The twilight battle over the effectiveness of sanctions against Iran is one of the most important world events happening today. There is a real chance that effective sanctions, consistently applied, could head off war with Iran.On one hand, the sanctions are clearly working. Iranian oil production is at a 20-year low, its currency has lost almost half of its value against the dollar, and inflation is running at 23 percent (at least according to official figures; the real number may be considerably higher).On the other hand, the Financial Times points out that the “the average Iranian consumer has yet to notice shortages.” Supermarket shelves and retail stores remain “fully stocked, and even luxury imported goods are easily attainable.” The high price of oil, which hovers around the $100 per barrel mark, is undoubtedly taking some of the pressure off the mullahs.But oil prices alone do not tell the whole story. Iranian oil tankers have taken to switching their flags and turning off their automated tracking systems to avoid detection. China and some other Asian countries appear to have accepted a bartering deal with Tehran, paying for oil in goods rather than dollars.Meanwhile, financial institutions around the world are helping Iranian businesses evade the sanctions. The British bank Standard Chartered was accused by the state of New York of hiding some 60,000 transactions with Iran over the past decade, worth up to $250 billion. HSBC, Europe’s biggest bank, was found to have engaged in nearly 20,000 transactions totaling close to $20 billion.Nor is it just the big banks:
Meanwhile, Iranian businessmen say small European banks, notably those in crisis-hit economies, still help with financial transactions to Iran through foreign nationals and money transactions to countries such as Turkey, Ukraine, Azerbaijan and some Gulf states. Businessmen, however, refuse to reveal the names of the European banks involved.
If a united sanctions campaign succeeds in halting Tehran’s nuclear ambitions, there is every chance a similar tactic could be used to peacefully confront other problematic regimes. In short, there is a lot riding on these sanctions, and those who seek to profit from evading them deserve the title “merchants of death.”