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Prime ways to evade sanctions
Iran's Supreme Leader has figured out a great way to get around sanctions, until he realizes someone has been stealing his packages...
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How Iran beats Russia at sanctions game
A recent attack on a weapons manufacturing compound in the Iranian city of Isfahan, presumably by Israel, has again highlighted the Islamic Republic's position as a global arms powerhouse.
While it’s hard to know exactly what projects are in the works at the Isfahan facility, there are reports that the site is used to produce "suicide drones.” These are the same cheap and dirty contraptions Vladimir Putin’s military is using to pummel Ukrainian cities.
With attention yet again on Iran’s drone-making prowess, a big question emerges: How has heavily sanctioned Iran managed to become a one-stop shop for Russia’s advanced weapons needs, while Moscow, largely cut off from Western supply chains, is desperately searching for weapons and parts?
What are some of the biggest pain points for Russia in procuring weapons and parts? Moscow has long relied heavily on Western components for making advanced weaponry. Before the war, the bulk of its stash came from US firms. But access to semiconductors, the nearly invisible microchips essential for running modern military hardware, changed after the outset of the war when more than 30 countries – like Japan, the Netherlands, and the EU – joined US-driven bans on exports to Russia.
What’s more, Russia has struggled to bulk up its domestic semiconductor industry. Some firms have gone bust, and private companies have refused to use domestically made chips, citing quality concerns – again reinforcing Russia’s reliance on foreign manufacturers. But global supply kinks have made procuring chips harder for everyone.
Still, Moscow has found ways to access these and other parts through third parties – including China and Turkey, a NATO member! Russia also imported $777 million worth of products from Western tech firms between April and October 2022 despite export bans. But Putin needs to get his hands on way more components to fuel his war machine.
Iran to the rescue, but how? Tehran, meanwhile, has developed a knack for skirting Western sanctions and finding gaps in international arms control agreements to procure Western-made components.
“Iran has been living under sanctions for more than 40 years, so they’ve developed elaborate processes to do it [evade sanctions],” says Dr. Jon B. Alterman, director of the Middle East Program at the Center for Strategic and International Studies. “The smuggling operations in Iran are run by people close to the government. They’ve gotten good at it, and they’ve gotten wealthy doing it. They have the infrastructure.”
One part of their solution is quite relatable: Like you and me, the mullahs turn to the World Wide Web to shop.
“Some of the stuff [needed to make drones], they can buy on eBay and Amazon,” says Alterman. “In a world of a huge amount of commerce, a lot of things are obtainable.”
It’s also a matter of proactive preparedness. Iran has for decades invested heavily in its arms industry, launching a modernization program that’s allowed it to make major advancements in ballistic and cruise missile production.
Iranian officials have also been known to scour conflict zones for American and Israeli debris for research purposes, including reverse-engineering. In fact, President Joe Biden recently tapped a task force to establish why a whopping 82% of components found in downed Iranian drones in Ukraine were reportedly made in … America. (Not exactly the Made in America promo Biden wanted).
Why would Iran help Russia? Like so many things in geopolitics, it’s a case of I’ll scratch your back if you scratch mine, but Iran is also playing the long game.
“The war in Ukraine has reshuffled the deck of alliances, and Iran now has access to modern weaponry,” says Pierre Boussel, a Middle East expert at the Liechtenstein-based Geopolitical Intelligence Service. So Iran is arming the Russians and, in return, the Russians are giving Tehran some advanced hardware. Case in point: Moscow recently sent Tehran the US Javelin anti-tank missile and Stinger anti-aircraft missile, as well as British anti-tank missiles.
While Iran’s rustic approach can’t compete with the West’s, it has helped Tehran carve out a nice space for itself in the arms-making world: “US sanctions have forced Tehran to position itself in a low-cost arms market,” Boussel says, adding that “Iranian drones may be slow and inaccurate … but they are numerous enough to overwhelm enemy defenses.”
Plagued by crises at home and abroad, Iran has enough on its plate. So what’s its game plan? “The Iranians have an interest in having at least one of the great powers being indebted to them,” says Alterman, adding “they see an opportunity to lock in some gains.”
“Iran has no partners, so the fact that somebody might owe it is kind of a big deal in Iran.”
A demonstrator wears elaborate face paint during a march for Mahsa (Zhina) Amini and those protesting her death in Iran.
Is the West doing enough to help Iranians?
The actions of Iranian protesters over the past two months – particularly women – have been awe-inspiring. Despite the prospect of incarceration, and worse, they’ve refused to kowtow to the bushy-eyebrowed mullahs calling the shots in the Islamic Republic. Fear of execution looms large, but Iranian women continue to abandon their headscarves and chant in the streets for regime change.
Things are only getting more dangerous after Iran’s parliament recently voted in favor of the death penalty for protesters. The first such sentences were handed down in recent days. Indeed, the stakes could not be higher, and yet hopeful Iranians continue to risk their lives.
As the government crackdown intensifies – there have been 300 deaths and 15,000 arrests to date – is the West doing enough to support the protesters in their bid for freedom?
Defying the despots. Iranians took to the streets in September in the aftermath of the in-custody death of Mahsa Amini, 22, who was arrested and reportedly beaten by Iran’s “morality police” for improperly donning her hijab.
