Since the Biden administration came to power, it seems that almost everyone has been violating the US sanctions in Iran, China or wherever, and no one is being held accountable. The Biden administration appears not to be taking any action against countries such as China or Iran, which continue freely to violate sanctions while using the revenues to bulk up their war machines. Pictured: Iran's Foreign Minister Mohammad Javad Zarif (right) and China's Foreign Minister Wang Yi, at the signing of the China-Iran comprehensive strategic 25-year partnership agreement on economic and security cooperation, in Tehran, Iran on March 27, 2021. (Photo by AFP via Getty Images)
One of the reasons behind US sanctions is to financially pressure a rogue state, such the Iranian regime, to halt its destabilizing behavior and its march towards acquiring a nuclear bomb. But if sanctions are being freely violated without any consequences, there is no incentive for a predatory and dangerous regime such as Iran to stop its malign activities.
Although the US sanctions did have a negative impact on Iran's economy when they were first re-imposed by the Trump administration in 2018, they have become far less effective as many countries ignored and violated them -- all while the Biden administration has not been taking any action to deter, disincentivize or punish those who breach the sanctions.
According to the US Treasury Department, persons and entities that are neither American nor Iranian will be sanctioned if they trade with the Iranian regime. The Treasury Department has clearly warned that the Iran sanctions are not limited to just Iranian or US entities:
"Consistent with this guidance from the President, the Department of State has revoked certain statutory waivers issued to implement the JCPOA sanctions relief, issued the necessary sanctions waivers to provide for an appropriate wind-down period, and plans to take appropriate action to keep such waivers in place for the duration of the relevant wind-down period, i.e., until August 6, 2018, or November 4, 2018, depending on the activity. Non-U.S., non-Iranian persons are advised to use these time periods to wind- down their activities with or involving Iran that will become sanctionable at the end of the applicable wind-down period."
The Trump administration was holding those who violated sanctions and did business with sanctioned entities accountable. In 2018, for instance, Communist China's Meng Wanzhou, the Chief Financial Officer of Huawei, the world's largest telecom equipment maker, was arrested in Canada at the request of American authorities. Under the Biden administration, however, she was released to return to China. China's ZTE Corp pled guilty to breaking US sanctions against the Iranian regime during the Trump administration. The Trump administration sent a robust message that violating sanctions would not be tolerated. But since the Biden administration came to power, it seems that almost everyone is freely violating the US sanctions on Iran, China or wherever, and no one is being held accountable.
The Iranian regime, for its part, is finding customers to buy its oil and with whom to trade in spite of the sanctions. The sanctions therefore are not crippling the regime financially even slightly, let alone bringing it to its knees. Before the US Department of the Treasury leveled secondary sanctions against Iran's oil and gas sectors in 2018, for example, Tehran was exporting more than two million barrels of oil a day. In 2019 and 2020, Iran's oil exports went down to fewer than 200,000 barrel a day, representing a decline of roughly 90%. This shift took place after the Trump administration decided not to extend its waiver for Iran's eight biggest oil buyers; China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea.
In 2021, though, right after the Biden administration took office, China ramped up its oil imports from by Iran increasing them from 200,000 a day to nearly one million barrels a day. In other words, Iran is exporting approximately five times more oil than at its nadir in 2019 and 2020. Central Asian countries are also continuing to trade with the Iranian regime. As the sale of oil accounts for more than 80% of the country's export revenues, Iran's regime relies heavily on oil exports.
Additionally, in spite of the US sanctions, the European countries are freely trading with Tehran. From January to July 2021, the EU's trade with Iran brought roughly $3 billion to the regime. The Financial Tribune reports:
"Germany remained the top trading partner of Iran during the seven months under review, as the two countries exchanged €1.01 billion worth of goods."
"Italy came next with €347.96 million worth of trade with Iran.... The Netherlands with €264.48 million (down 9.23%), Spain with €178.33 million (up 9.25%) and Belgium with €140.14 million (up 6.79%) were Iran's other major European trading partners. Estonia registered the highest growth of 709.52% in trade with Iran during the seven months under review. Malta with 471.77%, Romania with 284.86% and Croatia with 169.12% came next."
Iran's commodities exports to the EU in the first six month of 2021 was worth nearly half a billion:
"Iran exported €475.75 million worth of commodities to EU during the seven-month period, indicating an 8.08% growth compared with the similar period of the previous year. Germany with €162.38 million, Italy with €96 million, Spain with €48 million, Romania with €35 million and Bulgaria with €22 million were the main export destinations."
The objectives behind the sanctions are to cut off the flow of funds to the Iranian regime and significantly impact its efforts to advance its nuclear program as well as fund and sponsor terrorist and militia groups across the region.
The Biden administration appears not to be taking any action against countries such as China or Iran, which continue freely to violate sanctions while using the revenues to bulk up their war machines.
This US passivity seems due an emerging pattern from the Biden administration of serial surrenders, as seen recently in Afghanistan, on the pretext that "We still believe diplomacy is the best path forward" -- without the threat of an alternative outcome.
This US inaction also seems due to the false belief and myth, which the Obama administration seems to have held as well, that if you appease predatory regimes -- if you side with the mullahs rather than your old regional allies such as Israel -- then the ruling mullahs will suddenly change their behavior and become constructive players in the Middle East. The eight years of appeasement towards them by the Obama administration only further empowered the Iranian regime and happily bankrolled their military adventurism and nuclear program.
History has proven again and again that appeasing a rogue state will only embolden it. As Winston Churchill warned:
"Each one hopes that if he feeds the crocodile enough, the crocodile will eat him last. All of them hope that the storm will pass before their turn comes to be devoured. But I fear, I fear greatly, the storm will not pass."
Dr. Majid Rafizadeh is a business strategist and advisor, Harvard-educated scholar, political scientist, board member of Harvard International Review, and president of the International American Council on the Middle East. He has authored several books on Islam and US foreign policy. He can be reached at Dr.Rafizadeh@Post.Harvard.Edu