Are Iran Sanctions Worse Than Iraq?

Sanctions Panel

Washington, DC – “The most recent sanctions were actually described by some of the advocates on the Hill as being the strongest, most comprehensive sanctions ever put in place on a country,” said NIAC Policy Director Jamal Abdi, opening a Capitol Hill panel discussion on the humanitarian impact of Iran sanctions.  “When you hear that and you think about the experience of the Iraq, where we had pretty stringent sanctions in place, in which conservative estimates say 375,000 children died as the result of the sanctions, we want to know–is this the pathway of the Iran sanctions or are these smarter sanctions? Have we learned from these mistakes?”

According to Justin Logan, Director of Foreign Policy Studies at the Cato Institute, “the sanctions began as an effort to target the regime [and] to target the nuclear program.” But over time, he said, Washington has shifted its objectives. “These are broad sanctions, these are not targeted sanctions,” he said. “The theory underlying the sanctions as they are maintained today is to create pain on the Iranian population that will create fear inside of the regime that that pain will cause unrest–political unrest–and potential for regime collapse, revolution, overthrow, et cetera.”

Logan noted with skepticism that U.S. officials still publicly maintain that the impact on Iranian civilians is unintended.  “If you look at the statements of American officials, obviously they don’t put it as I put it; it’s not a very nice thing to say.”

Eric Ferrari, a Washington-based sanctions attorney, described how food and medical exports to Iran are being blocked, even though these items are technically exempt from sanctions.  He said he has encountered numerous scenarios–an attempted export of a $250,000 of burn medicine, a multimillion dollar export of prosthetic limbs, exports of food supplies–in which goods that had a license from the U.S. government, a willing exporter, and a willing importer, still were blocked because no foreign bank was willing to take the risk to facilitate the transaction.  The reason, he said, is that the U.S. government has announced broader and broader penalties for any foreign bank dealing with Iranian financial institutions, while making no distinction between prohibited and authorized transactions with those banks.  The result is fewer and fewer channels for legal, humanitarian, food, and medical transactions.

To compensate, importers are looking for alternative suppliers, to limited effect. In one case, an Iranian importer turned to China for pain medication and ended up empty handed. “They spent about five million dollars and, when it got to Iran, they tested it, and about 85% of it was just pure chalk, with no medicinal value.”

Ferrari spoke of one of his clients who had aunt in an Iranian hospital that was unable to obtain basic IV fluids. “The hospitals in Iran substituted what’s in the IV with just water. And because of that, her condition continued to worsen and worse. She died, in the hospital, because they couldn’t get the products they needed.” 

Noting similar findings in her organization’s recent report on the impact of sanctions in Iran, Sanam Anderlini of the International Civil society Action Network said, “cancer drugs are very hard to come by, dialysis drugs are very hard to come by, and people are dying.”  The combined effects of these shortages, she concluded, along with inflation and currency depreciation, is fatigue and depression throughout the Iranian population. “The idea that we’re going to have this population now coming out onto the streets to get rid of the regime without knowing what next happens is absurd.”  

According to Anderlini, one lesson from Iraq is that the sanctions promoted a rise in extremism.  “Things like child marriage went up, honor killings went up,” she said.  “What happened is that conservative ideology was given space to reign free.” She warned that we may be witnessing the first signs of a similar trend in Iran, noting the recent increase in restrictions on women’s education in Iranian universities. 

Anderlini also said that alternative power structures are being hard hit by sanctions. In a country in which civil society is based on volunteerism, she noted, human rights and democracy activists inside Iran are warning that the desperation to find a job or put food on the table is hindering participation in civil society organizations.  

Additionally, Anderlini argued, the independent private sector is being decimated. “Every piece of sanctions legislation that is passed takes businesses out of the hands of independent middle class families and forces them to shut down.” The regime, on the other hand, is able to fill these voids according because they have the ability to get around restrictions and thus sees their share of power increased by sanctions.  

Ferrari concurred, observing that sanctions were “actually bolstering this underground black market economy by cutting off legitimate transactions through the international financial system.”  The result, he said, undermined U.S. interests.  

“We’ve now pushed Iran into the backwaters of the international financial system. Well, who lurks in the backwaters of the international financial system?” he asked.  “Hawala brokers, sarafis,” and other illicit networks that are being utilized by Iran for “the types of activities that are not exactly in line with our foreign policy objectives.”




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