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July 31, 2020

Military Exercise in Persian Gulf, U.S. Sanctions Impacts Humanitarian Aid, & Clash between Israel and Hezbollah

This week, Iran conducted a new round of military exercises amid tensions with the U.S. Also, a new report shows how U.S. sanctions have stymied the transfer of humanitarian aid and food to Iran and clashes between Hezbollah and the IDF elevate the prospects of a potential conflict. Please see our breakdown of events and analysis below:

Iran Conducts War Games Amid Tensions with U.S. 

  • “The Great Prophet 14” Operation Begins in the Persian Gulf

    • On Tuesday, July 28th, Iran’s Islamic Revolution Guards Corps (IRGC) and the Iranian Navy conducted a new round of military exercises in the Persian Gulf amid simmering tensions between Iran, the U.S. and its regional partners. The operation, called “Great Prophet 14,” was conducted on the strait of Hormuz and included a mock up a U.S. Nimitz-class aircraft carrier.

    • In footage and photos released by Iranian state media, IRGC soldiers were filmed firing artillery guns, launching ballistic missiles, operating armed drones, and launching rockets from speed boats while encircling the replica U.S. aircraft carrier. Also, an Iranian helicopter was filmed firing a missile targeting the replica with footage showing it hitting the side of the mock aircraft carrier. Iranian state media also used images it said were taken from the Noor IRGC space satellite, which was launched in April to the dismay of U.S. officials.

    • After the operation began, the Al Udeid Air Base in Qatar and Al Dhafra Air Base in the United Arab Emirates, both of which host a large contingency of U.S. troops, were put on a heightened alert status based on an initial assessment of Iran’s activities. A statement from U.S. Central Command said, “the incident lasted for a matter of minutes, and an all clear was declared after the threat indicator had passed.”
    • In reference to the operation, Abbas Nilforoushan, the Guard’s deputy commander for the exercise, said the Guards will use “long-range ballistic missiles with the ability to hit far-reaching aggressor floating targets.” The last time Iran conducted an operation on this scale was in 2015, when the Guard’s sunk another replica ship, which also was modeled after U.S. ships.
    • Cmdr. Rebecca Rebarich, a spokeswoman for the U.S. Navy’s Bahrain-based 5th Fleet, said in reference to the mock-up ship that, “we cannot speak to what Iran hopes to gain by building this mockup, or what tactical value they would hope to gain by using such a mock-up in a training or exercise scenario.” In another statement, she mentioned that “this exercise has not disrupted coalition operations in the area nor had any impacts to the free flow of commerce in the Strait of Hormuz and surrounding waters.”

    • On June 26 Brigadier-General Hossein Dehghan, a military advisor to the Supreme Leader Ali Khamenei said the replica had “no message” but if there was a message it would be “we will strike back if you strike.”

  • Key Takeaways

    • Iranian military exercises in the Persian Gulf are nothing new, however the context they are now in seems particularly unique. Amid a coronavirus pandemic that has put both the U.S. and Iran under domestic pressure, tensions between the two countries remain high.

    • There have been increasing signs of a confrontation as America attempts to extend an expiring U.N. weapons embargo on Iran; Iran has threatened to leave the NPT if it is extended. Moreover, a recent incident over Syria involving an American jet fighter which made a dangerous approach to an Iranian civilian airliner prompted consternation from Iranian and international officials.

    • Mysterious explosions at sensitive security and critical infrastructure sites also continue to rock Iran, with many analysts pointing to an organized effort to undermine Iran’s stability and prompt an Iranian retaliation. This included an explosion at a centrifuge assembly plant, an incident widely attributed to Israel. All of these events are undergirded by a crippling sanctions regime that has decimated Iran’s economy.

    • The military exercise surely serves as a message to the U.S. and its regional allies about Iran’s willingness and resolve to combat U.S. pressure. However, drills such as the one this week are also intended to boost the military’s image domestically. The glossy pictures and slick videos overlaid with dramatic music are par for the course when it comes to IRGC media productions, similar to other militaries.

    • Domestically, these productions function to bolster their image as defenders of Iran at a time of deep cynicism toward both the security establishment and broader government. A crackdown on protests that left hundreds dead in November 2019, a beleaguered economy, and the accidental drowning of a Ukranian civilian airliner have further undermined the image of the establishment to many Iranians. Demonstrating military prowess, even with a mock-up American warship, is an attempt to stir nationalist sentiments both among the government’s conservative bases and ordinary patriotic Iranians.
U.S. Sanctions Impede Food and Humanitarian Sales to Iran

  • New Report Highlights Why Humanitarian Channels Fall Short

    • According to a Reuters report, U.S. sanctions exemptions on humanitarian aid, medicine, and food, along with various ‘white channels,’ have not been enough to dent the crippling impact of broad sector sanctions on Iran. Company and trade sources contend that despite the exemptions, banks and financial institutions are still wary of accepting Iranian payments for fear of sanctions violations. Without assurances from the U.S. Treasury Department, they fear the risks are too great.

    • Moreover, a U.S.- approved trade channel launched by the Swiss government – the Swiss Humanitarian Trade Agreement (SHTA) – has technically been operational since January, but has only completed two transactions since its inception, and only one during the coronavirus crisis.

    • A major hold up has been Iran’s inability to access funds in U.S. dollar denominations. Iran currently has billions of dollars in escrow accounts, accumulated between 2016 – 2018 from oil sales following the Iran deal era-sanctions relief. Iran’s Central Bank has tried to access this money to complete transactions via SHTA, but third party countries where it is being held say they will only do so with U.S. permission.

