Exports to Iran increase despite sanctions

Jeremy Hobson Jul 8, 2008

Exports to Iran increase despite sanctions

Jeremy Hobson Jul 8, 2008


Kai Ryssdal: In fact, it wasn’t just securities regulations that were in the news today. The Bush Administration has announced more economic sanctions on Iran. The rules are meant to target Iranian officials and companies accused of helping Tehran develop nuclear weapons.

Meanwhile, an investigation made public today by the Associated Press finds American exports to Iran have actually grown tenfold since President Bush took office.

From Washington, Marketplace’s Jeremy Hobson explains how.

Jeremy Hobson: Iran has lived with American sanctions since the 1979 revolution. Some products are still allowed, including agricultural commodities and medicine. That added up to $146 million last year, just a tiny fraction of U.S. exports.

But there are indirect exports as well, says Karim Sadjadpour at the Carnegie Endowment for International Peace.

Karim Sadjadpour: Dubai is kind of the giant swiss cheese hole of these swiss cheese sanctions.

Hobson: So the products go through Dubai and then they can come right into Iran?

Sadjadpour: Exactly. I think anyone who’s visited Tehran knows that if you want to find any type of American consumer product, you can.

Sadjadpour says Iranians are willing to pay a premium for American goods they love. All the more reason, he says, why sanctions should not include consumer goods.

Sadjadpour: The more Iranians are exposed to U.S. consumer products, the more they will pressure their government to enter the modern and global economy.

Nile Gardiner at the Heritage Foundation has a different view. He says sanctions need to be strengthened across the board to keep Iran from developing its nuclear program.

Nile Gardiner: It’s very important of course to send a very clear message on several different fronts to the Iranians that the west means business.

Still, the official line from the U.S. is that sanctions are not meant to hurt ordinary Iranians. Here’s the Treasury Department’s Adam Szubin:

Adam Szubin: Our concern is not with the Iranian people. The United States wants the Iranian people to succeed as a nation and to live in peace and be prosperous.

U.S. sanctions do allow for a few things, like rugs, to be shipped here from Iran. But the vast majority of Iran’s exports are oil. And as long as other countries buy it, it’s the ultimate safety net against any sanctions.

In Washington, I’m Jeremy Hobson for Marketplace.

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