By The Washington Post · Erin Cunningham · WORLD, MIDDLE-EAST
The broad U.S. restrictions on Iran's banking system and the embargo on its oil exports have limited Tehran's ability to finance and purchase essential items from abroad, including drugs as well as the raw materials and equipment needed to manufacture medicines domestically.
The Trump administration has also reduced the number of licenses it grants to companies for certain medical exports to Iran, according to quarterly reports from the Office of Foreign Assets Control, or OFAC, the enforcement agency of the U.S. Treasury Department. The list of items requiring special authorization includes oxygen generators, full-face mask respirators and thermal imaging equipment, all of which are needed to treat patients and keep medical workers safe, doctors say.
The tough measures are part of a U.S. "maximum pressure campaign" against Iran, adopted by the Trump administration after it unilaterally withdrew from the 2015 nuclear deal Iran had signed with world powers.
Iranian medical workers and global public health experts say it is not possible to determine exactly how much U.S. sanctions have impacted Iran's capacity to fight the virus - which has infected more than 35,000 Iranians, killed at least 2,500 and spawned outbreaks in other countries. But they say it is clear that the Iranian health care system is being deprived of equipment necessary to save lives and prevent wider infection.
"There are a lot of shortages now. ... (Hospitals) do not have enough diagnostic kits or good quality scanners, and there is also a shortage of masks," said Nouradin Pirmoazen, a thoracic surgeon and former lawmaker in Iran.
Pirmoazen, who now lives in Los Angeles, said that he is in regular contact with former colleagues and students at the Masih Daneshvari Hospital in Tehran, which is part of Iran's National Research Institute of Tuberculosis and Lung Diseases.
"Medical staff who want a specific type of medicine or equipment are having difficulty transferring money outside of Iran due to the sanctions," he said, adding that doctors and nurses at Masih Daneshvari have been overwhelmed by the crisis.
An employee of a major pharmaceutical company in Iran who spoke on the condition of anonymity said that "the sanctions have definitely made the import and production processes longer and more expensive."
"Some suppliers are afraid and not willing to work with us anymore," she said. "The sanctions have reduced Iran's capacity to control the outbreak."
According to the World Health Organization, the toll from the novel coronavirus in Iran is likely five times higher than official figures show. Earlier this month, The Washington Post obtained reporting data from a network of hospitals in Tehran, including Masih Daneshvari, that suggested the epidemic was far more widespread than the government had acknowledged.
Iranian leaders have come under fire for what critics say was a botched response to the outbreak, including initially refusing to quarantine affected areas or close religious shrines, measures that likely allowed the deadly pathogen to spread.
On Thursday, the Interior Ministry announced new restrictions on travel between provinces and ordered all nonessential shops to close.
"The reality is that the government refused to admit that it had a problem," said Amir Afkhami, an associate professor and global health expert at George Washington University. "There was a lack of transparency and officials took what were clearly inadequate precautionary measures."
This month, countries such as Britain, France, Germany and China, as well as the European Union, donated cash and emergency aid to Iran, including lab equipment, protective suits, face masks and gloves.
But economic analysts warn that emergency aid is not sustainable during a pandemic, especially as donor countries begin to face their own crises.
"In the medium-term, relying on political channels to arrange aid is going to be cumbersome," said Esfandyar Batmanghelidj, founder and publisher of Bourse & Bazaar, a media company supporting business diplomacy between Europe and Iran.
The United Nations Human Rights Commissioner also called this past week for the "urgent" re-evaluation of sanctions against countries grappling with the global pandemic. In a statement, Michelle Bachelet highlighted the impact of the Iran sanctions "on access to essential medicines and medical equipment - including respirators and protective equipment for health-care workers."
There should be "prompt, flexible authorization for essential medical equipment and supplies," she said.