    • In South Korea, a major importer of Iranian oil prior to the Trump administration’s withdrawal from the JCPOA, has refused to transfer the funds explicitly due to U.S. sanctions. A South Korean Foreign Ministry official told Reuters that, “Under the current U.S. sanctions, returning the money in cash is impossible. Any permission regarding the funds need to be strictly authorized by the U.S.”

    • Brazil, which supplies much of Iran’s corn imports, also has been having trouble completing transactions with Iran. Without major financial institutions and banks willing to facilitate the deals, they have turned to much smaller banks to complete them. Some have even gone so far as to barter in order to circumvent sanctions impediments. As a result of these inefficiencies and obstacles, corn imports from Brazil to Iran have dropped from 2.3 million tons to 339,000 in 2019 alone.

    • In response to the article, a State Department spokesperson commented that the United States remains committed to the success of the SHTA and that, “it has never been, nor is it now, U.S. policy to target humanitarian trade with Iran.”

  • Key Takeaways

    • The administration’s insistence that their policies do not harm ordinary Iranians has been a mainstay of their messaging since the pandemic began. Even OFAC director Andrea Gacki, who spoke on an April 17 panel discussion with the Center for New American Security, said, “It’s one of my primary objectives to make sure that sanctions do not impede humanitarian relief efforts related to the COVID-19 crisis.”
    • However, such statements are belied by the facts – the administration’s policies run contrary to the exemptions Congress has consistently created for humanitarian trade. Blocking funds from being transferred to the Swiss channel does little except make it more difficult for Iran to procure medicine and vital goods.This increases perceptions that increasing the suffering of the Iranian people is a means to an end of this administration, even amid the COVID-19 pandemic.
    • As the report notes, as well as a myriad of others since before the pandemic began, U.S. sanctions undermine the sale and procurements of medicine, food, and humanitarian aid in Iran. The issue has never been that there are official exemptions on the books for these items, but how those exemptions operate in reality and in the context of Iran’s economic situation. If no bank is willing to transact with Iran, then it doesn’t matter if there are designated ‘humanitarian channels’ or exemptions in place.
    • Despite the administration’s statements otherwise, U.S. sanctions inherently undermine the trade of vital goods to Iran – amid a pandemic no less. The administration may deny that it is not their intention, but this appears to be part and parcel of their collective punishment strategy.
Israel and Hezbollah Exchange Fire at the Border; No Casualties

  • Hezbollah Denies Incursion Into Israel; IDF Claims It Has Video

    • On Monday, July 27th, the Israeli Defense Forces (IDF) began shelling areas in Southern Lebanon after what they called a “security incident” occurred on the border. According to IDF spokesman Lt. Col. Jonathan Conricus, after a small group of Hezbollah soldiers crossed the Israeli border, IDF forces fired on their positions with small arms, tanks, and then artillery, forcing the Hezbollah fighters to retreat and fire back. However, Hezbollah denied that its members attempted to infiltrate Israel, calling the Israeli account a move to create “false victories.” The events come after three Hezbollah operatives were killed in an Israeli airstrike in Syria the previous week.

    • In their statement after the attack, Hezbollah said “the incident was from one side only, from the anxious enemy who opened fire first…All the enemy media claims about thwarting an infiltration operation from Lebanese territory into occupied Palestine … is absolutely not true.” The group laid blame of the incident on Israel’s “state of terror experienced by the Zionist occupation army” following calls of retaltiaon from Hezbollah after the killing of their members in Syria.

    • Shortly after Hezbollah’s statement on the incident was released, Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz held a press conference. In his remarks, Netanyahu said, “We view the attempt to infiltrate our territory with great severity. Hezbollah and Lebanon bear full responsibility for this incident and for any attack that comes out of Lebanese territory against Israel.”

    • In response to Hezbollah’s claim that they had not attempted to cross the border, Israeli defense officials said they had footage of the encounter and preceding infiltration. The IDF has yet to release any film.

    • On Tuesday, July 28th, Lebanese Prime Minister Hassan Diab stated in reference to the shellings that Israel’s actions were a “dangerous military escalation” that had violated Lebanon’s sovereignty. He also called for, “caution in coming days because I fear the situation will deteriorate in light of heightened tensions on our border.” Mr. Diab went on to accuse Israel of trying to “change the rules of engagement”, and stated that the Lebanese government had filed a complaint to the UN about the “Israeli assault on the south.”
    • Anticipating a response to the killing of Hezbollah fighters in Syria, Israel beefed up its security on the border in the lead up to the events earlier this week. On July 23rd, the IDF increased its presence along the borders in the north. In anticipation of a response, a Kuwaiti news site Al Jarida reported Israel had sent a message to Hezbollah seeking to de-escalate tensions that have risen between the sides in recent days.
  • Key Takeaways

    • Conflicting messages from both parties makes what truly happened difficult to discern. While the IDF has stated they have video evidence of the incident, their unwillingness to release the images so far is telling. Following the killing of Hezbollah fighters in Syria, Israel had been attempting to dial down tensions, even going as far as saying that the killings were a mistake according to some reports. The video’s release would simply be more fuel to the fire at a time when both Israel and Hezbollah do not appear to want another war, especially following the last conflict in 2006.

    • Both sides are embroiled in their countries respective coronavirus response and the subsequent fall out. While Lebanon has been plagued with protests since the middle of 2019 following a decline in the country’s economy, demonstrations have also broken out in Israel as a result of the government’s poor coronavirus response and its economic implications.

    • Given the context, both sides must find a way to save face for domestic and international audiences while avoiding escalation. Hezbollah has said that this incident does not constitute retaliation for their slain fighters, and over the next days and weeks, there most likely will be another spike in tensions as a result.
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