by Tahir Mahmoud (News & Analysis, Crescent International Vol. 45, No. 3, Rajab, 1437)
While Iran has fulfilled its part of the bargain in the nuclear deal, the US is putting hurdles in its way by refusing to release Iran’s frozen assets. Instead, US courts have indulging in grand larceny by awarding Iranian money to families making ludicrous claims. One Judge, George Benjamin Daniels of US District court in Southern New York is shown in the picture. Is there a better definition of Uncle Tom.
The euphoria generated by the Iran-P5+1 nuclear agreement appears to be dissipating as most of the illegal sanctions against Tehran remain in place. The skeptics sesm to have been proved right: that the US cannot be trusted in any dealings even when it signs an agreement. Islamic Iran has fulfilled its part of the bargain in capping its nuclear program and not installing the next generation of centrifuges. Both UN as well as American officials have confirmed this yet many of the sanctions remain in place.
Islamic Iran is still prohibited from using the US dollar in international transactions. Since the dollar is the world’s reserve currency, this has resulted in two problems. First, Iran cannot get access to billions of its dollars stuck in various banks around the world. Second, most countries are unable to enter into major trade deals with Iran because of restrictions on dollar trades. True, they can enter into agreements in euros or in barter deals but the dollar prohibition still acts as a major impediment to Iran being able to trade openly in the international market.
Tehran faces a raft of challenges starting with its inability to connect with the worldwide banking system. Every bank in the world is connected through the Society for Worldwide Interbank Financial Telecommunication (SWFIT). Each bank has its own unique SWIFT code that is used to identify it and facilitate its dealings with other banks to send payment messages that lead to the transfer of money across international borders.
In 2012, when the US and its allies imposed economic sanctions against the Islamic Republic and also roped in the UN, Iranian banks were instantly cut off from all transactions with some 9,700 banks in 209 countries. Tehran could neither receive nor transfer money to any bank. With the lifting of sanctions last January, 26 Iranian banks have been reconnected to SWIFT but that does not capture the reality of what is underway.
When the Joint Comprehensive Plan of Action (JCPOA) went into effect on January 16, it led to the removal of UN and US imposed sanctions related to Iran’s nuclear activities. Other sanctions imposed unilaterally by the US or its allies that were based on allegations that Iran was “supporting terrorism,” or because of its domestic arms production have remained in place. Similarly, there is a raft of US Treasury Department rules that prohibit dealings with Iran. This has acted as a strong deterrent for many major Western banks to underwrite trade transactions of Western companies with Iran. Thus, while smaller banks are prepared to underwrite deals worth about $100 million, the major banks have shied away from deals that would run into billions of dollars.
Even the Austrian President Heinz Fischer who visited Tehran last September at the head of a large delegation, expressed doubts about the immediate removal of all anti-Iran sanctions by the US and Western governments. He told the Islamic Republic of Iran Broadcasting (IRIB) in an interview on March 30 that he was not sure how long it would take for the West to lift sanctions on Iran. The Austrian leader admitted it was not up to a single country to lift all the sanctions, but that the United States had a part to play.
“Austria alone cannot lift the sanctions. The EU cannot do it alone too, but it is the international community that should do it,” Fischer said. “The US also plays a role in this regard,” he added. “A process for sanctions removal has begun, but I cannot make any predictions on how long this issue will last. I hope all sides fully adhere to the [nuclear] agreement,” clearly expressing frustration with the Americans for dragging their feet.
Since the agreement was signed last November and it was subsequently announced that UN resolutions on Iran’s sanctions had been annulled, American officials have merely made soothing noises. On April 5, for instance, US Secretary of State John Kerry told MSNBC, “It’s fair for Iran to get what it deserves because it kept its part of the bargain to date, with respect to the nuclear agreement.” He went on, “We’ve in fact tried to work to make sure that the banks that are supposed to be doing legitimate business with respect to the transactions that are okay after the agreement, that they’re operating.”
