The UK has imposed additional sanctions on Iran in response to its drone attack against Israel on Sunday’s (14 April).
Foreign secretary Lord Cameron announced the package, coordinated with the US, at the meeting of the G7, in the Italian island of Capri yesterday (18 April).
He said that the new measures, imposed on seven individuals and six entities, reflect the countries’ “unequivocal condemnation” of Iran’s attack and risk posed of “wider escalation” in the region.
Increased measures
The new measures include additional sanctions on the country’s armed forces general staff, defence minister, armed forced commander, the Islamic Revolutionary Guards Corps (IRGC) navy and the director of Aerospace Industries Organization (AIO), which oversees Iran’s missile production.
UK prime minister, Rishi Sunak, described the sanctions as hitting “ringleaders of the Iranian military and forces responsible for the weekend’s attack”.
“These sanctions – announced with the US – show we unequivocally condemn this behaviour, and they will further limit Iran’s ability to destabilise the region.”
It has been hoped by Western powers that violence in the Middle East could be contained to Israel and Palestine, following Hamas’ 7 October attack and the Israel’s sustained military operation in Gaza .
Sanctions regime
However, on Sunday, Iran launched a wave of drone strikes against Israel, in retaliation for a strike on the Iranian consulate in Syria, prompting Israeli politicians to call for sanctions against its long-time rival.
The UK already has already imposed over 400 sanctions on the Iranian regime, including 154 new designations last year. This is in addition to trade measures banning the export of components that could be used to make drones.
Companies found to be involved in the production of Shahed-131 and Shahed-136 drones – the models used in the Israel attack – were also sanctioned last year.
Oil impasse
The sanctions against high-profile members of the regime are likely to be the only new economic measures, as US officials have ruled out the possibility of increased sanctions on Iranian oil.
Previous attempts appear to have been largely unsuccessful as Iran have shifted their exports towards China. An FT report details how sales of oil have reached a 6-year high, and added over US$35bn to Iran’s economy.
Fernando Ferreira, head of geopolitical risk service at the US’ Rapidan Energy Group told the paper that Iran has “mastered the art of sanctions circumvention”.
“If the Biden administration is really going to have an impact, it has to shift the focus to China.”
The passing of the Iran-China Energy Sanctions Act through the US House of Representatives on Monday (15 April) signalled an effort to adopt this tactic. The bill would require US financial institutions to suspend engagement with Chinese institutions involved in transactions of Iranian oil.
However, experts believe the bill will struggle to pass through the US’ other legislative body – the Senate – despite it being narrowly controlled by Democrats.
Some experts suggested existing sanctions had not been fully enforced, with the Atlantic Council’s anti-money laundering expert, Kimberly Donovan, telling Reuters:
“I would not expect the administration to tighten enforcement in response to Iran's missile and drone attacks against Israel over the weekend, mainly for concerns [that] could lead to increases in oil prices.
“The price of oil and ultimately the prices of gas at the pump become critical during an election year.”
A State Department spokesperson denied the claim of any non-enforcement, saying that president Joe Biden’s administration was continuing to apply pressure to Iran.
The UK’s sanctions do not target Iran’s oil industry.
Russian sanction success
The US strategy of ‘shifting focus to China’ is reportedly proving effective against Russia. Newsweek writes that several large banks, including the world’s third-largest the Industrial and Commercial Bank of China (ICBC), have stopped taking Russian payments.
This follows an executive order from Biden in December than imposed secondary sanctions on countries believed to be contributing to Russia’s military supply chain, and therefore supporting its ongoing war in Ukraine.
This lack of support contrasts with the allies otherwise strong trade partnership, with the publication reporting that China-Russia trade outpaced the growth of China’s other major trading partners.
This year’s latest trading data revealed bilateral trade worth $37bn – a 9.3% year-on-year increase. The only other trading partners to surpass this were India and Canada.
G7 action
This blow comes as G7 officials discussed the best way to support Ukraine using seized Russian assets on Wednesday (17 April).
At the IMF and World Bank spring meetings in Washington D.C., the group said it planned to use revenues from unspecified Russian assets to support Ukraine with short-term financing needs for its defence.
In a joint statement, G7 ministers said:
“We reaffirm our determination to ensure that Russia pays for the damage it has caused to Ukraine. Russia’s sovereign assets in our jurisdictions will remain immobilized until then, consistent with our respective legal systems.”
