Kemi Osukoya


January 10, 2020

The Trump administration announced on Friday it is adding new economic sanctions against Iranian regime due to recent attacks on U.S. and allied troops in Iraq.

The new sanctions signed by President Donald J. Trump as Executive Order will inflict harsher economic punitive damages on the Iranian regime, and consist of 17 additional approved punitive actions against Iran’s largest steel and iron manufacturers, three Seychelles-based companies, and a ship that transfers of products. 

The sanctions ban individual, businesses from “owning, operating, trading with any sector of the Iranian economy, including construction, manufacturing, textiles, and mining, which will be both primary and secondary sanctions.”  The administration also announced sanctions against eight senior Iranian officials “who advanced the regime’s destabilizing activity and were involved in Tuesday’s ballistic missile strike,” the Trump administration said

On Jan. 8, in response to U.S. ordered killing of one of Iranian top leaders, Maj. Gen. Qassem Soleimani in Iraq on Jan. 3 by American drones which targeted his convoy in Iraq, the Iranian regime attacked U.S. military bases with missiles, resulting in property damages but no American or collision forces lives were lost. The incident exacerbated an already fervor situation.

Earlier in the week on Sunday, U.S. National Security Advisor, Ambassador Robert C. O’Brien told journalists during a press call that the kill ordered for Soleimani from President Trump “was something that the President felt was necessary to do.” A defensive action designed to protect and prevent further bloodshed of American personnel in the Middle East.  Soleimani was the leader of the foreign wing of Iran’s Islamic Revolutionary Guard Corps.

“Soleimani has a long history of attacking Americans.  And there are at least 600 Americans that were killed with these shaped explosives — IEDs — that were used in Iraq on a regular basis, and there were many, many more Americans that were maimed, losing arms, legs, their limbs, because of his activities. The most notable example of his activities in the past couple of weeks was the attack on the K-1 Air Base, on December 27th, which resulted in the lives — the loss of life of one American contractor and the injury to four of our service men and women,” said a senior official,” said Ambassador O’Brien.

“The President exercised America’s clear and inherent right of self-defense to counter this threat to disrupt “ongoing attacks that were being planned by Soleimani, and deterring future Iranian attacks, through their proxies or through the IRGC Quds Force directly, against Americans,” added Ambassador O’Brien.

The ongoing tensions between the current U.S. administration and the Iranian regime, U.S.’ latest attack that killed Soleimani and Iran’s response to the attack, have left many Americans and other people around the world feeling very disconcerted and worrying about a possible new war in the Middle East.

Political and financial analysts said they are keeping a very close watch on the situation. The U.S. said it has stocked up on its oil supply. The stock market briefly retracted in reaction to the current tension in the Mideast and the U.S. at the start of 2020 but has since recovered. On Jan. 6, oil prices hit an eight month high after news of Soleimani death was announced. Prices are at their lowest since early December. Brent Crude, the global gauge of oil price, declined 1.2% to $64.20 a barrel on the International Exchange. The Organization of Petroleum Exporting Countries continues to curb oil output to support prices.

The U.S. latest move against Iran is expected to cut-off billion of dollars in trade and investments from Iran. The Trump administration’s ultimate goal is to deprive the Iranian regime of any external help or economic resources that could aid Iran’s economy.

“Today’s sanctions are part of our commitment to stop the Iranian regime’s global terrorist activities,” Secretary of Treasury Steven Mnuchin told journalists during a press briefing at the White House on Friday.  “The President has been very clear: We will continue to apply economic sanctions until Iran stops its terrorist activities and commit that it will never have nuclear weapons.” 

“President Trump is delivering on the pledge that he made the day after Iran attacked American forces in Iraq: There will be a series of new sanctions,” Secretary of State Mike Pompeo remarked at the same press briefing. “Our campaign is composed of diplomatic, economic components that have deprived the regime of billions in revenue the regime has used to fuel death and destruction across the Middle East and all across the world.”

From analysts’ perspectives, the jury is mixed on whether or not these sanctions and previous ones are achieving the administration’s desired results. On the other hand, they noted that since those earlier sanctions were announced in September, violence from Iran has escalated, including an attack on a Saudi oil vessel, shooting down a drone, attacking an embassy, killing a contractor and injuring a U.S. soldier.

Other concerns are related to how these sanctions will impact the Instrument in Support of Trade Exchanges or INSTEX trade system or INSTEX that was set up in January 2019 by United Kingdom, France and Germany as a swap payment system to improve non-USD transactions and non-SWIFT without running afoul of doing business without using the U.S. dollar. 

The INSTEX system allows companies that are based in EU, and other prospects to continue to engage in business with Iran without breaking U.S. sanctions by using an alternative bar system that bypass the U.S financial system and eliminate cross-border payments, and other typical transactions. Most multinational companies have refrained from using the system.

Secretary Mnuchin said he and Secretary Pompeo have spoken with their EU counterparts regarding INSTEX transactions and he believes there’s been no INSTEX transactions. “As we have made clear, the U.S. is working on a Swiss channel that we have approved for humanitarian transactions.  We’ll continue to allow humanitarian transactions.  We have warned INSTEX and others that they will most likely be subject to secondary sanctions, depending on how they use that,” he said.