Iran sanctions are on the rise again, and more are coming. Iran is engaged in a series of missteps that will land it further in financial pain, rather than war. The reason for that is because from the Trump administration’s point of view, these sanctions are working to achieve their goals.
On June 13, the Iranian regime allegedly orchestrated attacks against two oil tankers in the Gulf of Oman. This development followed a report by the International Atomic Energy Agency confirming that Iran was increasing its production rate of low-enriched uranium.
These actions follow a series of measures by the US Treasury Department, which on June 12 imposed sanctions on a financial conduit of the Islamic Revolutionary Guard Corps-Qods Force, and on June 7 sanctioned Iran’s largest petrochemical holding group. US officials are also considering sanctions against the Iranian financial body that was established as a trade channel with Europe – a move that would underscore US intolerance to any international workarounds to the Iran sanctions campaign.
You don’t need to read the tea leaves too closely to know the administration’s plan for its “maximum pressure” campaign. But one thing the tea leaves don’t show are plans for war. And the reason is simple: the sanctions are working; they are helping to achieve President Donald Trump’s priority goal, which is to undermine Iran’s influence and support for terrorism in the Middle East.
The Treasury’s latest steps follow a State Department press briefing, during which its spokesperson, Morgan Ortagus, listed the negative effects Iran sanctions were having on that country’s terrorist proxies and on its other actions in the region. She pointed to the Lebanese group Hezbollah’s “pleas for public donations via billboards, posters and collection cans” and stressed that “Iran is withdrawing Hezbollah fighters from Syria and cutting or canceling their salaries.” This is a big deal.
She also pointed to Hamas’s austerity plan in Gaza and to the IRGC’s budget cuts for Iraq Shia militia groups. She highlighted fuel shortages in Syria due to the cut in Iranian oil supply and noted the IRGC cyber command “is short on cash.”
Others have also picked up on this emerging trend: that Iran sanctions are starving Iran’s proxies of critical funds. The Washington Post reported that US sanctions against Iran have “curtailed” Iran’s finances to Hezbollah, which “has seen a sharp fall in its revenue and is being forced to make draconian cuts to its spending.” A fighter with an Iranian-backed militia in Syria told The New York Times that he lost a third of his salary and other benefits, lamenting, “Iran doesn’t have enough money to give us.”
When he withdrew the United States from the Joint Comprehensive Plan of Action, or what is often called the Iran nuclear deal, last year, President Trump made his top goal clear. Before even addressing Iran’s nuclear capabilities or speaking about working toward a new agreement, he emphasized Iran’s support for terrorism and plans for regional influence as among his key concerns and reasons for withdrawing from the deal. Working to undermine that behavior has been the administration’s top priority in its Iran policy.
Take Hezbollah. If you look closely, the US has worked over many years to inflict financial pain on the terrorist organization. Could heavy Iran sanctions be the arrow through Hezbollah’s heart?
The US government says its Iran sanctions are having an effect in inflicting financial pain on the group. But we also know that Hezbollah maintains global business enterprises and active global criminal activity to heavily supplement its allowance from Iran. Dating back to the Bush administration, the US Treasury has focused on targeting Hezbollah’s business operations and sanctions-evasion conduits to further expose its illicit financial behavior and to rachet up pressure on it. And those efforts have increased over the years.
Furthermore, the threat of secondary sanctions and deliberately broad language in the Hezbollah International Financing Prevention Amendment Act, passed last year, has made Lebanese banks uncertain as to who or what the Treasury Department will target next – a maneuver that helps deter anyone from doing business with it.
In order to further isolate Hezbollah and undermine its influence, however, more needs to be done to expose and target Hezbollah’s global business and criminal behavior, particularly by the US’s global partners and by Europe, specifically. Nonetheless, Iran sanctions, while not the silver bullet, are making a real, tangible difference.
If the goal is to undermine Iran’s nefarious behavior and the strong support it offers to terrorist groups and other militants in the region, then the strategy appears to be working. And for that reason, the administration is likely to continue focusing on targeted financial measures as its tool of choice.
Hagar Hajjar Chemali was a Middle East policy advisor at the US Treasury Department’s office of terrorist financing and financial crimes. Among her other government roles, she was director for Syria and Lebanon at the National Security Council at the White House. She is CEO of Greenwich Media Strategies, which she founded.