United States Strengthens Iran Sanctions; Charges Laid

29 June 2011 FDI Team

Background

In the latest development in US-Iran relations, authorities in New York have filed criminal charges against Islamic Republic of Iran Shipping Lines (IRISL), the largest Iranian merchant shipping company, accusing it of trafficking and procuring weapons for use in Tehran’s ballistic missile programme. On 24 June, the United States Government widened its sanctions to include Iran Air, the Iranian national airline. 

Comment

According to the Financial Times, on 20 June the New York County District Attorney’s office lodged a 317-count indictment against IRISL, ten alleged front companies and five individuals. They were charged with misleading a number of well-known international banks, including Citibank, HSBC, Deutsche Bank, Bank of America, JPMorgan Chase and Standard Chartered, in transactions worth US$60 million ($57.1 million). The charges follow a 14-month joint investigation by New York authorities and the US Treasury Department Office of Foreign Assets Control.[1]  

Four days later, Washington expanded its sanctions to include Iran Air and a port handling company, Tidewater Middle East. According to Washington, Iran Air has broken US and United Nations sanctions by providing assistance to the Iranian Revolutionary Guard Corps, which is also thought to be the owner of Tidewater. Both companies are alleged to have been involved in the transport of illegal weapons.

US sanctions against Iran were imposed as a response to the Iranian uranium enrichment programme, which the US and other countries fear is being used to develop nuclear weapons, a charge Tehran denies. The sanctions chiefly target sales of oil products, the activities of 16 blacklisted Iranian banks and those businesses and individuals trading with the Revolutionary Guard Corps or its front companies.

Writing to UN Secretary General Ban Ki-moon on 25 June, Mohammad Khazaee, the Iranian Ambassador to the UN, responded to the latest US sanctions, describing them as:

‘… tantamount to economic and political blackmail against a sovereign member state of the United Nations, and a serious violation of United States obligations under the provision of international law ….’[2]

For the US, however, the sanctions are a key weapon in stopping an Iranian nuclear weapons programme. The aim is to pressure the Iranian leadership via its economy, by reducing the number of ports Iranian transport operators can call at, and by restricting Tehran’s ability to finance its endeavours. Despite the pressure placed on the Iranian economy, Iran’s leaders show no willingness to end the nuclear programme.

Leighton G. Luke

Research Manager

FDI Indian Ocean Research Programme

[email protected]

 


[1]Scanell, K., ‘Iran shipping line charged in US over arms’ Financial Times, 20 June 2011.

[2]‘Iran says new US sanctions exemplify serious violation of intl. law’, Tehran Times, 26 June 2011.

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