Assessing the Impact of New Western Sanctions on Iran

With old sanctions still in effect, additional sanctions from the West are predicted to do little to increase pressure on Iran.

AFP/ATTA KENARE

A military truck from Iran was carrying parts of the Sayad 4-B missile, passing by a portrait of the Iranian Supreme Leader Ayatollah Ali Khamenei during a military parade as part of the annual commemoration ceremony for the country's military in Tehran, Iran on April 17, 2024.

The United States and The United Kingdom imposed new sanctions on Iran over its attack on Israel. The European Union will take the same steps. However, it is believed that the new sanctions from Western countries on Iran will not have much effect.

This is because the new sanctions are only imposed on companies and sectors that have previously been sanctioned by the United States. In addition, several individuals targeted by the new US sanctions are strongly suspected of not having assets in the US jurisdiction.

Also read: Tehran still wants the US to lift all sanctions on Iran at once

New US and UK sanctions on Iran came into effect on Friday (19/4/2024). The new sanctions are a response to Iran's attack on Israel which is feared to trigger widespread war in the Middle East.

So far, Iran has not commented on the new sanctions. Tehran actually held a weapons parade showcasing drones and ballistic missiles this week.

AFP/ATTA KENARE

Armed forces members of Iran led a military orchestra as a truck carrying missiles paraded in a military ceremony commemorating the country's annual army day in Tehran, Iran on April 17, 2024.

When speaking at a forum on the Middle East in the United Nations Security Council, Iranian Foreign Minister Hossein Amir-Abdollahian only reiterated a warning that Tehran will make Israel regret any retaliatory attack against Iran.

The first direct attack by Iran on Israel on April 13th was said to be Tehran's retaliation against Israel's attack on the Iranian consulate in Damascus, Syria. Two Iranian generals were killed in the attack.

"If the Israeli regime uses force and violates our sovereignty, the Islamic Republic of Iran will not hesitate to assert its rights, provide a firm and appropriate response, and make the regime regret its actions," he said.

AFP/ANGELA WEISS

Iran's Foreign Minister Hossein Amir-Abdollahian attended a United Nations Security Council meeting on the situation in the Middle East, including the issue of Palestine, at the UN Headquarters in New York, USA on April 18, 2024.

British Prime Minister Rishi Sunak said Britain's sanctions were intended to further limit Iran's ability to disrupt regional stability. Britain's new sanctions were imposed on 13 parties, including several branches of Iran's military and individuals involved in Iran's drone and ballistic missile industries.

Also read: US Discusses New Sanctions for Iran, Israel Hasn't Decided on Counterattack

Meanwhile in the US, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) targeted 16 people and two entities in Iran that produced the drones used to attack Israel, April 13 2024.

In addition, OFAC also imposed sanctions on five companies involved in steel production and three Iran-based automotive subsidiaries of Bahman Group. The sanctions against Bahman Group are based on allegations that the company supports the Iranian military and other sanctioned groups. So far, there has been no comment from Bahman Group.

AP PHOTO/PABLO MARTINEZ MONSIVAIS

US President Joe Biden briefly stopped to answer questions from journalists while boarding Air Force One at Andrews Air Force Base, USA on April 12, 2024.

US President Joe Biden stated that he directed the US Department of Treasury to continue imposing sanctions to pressure Iran's military industry. "Let it be clear to all parties who support Iran's attacks, we will not hesitate to take all necessary actions to hold you accountable," Biden said in a statement.

I do not want to exaggerate, but we are on the brink of war, a regional war in the Middle East, which will send shockwaves around the world, and especially to Europe. So, stop.

In addition, the US Department of Commerce has also tightened Iran's access to obtain commercial-grade microelectronics. This tightening applies to goods produced using US technology even if they are made outside of the US.

The new sanctions from the US are said to be aimed at preventing future attacks. On Capitol Hill, US Congress members are also pushing for legislation to impose financial sanctions against Iran and its leaders.

AFP/GETTY IMAGES/MICHAEL A. MCCOY

US Treasury Secretary Janet Yellen at the US Treasury Department on April 17, 2024.

Earlier this week, US Treasury Secretary Janet Yellen stated that the US has been attempting to reduce Iran's capability to export oil. "There may still be more that we can do," she said.

Deputy Spokesperson of the US Department of State, Vedant Patel, stated that the US has re-imposed travel restrictions on Iranian delegations at the UN. These sanctions prevent Iranian delegations from travelling beyond a two-block radius from UN headquarters. This restriction was implemented during the presidency of Donald Trump but was lifted at the start of the Biden administration.

Also read: Iran attacks Israel, conflict is feared to spread

In line with its allies, European Union leaders said they were discussing new sanctions against Iran. New European Union sanctions target delivery of drones and missiles to Iranian proxy groups in Gaza, Yemen and Lebanon.

The EU's Foreign Policy Chief, Josep Borrell, stated that EU sanctions against Iran will be strengthened and expanded. This is to punish Tehran and help prevent future attacks on Israel.

AFP/ROBYN BECK

Protesters unfurled a banner reading "No War with Iran" during a demonstration calling for a permanent ceasefire in the Israel-Hamas conflict in Los Angeles, California, United States, on Monday (15/4/2024).

At the same time, he said, Israel needs to exercise restraint. Currently, the world is on the brink of war. "I don't want to exaggerate, but we are on the brink of a regional war in the Middle East, which will send shock waves around the world, especially to Europe. So, stop," he said.

Old sanctions

Previously, the US had imposed sanctions on around 600 Iranian entities and citizens, ranging from the central bank, government officials, to drone manufacturers and money changers. The old sanctions, which are still in effect, were imposed on accusations that they supported Iran's Revolutionary Guard and foreign groups such as Hamas, Hezbollah and the Houthis.

Additionally, for several decades now, the US has also been trying to limit Iran's income from the sale of oil and other petroleum products.

Richard Goldberg, former director of Iran's weapons of mass destruction countermeasures at the National Security Council during the presidency of US President Donald Trump, referred to the new sanctions as important, but not impactful.

The new sanctions impose restrictions on entities involved in manufacturing Iran's missiles and drones. Apart from that, it also strengthens actions that impact existing main industries. However, Goldberg said, the new sanctions are not strong enough to force Iran to change its calculations.

Also read: International Court Listens to Tehran's Complaints about US Nuclear Sanctions

Daniel Pickard, a legal expert on sanctions at Buchanan, Ingersoll & Rooney in Washington, believes that the new sanctions will not be able to stop Iran's role as a financier for the groups that have been proxies for Iran.

However, the idea is quite strong, which is to separate Iran from the international financial system. "Only one more push is needed for the Iranian economy to experience an unstoppable decline," he said. (AP/AFP/REUTERS)