The Unintended Consequences of More Sanctions Against Iran

US Secretary of State Hillary Clinton called for tighter sanctions on Iran in an interview with the BBC Persian service Wednesday. She said Iran is among the most heavily sanctioned countries in the world because it continues to defy the United Nations over the country’s nuclear programs.

Clinton did concede that sanctions are a blunt instrument.

“I am aware that from time to time, certain sanctions can be difficult for totally innocent people going about their daily lives. But I would ask you to put yourself in the position of the international community and those who seek a better future inside Iran.”

One group of Iranians whose daily lives are being made more difficult by sanctions is Iranian students studying in the US.

When “Sarah” flew to San Francisco from Iran, she and her father were carrying $30,000 in cash.

“Handbags. I put it in my handbag, and my father put it in his carry on.”

I asked if that made her a bit, well, nervous?

“Yea, a little bit nervous, yea.”

Sarah was carrying stacks of hundred dollar bills because she needed the money to pay for her graduate studies. It’s not illegal to carry in large sums of cash. You just have to declare anything over $10,000.

Sarah had to do this because US sanctions imposed last year restrict Iranian banks from transferring more than $100 to American banks.

Sarah didn’t want to use her real name. Neither did her father. He lives in Tehran but was visiting Los Angeles when we spoke.

Speaking through a translator, he said he sent another $90,000 to Sarah through a third party. They wired money to his daughter from Turkey or Kuwait. Sarah’s father wasn’t sure which country the middle man used.

In the end, Sarah got the money to pay for her tuition, books and housing. But she and her father argue that the process was more than just an inconvenience. For instance, if something were to happen with the money transfer and Sarah was late with her tuition, she’d be in violation of her visa, and could be deported.

The US government wants Iranian students to come here. After all, they’re paying good money and serving as cultural ambassadors. Sarah’s father says the newest sanctions discriminate against average Iranians.

Banafsheh Akhlaghi agrees with that. She’s a human rights attorney in San Francisco who works with Iranian students.

“The intention behind the sanction is to support democracy, eliminate the aiding and abetting of further national security issues. It’s not to have this young lady, Sarah, have difficulty in being able to be an international student here. I can’t imagine that the policymakers sat around the tables and thought that that’s the way in which they’re going to be able to get us to a safer nation, a safer global environment.”

“It’s very unfortunate that Iranian students, or Iranian citizens, should be hurt because of the actions of their own government,” said Nicholas Burns at the Harvard Kennedy School. “But I think the blame has got lie with their government”

Burns said sanctions are highly imprecise instruments. But they serve a purpose.

“They appear to be working well in Iran because they’re isolating the Iranian government, and that has been the purpose all along. Not just by the United States by the way. This is a policy agreed to by the European allies, and also by the other members of the (UN) Security Council.”

US officials have recently said that sanctions are slowing Iran’s nuclear program. Still, politicians and scholars have long argued over the effectiveness of sanctions.

Ibrahim Warde with the Fletcher School at Tufts University says the story of the Iranian students illustrates one point: It’s not that hard to get around the sanctions.

“An easy thing to do when you’re a tourist in Iran is to go to rug merchants and ask them, ‘OK, if I were to ship 20 of your carpets to the US, how would I do it?’ And then they would say, ‘Well, it’s very easy, because we have sister company in Turkey, or in Malaysia, or in Iraq. And what we’ll do is, we’ll do the billing thru these companies.'”

Those may just be carpets we’re talking about. But Warde says, in general, sanctions aren’t that effective if the rest of the world doesn’t cooperate.

“And there are always countries that are willing to help Iran and unwilling to go along with the sanctions.”

So what’s the answer? I asked attorney Banafsheh Akhlaghi what she proposed?

“So what do we want?” said Akhlagi. “An opportunity to also be part of those conversations as these policies are being written. We’re not there.”

Akhlaghi isn’t opposed to sanctions on the whole. But she says if policymakers see the broader impacts on average Iranians, they could write in exceptions.

When Secretary of State Hillary Clinton called for tighter sanctions yesterday, she also called for a “virtual embassy” for Iran. That could provide Iranians with online information about visas and student exchange programs.