top of page

Source: The Intercept

Jun 12, 2023


Joe Biden kept Donald Trump’s “maximum pressure” sanctions — discouraging even legal, humanitarian trade.

BY Murtaza Hussain

AMIR HOSSEIN NAROI, an Iranian boy, was only 10 years old when he died from thalassemia, an inherited blood disease. The condition is highly prevalent in the southern Iranian province of Sistan-Balochistan, where Naroi’s family lives; tens of thousands of people in the region are believed suffer from the disease. It is not an inevitably fatal condition: Thalassemia can be treated with regular blood transfusions and oral medications designed to remove the excess of iron built up in the bodies of patients. For much of his short life, Naroi was able to get treatment. His fate, however, was decided when access to the necessary medicines inside Iran began to dry up in recent years.

In the earliest years of his life, Naroi was taking a specialized drug known as Desferal, which is manufactured by the Swiss pharmaceutical company Novartis. Starting in 2018, however, around the time that President Donald Trump launched a “maximum pressure” campaign of economic sanctions against Iran, supplies of the iron-chelating drug in Iran — along with other medicines used to treat critical diseases — started to become difficult or impossible to access inside Iran, according to local NGOs supporting patients with the disease. By the summer of 2022, his organs failing due to complications from the disease, including damage to his organs from excess iron in his blood, Naroi passed away in a hospital, surrounded by his family.

According to documents obtained by The Intercept, multinational companies providing drugs for thalassemia and other conditions, as well as banks acting as intermediaries for attempted purchases, said U.S. foreign policy was ultimately causing the problems delivering drugs to Iranians. Namely, American sanctions against Iran have made the transactions so difficult that supplies of the medicines are dwindling.

The U.S. government is now facing a lawsuit from the Iran Thalassemia Society — an Iran-based NGO supporting victims of the disease — on behalf of Iranians with thalassemia and another inherited disease, epidermolysis bullosa, claiming that thousands of Iranian patients have been killed or injured after foreign companies producing specialized medicines and equipment for these diseases and others began cutting off or reducing their business with Iran as a result of sanctions. While the U.S. has given assurances that humanitarian trade with Iran will be exempted from sanctions, the lawsuit, which is currently pending appeal after being dismissed, alleges that the large-scale sanctioning of Iran’s banking sector has created a situation in which foreign companies are either unwilling or unable to do any trade with Iran at all.

“The American government has said that they will consider some exceptions for humanitarian aid, but in practice we have seen that there are no exceptions,” said Mohammed Faraji, staff attorney at the Iran Thalassemia Society. “We have had communications with countries that export medicines and medical equipment who have clearly told us that we cannot import medicaments to Iran because of sanctions. Banks won’t work with us, and health care companies won’t work with us. They are afraid of secondary sanctions and tell us that directly.”

Documents obtained by The Intercept bear out the picture of some companies balking at humanitarian trade with Iran because of the risk of being caught up in sanctions enforcement or because sanctions have closed off legal pathways for transacting with Iran. The communications reviewed, between European health care companies, foreign banks, and their Iranian counterparties, began in 2018. At times, the messages relayed are explicit: The companies won’t engage in trade with Iran — even to provide lifesaving medicines — due to the sanctions.

The intensity of foreign companies and banks aversion to dealing with Iranians reflects a victory of sorts for sanctions advocates, including hawkish pro-Israel advocacy groups and think tanks like United Against Nuclear Iran and the Foundation for Defense of Democracies. Thanks to their efforts, Iran today is one of the most sanctioned and isolated countries on Earth. While its government has held on to power and continues to remain aggressive and defiant despite the international pressure, life for ordinary Iranians has become materially worse under the sanctions regime, especially patients suffering from rare diseases.

THE LETTERS BETWEEN banks, drug companies, and their Iranian interlocutors show in detail how the “maximum pressure” sanctions on Iranian financial institutions have blocked even mundane transactions for medical equipment required to treat a range of conditions.

A letter in September 2018 from a Danish manufacturer of urology products, Coloplast, informed its Iranian distributor that “despite the fact that Coloplast products are not excluded by US and/or international export control sanctions, we now face a situation, where the international banks have stopped for financial transactions with Iran. Under current conditions it is not possible to receive money for products sold in Iran.” (Coloplast did not respond to a request for comment.)

