The Islamic Republic of Iran has been subject to sanctions ever since its creation in 1979. The more the regime has entrenched itself and expanded its power in the region, the more sophisticated the sanctions have become, effectively crippling the country. Will they ever end? Ali Sadrzadeh traces their history
"My poverty is my pride, and it elevates me above all the prophets before me." This well-known quote by the Prophet Muhammad is often heard these days in Iran. Should one, like the prophet, be proud of being poor? When people are in need, does it really bring them closer to their Creator? And how is one to behave in times of scarcity and shortage?
Scholars in the Islamic Republic have been forced to confront questions like these more than ever lately. Because in times of sanctions and the coronavirus pandemic, the pressure exerted by practical circumstances is crushing. Everyone is talking and complaining about poverty, rising prices and shortages – realities that can no longer be ignored. Even the news website Fars, which is closely allied with the Revolutionary Guards, is compelled to address the issue on a daily basis.
But the cardinal question remains: when did Iran embark on this hopeless path, and why? Who caused this undeniable age of misery? Was it the suffocating U.S. sanctions, or was it the country's own government mismanagement, coupled with rampant corruption? Which president is responsible for all the burdens and suffering that are driving people to despair? Donald Trump or Hassan Rouhani? And how is the country to escape from this impasse? Everyone has their own answer and no one has a solution.
USA – the eternal foe
These days, parliamentarians, preachers and propagandists in Iran cannot avoid addressing on radio and television the economic plight that has gripped the country. Each of them has their own explanation for how Iran got into this predicament. And yet they dare not get too close to voicing the real reasons for the foreign sanctions, or the foundations of the entire system will begin to shake.
To answer the question of why sanctions were imposed, one word suffices: enmity. The USA has been an enemy of the Islamic Republic from the beginning, it is still an enemy today and it will always remain an enemy, refusing as it does to accept the rule of revolutionary Islam. That is the solution to the riddle, the whole story behind sanctions that have persisted for over 40 years.
The narrative is not entirely false. Nevertheless, political Islam alone cannot explain this old antagonism. Otherwise, how would it be possible to understand the close relations the USA maintains with Stone-Age Islamists in Saudi Arabia, with the Afghan Taliban and with dictators who put on an Islamic face? The reasons for U.S. hostility towards Iran must hence be sought not in Islam, but in the events of the past forty years. These events are what have shaped relations between Tehran and Washington.
Sanctions as a permanent state of affairs
Sanctions accompanied the birth of the Islamic Republic like labour pains. Yet the more this child has grown, the stronger and more painful they have become. After all the Islamic Republic will soon be 42 years old.
11 February 1979 is the officially proclaimed hour of victory of the Islamic Revolution, the day marking the final overthrow of the monarchy. But the revolutionaries did not in fact truly prevail until 4 November. Ayatollah Ruhollah Khomeini would later call what happened that day "the second revolution".
The mood in Tehran that morning was agitated. "Death to America!" chanted several hundred revolution-hungry students outside the U.S. Embassy that day, dozens of them climbing the fence and forcibly entering the building. They took 66 U.S. diplomats hostage, 52 of whom would be held captive for over a year.
Khomeini's second revolution was accomplished: the provisional civilian government stepped down and the radical clergy crossed the finish line. On 4 November 1979, an enmity was thus born that many in Iran, as well as America, still consider incapable of ever being resolved.