The United States reimposed sanctions on Iran after President Donald Trump pulled out of the nuclear deal, citing concerns with the agreement as well as Iran's ballistic missile development and continued support for proxy forces in the region. The agreement had curbed Iran's atomic energy activities in exchange for widespread sanctions relief, including opening the country up to foreign investment, allowing sales of oil on the global market, removing restrictions on its banking, insurance and shipbuilding sectors, and expanding permitted exports.
The Trump administration, like its predecessors, has technically maintained an exemption from sanctions on the sale of humanitarian items to Iran. The Treasury Department recently approved a Swiss-sponsored mechanism allowing for the trade of food, medicine and other supplies with Tehran, without triggering U.S. sanctions. Secretary of State Mike Pompeo touted the move at a March 20 news conference.
"The whole world should know that humanitarian assistance to Iran is wide open. It's not sanctioned," he said. "We're doing everything we can to facilitate both the humanitarian assistance moving in and to make sure the financial transactions connected to that can take place as well."
In practice, however, the U.S. restrictions - including penalties for conducting business with a range of Iranian banks and companies, including the Central Bank of Iran - have discouraged Western counterparts from trading with Tehran.
To use the Swiss humanitarian channel, for example, companies must provide extensive information to the Treasury Department every month about the Iranian beneficiaries of the goods. The documents must include, among other things, the Iranian companies' business relationships, financial details and a written commitment from distributors that they will not allow the goods to be sold or resold to sanctioned individuals or entities in Iran.
European officials have likened the reporting requirements "to a 'fishing expedition' for information about the commercial relationships with European and Iranian firms," Batmanghelidj said.
According to Mohsen Zarkesh, an OFAC sanctions attorney at the Price Benowitz law firm in Washington, the sanctions exemptions don't guarantee an unimpeded flow of humanitarian goods to Iran. He said that the United States has created "a legal and business environment equivalent to walking through a compliance mine field."
"My experience shows that as the compliance burden of exports to Iran increases ... companies of all sizes abstain from engaging in any form of trade with Iran," Zarkesh said.
The U.S. embargo on Iran's oil exports has also cut off a key source of foreign currency, which the government needs to pay for imports. Pharmaceutical companies in Iran say the government has limited the foreign currency made available to purchase foreign drugs and to obtain materials required by Iran's robust manufacturing industry to produce medicine.
The bottlenecks created by the sanctions have contributed to recent shortages of certain medications and supplements, according to employees of Iranian pharmaceutical companies.
Due to the sanctions, "banking transactions are carried out through very limited channels ... and the government's currency shortage means it is unable to allocate state funds for a lot of essential goods, including medical items," said Ayat, a general practitioner who works for Bayer Parsian AG, the Iranian subsidiary of the German pharmaceutical giant. He declined to give his full name so that he could freely discuss his company's business and the government's lack of foreign exchange reserves.
Sanctions experts also point to a decline in the number of special OFAC licenses issued under the Trump administration for the export of specific medicine and medical devices to Iran.
According to the agency's quarterly reports, more than half of the companies applying for authorization received licenses in the first quarter of 2016. But in the period after Trump announced his decision to abandon the nuclear deal, from July to September 2018, fewer companies applied for authorization and the rate of approval dropped to 15 percent. In the first quarter of 2019, only 10 percent of applicants received licenses to export.
"What these reports show is a significant decline in license applications to OFAC and, accordingly, licenses issued by OFAC with regards to humanitarian goods," Zarkesh said.
The Treasury Department did not respond to a request for comment.
While the sanctions have limited Iran's access to some medical supplies, it can still obtain others, including diagnostic imaging equipment from GE Healthcare, a General Electric subsidiary. OFAC does not publish a list of companies with special licenses to export to Iran. GE Healthcare, however, is one of the companies that continues to sell medical devices through a local distributor.
A recent photo published by Iran's semiofficial ISNA news agency showed an Iranian medical worker using a GE Healthcare imaging scanner to check the lungs of coronavirus patients at a hospital in Arak, about 170 miles southwest of Tehran.
"We continue to operate in compliance with U.S. and local laws and regulations," a GE spokesperson said.