Mölnlycke, a Swedish provider of specialized bandages needed to treat patients with epidermolysis bullosa, sent a letter that same year to the head of an Iranian NGO supporting patients with the disease, EBHome, commending the organization for its work helping patients with the condition. Despite the approbation, the company said it would not be sending any more bandages to treat Iranian epidermolysis bullosa sufferers: “Due to the U.S. economic sanctions in force Mölnlycke Healthcare have decided not to conduct any business in relation to Iran for the time being.” A complaint from an Iranian NGO was filed against the company in Sweden in 2021 over the humanitarian impact of its cessation of business in Iran, but the complaint was rejected. (Mölnlycke did not respond to a request for comment.)

The denial of these specialized bandages has been particularly dire for Iranian patients. Epidermolysis bullosa is a disease that causes painful blisters and sores to appear on patients’ bodies. Many people with the condition are children whose skin is particularly tender and who require specialized wound dressings to avoid tearing the skin off when bandages are changed. An Iranian specialist on the disease submitted a testimony as part of the pending lawsuit describing the cases of six young Iranian patients who suffered excessive bleeding, infection, and “excruciating, severe pain” as a result of losing access to the specialized bandages produced by Mölnlycke.

The sanctioning of these supplies has at times led to desperate workarounds by foreign governments. In 2020, the German government and UNICEF cooperated to purchase and deliver a shipment of specialized bandages to Iran. Iranian doctors have also been forced to rely on locally produced approximations of specialized foreign medicines, many of which are of poorer quality and have resulted in life-altering complications and even deaths of patients.

Thalassemia sufferers, in particular, have been forced to use a product known as “Desfonac,” a local equivalent which is less effective at treating the disease and carries debilitating side effects not found in the original product. The Intercept obtained communications made in 2018 by local country representatives for Novartis, the company that manufactures Desferal, telling their Iranian interlocutors the drug company experiencing difficulty conducting transactions as a result of banking sanctions. These transaction problems, local organizations working on the disease say, were the beginning of the end of their own steady access to thalassemia drugs, which must be regularly administered to patients with the disease to be effective.

“We have been fighting for years to control this disease inside Iran, and it is achievable, but the simple reality is that if patients do not get the iron-regulating drugs they need to treat it, they will die,” said Younus Arab, head of the Iran Thalassemia Society. “We have documented at least 650 people who have died since 2018 when we stopped being able to import medicine and over 10,000 who have had serious complications.”

Unlike other companies, and despite difficulties in receiving payments, Novartis did not cut off ties with Iran in response to U.S. sanctions. A spokesperson for Novartis told The Intercept that the company is willing to send medical supplies to Iran and has done so since the imposition of the “maximum pressure” sanctions, including through the use of a humanitarian trade channel created by the Swiss government in 2020.

The problem created by sanctions, according to the company, is less an unwillingness to do business with Iran over legal fears than an inability of Iranian officials to access their own foreign currency reserves to make payments. The sanctions, while not eliminating Iran’s foreign reserves, have frozen Iran’s access to them, sending the country’s accessible reserves from $122.5 billion down to a mere $4 billion between 2018 and 2020, according to International Monetary Fund figures. The collapse of accessible reserves has made it impossible for the Iranian government to carry out basic economic functions like stabilizing its currency or engaging in foreign trade, even with willing parties.

“Since the imposition of certain sanctions in 2018, the most significant challenge observed by many pharmaceutical companies has been a shortfall of foreign exchange made available by the Iranian government for the import of humanitarian goods, such as medicines,” said Michael Meo, the Novartis spokesperson. “With respect to thalassemia medicines specifically, Novartis has supplied these medicines continuously since 2019. We have been — and remain — ready to satisfy orders for these medicines.”

“However,” Meo’s statement continued, “for our medicines to reach thalassemia patients in Iran, Novartis relies on the action and collaboration of the Iran Ministry of Health and Food and Drug Authority in allocating sufficient foreign currency resources to import these medicines through regular commercial channels.” (The Iranian Ministry of Health and Iranian Ministry of Foreign Affairs did not reply to requests for comment.)

For Arab, whether sanctions are creating difficulties importing medicines due to companies’ reticence or a lack of foreign currency reserves, the results are the same: Patients under the care of his organization are dying.

“We don’t want money,” he said, “what we need is medicine for these patients.”

Iranian citizens seem hopeful that incoming U.S. President Joe Biden will lift the sanctions as they read the news regarding the U.S. election on Nov. 9, 2020, in Tehran, Iran.

Photo: Fatemeh Bahrami/Anadolu Agency via Getty Images

THE TRUMP-ERA ECONOMIC SANCTIONS were considered a crowning achievement of the “maximum pressure” campaign against Iran. Some of the economic sanctions against Iran targeted specific individuals and institutions involved in human rights abuses, but many others went after entire sectors of the Iranian economy, including its financial sector.

