Trump Administration Moves To Throttle Iran’s Financial System As It Battles Covid-19

Trump Administration Moves To Throttle Iran’s Financial System As It Battles Covid-19

Topline

The U.S. Treasury Department on Thursday announced new restrictions targeting the few Iranian banks that hadn’t been subject to the sanctions Washington reimposed following its withdrawal from the multilateral nuclear deal with Iran, raising fears that the country could face difficulty bringing in food, medicine and other humanitarian necessities as it battles a severe coronavirus outbreak.

Key Facts

Treasury Secretary Steve Mnuchin identified 18 Iranian banks it would target with sanctions in order to choke off the country’s connection to the global economy.

While the Trump administration claimed the action would “allow for humanitarian trade,” European officials expressed concern that it would deprive Iran’s devastated economy of access to foreign currency to pay to import essential supplies.

Iran is battling a new rise in Covd-19 cases, seeing its highest-single day case number on Tuesday with 4,151, as well as a record 227 deaths on Monday, according to Al Jazeera.

In August, the U.S. attempted to “snapback” sanctions that were lifted by the multilateral nuclear deal struck in 2015, but the U.N. Security Council announced all 15 member countries except the Dominican Republican rejected the proposal, deeming it illegal given Trump’s withdrawal from the agreement.

The sanctions are meant to dissuade Iran from developing nuclear weapons, but since Trump’s controversial withdrawal from the global pact in 2018, Iran has enriched more uranium than before its signing.

European allies have objected to further sanctions against Iran, with the European Union foreign policy chief Josep Borrell in April expressing regret over Washington’s opposition to Iran’s request to ease sanctions and to receive financial help from the International Monetary Fund to combat the pandemic.

Chief Critic

“We were in the Iran nuclear deal with friends, with allies. . . .and because of Donald Trump’s unilateral approach to foreign policy, coupled with his isolationism, he pulled us out and has made America less safe.”

Tangent

The actions by Trump come right before the November presidential election. The nuclear deal isn’t dead yet despite the White House’s best efforts, and former Vice President Joe Biden would push to restore its agreement if elected. “If Tehran returns to compliance with the deal, President Biden would re-enter the agreement, using hard-nosed diplomacy and support from our allies to strengthen and extend it, while more effectively pushing back against Iran’s other destabilizing activities,” his campaign site reads.

Key Background

Mnuchin and Secretary of State Mike Pompeo were afforded authority to sanction Iran’s economy through an executive order signed by Trump in January. Iran currently has 488,236 confirmed cases of the coronavirus and 27,888 deaths, according to data from Johns Hopkins University.

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