EU, UK INSTEX Humanitarian, Medical Aid to Iran Could Backfire

The first use of the EU’s INSTEX to provide humanitarian medical aid to Iran involving Germany, France, UK. At first sight, this would seem to be an entirely laudable and well-meaning measure – and indeed it is – as Iran is in desperate straits in the aftermath of the Coronavirus outbreak. Furthermore, US sanctions broadly provide exceptions for humanitarian aid where medicine, medical devices, food, agriculture commodities to help Iran cope with the COVID-19 outbreak, confirmed by both Secretary of State Mike Pompeo and Treasury Secretary Steve Mnuchin. But there are likely to be major US sanctions ramifications down the line with the European use of INSTEX.

Treasury Secretary Steven T. Mnuchin, 26 March 2020:

“Iran employs a web of front companies to fund terrorist groups across the region, siphoning resources away from the Iranian people and prioritizing terrorist proxies over the basic needs of its people.”

“The United States maintains broad exceptions and authorizations for humanitarian aid including agriculture commodities, food, medicine, and medical devices to help the people of Iran combat the coronavirus.”

That European governments already struggling with their own domestic issues dealing with the current outbreak are willing to extend aid to Iran is entirely laudable and commendable. It seems that these medical supplies were not specifically designed to offer humanitarian aid to assist with the COVID19 outbreak and ongoing crisis. Indeed, it is understood that this shipment related to medical supplies for Iran that were requested before the Coronavirus outbreak. The UN has already called for humanitarian assistance to Iran in the wake of the unfolding disaster there in the developing crisis.

Unintended Consequences of Humanitarian Aid to Iran Acute

But this twist in the never-ending saga of the fatally-doomed JCPOA of 2015 which the US exited in November 2018 is a very real one. This could all end very badly for European Union and United Nations good intentions with potentially horrific unintended consequences. It could easily transpire that those who are genuinely trying to help end up simply funding a reprehensible Iranian regime and its key policy actors who, on the clear evidence to date, may not be remotely interested in diverting this aid to those who so desperately need it. The ramifications of this are significant and could be entirely devastating for Iran. Interestingly, pressure is mounting up in Congress in the US where the likes of Bernie Sanders are pushing for a relaxation of US sanctions on Iran.

INSTEX Not a Credible Solution

INSTEX is not a particularly viable mechanism, as it inevitably causes direct friction with US sanctions policy – dealing with Iran requires specific US permissions and there are now so many US-designated entities in Iran that such a mechanism is bound to be caught up in potential sanctions breach issues – regardless of any broad US sanctions exemption on humanitarian aid. In short, INSTEX is fraught with issues as a broad trade device where Iran is concerned. Europeans have consistently underplayed the risks of dealing with Iran over the past decade or so, and paid the price immensely for their relative ignorance via massive US penalties. With EU-Headquartered banks, in particular, on the receiving end – such as the eye-watering BNP Paribas US $8.9 billion fine in 2014. It should not be assumed that INSTEX transactions to Iran are necessarily going to continue unfettered – there could easily be major friction with US sanctions – if not immediately, certainly retrospectively. INSTEX is entirely incompatible with US sanctions – which reign pretty supreme in the world of sanctions enforcement.

Post-Brexit UK’s Role in INSTEX Perplexing?

Quite what the role of the UK in this post-Brexit is anyone’s guess. One best case is that this could be simply down to plain ignorance or a genuine desire for goodwill. A more circumspect and advisable way forward, for example would have been for Brexit UK to broker humanitarian aid alongside the US for Iran. If Iran chose to refuse such aid – so be it. The difficulty is that the IRGC and Qods – both obviously US-designated – are the inevitable recipients of humanitarian and medical aid, and INSTEX can so easily be construed as a deliberate US sanctions circumvention device.

EU, Germany, France in Classic US Sanctions Denial in Pushing INSTEX Forward…?

Many Europeans, in classic “Neo-Westphalian” mode are adamant that US sanctions are ill-founded and not to be respected. European banks have paid a heavy price trying to pursue such an approach – which is untenable. My grave concern and reservations about sanctions policy is exactly because they play out so unfavourably on ordinary folk in the crossfire of an irresponsible regime (the examples are to numerous to cite). That said, the actions of the current Iranian regime are beyond reprehensible, and this is no way to garner global favour. Europeans – and others who are prone to US sanctions circumvention – need to understand the cost of taking such risks and get a sharp reality check. Why Brussels, Berlin and Paris continue to try to compete with unrivalled US Sanctions power when a more pragmatic, brokered solution alongside the US would have been arguably more effective is baffling – likely the US exit from the JCPOA in November 2018 still rankles in Brussels. The Iranian regime, after all, has already expelled medical charity organisation Médecins Sans Frontières and has refused point blank US aid – both over the COVID-19 crisis – to date. This is not the fault of the ordinary Iranian populace, of course – who are left, disgracefully to suffer. Overall, EU/UN/UK versus US Sanctions friction – a common theme – is unwelcome. Some coherence is needed at this hour of global crisis.