The blanket sanctions on Iranian banks essentially severed the country from trade with the rest of the world by cutting its financial arteries, including access to Iran’s own reserves held in foreign banks. The U.S. government has also imposed so-called secondary sanctions on Iran, meaning that any foreign entity that still dares to engage in trade with Iranian banks or companies puts itself at risk of being sanctioned and being cut off from doing business in the U.S. — a risk that few businesses are willing to take.

Though the U.S. government repeatedly insisted that humanitarian trade with Iran would not be affected by its “maximum pressure” campaign, economic sanctions experts said the claim is misleading. Assurances that ordinary Iranians will still be able to purchase food and medicine are meaningless, they say, when the sanctions in place are so broad that banks and foreign countries view any dealings at all with the country as a looming violation.

“The banking issue is the real crux of the problem. There is a general blocking authority on all of Iran’s financial institutions, some on which have been designated for terrorism-related reasons, some for WMD reasons, and some for human rights reasons,” said Tyler Cullis, an attorney at Ferrari & Associates, a D.C.-based law firm specializing in economic sanctions. “The Trump administration then came and imposed sanctions on Iran’s entire financial sector, and that has targeted any remaining Iranian institutions that were not covered by those measures.”

Although President Joe Biden campaigned in part on restoring the Obama-era nuclear deal, his administration effectively maintained the maximum pressure policy. The banking sanctions that made Iranian business anathema to foreign financial institutions remain in place, making the prospect of doing any trade with Iran too legally and financially risky to be worth it for any foreign company. Those risks are augmented by hawkish activist groups like United Against Nuclear Iran, which maintains public lists of companies accused of engaging in trade with Iran. The blacklists — on which UANI has in the past included companies engaged in legal trade, including for medicines, with Iran — create a potential for reputational risk that makes doing business with Iran an even more unsavory prospect.

“At the end of the Obama administration, we had ideas in front of the administration calling for a direct financial channel between the U.S. and Iran that would be able to facilitate licensed and exempt trade between the two countries. To be frank, the Obama administration rejected creating such a channel on multiple occasions,” said Cullis. “The U.S. has now hit a dead end where they have used up all their levers of pressure other than military force.”

He went on, “I sympathize with folks in Iran, as there are a lot of people there who are nonpolitical and simply trying to find solutions. But it’s really hard to find a solution when U.S. government itself is not interested in one.”

WHILE U.S. SANCTIONS succeeded at wrecking Iran’s middle class and preventing Iranians from accessing necessities like food and medicine, they failed to achieve the aims of Washington: forcing Iran to change its foreign policy or renegotiate the 2015 Iran nuclear deal on less favorable terms. Instead, the Iranian government has survived waves of popular anger by doubling down on repression — including through executions and imprisonment of political dissenters — against an increasingly impoverished population.

Despite growing misery in the country, the Islamic Republic of Iran seems to be as firmly in charge as ever. The hardening narrative echoes the story of U.S. economic sanctions on countries like Iraq, Cuba, and Venezuela that succeeded in harming civilians but never resulted in regime change.

“The original idea of such sanctions is that they will cause people to rise up and overthrow their government, but there is not much evidence of that while there is a lot of evidence that they harm ordinary people,” said Amir Handjani, a nonresident senior fellow at the Quincy Institute and a security fellow with the Truman National Security Project. “When you consider regular Iranians living under sanctions with rare diseases, who need specialized drugs that can only be imported from the West, they are facing a very dark future.”

The lawsuit currently filed in U.S. federal court in Oregon on behalf of Iranians with thalassemia calls on the U.S. government and the Office of Foreign Assets Control, or OFAC, which administers sanctions and trade licenses, to “permit the reintroduction of life-saving medicines and medical devices into Iran through normal business channels.”

The suit was recently dismissed by the court on grounds of proving standing by the plaintiffs; an appeal of the ruling was filed in May. Lawyers working on the case say that they will continue pressing the matter in U.S. courts to compel the government to create a solution that will allow critical medicines to reach patients inside Iran. Neither the Office of Foreign Assets Control nor the Biden White House responded to requests for comment.

“On a visceral level, people are suffering and dying. We’re talking about little children who need medical dressings and didn’t get them,” said Thomas Nelson, the attorney for the plaintiffs in the case. “No one is willing to stand up to the impunity and bullying of the U.S. government on this subject, and particularly OFAC. It ought to be brought to the public’s attention that these types of things are happening.”

bottom of page