Post #406 - Pressure or Punishment?

The following post on the website of the National Iranian American Council, entitled "Organizations Call for Obama to Allow Medicine and Humanitarian Trade with Iran," appeared 2/7/13.

Washington, DC - Twenty-five organizations called on President Obama yesterday to ensure that existing U.S. sanctions on Iran do not block access for medicine, food, and basic humanitarian goods for Iranian civilians. In a letter led by the Friends Committee on National Legislation (FCNL) and signed by NIAC and other anti-war, human rights, and humanitarian organizations, the groups urged the President to exempt humanitarian transactions from sanctions against Iran’s banking sector.

While Obama Administration officials have reiterated that sanctions on Iran do not specifically “target” medicine or food, the broad measures aimed at Iran’s economy--combined with the Iranian government’s failure to manage the situation--have led to widely reported medicine shortages inside the country.

The letter to the President notes that, although food and medicine are technically exempt from sanctions passed by Congress and enforced by Treasury, the White House has imposed sanctions on Iranian banks by Executive Order that make no such humanitarian distinction. So, while actual humanitarian goods are not prohibited for sale to Iran, most of the banking channels through which those goods can be sold are indeed blocked by sanctions. As a result, there remain few legal banking channels through which to conduct medicine and food sales, family remittances, and other permissible transactions. And private companies and banks are increasingly unwilling to invest the resources and take the risks required to navigate those channels.

In response to the growing reports of medicine shortages in Iran and the sanctions’ negative humanitarian impacts, the U.S. Treasury did release a guidance yesterday aimed at clarifying ambiguities and providing reassurance to businesses and banks regarding humanitarian exports to Iran.

The document notes that non-U.S. banks are allowed to facilitate transactions of humanitarian goods and other items that have been exempt from sanctions, though it reiterates that those transactions cannot include financial institutions designated under WMD or terrorism sanctions--which means they cannot involve any major Iranian bank.

At the same time, European Union sanctions similar to U.S. sanctions against major Iranian banks are coming under increasing scrutiny. An EU court yesterday ruled that the body had not properly demonstrated Bank Saderat’s linkage to Iranian WMD programs, and thus ruled that the sanctions on the bank must be removed. A similar ruling was issued by another EU court the previous week regarding Bank Mellat, in addition to prior rulings against sanctions on a private Iranian bank. The EU can appeal the decision.

The letter to President Obama is included below and a PDF is available at the website of the Friends Committee for National Legislation.

February 4, 2013

SUBJECT: Open Channel for Food and Medicine to Iran

Dear President Obama,

We write to express our deep concern for Iranian civilians who have not been able to access life-saving medicines and humanitarian goods inside of Iran, which has been caused in part by U.S. sanctions against Iran. We urge your Administration to take all necessary steps to ensure that licensed humanitarian goods are not prevented from reaching the people of Iran as a result of U.S. sanctions imposed on the Iranian banking sector.

Thomas Pickering, former U.S. ambassador to the United Nations and Undersecretary of State for Political Affairs, expertly summarized the crux of this problem posed by U.S. sanctions. Referring to U.S. sanctions on the banking sector that block purchases of humanitarian goods, he explained on October 1, 2012: "we issue licenses for sales of food and medicine to Iran, but it is not legal for them to pay for it." Various recent reports have illustrated the grave impact that the shortages of life-saving medicines and humanitarian goods inside Iran have had on ordinary civilians:

In an October 2012 report on the human rights situation in Iran, U.N. Secretary General Ban Ki Moon spelled out how sanctions block Iranians from accessing food and medicine, noting that "Even companies that have obtained the requisite license to import food and medicine are facing difficulties in finding third-country banks to process the transactions. Owing to payment problems, several medical companies have stopped exporting medicines to the Islamic Republic of Iran, leading to a reported shortage of drugs used in the treatment of various illnesses, including cancer, heart and respiratory conditions, thalassemia and multiple sclerosis.” 

On November 23, 2012, the BBC reported: “Hospitals, clinics and pharmacies in Iran are running out of medicine as the government cuts health funding because of international sanctions, putting the lives of thousands of people at risk.”

Recent reports by The Financial Times, Al Monitor and the International Civil Society Action Network indicate that a growing number of Iranians do not have access to life-saving medicines. As this legislative record makes clear, Congress has established some protections to help humanitarian goods reach the people living under sanctioned regimes. Under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) the export of licensed medicines, medical devices, agricultural commodities, and food are exempt from sanctions. Congress has explicitly reaffirmed this policy in four acts authorizing sanctions on Iran which you have signed into law, including the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010; the 2012 National Defense Authorization Act, the Iran Threat Reduction and Syria Human Rights Act of 2012, and the 2013 National Defense Authorization Act.

While congressional sanctions distinguish between sanctionable activities and exempt humanitarian transactions, executive order sanction 13382 affects all of Iran’s largest banks and does not specify an exception for humanitarian transactions. In addition, the humanitarian licenses issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) expressly prohibit not only the direct involvement of these banks, but also their indirect involvement. We appreciate your Administration issuing new regulations on October 22, 2012 that allow U.S. companies to sell certain medicines and medical supplies to Iran without first seeking a license from the Office of Foreign Assets Control. However, as the New York Times recently reported, “the exporters [of medicines] still face troubles getting paid” and a result, “virtually no American or European bank wants to be involved in financial transactions with Iran.” To ensure that Iranian civilians are not barred from accessing food and medicine, humanitarian transactions must be exempted from banking sanctions.

The current impasse with Iran over its nuclear program should not prohibit the export of life-saving medicines which millions of Iranian civilians depend on. We urge your Administration to take all appropriate steps to ensure authorized humanitarian transactions regarding Iran are not obstructed by U.S. sanctions. As a first step, we hope that your Administration would provide a clear statement that it is not the policy of the United States to in any manner prohibit permissible humanitarian transactions.

Sincerely,

American Friends Service Committee
Arms and Security Project at the Center for International Policy
Campaign for Peace and Democracy
Center for Interfaith Engagement—Eastern Mennonite University
Church of the Brethren
Conference of Major Superiors of Men
Fellowship of Reconciliation
Friends Committee on National Legislation
Havaar: Iranian Initiative Against War, Sanctions and State Repression
International Campaign for Human Rights in Iran
International Civil Society Action Network (ICAN)
Just Foreign Policy
Mennonite Central Committee U.S. Washington Office
National Iranian American Council
Orthodox Peace Fellowship
Peace Action
Peace Action West
Peace X Peace
Physicians for Social Responsibility
Presbyterian Church (U.S.A.)
Progressive Democrats of America
The Peace Alliance
The Student Peace Alliance
United Methodist Church—General Board of Church & Society
Women’s Action for New Directions

Cc: Vice President Joseph Biden
Secretary of State John Kerry
Acting Secretary and Deputy Secretary of the Treasury Neal Wolin
National Security Advisor Thomas Donilin
Undersecretary of State for Economic Growth, Energy, and the Environment Robert Hormats
Undersecretary of State for Political Affairs Wendy Sherman
Undersecretary of the Treasury for International Affairs Lael Brainard
Assistant Secretary for Economic and Business Affairs Jose Fernandez
Deputy Assistant Secretary for Counter Threat Finance and Sanctions Peter Harrell
Director of the Office of Foreign Assets Control (OFAC) Adam Szubin