Iran’s Pezeshkian vows resistance at UN General Assembly
A top U.S. Treasury Department official hopscotched across the Middle East and Europe this month carrying a warning to Iran’s trading partners, the Wall Street Journal reported: you either trade with Tehran or Washington. Within days of Burke’s stops in Muscat, Abu Dhabi, Ankara and London, the paper said, Iran saw its airlines cut off from critical regional routes and its top commercial bank blocked from transacting in the United Arab Emirates and Turkey.
In an article by Middle East correspondent Benoit Faucon, the Wall Street Journal reported that “the commercial strongarming is working.” The restrictions add to longstanding U.S. sanctions and a continuing U.S. naval blockade.
A growing distrust of Tehran by Gulf Arab states has made the pressure campaign more effective, the Journal reported, as the U.S. works to end a war that has sent American fuel prices soaring. Burke, a former managing director at bank Citi in London, serves as the Treasury’s assistant secretary for terrorist financing. The administration is committed to the hardball strategy even as Iran has offered a seven-day halt to attacks in exchange for economic relief, the paper said.
Iran lashed out at targets including energy infrastructure in countries such as the U.A.E., a key commercial conduit to the world, the Journal reported. The paramilitary Islamic Revolutionary Guard Corps continues to attack ships around the Strait of Hormuz, the narrow mouth of the Persian Gulf that had been the gateway for about a fifth of the world’s oil. Iranian-backed Houthi rebels in Yemen have seized territory along the Bab al-Mandeb Strait, the Red Sea’s version of the Hormuz chokepoint, and have attacked Saudi oil infrastructure, the paper said.
“We’re seeing a new urgency from our partners,” Burke told the Journal. “They’re taking it very seriously.” He added: “Iran has been a problem for 50 years, and we’ve kind of reached our peak at tolerating this problem.”
Burke’s first target was flights by Iranian carrier Mahan Air, a private carrier that the West says is linked to the Islamic Revolutionary Guard Corps and thought to funnel arms, troops and supplies, the Journal reported. Though the airline had been sanctioned by the U.S., Oman and others had continued to allow its flights.
“I’ve had calls with some of these partners for months, raising Mahan Air,” Burke said. “I pull up FlightRadar, and I can see a flight in between the countries while we’re on the call. I’m like, ‘How can you possibly allow this?’”
Oman, the first stop on the tour and a long-standing intermediary between Iran and the West, moved within a week of Burke’s visit, the Journal reported. Omani authorities banned Mahan flights and, after new U.S. restrictions on Iranian aviation took effect, followed up Wednesday by blocking all Iranian airlines.
In the U.A.E., Burke raised recent U.S. action against the local branch of an Egyptian bank that had dealings with Iran, according to people familiar with the conversations. This week Emirati officials banned local branches of Bank Melli Iran — the Islamic Republic’s biggest commercial lender — from conducting transactions involving Iran, the paper reported. Mustapha Pakzad, a former Iranian financial intermediary who used the bank in the past to help Iranian clients pay for goods, said the action “strikes at the plumbing of Iran’s external commerce.” The Emirates banned all flights by Iranian airlines on Thursday.
Burke then traveled to Turkey, where officials canceled Mahan flights and revoked the Turkish license of Bank Mellat, one of Iran’s largest private lenders and a conduit for trade transactions between Iran and Turkey.
The Treasury Department engaged officials from more than 50 countries, the Journal reported. Diplomats reached out to nations including Azerbaijan and Georgia, which also shut out Iranian airlines.
Some routes out of Iran remain. Mahan Air still flies to China and Russia, two of Iran’s biggest partners. The Treasury has sanctioned Iranian-affiliated businesses and agents in both countries, though Burke told the Journal that discussions with Chinese and Russian counterparts are part of broader political negotiations with the White House.
Burke finished his two-week trip in London, where he visited the Foreign Office and the U.K. Treasury. The British government said it would not renew waivers for Iranian banks operating in Europe’s financial capital — a step that could effectively shut down the British subsidiary of Bank Melli, whose U.K. license is due for renewal next month.
Speaking this week at the United Nations General Assembly, Iranian President Masoud Pezeshkian acknowledged the pain the sanctions are causing but said his nation would stand up to the pressure. “The resistance of the Iranian people will only increase in the face of sanctions,” Pezeshkian said. “We will never bow our head or bend at the knee.”
Nigel Kushner, a British lawyer who has advised companies on Iran sanctions for two decades, told the Journal he had not seen such intense pressure applied on Iran’s banking and aviation sectors. “The U.S. has achieved greater impact in a matter of weeks than during the lengthier campaigns commenced from 2010,” Kushner said.
Matthew Levitt, who served as deputy assistant secretary for intelligence and analysis at the Treasury Department during the George W. Bush administration, told the paper that the strategy only works if sustained. “The impact of sanctions is only effective if you can convince them you are very serious,” Levitt said. “But the truth is in the pudding. It only works if you keep the pressure up.”
Iran has faced a growing burden of sanctions since the 1979 Islamic Revolution and the U.S. Embassy hostage crisis, the Journal noted. Despite losing contact with the dollar system and overseas assets, however, Tehran has managed to hang on to vital air links and banking connections with neighbors across the Middle East.