Sanctions against Iran and workarounds that works

Cash not accepted, let's do old-fashioned bartering

RELATED INFORMATION FOR READERS Raymond Cheng

• India, Iran to work around sanctions - attempt to work around hurdles placed by American and European sanctions to step up economic ties - The Hindu (2012/08/31)
• Thailand insists on agricultural barter with Iran: FM - Thailand insisted it would develop a barter scheme with Tehran for the benefit of economic relations; agricultural items not prohibited by the UN resolutions; eyebrows raised in the U.S. - Tehran Times (2012/09/02)
• India exports 176,000 tonnes sugar to Iran - India has sealed deals to export 176,000 tonnes of sugar to sanctions-hit Iran so far this year and a vessel with 32,000 tonnes of that, the last consignment, is being loaded at a southern port - Reuters (2012/09/06)
  1. Crops in India wilt in a weak monsoon season - in addition to increasing temperatures, scientists say climate change appears to be making India and its neighbors Pakistan, Sri Lanka and Bangladesh more vulnerable to erratic monsoons - New York Times (2012/09/03)
  2. India could become net sugar importer as early as 2013/14, bolster prices - as drought-hit farmers replace cane with less water-intensive crops - Reuters (2012/09/05)
  3. India's sugar exports seen dropping after poor rains - the world's second largest sugar producer; the country had an exportable surplus of 4 million tonnes in 2011/12 but the average projection of industry experts for the next year was around just one million - Reuters (2012/09/12)
• US pressure ignored, Pakistan and Iran strike barter trade deal - barter trade agreement signed, featuring the export of one million tons of wheat to Iran at $300 per ton - The Express Tribune (2012/09/06)
• Iran finds ways around sanctions targeting oil sales - for India: payment accepted in rice, medicine, engineering supplies and steel; for China: oil delivered on its own tankers backed by state insurance, not on the commercial tankers; for Japan: Tokyo is furnishing the multibillion-dollar marine insurance for its crude oil ships - LA Times (2012/09/09)
• Insight: Iran parks oil off Malaysia to dodge Western sanctions - Iran is using a little-known port, Labuan (where unwanted ships are parked), off the East Malaysia coast to hide millions of barrels of oil from Western sanctions, according to shipping data, industry sources and officials; China, India, Japan and South Korea, together, buy over half of Iran's crude exports - Reuters (2012/09/12)
• South Korea halts crude imports from Iran after insurance lost - an EU ban introduced on July 1 prevented Korean refiners from insuring their tankers; would resume when Iran provide its own tankers in September - Bloomberg (2012/09/14)
• S.Korea's SK Energy resumes Iran crude import - South Korean refiners planned to resume from September monthly imports of up to 6 million barrels, or 200,000 barrels per day (bpd), of Iranian crude; Tehran offered to provide up to $1 billion of insurance cover to Iranian oil vessels - Reuters (2012/09/21)
• Currency war also waged on Iran?
  1. Iran's currency falls to record low against dollar - the collapse is a sign of the effect of Western sanctions over Iran's nuclear program - BusinessWeek (2012/09/09)
  2. Iran's rial currency dives to historic low - previous falls have coincided with new sanctions or diplomatic isolation of Iran over its contested nuclear program; Iranians rush to convert their savings into dollars, further depressing the rial; rial fell from 12,000 (in June 2011) to now about 28,000 to 1 dollar - Reuters (2012/09/29)
  3. A new sign of distress as Iran's currency falls - by October 1, it cost about 34,800 rials to buy $1 in Tehran; preferential rates given to importers of priority goods like meats, grains and medicine - New York Times (2012/10/01)
  4. Iran cracks down on money changers as currency continues to fall - making arrests, vowing to stamp out sidewalk money changers and warning merchants against fueling the mounting public anger over the economy - Fox News (2012/10/03)
  5. Police, protesters clash in Iran as currency collapses - Iran becoming unstable: people gathered outside Iran's central bank to call for its governor to resign and to chant anti-government slogans - USA Today (2012/10/03)
  6. Strict new procedures for Iran currency trading after protest - only those traders licensed by Iran's central bank may buy and sell the rial for foreign currency, and at rates that value the rial at 25,500 to the dollar – substantially more than as many as 37,500 rials last week - New York Times (2012/10/08)
• As Iran's economy crashes, sanctions could yet bear fruit - Iranian economy appears to be teetering on the brink of collapse; Khamenei: "refraining from submission to the system of dominance" - Boston Globe (2012/10/05)
• Iran's sea trade buckles under Western sanctions - seaborne trade crashes more than 50 percent; Iranian economy near collapse - Reuters (2012/10/11)
• Desperate for business, Iran heads to India - the U.S. has pressed India to scale back its imports of Iranian crude to support those sanctions, but energy-starved India remains one of Iran's biggest oil purchasers - Business Insider (2012/10/11)
• EU plans major new sanctions against Iran - new measures against Tehran's banking sector, industry and shipping - Reuters (2012/10/14)
• Meanwhile: U.S. exports to Iran rise nearly one-third despite sanctions - chiefly because of grain sales, also milk products and medical equipment - Reuters (2012/10/15)
• EU to symbollically join the sanction party: "Iran media officials outraged over satellite blackout" - Europe's largest satellite providers to cease transmission of Iran's 19 state-operated satellite television and radio channels that broadcast to Europe and parts of the Middle East - Mercury News (2012/10/17) - Iran calls it hypocritical Western suppression of free speech; yet the EU still trades wheat with Iran (see below)
• U.S. says it will 'ratchet up' sanctions pressure on Iran - driving its leaders into making concessions on its nuclear activities - BusinessWeek (2012/10/19)
• Iran bans 'luxury' imports as sanctions bite - 75 so-called luxury products: ranging from high-end cars to coffee to toilet paper; stemming the outflow of dollars - BusinessWeek (2012/11/08)
• Indian firms still active in Iran's energy sector - at least seven companies from China, India, South Korea and South Africa continued to have investments in Iran's oil and gas sectors in 2012 even as Tehran came under international scrutiny for its nuclear ambitions - IBN Live (2012/12/09)
• New Iran sanctions target industry in bid for deal curbing nuclear program - new sanctions target large swaths of the country's industrial infrastructure - Washington Post (2013/01/06)