1953: The CIA and Iran's stolen democracy
Almost 65 years ago, the CIA overthrew Iran's first democratically elected prime minister, Mohammed Mossadegh. Recently the U.S. State Department published documents showing the full extent of U.S. involvement in the coup. By Thomas Latschan
Glowing advocate of Iranian interests: Mohammed Mossadegh was Iran's first democratically elected prime minister from 1951 – with a brief interruption – until his fall in 1953. Educated, eloquent and charismatic, he also had many admirers in the West. Daring to nationalise the British oil industry in Iran, he quickly became an icon of anti-imperialism across the Third World
Oil for the Empire: the British had had a quasi-monopoly on Iranian oil since 1909. The Anglo-Iranian Oil Company (AIOC) – these days British Petroleum (BP) – had negotiated contracts that gave the colonisers a distinct advantage, allowing the British Empire to skim off profits in their millions every year. In return Iran received meagre royalties
Labouring under a burning sun: the British shamelessly exploited their Iranian oil workers. In Abadan, the site of the largest Iranian refinery, those who worked for the AIOC lived in slums under catastrophic conditions. The company refused to contemplate any improvement in living standards. After the Second World War, Iranian politicians attempted to renegotiate business terms but their appeals fell on deaf ears
"Nationalisation or death!" In 1951 the situation came to a head. Mohammed Mossadegh, who had just become prime minister, ordered the nationalisation of the Iranian oil industry. The British reacted with outrage, withdrawing all British expertise and imposing an oil embargo against Iran. Over the next two years, the so-called "Abadan crisis" brought Iran to the brink of bankruptcy
American ambivalence: the British also turned to the USA for help. But U.S. President Truman was against any intervention. Truman was torn: on the one hand, he didn't want to alienate his British allies. On the other, he sympathised with Mossadegh and believed that only a free, economically strong Iran could resist the communist influence of the USSR
Dwindling stability: but Iran's continuing economic crisis was having an effect: slowly, more radical currents were gaining ground – such as the communist Tudeh Party. In several mass demonstrations it called for the expulsion of Americans and British and for the country to turn towards Moscow. Yet the U.S. still believed that Mossadegh had the domestic political situation under control
Two elections changed everything: Winston Churchill regained power in London at the end of 1951. And one year later Dwight D. Eisenhower replaced Truman in Washington. Churchill skilfully presented the risk of a communist revolution in Iran. Eisenhower, who had already worked effectively with the secret services during World War II, agreed to engage the CIA to overthrow Mossadegh
"Operation Ajax" begins: in July 1953, CIA agent Kermit Roosevelt travelled to Iran. He convinced the Shah (right) to dismiss Mossadegh and appoint General Fazlollah Zahedi, a straw man of Western interests, as the new prime minister. A courier would bring the signed release papers to Mossadegh; Mossadegh himself was to be placed under house arrest immediately upon receipt
Organised chaos: at the same time, the CIA created chaos in Tehran. Its operatives bribed politicians, clergy, journalists, and workers, thus outweighing Mossadegh's supporters and opponents. The agents didn't care who would get the upper hand on the street. The only important thing was to stage the Shah as the saviour of the people, who would use his loyal army to restore peace and order
Escape to Rome: the first coup attempt on 15 August 1953, however, failed. Mossadegh had got wind of the plans. He arrested several Iranian ringleaders of the coup attempt and paid a bounty to General Zahedi, who went into hiding. When the Shah learned that the mood had turned against him, he fled the country: first to Baghdad, then to Rome
Deceptive calm: on 18 August, 1953, Mossadegh looked like the sure winner. He assumed that the Shah and the British had plotted against him, but he did not know that the USA was involved as well. Mossadegh called on his followers to stay at home the next day to prevent any further escalation of violence on Tehran's streets. Mossadegh did not expect a second coup attempt
The mood turns: CIA agent Roosevelt mobilised the masses again. On 19 August, they took to the streets for the Shah – this time without resistance from Mossadegh supporters. The Shah's release certificates were copied thousands of times and distributed among the population. More and more police and military units joined the demonstrators, who stormed the Foreign Ministry and the police headquarters
Decision time in front of Mossadegh's house: supported by a column of tanks, a crowd of people broke into Mossadegh's private house. A street battle broke out between supporters and opponents of the prime minister, killing more than 200 people. When the Shah followers stormed the house, Mossadegh fled over the garden wall. Five days later he surrendered and was arrested by his adversary General Zahedi
Under Washington's thumb: on 22 August 1953, the Shah returned from Rome. In the period that followed he established a military dictatorship, which was massively supported by the USA. With American help he also established the infamous secret police SAVAK. The nationalisation of oil production was reversed – almost half of the proceeds now went to American companies
All hope gone: after his arrest, Mossadegh was tried for treason and sentenced to three years in prison. Released from prison in December 1956, Mossadegh retreated to his private home in Ahmad Abad, guarded by SAVAK secret service personnel. Mossadegh was no longer allowed to leave his home village. He died on 5 March 1967
Some 47 years later, in March 2000, the then U.S. Secretary of State Madelaine Albright admitted for the first time that the USA had been involved in the coup d'etat. One month later, the New York Times published documents describing the CIA's key role in the coup against Mossadegh. But no action was taken in response to this avowal of guilt. The ice age between Iran and the USA that had begun with the occupation of the embassy in Tehran would not be easy to bring to an end.
