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The New Arab Staff

US sanctions 'hinder Iran's access to coronavirus vaccines': report

Bureaucratic hurdles dissuade banks and financial institutions from dealing with Iran [Getty]

Date of publication: 8 December, 2020

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Despite exemptions, the complicating force of sanctions on Iran's banking sector dissuade firms from dealing with Tehran, even on humanitarian issues.

US sanctions on Iran could hinder Tehran's access to coronavirus vaccines, disrupting efforts to contain the Middle East's worst outbreak, analysts told The Washington Post in a report published on Monday.

Banks and financial institutions that contain Iranian accounts do not have the "clarity" and "guidance" to use Iranian money to make vaccine purchases, said Esfandyar Batmanghelidj, founder of the think tank Bourse & Bazaar.

Despite legal exemptions, a "culture of over-compliance and a culture of fear" have had the effect of stripping foreign banks of the know-how or resolve "to handle Iranian money, even for permissible trade", he said.

Bureaucratic hurdles also dissuade firms from dealing with Iran, he added. 

Mohsen Zarkash, a US treasury sanctions lawyer based in Washington, affirmed that "complication, whether minor or major, will occur with regards to Iran's financial contributions to the Covax program", referring to the World Health Organisation’s (WHO) mechanism for equitable access to vaccines.

Zarkash said that use of Iran's foreign currency reserves in countries such as Germany and South Korea, as well as its own central bank, involved hefty paperwork and costly delays.

A spokesperson for Covax said that Iran has secured a license from the US Treasury Department's Office of Foreign Assets Control (OFAC) to exempt payments.

Yet the effects sanctions on Iran's banking sector have still made it difficult to process transactions, Tara Sepehri Far, an Iran researcher at a New York-based Human Rights Watch, told the Post.

Last week, Foreign Minister Mohammad Javad Zarif said that sanctions prevented Iran from making an initial advanced payment to Covax, which came after a health ministry spokesperson, Simar Lari, told state television last month that the payments had been held up.

The US has slapped heavy sanctions on Iran under President Donald Trump's "maximum pressure" campaign and withdrawal from the nuclear deal, which President-elect Joe Biden has vowed to rejoin.

Iranian banks and individuals accused of funding terrorism have been targeted. Transactions involving medical and humanitarian goods can be waived.

Another health ministry spokesperson Kianoush Jahanpour said in a tweet on Thursday that Iran had "pre-ordered" 16.8 million unspecified vaccines "via Covax" and that the government had given approval to move forward with human vaccine trials, with doses said to be rolled out this Spring.

The same day, Iran announced the country had passed the grim milestone of one million cases, with nearly 50,000 officials deaths recorded from the start of the outbreak in February.

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