    TRADING AGAINST SANCTIONS

• Japan imports no Iran crude in July, for 1st time since 1981 - imports from Iran hit zero due to start of EU sanctions; import to resume in August; together with South Korea, China, and India, Japan are the top four customers of Iranian oil - Reuters (2012/08/31)
• Iran and North Korea sign technological cooperation agreement, deepening ties - U.N. panel report says North Korea and Iran appear to have been regularly exchanging ballistic missiles, components and technology in violation of U.N. sanctions - Washington Post (2012/09/01)
• Iran says India to continue energy ties - India considers Iran as an energy- producing source - Tehran Times (2012/09/02)
• Despite delays, China seeks full Iran oil volume for 3rd mth - about 15.5 million barrels for September; contracts do not provide for penalties for delays - Reuters (2012/09/05)
• Joel Brinkley: In dealing with Iran, all the options look lousy - China is routing Iranian money through its banks, while also buying about half of Iran's oil exports; Iranian merchants are trading truckloads of devalued rial for dollars at raucous, unregulated bazaars over the border in Afghanistan - Kansas City Star (2012/09/07)
• Iran quietly makes massive wheat buy on global markets - mostly imports from the EU, Russia and Australia; showing Iran's increased ability to import food despite financial sanctions (or is it the U.S. strategy to ease the tension?) - Reuters (2012/09/27)
• Reuters Exclusive: Iran's coal shipping trade booms despite Western heat - Ukraine is providing Iran with coking coal, also known as metallurgical coal, and coke - key steel ingredients, previously provided by Australia - Reuters (2012/10/26)
• Haha, and you can't stop this, can you? See: "Iran remains electricity exporter despite sanctions: report" - exporting electricity to neighboring states including Armenia, Pakistan, Turkey, Iraq, and Afghanistan; and the business is flourishing - Tehran Times (2012/11/07)
• Iran starts building gas pipeline to Syria - construction on a $10 billion 1,500-kilometer (750-mile) natural gas pipeline to key ally Syria just started - ABC News (2012/11/19) - no wonder all the support along (see below) - it's just business, after all
  1. Iran will form troika to explore Syria solution - a team of three (in Russian: troika) with other non-aligned countries, including Egypt and Venezuela - Reuters (2012/08/29)
  2. Iran urges nonaligned nations role in Syria - Iran to lead a diplomatic push over the crisis in its close ally Syria through the divided members of the Nonaligned Movement (which was formed in the Cold War as an alternative to both the Soviet and U.S. blocs) - Fox News (2012/08/31)
  3. Egypt trying to persuade Iran to drop Assad - in exchange for help in easing Tehran's regional isolation at a time of mounting pressure on it over its disputed nuclear program, and while suffering from acute fuel shortages (due to dwindling foreign currency reserves and lower credit ratings), it is rumoured that Cairo wanted to buy oil from Iran as well - USA Today (2012/09/11)
  4. Egypt: Iran's support for Syria hinders relations - as president, Morsi cannot ignore public sentiment in Egypt, which is against the Syrian regime "that uses harsh language and violence against people" - ABC News (2012/09/18)
  5. Pakistan's president, Zardari, cancels Iran gas pipeline talks - the US is pushing an alternative gas route known as Tapi (Turkmenistan-Afghanistan-Pakistan-India), but it would face security obstacles at least as serious as the Iran-Pakistan pipeline would confront in the restive Pakistani province of Baluchistan - Financial Times (2012/12/09)
• Pakistan may have to wait for Iranian loan for IP project - loan was to be used to lay a pipeline on Pakistan's side of the border for the import of gas under the Iran-Pakistan (IP) gas pipeline project - Express Tribune (2012/11/20)
• Meanwhile: "Pakistan, Iran should establish banking channel" - Pakistani rice, wheat, fruits, dry fruits, mangoes, textiles items, petrochemical, livestock, meat and dairy products have great demand in Iran - The News (2012/11/23)
• And so, the US makes it even tougher for Iran: "New Iran sanctions measure to 'lock up' oil earnings" - starting February 6, 2013, U.S. law will prevent Iran from repatriating earnings it gets from its shrinking oil export trade - Reuters (2012/12/06) - and it seems to be working already, at least politically: "Iran oil export delays seen worsening as sanctions hinder trade" - and Iran's carrier, NITC (the Tehran-based tanker owner), has to rename vessels, switch their flag states and signal inaccurate information about where they are registered - BusinessWeek (2012/12/06)

