US tries to force other countries to follow its sanctions against Iran

The US special envoy to Iran Brian Hook spent the last week spreading the idea that Iran was a threat to the US and the world. Now, Hook is threatening other nations directly.

Choose to do business with the US or Iran

Hook is now warning that if countries do business with Iran they will not be able to do business with the US. In particular Hook warned the EU about trading with Iran.

The P5 +1 nations

Wikipedia describes the P5 +1 nations: "The P5+1 refers to the UN Security Council's five permanent members (the P5); namely China, France, Russia, the United Kingdom, and the United States; plus Germany. The P5+1 is often referred to as the E3+3 by European countries. It is a group of six world powers which, in 2006, joined together in diplomatic efforts with Iran with regard to its nuclear program."

The US withdrew from the agreement with Iran. However France Russia and Germany all members of the EU are put in a difficult position as the Iran deal gives it relief from sanctions. Now the US is demanding that the three countries implement US sanctions. This is an extraterritorial application of laws that apply only to the US. The US is not just itself refusing to trade with Iran but demanding that everyone else do so as well. Hook says that the US will sanction any country that tries to purchase Iranian oil.

The EU attempt to circumvent US power

Most financial arrangements arising from trading go through what is called the SWIFT system. This is described by Wikipedia as follows: "The Society for Worldwide Interbank Financial Telecommunication (SWIFT), legally S.W.I.F.T. SCRL, provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. SWIFT also sells software and services to financial institutions, much of it for use on the SWIFTNet network, and ISO 9362. Business Identifier Codes (BICs, previously Bank Identifier Codes) are popularly known as "SWIFT codes". The majority of international interbank messages use the SWIFT network. As of 2015, SWIFT linked more than 11,000 financial institutions in more than 200 countries and territories, who were exchanging an average of over 32 million messages per day (compared to an average of 2.4 million daily messages in 1995). "

While SWIFT itself is neutral, the US will be able to see if banks are trading with Iran if transactions go through it and the US can take action against the bank by cutting off any business with the US. US threats frighten the banks so the EU has developed a clearing house that will allow trade with Iran without money crossing borders. With no role for the banks SWIFT is not involved either.

US threats may not be enforceable

China is continuing to buy oil from Iran despite US warnings about doing so. Other countries that need Iranian oil such as India may follow suit.

If the EU is to convince Iran to stay in the nuclear agreement it must continue trade in spite of the threats of the US. The US is creating a great deal of friction with its policies. It may end up not only creating new financial systems to avoid US power in the financial area but also encourage the use of monetary units other than the dollar in international trade. China and Russia have already agreed to trade in their national currencies.

Previously published  in the DIgital Journal

US imposes new sanction on Iran

These actions are so drastic they are almost an invitation to war an invitation that Iran will decline of course. However, I just wonder if these types of sanctions are not going to result in the creation of new financial relations in China and Russia that will operate outside the grasp of US foreign policy. The US has more and more tried to US its financial clout and influence on global financial institutions for foreign policy aims. This is surely bound to create a reaction.

Analysis: US hopeful firms will cut ties with Iranian banks


Oct 25, 2007, 22:40 GMT


Washington - The US decision to slap new, broad sanctions on Iran reflects the growing frustration within the Bush administration about the lack of progress in the international effort to prevent the Islamic state from developing nuclear weapons.


US Secretary of State Condoleezza Rice announced the sanctions that target three of Iran's largest banks, hoping the move will prompt banks worldwide to cut ties with the Iranian institutions and further squeeze the regime's ability to finance nuclear activities or terrorism in the Middle East.

At the same time, Rice made it clear Washington remains committed to the diplomatic process through the United Nations Security Council to resolve the dispute over Iran's nuclear ambitions, even though the United States has acted unilaterally by imposing the sanctions.

'The United States and our partners are fully committed to a diplomatic solution with Iran,' Rice said, reiterating her willingness to meet with her Iranian counterpart 'any time, anywhere' if Tehran agrees to suspend uranium enrichment - a condition Iran has repeatedly rejected. Iran insists its nuclear activities are solely for civilian energy use.

Some analysts, however, warn the US decision to act alone could send the wrong message to the five other countries - Britain, China, France, Russia and Germany - who are working closely with the United States to ensure Iran does not acquire nuclear weapons.

'It makes it more difficult for the United States to make the argument that we need to maintain an international consensus and be in lock step ... if we have just imposed unilateral sanctions,' said Jon Wolfstahl of the Centre for Strategic and International Studies in Washington.

The sanctions target the elite Iranian Revolutionary Guard Corps and its commercial entities, and three of the largest state-owned banks suspected of helping finance the nuclear programme and terrorism. They are the most sweeping sanctions since the 1979 seizure of the US embassy in Tehran.

Going after the three banks - Bank Melli, Bank Mellat and Bank Saderat - serves as a 'powerful deterrent' to international banks carrying out business transactions with Iran, Rice said.

The United States hopes the effectiveness of the new sanctions lies in a desire of outside European and Asian banks to not do business with Iranian banks accused of financing illicit activities.

'We've seen a dramatic effect in the last several months with financial institutions and others deciding they don't want to be bankers for this regime,' said Stuart Levey, a US Treasury Department undersecretary.

The United States has no plans to sanction banks that continue relationships with Iranian banks, Levey said. The announcement of the new sanctions came as President George W Bush stepped up his rhetoric over the dispute with Iran, saying last week that a nuclear-armed Iran could provoke a conflict on the scale of World War III.

Vice President Dick Cheney said Sunday that the United States was 'prepared to impose serious consequences' if Iran did not comply with international demands to come clean on its nuclear ambitions.

Lee Wolosky, a former member of the White House's National Security Council under Bill Clinton and Bush, said the sanctions could have an effect comparable to steps taken against a bank in Macau for handling North Korean illicit funds. The Banco Delta Asia was crippled when banks cut ties after the United States imposed sanctions.

'When the US government declares a financial institution radioactive, we see a tremendous ripple effect throughout the financial community,' Wolosky said.


© 2007 dpa - Deutsche Presse-Agentur