Iran’s Revolutionary Guard Corps (IRGC), which has been combating Israel within the shadows for years, has lastly crossed the road. On April 13, the IRGC launched an open and direct assault on Israel from its personal territory, firing greater than 300 projectiles, together with one-way assault drones, land-attack cruise missiles, and even nuclear-capable medium-range ballistic missiles. The IRGC assault heightens the urgency of cracking down on all types of funding that underpins the capabilities of the Guards.
Just days earlier than the assault, a Biden administration appointee publicly acknowledged that Iran was misusing humanitarian support funds. On April 9, U.S. Deputy Secretary of the Treasury Wali Adeyemo testified that Iran was misusing fungible humanitarian support, stating, “Every greenback they’ve shall be used for violence earlier than they take care of their folks.” Deputy Secretary Adeyemo’s testimony raises critical issues concerning the Biden administration’s humanitarian support insurance policies. Hold Exemptions from some Iran sanctions.
Nearly all statutory sanctions have exemptions that enable usually prohibited transactions if sure necessities are met. In the case of Iran, one of many causes for issuing such exemptions is to make sure financial arteries for the acquisition and supply of humanitarian provides. However, the issuance of waivers is as a lot political as it’s technical, because it not directly eases sanctions and macroeconomic pressures on the goal nation and might have an effect on international coverage in the direction of third international locations.
For instance, from 2018 to 2023, the State Department issued sanctions waivers permitting Iraq to import electrical energy from Iran, however on the situation that every one funds be held in an escrow account in Baghdad, stopping Iran from accessing the proceeds. But final summer season, the Biden administration modified that waiver, permitting Iraq to switch $10 billion to Iran and deposit future funds in an Iranian checking account in Oman. The new coverage additionally allowed Iran to transform cash from Iraqi dinars to euros. Iran might then course of euro-based transactions for imports and debt funds from the Omani account.
Prior to this, the Biden administration unfrozen $6 billion in Iranian property in South Korea that had been transformed into euros and despatched to Qatar within the fall of 2023. The administration claimed the funds would solely be used for humanitarian transactions.
The declare that US sanctions towards Iran are inflicting humanitarian struggling has lengthy been a key argument made by opponents of strain on the Islamic Republic, regardless of proof on the contrary. For instance, when COVID-19 was raging in Iran, many Western media retailers, citing sanctions skeptics, argued that US sanctions straight led to drugs shortages throughout Iran, exacerbating Iran’s humanitarian challenges. Even worldwide organizations such because the United Nations and the European Union have reaffirmed this view that US sanctions are hindering Iran’s capability to import medicines.
Despite claims that US sanctions have exacerbated the COVID-19 epidemic in Iran, commerce information reveals that sanctions haven’t restricted Iran’s capability to import medicines. Moreover, the US and EU have taken varied steps to protect humanitarian commerce, resembling establishing a Swiss banking channel to facilitate the movement of humanitarian provides into Iran. In 2019, Human Rights Watch printed a report blaming the utmost strain marketing campaign for drugs shortages in Iran. However, FDD analysis confirmed that Iran’s drugs imports from the EU in 2019 have been solely 5% decrease in comparison with 2018.
The Islamic Republic additionally has a historical past of misappropriating assets meant for humanitarian functions. In July 2019, President Hassan Rouhani’s administration reported that $186 million in international forex earmarked for the import of medicines and important provides was spent on tobacco. A 2018 Treasury Department investigation discovered that the administration had assisted the IRGC Quds Force in making illicit funds to Hamas, Hezbollah, Syria, and Russia below the guise of the Iranian Medical and Pharmaceutical Company (Tadbir Kish).
In the years main as much as the 2015 Iran nuclear deal, Turkish banks facilitated billions of {dollars} of illicit transactions utilizing false invoices for fictitious humanitarian provides and meals to evade sanctions. In early 2012, Iran’s well being minister complained that backed authorities funds have been getting used to import luxurious vehicles reasonably than meet Iran’s demand for imported medicines. He misplaced his job for criticizing Iran’s banking insurance policies.
This observe document, mixed with latest statements from the Treasury Department, makes it more and more clear that Iran will proceed to divert funds obtained by sanctions waivers to not directly bolster the IRGC. Therefore, the Biden Administration ought to use this chance to work with Congress, reasonably than towards it, to restrict Iran’s entry to frozen funds and be certain that waivers issued should not utilized by the Administration to fund terrorist organizations.
Benam Ben Taleb is a senior fellow at FDD specializing in Iranian safety and political points. Benam was beforehand a analysis fellow and senior Iran analyst at FDD.