Directly after the American diplomats were taken hostage in 1979, the U.S. government decided to impose an import ban on Iranian goods. But the Islamic Republic continued to run riot. Some of the diplomats were still being held hostage when war broke out against Iraq on 22 September 1980.
The Iran-Iraq war raged on for eight years: while the Islamic Republic was under a worldwide arms embargo for the entire duration, Iraqi dictator Saddam Hussein was able to obtain weapons and materials from almost any country in the Western world. The war was at its height when 60 U.S. soldiers were killed in a terrorist attack on the U.S. embassy in Beirut on 18 April 1983. In response, President Ronald Reagan declared Iran a "sponsor of international terrorism". Again, sanctions were tightened.
No sooner was the Iran-Iraq war over than Ayatollah Khomeini issued a death fatwa against the writer Salman Rushdie in 1989 for his book "The Satanic Verses". The Islamic Republic was henceforward considered a "rogue state" not only by the U.S. government, but by many others in the Western world as well. In protest against the fatwa, all EU member states withdrew their ambassadors from Iran. Once again, sanctions would follow.
Three years later, on 17 September 1992, a death squad following orders from Tehran murdered four Iranian opposition members at the Mykonos Restaurant in Berlin. A Berlin court later noted in its ruling that nearly the entire leadership of the Islamic Republic had been involved in the assassination. In response, Germany's political parties unanimously called for an end to the European Union's "critical dialogue" with Iran. The upshot: more sanctions.
The short-lived thaw of 1997, when Mohammed Khatami was elected president, failed to lastingly melt the ice. While Khatami was busy advocating for a "dialogue among civilisations" on the world political stage, something extremely dangerous was going on in secret that would trigger the global sanctions that are still in effect against Iran today. In 2002, it became known that Tehran's rulers were operating two nuclear facilities, a uranium enrichment plant in Natanz and a heavy water reactor in Arak. Iran was apparently on its way to producing nuclear weapons.
The situation became critical when the International Atomic Energy Agency (IAEA) found traces of enriched uranium in Natanz in late summer 2003. The agency later reported that Iran had kept its nuclear programme a secret for 18 years. Since then, uranium enrichment in Iran's nuclear facilities and international sanctions have both continued apace, through at different speeds.
Numerous sanctions from numerous sources
There are numerous different sets of sanctions: UN sanctions that are binding on all nations of the world, sanctions imposed by national governments that have their own special problems with Tehran, and finally the U.S. sanctions, which are comprehensive, universal and particularly painful for Tehran's rulers. The story behind these sanctions often reads like a thriller.
“Crippling sanctions”: though generally associated with the globally acclaimed nuclear agreement, it was under Barack Obama that the toughest sanctions of all were imposed on Iran. Secretary of state Hillary Clinton was supported in her hardline approach by diplomat Dennis Ross, a hawk in charge of the Iran dossier. Known in Washington for being an Israel lobbyist, it was Ross who proposed sanctioning Iranian companies believed to have links to the country's largest bank, Bank Melli
Since its inception the Islamic Republic has seen seven U.S. presidents come and go, from Jimmy Carter to Donald Trump. These have been men of widely varying characters and political leanings in domestic and foreign policy.
