The call for increasing the pressure on the Islamic Iranian regime is ongoing.
Most of the measures were announced in the past, yet were not executed due the differences in the political and commercial interests of different countries involved.
Most successful of those was the US, by using its treasury ministry and the NY DA against those who broke their sanctions. Others just talked sanctions without actions.
Creative activities like blocking the Iranian fleet from international insurance also proved to be successful.
At a time when Iran is launching hundreds of deadly weapons carrying tens of tons of explosives towards another country, it’s time to tighten the economic warfare, with emphasis on the improvements of its missile project, rather than to be forced to start a regional or a world war.
————————————————————————————
Recently we are witnessing a rise in demands to choose diplomatic and economic measures over a direct military confrontation with Iran. They are calling for paralyzing sanctions, for diplomatic bans, for denunciation and even resolutions against the mullah-regime in general and especially against the revolutionary Guards known as the IRGC, going hand-in-hand with the growing concern over a possible escalation that might deteriorate the middle East into a regional war.
The protagonists of this conception see many advantages to the alternative of a military confrontation, including there is no blood-shed and that it may influence the Iranian regime would be much greater to the point where the regime would be pushed into the corner, maybe leading to a complete surrender. This is the moment to point out that Iran is under broad sanctions and has been for decades, mainly by the US, the European Union, Australia, Japan and the UK. These included paralyzing sanction on Iranian banking, with direct sanctions on most major banks in Iran, not to mention the Iranian Central Bank. Further sanctions were imposed on the oil sector, cutting off CBI including the SWIFT from the global transaction network, sanctions on Iranian national shipping line IRISL and NITC in the shipping sector and on Irans national oil company NIOC, along with sanctions on the petrochemical sector and the car industry, just to name a few.
Fines for billions of Dollars were imposed on Western banks that didn’t comply, including PNB Paribas, Credit Suisse and LLYDS TSB. All of these did not stop Iran and did not bring the prospected results. You may ask yourself, why is that!?
The impact of economic warfare derives from the strength of the stranglehold one can cast on Iran, compiled from following factors:
1. Formulating paralyzing sanctions on key entities in Iran and their international subsidiaries.
2. Change of legislation on a national level to open the path for such sanctions.
3. Formulating a list of high-quality targets based on the available information in all Western countries focused on the Iranian investment and trade system and its MO.
4. Worldwide enforcement on a national level utilizing the banking, trading and legal sector.
The available information to the West on the Iranian investment and trade system
Decades of sanctions led Iran to build a complex structure of thousands of companies around the world, including in various tax havens. This structure allows the IRGC to move billions of Dollars around the world according to their needs. Western institutions assess that the investment system of the spiritual leader with billions of Dollars is handled by EIKO (Execution of Imam Khumeini’s Order). Only parts of this system have been resolved.
Currently the main problem is that the available information on the Iranian investment and trade system is sectional at best and dispersed between various Western countries, all of which keep this information to themselves, so as to protect their own interests. Furthermore, the Iranian Central Bank is acting outside the usual guidelines of a national central Bank, as the Bank acts in some way as a trade-bank, not only handling the currency reserves and the monetary markets of Iran, but directly involved international trade deals. The Iranian investment portfolio is generally managed in foreign currency and outside of Iran. Still, most of the portfolio and the location of the accounts have yet to be resolved.
Compartmentations and bureaucracy are yet another obstacle. Several intelligence agencies have some of the relevant information, but wouldn’t share it for said reasons. These cause a major weak point when it comes to the legal aspect of economic warfare.
Changes of legislation on a national level in order to prepare the background for the needed sanctions. For example, in the US you need information about a specific person that has influence on the company or entity (owner, GM) and his involvement in forbidden, in order to be able to impose sanctions. There is no automatic derivation to impose sanctions on mother-companies, subsidiaries or connected entities. In the EU you need a court decision by an EU court that the named entity has broken the law, as defined by the High Representative of the European Union for Foreign Affairs and Security Policy.
Such discrepancies in legislation can affect the nature of the information needed to impose mutual sanctions as mentioned above.
Paralyzing Sanctions on key figures in Iran and international entities subordinated to them
Even if the relevant information is found, imposing sanctions involves political considerations. Today most sanction are far from paralyzing, are pin-pointed at people and specific companies rather than central entities that have an impact on the Iranian economy. Amongst other things, this stem from the fear of damaging diplomatic channels, which in Western eyes are the key instrument to resolve the nuclear issues with Iran (as stated not too long ago by UK prime minister Rishi Sunak and UK foreign minister David Cameron). Furthermore, a profound issue is the possibility that a paralyzing and even lethal attack on the monetary system of Iran may be seen by the regime as a declaration of war, or at least a war-act that deserves a suitable reaction.
Worldwide enforcement on a national level utilizing the banking, trading and legal sector
Enforcement on an international level is very complex, very much because of the Iranian resourcefulness in channeling their activities through locations where there is almost no enforcement (China, Russia, Qatar and Turkey etc.) and there are mutual Western economic interests which make a profit on Iranian transactions and from the sanctions, as these raise the issue of danger to the transactions, pushing the price up. Even today, after decades of sanctions and enormous fines imposed, banks all over the world play along with the Iranians in circumventing sanctions. On the legal level, the examination of past cases show that whenever a major Iranian entity is concerned, the Iranian will take profound legal actions and drag the issue over years through the courts and by such delaying the decision to forfeit or freeze assets. This allows the Iranians to reorganize and empty the accused entity of any substance or relevancy. Thus, the sanctions are not enforced and de facto have only a declarative nature.
The change needed to turn economic warfare into an effective tool
The main idea is an international coalition, compulsory entity that will act independently against terror threats, both of organizational as well as national nature. This entity should have two wings
1. A targeting wing – this wing will collect and analyze intelligence from open sources and Western intelligence services, producing recommendations on targets. For each target the wing will produce a current and updated legal intelligence portfolio. They will have direct contact to the intelligence collection in the services to improve collection capabilities.
2. Enforcement wing – in charge of implementing the target portfolios produced to directly impact on the economy, through sanctions, freezing activities, imposing heavy fines on all involved, based on binding international legislation and assisting legal economic warfare.
The targets should be several, focused, with maximum effect, accessible intel, and agreed upon the coalition members. For example:
• monitoring all the activity around any attempt of the regime to achieve missilery upgrades.
• Blocking all EIKO worldwide activity.
• Blocking all Iranian commercial activities made for strategic Iranian projects like GIC (Ghadir International company), based in Germany.
More options will follow.
