After Iran attacked Israel with more than 300 Missiles and Drones, the US announced that it would impose sanctions on Iran soon. The US sanctions are likely to target the drone program of Iran and US allies are also likely to join them in extending the reach of these sanctions on Iran.
This attack was a response to the Israeli strike on the consular section of the Iranian embassy in the Syrian capital city of Damascus on April 1, which killed seven Iranians, including two veteran commanders.
Even in past, Iran was put on the blacklist by FATF after imposing sanctions on the country. Iran was well known for funding and supporting terrorism. FATF had imposed anti-terrorism norms on Iran to curb terrorist activities.
However, Iran failed to comply with these norms. Due to this, they were put on the blacklist by FATF.
How Sanctions on Iran were evaded?
To evade the sanctions in the past, Iran purchased dual-use goods and encouraged the use of cryptocurrencies to avoid the inconvenience in using the banking system.
China helped Iran in buying the Oil through the teapot refineries which use small amounts in trade, small banks and avoid reporting.
US sanctions in past have drastically hampered their economy but Iran has now learned to defeat the sanctions. The country has been isolated from financial markets. Iran has received warnings from FATF for three consecutive years regarding complying with the regulation of FATF in controlling terrorist financing. However, Iran ignored these dual warnings.
The nations have reduced their transactions with Iran. The banks and the businesses which are still operating in Iran are under immense pressure. As Iran is being isolated from the financial markets the borrowing cost of the goods is spiking up. Iran has been continuously failing to abide by international norms which is weakening their economy. The chief of Iran’s central bank was completely against this decision declaring it as a politically motivated instead of a technical decision.
Iran failed to attract new investors and also lost the existing ones because of the failure in comply with international norms. A policy of maximum pressure has been imposed on Iran by USA in order to control the nuclear issues, ballistic missile support and Iran’s support to terrorism in the Middle East.
Various other countries have joined America in the isolation of Iran. Because of the sanctions imposed by USA, Iran’s oil exports have been reduced drastically and it has been boycotted from the international financial system. If Iran wants to get out of the blacklist then it has to come up with a strong framework and a plan for countering terrorism. Until then terrorist financing is going to remain a big concern for FATF. Unless Iran actually shows efforts in complying either the regulations put forth by FATF, the sanctions imposed on the country are not going to get lifted.
