US grants Iran sanctions waiver to ease humanitarian aid via Swiss channel

The United States has issued a license to permit some humanitarian trade transactions to be conducted with Iran's sanctioned central bank.

On Thursday, the US Department of the Treasury announced the Swiss Humanitarian Trade Agreement External link (SHTA) is fully operational, which means companies can now send food, medicine and other critical supplies to Iran.

This will “help ensure that humanitarian goods continue to reach the Iranian people,” said Secretary Steven Mnuchin in a statement, adding, “We thank our Swiss counterparts for their dedicated efforts in establishing the SHTA and we look forward to our continued collaboration.”

This comes after US Special Representative for Iran Brian Hook said last week that food and drug companies were very much interested in using the SHTA.

The SHTA began trial operations last month during which Novartis, a global healthcare company based in Switzerland, supplied Iran with €2.3 million worth of cancer medicines and medicines needed for organ transplants.

The SHTA aims to ensure that Swiss-based exporters and trading firms in the food, pharmaceutical and medical sectors have access to a secure payment channel with a Swiss bank, by means of which payments for their exports to Iran are guaranteed.

Although food, medicine and other humanitarian supplies are exempt from the sanctions imposed by Washington, the US measures, targeting everything from oil sales to shipping and financial activities, have deterred several foreign banks from doing business with Iran, including humanitarian deals.

In 2018, US President Donald Trump withdrew Washington from a 2015 international deal, known as the Joint Comprehensive Plan of Action (JCPOA), reached between Iran and the 5+1 Group - the US, the UK, Russia, China, France, and Germany.

The US then returned its sanctions against Iran in defiance of the agreement’s multilateral nature and the fact that it had been ratified by the United Nations Security Council.

Washington then began forcing other parties to toe its sanctions line. The three European signatories to the JCPOA -- the UK, France and Germany -- have stopped their transactions with the Islamic Republic, bowing under the pressure.

Late in January 2019, the three countries unveiled a mechanism meant to safeguard their trade ties with Tehran in the face of the harsh US sanctions.

Defying US, European parties to JCPOA launch payment channel with Iran

In a blow to US sanctions against Iran, the European parties to the 2015 nuclear deal unveil a direct payment channel with Tehran meant to protect bilateral trade ties.

The mechanism officially called the Instrument in Support of Trade Exchanges (INSTEX) is a non-dollar direct payment channel.

In its initial stage, INSTEX was supposed to facilitate trade of humanitarian goods such as medicine, food and medical devices, and later be expanded to cover other areas of trade, including Iran’s oil sales. However, it has not resulted in any trade deals so far.

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