banks in the country to comply with the U.S. sanctions on the Iranian Regime. It issued a directive stating that it expects banks to comply with the list of limitations to avoid “the consequences of U.S. sanctions”.
This is a major blow to the Iranian regime because it depends heavily on Iraq and its future is a lot less certain as a result of this directive.
President Rouhani’s first deputy, Eshaq Jahangiri, has admitted that the claims of the inefficacity of the sanctions are not true. He said: “I would have lied if I said that the sanctions have no impact. U.S. sanctions have negative impact on the country’s economy. The government is not able to shoulder the economic management of the country on its own.”
