Analysts: Iran, Trading Partners Will Find Ways to Skirt Sanctions

The administration of US President Donald Trump hopes the sweeping sanctions it has imposed on Iran’s oil, shipping and banking industries will cripple its economy and force it to negotiate a new nuclear deal, but analysts point out that while such penalties can strain the Iranian economy, there are also ways to circumvent them.
“There will always be both overt and covert activities to work around sanctions, to dodge sanctions or evade them,” said Dan Wager, a global sanctions expert at the consulting firm LexisNexis Risk Solutions, NPR reported. 
“That’s something that’s gone on for a very long time.”
Iran endured global sanctions for years until 2016, when an agreement with the US and other world powers gave the country economic relief in exchange for limiting Tehran’s nuclear program. 
Trump unilaterally pulled out of the multinational nuclear deal and reimposed a raft of US sanctions on Iran.
Wager named some techniques to skirt sanctions, including the use of shell companies, freight forwarding companies or other intermediaries to hide the origin or destination of goods.
He pointed to Iran’s efforts to procure aircraft parts and components.
“There’s a vast network of individuals who are out there that will go to a company that provides aircraft components, engine parts, landing gear parts, avionics and electronics, and they will procure them and represent that those goods are being shipped to and paid for by someone in a country where it is allowed,” he said. 
“Once the goods are shipped there, they are further transshipped onward to Iran.”

Tricky Job

It is trickier to work around oil sanctions because the crude has to be transported by large tankers on open waters. But Iran still found ways to do it under past rounds of international sanctions, according to Peter Harrell, a senior fellow with the Center for a New American Security.
“You saw Iran have its oil tankers turn off the tracking information. They’d kind of take these very convoluted shipping routes to try to disguise that they were Iranian tankers. They change their flag and they change their name ... tactics that a ship can use to disguise its origin,” he said. 
Iran exported an average of 2.5 million oil barrels per day before the US pulled out of the agreement in May. US officials say that figure has been cut nearly by half.
The Trump administration wants Iran’s oil exports—the country’s vital economic engine—down to zero and says it will punish any country or company that continues to trade with Iran.
Earlier this month, the US granted temporary waivers to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey, allowing them to continue buying Iranian oil without consequences for six months.
Harrell said energy-hungry nations are willing to risk sanctions that could reduce their access to US markets. He said the countries can use small companies or banks to do the transactions.
“So, you could see countries such as China that’s importing oil—instead of the oil being purchased by a great big Chinese company that has lots of business in the United States, it will be purchased by some small company that doesn’t really do any business in the US and if it is sanctioned, so what,” he said.