And yet, for all their political differences, U.S. policy has remained consistent all these years as regards sanctions against Iran. Sanctions began with Reagan and spiralled as each of his successors set his own emphasis. There was a brief pause only during the years 1990 and 1991 when "the end of history" was celebrated after the collapse of the Soviet Union. During this historic period President George Bush Sr. was busy with more important things than sanctions against Iran.
His successor, Bill Clinton, however, continued to ramp them up. Citing Iran's support for terrorists and pursuit of weapons of mass destruction, he imposed a comprehensive trade embargo on the country in 1995. George Bush Jr. took things a step further and declared the Islamic Republic an "axis of evil", even verging on declaring war.
The Obama contradiction
Finally there came a ray of hope with Barack Obama. His presidency is widely seen as an era of detente and rapprochement with Iran, as Obama is associated in this context mainly with the globally acclaimed nuclear agreement. And yet, as strange as it may sound: it was during the Obama years that the toughest sanctions of all were imposed on Iran. Although when he first took office Obama had spoken out in favour of a "constructive new beginning" with Iran, his secretary of state, Hillary Clinton, was an advocate of so-called "crippling sanctions" of the type hardliners usually called for.
While Obama was secretly seeking a solution to the problem of Iran's nuclear agenda, he put diplomat Dennis Ross, a hawk, in charge of the Iran dossier. Ross was known in Washington as a lobbyist for Israel. Under Bill Clinton he had been chief negotiator for the Middle East and even at that time special envoy for Iran. It was Ross who proposed sanctioning Iranian companies that were believed to have links to the country's largest bank, Bank Melli. Further sanctions would follow.
At the end of October 2009, the U.S. Congress passed a hitherto unprecedented tightening of sanctions. The aim was to bring oil exports, Iran's main source of income, to a complete halt. The USA threatened all foreign financial institutions that conducted business with the Central Bank of Iran or other Iranian financial institutions on U.S. lists with the loss of their bank accounts in the United States.
This also affected all foreign central banks if they wished to channel their oil deals through the Central Bank of Iran. Other nations besides the USA were thus forced to stop buying oil from Iran. The measures likewise penalised all companies that exported petrol to Iran, or were involved in the development of Iran's ailing oil industry.
In 2010, sanctions relating to human rights violations were then imposed for the first time on leading members of the Iranian regime, and in 2011 it was the turn of the petrochemical industry, which is another important source of revenue for the country.
In February 2013, sanctions were imposed on Iranian state broadcasters and those responsible for them, on the grounds that they were censoring the Iranian opposition. All of these sanctions remained in force even after the nuclear agreement was put in place. President Trump inherited and further expanded on them.
"Biden should take a clear stand — with Germany, France and Britain — that there will be no new negotiations until nationals of these countries held hostage in #Iran are set free and the Islamic Republic quits this savage practice," writes @jrezaian. https://t.co/WWEwx1QaPC
Trump plugged the last holes – and what will Biden do?
After Donald Trump announced the U.S. withdrawal from the nuclear agreement in May 2018, he set about plugging the last remaining holes through which the Islamic Republic could evade sanctions. In late April 2019, he suspended the waivers that allowed some countries to make oil deals with Iran for six months. The aim was to cut Iran off from the five main purchasers of its oil – China, India, Japan, South Korea and Turkey. And that goal was achieved.
Iran is currently no longer exporting oil in an amount worthy of mention. At six to seven million barrels per day, the country was once the world's second largest oil exporter. Today, the country sells about 750,000 barrels a day indirectly or through the black market, but even those sales have to take place without normal banking transactions, which means the deals often involve bartering oil in exchange for goods.
When and under what conditions U.S. President Joe Biden will return to the nuclear agreement is uncertain. What we do know for sure is that even under Biden almost all sanctions will remain in place for the time being. This is because Biden would need the approval of the U.S. Congress for their repeal. And there are plenty of members of Congress who oppose loosening Iran's shackles – including many Democrats.