Many young Iranians have died in custody over the past decade, but Amini’s story has galvanized a generation of millennial and Gen-Z women who have no recollection of the 1979 Islamic Revolution that brought down a corrupt Shah and have zero affinity for the mullahs who rule their lives.
As the human rights situation in Iran deteriorates, what’s the West doing about it?
Suit-clad politicians in Brussels and Washington have imparted all the right platitudes expressing support for Iran’s women-led movement.
More substantially, the US and EU, the UK, and Canada have expanded on Western sanctions in recent weeks – in place for the better part of a decade – aimed at stopping Iran from further developing its nuclear program. The Western alliance has sanctioned a host of officials from the Islamic Republican Guard Corps, a key unit of Iran's armed forces, as well as high-ranking government officials and regime loyalists.
These new measures come on top of long-term sanctions that have sought to cut Tehran off from the global financial system in hopes of strangling Iran’s most lucrative export – oil – and bringing the regime to its knees.
Still, while these established measures remain in place, the Biden administration has so far been unwilling to up the ante by implementing a cohesive strategy for further inflicting pain on the Iranian energy sector. Consider that in the fiscal year leading up to March 2023, Iran is expected to export 1.4 billion barrels per day, compared to around 500,000 bpd or less when former President Donald Trump was in the White House and enforced a “maximum pressure” campaign on Iran.
This suggests, analysts say, that the West, long trying to keep the dialogue open with Tehran in hopes of reviving the now-defunct nuclear deal, has overseen a lax enforcement system.
Many observers point to the latest developments in Ukraine as a case in point. Despite Western sanctions intended to stop Iran from developing its military-industrial complex, Iran has succeeded in building one of the world’s biggest drone fleets – and is supplying the Russians with thousands of sophisticated “killer drones” that the Kremlin is using to pummel Ukraine.
What’s more, debris from the battlefield suggests that Iranians have been able to rely on Chinese copies of Western parts to build their drone stockpile, while they’ve also acquired Western-made parts to power their drones. Clearly, Western sanctions haven’t had the intended effect of cutting Iran off and making it squirm. (To be sure, the EU has recently imposed sanctions on Iran drone makers, while the US sanctioned Iranian flight companies for helping transfer drones to Russia. Still, it comes after Iran had already developed one of the best arms games in the business.)
Moreover, that countries including China and the United Arab Emirates have had no qualms about flouting Western sanctions on Iranian energy exports suggests that the perceived cost of buying and selling Iranian oil has waned.
What more could be done? The US could sanction Iran’s drone program and increase the pace of its ad-hoc sanctions regime. What’s more, while hundreds of Russian diplomats have been expelled from Europe and the US, many Iranian dignitaries continue to get the royal treatment in global forums.
Looking ahead. The UN Human Rights Council says it will hold a special session to discuss Iran on Nov. 24. Meanwhile, the world's largest and most influential economies are currently gathering at the G-20 summit to talk about all things geopolitics. Will their response to Iran be united and stern? Don’t hold your breath.
This was featured in Signal, the daily politics newsletter of GZERO Media. For smart coverage of global affairs that normal people can understand, subscribe here.
The Iran nuclear deal
The Iran nuclear deal was enacted in 2015 to stop Tehran from getting the bomb in exchange for economic sanctions relief. At the time it was a big win — especially for the Obama administration.
But not everyone was a fan. Critics say the deal only slowed down the nuclear program, didn’t address Iran's support for Hezbollah, and hardly reset US-Iran ties.
Then, as he promised on the campaign trail, then-US President Donald Trump withdrew from the Iran nuclear deal in 2018.
Since taking office, Biden has made it a priority to revive the agreement. Some progress has been made.
But now, the war in Ukraine is a problem because Russia is at the negotiating table. If the Russians walk away, the deal will be hard to implement politically. Moscow may also use its support for the deal as leverage to lift Western sanctions. And then there's the global oil crisis, which gives the Iranians more bargaining power.
What's more, a new US administration could still withdraw (again) in 2025.
Watch the GZERO World episode: Iran nuclear deal 2.0, or war?
Iran nuclear deal now a toss-up, says International Crisis Group expert
So, is the Iran nuclear deal 2.0 finally happening, or not?
Ali Vaez, Iran project director at the International Crisis Group, says he stopped making predictions months ago. Still, he puts the odds now at 50/50.
Failure is not an option for the Iranians, Vaez tells Ian Bremmer in a GZERO World interview, because they've survived crippling US economic sanctions but will never thrive under them. Also, if the crisis escalated, additional UN sanctions will snap back.
The Iran nuclear deal has also become too big to fail for the Americans, he says. Why? Iran is closer to the verge of acquiring nukes than it's been in 20 years.Vaez explains that Iran's breakout time — how long it'll take the Iranians to enrich enough uranium for a single nuclear weapon — is now less than two weeks. It was more than 12 months when former US President Donald Trump took office.
Biden, he thinks, could pay a political price for restoring the agreement in the November midterm elections — but allowing Iran to become a nuclear-armed state on his watch could hurt the president even more.
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