    REPORTS ON WAIVERS

• U.S. renews waivers of Iran sanctions for Japan, EU nations - the renewal means banks in Japan and 10 EU countries have been given a second 180 day reprieve from the threat of being cut off from the U.S. financial system - Chicago Tribune (2012/09/14)
• India says U.S. understands its need for Iran oil - Washington said the waiver was granted because India had reduced its purchases - Reuters (2012/10/22)

    OTHER REPORTS

• U.S. sanctions against Iran violate international law: Russian diplomat - unilateral sanctions against Iran a violation of international law: Russian Deputy Foreign Minister - Xinhua News (2012/09/06)
• U.S. sanctions on Iran hit health care - impact on all sectors of the Iranian economy but is increasingly hitting vulnerable medical patients as deliveries of medicine and raw materials for Iranian pharmaceutical companies are either stopped or delayed as international banks do not accept Iran's money for fear of facing U.S. punishment - Export Law Blog (2012/09/06)
• Ahmadinejad says enemies destroy Iran's rain clouds - Iran president accused his country's enemies of enacting a sinister plan to create a drought by somehow destroying the rain clouds before they reach Iran - Reuters (2012/09/11)
• U.S. says Iran oil exports down dramatically - crude exports drop to about 1 mln barrels per day from 2.4 mln; costing Iran about $5 billion a month - Reuters (2012/09/13)
• Despite sanctions, American brands sought out in Iran - American products manage to find their way into the Iranian marketplace; routes varied: back channel exporters, licensing workarounds and straightforward trade for goods not covered by the U.S. embargoes over Iran's nuclear program - Star Telegram (2012/09/14)
• Lieberman: Sanctions could push Iran into Tahrir scenario by summer - economic sanctions have brought unrest to Iran; the young generation is sick of being held hostage and sacrificing their future and Iranian-style Tahrir revolution could happen, says Israeli foreign minister - Haaretz (2012/09/30)

ABOUT THE CONTRIBUTOR Raymond Cheng, PhD DPA FRSA, is the founder and chief editor of Commentary.com. He is an adjunct professor in international business and in marketing, an independent policy analyst as well as a language and cultural briefing consultant. Email Raymond at raymond {dot} cheng {at} kellogg {dot} oxon {dot} org

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