“Iran deserves the benefits of the agreement they struck. And President Obama has said it, I’ve said it, US [Treasury] Secretary [Jack] Lew has said it.” Saying is one thing but doing is another. Numerous Treasury Department restrictions remain in place preventing major Western banks and companies from entering into agreements with the Islamic Republic. Despite Kerry’s pronouncements, on April 11, Treasury Secretary Jack Lew once again said Iran would not be permitted to use US dollar transactions. He reiterated this again after meeting the governor of Iran’s Central Bank Valiollah Seif in Washington. DC on April 14. The latter was in town to attend the International Monetary Fund (IMF) meeting.
This is what the Rahbar, Imam Seyyed Ali Khamenei was referring to when he said on March 30, “Negotiations should be carried out in such a way that we do not get cheated.” He went on to say “That we negotiate, put things on paper, but sanctions don’t get removed, and trade doesn’t get going is a sign that something is wrong.”
The Rahbar returned to this theme on April 6 — as he has done on numerous previous occasions — that Western officials cannot be trusted. Addressing a group of senior Iranian officials, the Rahbar described the US as a symbol of dishonesty. He said, “We cannot trust the Americans, and besides the Americans, some other Western governments are like that. Therefore we have to rely on our own capabilities and the American officials’ positions and performance endorse such a view.” The Rahbar assured the senior officials that Allah (swt) would help the Iranian people if they act with sincere intentions.
Within days of the Rahbar’s address, The European Union (EU) extended sanctions against 82 Iranian individuals, whom it accused of human rights violations. The 28-member bloc took the measure on April 11, with the Council of the European Union notifying that the sanctions will be running through April 13, 2017.
And on April 18, while addressing a gala dinner organized by the Jewish group, J Street, Kerry said, “Guess what, folks. You know how much [money] they [Iranians] have received to date as I stand here tonight? About $3 billion.” He also said that Iran’s total frozen assets are $55 billion, not $155 billion or even $100 billion as some have suggested. “So what we said to people was true,” Kerry boasted.
Meanwhile American courts have been involved in their own highway robbery of Iranian money. In March, a federal judge in New York ordered Tehran to pay $11 billion in compensation to families of 9/11 attack victims. This was followed on April 20 by the US Supreme Court ruling that $2 billion of Iranian money should be handed over to families of victims of the October 1983 bombing of the US embassy in Beirut. Iran has denied any involvement in the embassy attack and nobody has been able to prove that Tehran was responsible but American courts are in the habit of stealing others’ money.
Even the usually cool Iranian Foreign Minister Mohammad Javad Zarif was forced to lash out at the US courts’ decisions. “It is a theft. Huge theft. It is highway robbery. And believe you me, we will get it back,” Foreign Minister Zarif told The New Yorker in an interview published on April 25. “I have lost every respect for US justice. The judgment by the Supreme Court and the other, even more absurd judgment by a New York circuit court deciding that Iran should pay damages for 9/11 are the height of absurdity,” Dr. Zarif said.
“How would you explain Iran being held accountable for the damages to the victims of 9/11 — and others being absolved of any responsibility, those who were actually responsible for it?” he said apparently referring to Saudi Arabia. “These cases cannot stand in any serious civilized court of law. When a US court condemns Iran for 9/11, it finishes the credibility of the US justice system when it comes to Iran,” the Iranian foreign minister added.
Increasingly, Iranians are asking whether the nuclear deal was worth it. Their frozen assets have not been released; they are constrained from receiving money from third countries because even if paid in euros, it has to be circulated via dollars as the instrument of exchange, which the Americans are refusing to permit, and now American courts have rendered judgments that amount to grand larceny.
This is not to suggest that Iran has had no benefits whatsoever from the nuclear agreement but these can be counted on one’s fingers. It is able to export oil, for instance, and has increased exports substantially although the price of crude oil is being kept low deliberately through increased production for which the Najdi Bedouins are to blame. Iran has also entered into a number of deals to purchase passenger airliners. These are big-ticket items and will cost tens of billions of dollars.
Despite their obvious benefit — Iran’s fleet of aircraft is quite aged and its upgrade and expansion is urgently needed — there is also a downside to it. Islamic Iran must be extremely careful not to fall into the debt trap that it has so far avoided through judicious use of its resources.