How an ease of sanctions may combat the coronavirus crisis

How an ease of sanctions may combat the coronavirus crisis
© iStock

Pressure is increasing to ease sanctions on Iran and Venezuela in response to the coronavirus crisis. Prominent Democrats in Congress have called on the administration to lift sanctions that will impede humanitarian supplies, adding their voices to the collection of organizations that are demanding sanctions relief. United Nations Secretary General Antonio Guterres also already urged the Group of 20 to ease sanctions in a bid to help countries battle the pandemic. While the hardline views of President Trump on Iran and Venezuela make it unlikely that the United States will engage in any comprehensive measures, the administration must still move quickly to provide targeted sanctions relief to alleviate human suffering.

The coronavirus has been devastating to Iran. Official statistics show that it has suffered more than 20,000 cases and nearly 2,000 deaths, but the real toll is likely much higher. Satellite imagery indicates that Iran has had to dig mass graves to bury coronavirus victims. While Venezuela appears early in the trajectory of the pandemic, its failing health system and ruined economy make it exceptionally vulnerable. Leaders in Iran and Venezuela bear ultimate responsibility for the mismanagement and corruption that has impaired their ability to respond to the disease, but the United States should nonetheless resolve to address the humanitarian issue.

There are important steps to address the crisis without undermining the overall sanctions objectives of the United States. The administration can start by broadening those existing exceptions to sanctions that allow the provision of medical supplies to Iran. This means making sure that all the products that Iran needs to treat coronavirus victims, including ventilators and protective gear for doctors, are covered by general licenses and can be sent to Iran without requiring specific approval from American officials. This bureaucratic process can typically cause months of delays.


American officials should also expand on the Iran humanitarian payment channel that Switzerland and the Treasury Department announced this year. It was designed to enable Iran to pay for humanitarian goods while providing oversight to ensure that specifically sanctioned companies and entities, like the Iranian Revolutionary Guards Corps, cannot benefit from the transactions. The Treasury Department may also need to temporarily relax some of the most oversight stringent requirements for this.

The Treasury Department should work with banks in other countries where Iran has had economic ties, such as Japan and South Korea, to make clear that they can implement similar payment mechanisms. American officials should also approve the use of Instex, the payment channel that several European countries had established to enable trade with Iran despite the sanctions, for the provision of humanitarian goods to Iran. The Treasury Department should also immediately work with a bank and a partner in Venezuela to establish a dedicated payment mechanism to enable the country to purchase humanitarian goods as the pandemic rages.

The administration needs to make sure that both Iran and Venezuela have funds available to purchase medical supplies. Payment mechanisms work where funds exist, but not for ventilators and other medical supplies if no funds are made available. The administration should allow both Iran and Venezuela to transfer frozen government assets to humanitarian payment mechanisms and allow both countries to sell oil to international buyers on the condition that proceeds be sent directly to the humanitarian payment mechanisms. This will ensure that unfrozen funds and oil revenues would only be used to purchase medical supplies and other necessities.

The administration has shown little interest in measures to help Iran and Venezuela address the pandemic. Secretary of State Mike Pompeo made clear that he blames Iran for the crisis, and the United States added new sanctions in the past week. Pompeo is right that Iran and Venezuela have squandered tens of billions of dollars on corruption, repression, and other malign activities that could have been used to fight the pandemic. But the reality right now is that sanctions should not compound human suffering by denying Iran and Venezuela the chance to purchase needed medical supplies, especially since dedicated humanitarian payment mechanisms can ensure that the funds are used only for that specific purpose.

Of course, the administration may quietly hope that the governments of Iran and Venezuela collapse in the face of popular pressure driven by the pandemic. But in the short term, that appears unlikely. The protestors who filled public squares in Iran and Venezuela last year will be busy caring for sick loved ones and avoiding crowds to try and prevent further infections. The administration has shown itself to be an avid fan of sanctions and has certainly innovated in their use. It should continue to evolve its sanctions in a way that will relieve human suffering rather than compound it.

Peter Harrell is an adjunct senior fellow at the Center for a New American Security. He was the deputy assistant secretary for counter threat finance and sanctions at the State Department during the Obama administration.