Increased Impact of Sanctions on Tehran
The increased impact of sanctions on Tehran within the current geopolitical framework, characterized by a vast array of mandatory sanctions against Russia and Belarus, albeit to a lesser extent, has led many Italian companies to feel the need to focus their concerned outlook on the global restrictions and export controls. In this context, the European Union, in response to the repressive actions carried out by the Iranian government that resulted in the death of Mahsa Amini, a 22-year-old woman, took measures and approved sanctions against the Iranian government.
This initiative includes the adoption of Council Implementing Regulation 2022/1955 on October 17, 2022, which essentially enforces Regulation 359/2011 related to the Green Movement protests concerning restrictive measures against certain individuals, institutions, and entities considering the situation in Iran.
New Sanctions
By amending Regulation 359/2011, the relevant Council in the European Union added eleven individuals and four government entities accused of human rights violations to the list of previously sanctioned individuals, thus raising the total to 97 individuals and 8 entities. The Iranian morality police, part of the Iranian law enforcement, and two of its main representatives, Mohammad Rostami and Haj Ahmad Mirzaei, who were specifically held responsible for Mahsa Amini’s death, were included.
Additionally, the Iranian police were sanctioned for their role in violently suppressing peaceful protests that began in the days following the death of young Iranian woman Mahsa Amini. Isa Zarepour, the Iranian Minister of Information and Communications Technology, was also sanctioned for playing a key role in the systematic violation of freedom of expression and opinion by the Iranian government through the imposition of internet access restrictions.
Article 2 of Regulation 359/2011 stipulates that all funds and economic resources, whether belonging to these individuals, entities, or organizations, or even if merely held and controlled by them, must be frozen. Furthermore, providing funds or economic resources, directly or indirectly, to these individuals, entities, and organizations is prohibited.
As stated, the prohibition on making funds available does not only refer to payments to these individuals but also includes the prohibition on buying and selling goods or services that, by their nature, have the potential to generate economic resources.
Iran’s Support for Russia
The sanctions outlined in Regulation 2022/1955, in response to the internal repressive actions carried out by the Iranian government, were followed by additional sanctions under Implementing Regulation 2022/1985 of the European Union, this time due to the situation in Ukraine. According to this, all assets and properties of the Iranian company Shahed were frozen, and making any economic resources available to this company was prohibited.
Furthermore, sanctions were imposed on the aviation industry and three senior Iranian military officials for military support to Russia by sending armed Shahed-136 drones and low-cost aircraft that explode upon landing, causing the deaths of five people in Kyiv, the capital of Ukraine, and damaging civilian infrastructure.
Although the Iranian government has firmly denied these accusations and deemed them baseless, this did not affect the European Union’s sanctions process against Iran, nor did it cause them to back down from their stance in approving the sanctions.
Although the regulations and the decision of the European Council on October 17, 2022, exclusively provide sanctions against specific individuals, entities, and organizations, the events of recent weeks indicate that the issue of restrictions, even those currently existing against Iran, point to the repressive activities of security forces against protesters that should be resumed and turned into multiple restrictions with a tangible nature referring to tangible and intangible assets.
Previous Sanctions
In fact, despite the Joint Comprehensive Plan of Action (JCPOA) in 2016, commonly referred to as the nuclear deal, leading to the lifting of very heavy restrictions imposed by the international community in response to Iran’s nuclear activities, precisely because of the JCPOA, according to Regulation 1861/2016 of the European Union, the sanctions adopted in relation to internal repressive actions concerning Regulation 359/2011, which related to the 2011 protests in Iran, were not lifted.
Regulation 359/2011 was originally designed to create a list of entities and individuals responsible for violence against protesters, with the aim of specific actions such as freezing assets and prohibiting the provision of funds and economic resources to these entities and individuals. This list is regularly updated annually, and before Regulation 2022/1955, the list of sanctioned individuals included 25 people.
Additionally, in early 2012, Regulations 359/2011 and 264/2012 of the European Union were amended by including two articles that prohibit the export of goods directly intended for internal repression and also require special licensing for the sale of software technologies and services related to communication interception, as per Annex 4.
These lists have not changed since 2012. Among the listed goods are items such as sharp barbed wire, night vision equipment, thermal imaging recorders, and helmets. The regulation specifies that helmets of a sporting nature or those designed for occupational safety are not subject to these restrictions and prohibitions. However, Annex 4 includes a ban on types of software technologies and equipment provided they are only usable for controlling or intercepting internet or phone communications.
Coercive Yet Soft Approach
Nevertheless, all the regulations mentioned in Regulation 267/2012, later amended by Regulation 1861/2016, remain in the background, creating a potential sanction framework. This means that if the agreements concluded in the JCPOA are violated, these sanctions will be re-implemented, which, if occurring, will have a significant impact. Currently, the conditions and procedures have remained the same since 2016.
Given today’s restrictions, we cannot expect an unexpected impact on trade with Iran, as these restrictions seem to be more imposed to have a coercive effect on the country, meaning they aim to exert political pressure on the Iranian government rather than seeking a negative impact on the entire country’s economy.