Iran’s Nefarious Use of Medical Supplies, Aid Does Not Bode Well

However, with clear hoarding of medical supplies and nefarious use of humanitarian aid by the IRGC and Qods Force – the spectre of the major fundamental breaches of (US) sanctions are very clear and present – terror financing, money laundering, human rights violations, ballistic and other weapon proliferation, and so on. It is very hard to see how this will be tolerated by the US. There is, for example, ample evidence that human rights violations – a fundamental US sanctions violation – are occurring on the ground in Iran. Iranian Opposition groups National Council of Resistance of Iran (NCRI) and People’s Mojahedin Organization of Iran (PMOI/MEK) have reported that Iran’s Revolutionary Guard shot 1,500 protesters in December and there have been multiple accounts of human rights abuses in Iranian prisons. Furthermore, the Coronavirus outbreak has been alleged to have cost some 15,500+ lives in an epic cover-up by the Iranian government, which claims that a “mere” 3,111 or so lives have been lost to COVID-19. Independent reports on the ground indicate a breathtaking disregard for humanity on the part of the Iranian regime – wantonly incompetent in the throes of the Coronavirus epidemic.

Iranian Regime in Freefall Since December 2019

Then there is the brazen behaviour of the Iranian regime. If, for example, Iran were so keen on helping its citizens, President Rouhani would not have refused US humanitarian and medical aid to Iran already. There are already reports on the ground that IRGC and Qods Force have been imposing brutal martial law, and hoarding medical supplies for their own nefarious ends. Should the Iranian regime via IRGC and Qods Force abuse the humanitarian aid to engineer financing of terrorism moneylaundering or other illicit activities, or, worse still, provoke Human Rights Violations by denying ordinary, beleaguered Iranian folk the right to medical supplies and humanitarian aid, US sanctions enforcement will undoubtedly follow. Iran’s already poor track record since the end of 2019, start of 2020 is evidenced by the appalling behaviour of its regime – shooting of protesters in December 2019, then provoking the unsolicited attack on the US Embassy in Baghdad and then the unforgivable shooting down of the civilian Ukrainian passenger aircraft in January 2020.

Iran Expelled Médecins Sans Frontières March 2020 After COVID-19 Aid Arrived in Iran...

The Iranian people deserve far better – the Iranian regime has, after all, already inexcusably banned the goodwill medical charity organisation Médecins Sans Frontières (MSF) in March 2020 from its borders in another disgraceful act of irresponsibility. MSF had sent a mobile 50-bed hospital and team of medics to Isfahan to help Iranian hospital workers handle the huge volume of COVID-19 cases. MSF found it incomprehensible that Iranian health ministry officials had removed approval for MSF to help manage severe cases after the team and equipment had already arrived in Tehran. Whether Iran needs assistance in tackling the Coronavirus outbreak is not in question – clearly the Iranian regime is more concerned about the revelations from independent observers about its mishandling of the Coronavirus crisis in Iran.

IRGC, Qods Potential Abuse of Humanitarian, Medical Aid Will Have Major Consequences

If IRGC and Qods engage in the financing of terrorism, money laundering via humanitarian aid or more acts of human rights violations involving the denial of basic medical supplies to desperate Iranian folk on the ground – severe consequences will follow. Only a failing, ever-desperate regime would seek to make political gains on the back of its own people’s suffering and pain. Apparent US sanctions violations – given the current reporting on the ground by more independent Opposition voices in Iran – are all but inevitable after this INSTEX “moment” – regardless of the humanitarian and medical aid exemption from US sanctions – which barely applies in reality where clearly designated entities are the direct recipients of such aid.

One suspects that the US will not have to look too hard to find fault with any nefarious IRGC or Qods Force activities in direct abuse of such aid anyway. In a way, this would be the best approach for the US – to clamp down hard, retrospectively, on deliberate nefarious activities or apparent sanctions violations in an “amnesty”-type approach to ensure those who need the help are not unduly affected. That would require monitoring and on the ground observance – major Opposition to the Iranian regime are preparing regular reports to substantiate the desperate state of affairs in real-time. Ultimately, Iran’s regime loses every which way one looks at this.

US Best Advised To Put Diplomacy, Humanity Before Sanctions Counter-Action

The US should definitely consider the global ramifications of any immediate counter-action. Any abuse of humanitarian or medical aid will undoubtedly lead to widespread condemnation of the Iranian regime whose actions to date in the Coronavirus crisis have been nothing short of inexcusable. This case raises some exceptional circumstances and a very clear and highly dubious level of brinkmanship from a regime which has handled recent months particularly poorly and this dreadful Coronavirus outbreak appallingly. But it is no good talking about regime change when so many ordinary folk – who do not deserve this – are suffering in the throes of such a humanitarian disaster. Things were bad enough in Iran by the time the COVID-19 crisis hit.

Even in an environment where the US is offering broad exceptions to humanitarian aid to Iran. It is not a stretch to figure out how this plays out in US enforcement terms, although delicate diplomacy would be advisable at this global hour of need – not something necessarily in the gift of the current US Administration. Given the humanitarian crisis, and in the spirit of goodwill, one suspects that the US will put off any immediate sanctions enforcement in the hope that some of the most in need get the humanitarian and medical assistance they need. Further evidence of this may be coming through in a desire to take a different tack with Venezuela of late – where US policy has been to push for internal regime change by suggesting an alliance of political forces – as the Maduro regime has continued despite major US economic sanctions pressure.

Regime Change in Iran Inevitable

Our hearts go out to those suffering in Iran through no fault of their own. Any humanitarian or medical aid must go out to those who need it – nothing else will do. With international aid comes inevitable international scrutiny, and, ironically, may well end up highlighting the flawed but well-meaning INSTEX approach by Germany, France and the UK . This is further proof that the ill-fated Iran Nuclear Deal of 2015 – or JCPOA – was fundamentally flawed from the get-go. And that, ironically, constant US sanctions pressure has ultimately worked. It must be stressed – the US and Médecins Sans Frontières have already offered humanitarian aid to Iran during the COVID-19 crisis. But Iran refused the offers of help. That tells you all you need to know about the current Iranian regime.