‘Black Market’: Iran's Mullahs dodge U.S. sanctions

Iran’s currency started devaluating after U.S. President Donald Trump imposed sanctions over Tehran as he pulled out of an international agreement on curbing Iran's nuclear program last May.

The second round of sanctions, planned for November, is expected to further strain Iran's economy by targeting its oil sector and central bank.

The Iranian regime, however, has been seeking evasion of U.S. sanctions through other routes, including the black market, backdoors for financial transactions, or resistance economy, which was proposed by Ayatollah Khamenei during a meeting with Iranian entrepreneurs as a response to the Western sanctions and subversion policies against Iran in 2011.

Iranian Deputy Foreign Minister Abbas Araghchi stated on Monday that Tehran is not ruling out the possibility of establishing an alternative to the international payments provider SWIFT to circumvent U.S. sanctions.

SWIFT is a financial network, based on Belgium, that provides high-value cross-border transfers for members across the world. Its board includes executives from U.S. banks with US federal law allowing the administration to act against banks and regulators across the globe.

Mohammed Mohsen Abo El-Nour, an Egyptian political analyst specializing in international relations, told The Reference that Iran’s Revolutionary Guards might resort to one of five possible routes; first, Iran might consider selling its oil in the black market or to European countries using its borders with Iraq; second, is by trading oil for products; third, through a mediator; and finally, to sell oil in other currency than the U.S. dollars.

“Washington won’t allow Iran to evade its sanctions, and will punish whoever deals with it, for example, if Germany sold BMW cars in Iran, the U.S. might cut business with the company,” he added. “All these solutions are worthless unless Iran decides to negotiate.”

Iran affairs expert Nesrin Mostafa also told The Reference that pulling out of the nuclear deal was not a surprise to Tehran, as it already knew that it will get canceled sooner or later, therefore, it always had a plan to evade the sanctions and get out of its economic crisis.

She also added that the Revolutionary Guards have always played significant roles in easing crises that hit Tahran; they generated around $10-12 billion in 2014, and have companies in key fields and sectors. Currently, the Revolutionary Guards are trying to get closer to countries in Asia, such as China, Russia and South Korea, to sell them oil at reduced prices.