In 2015, Iran entered into a long-term agreement (Joint Comprehensive Plan of Action) on its nuclear program with the major world powers, known as the P5 + 1. Under the agreement, Tehran agreed to limit its nuclear program and allowed the international community to visit and observe this program in exchange for the lifting of economic sanctions. US President Barack Obama said on the occasion that the agreement would prevent Iran from having a secret program.

Under the deal, Iran was able to secure more than $ 100 billion in foreign investment and the sale of petroleum products, and use the global trade finance system. The Iranian economy had a GDP growth of 12.3% after the agreement. International companies have flocked to Iran.

In May 2018, President Trump scrapped the landmark deal announcing that “it hasn’t brought calm, it hasn’t brought peace and it never will.” Trump supporters have argued that “Tehran has deceived the international community and continues to undermine the destabilization of the Middle East, via proxies in Lebanon, Syria, Yemen and other parts of the region. “.

Then, in November 2018, he reinstated economic sanctions targeting both Iran and countries trading with Iran. Washington wanted to exert maximum pressure on Iran to force it to renegotiate the deal, but Tehran remained rebellious. Other European parties to the deal like Britain, France and Germany opposed the pullout, arguing that Iran was respecting the deal. European countries have also announced that they will establish a mechanism to protect their trade with Iran. Despite this opposition, US economic sanctions have had a substantial impact. Sanctions have made Tehran more isolated and its economy has also been hit hard. Real GDP growth has started to decline.

Even before the sanctions, Iran’s economy had started to decline, especially its currency. Western companies and businessmen began to flee Iran to avoid compromising their ties with the financial system and the American market. Some European and Asian countries continued to support Tehran and refused to cooperate with the United States. Iran apparently intended to bypass those sanctions in the hope that the post-Trump US government would revert to the nuclear deal. But it is still worth evaluating Iran’s strategy for breaking out of geopolitical isolation.

The isolation has reduced Iranian economic activities both at home and abroad. The currency was a major obstacle for Iranian economic activities, fireugn and domestic. Most people avoided commerce, business, and dollar transactions. To get around this problem, Iran has decided to allow its trading partners to use their own currencies in bilateral trade and to resolve any imbalances at the end of a specific period.

The history of sanctions against Iran demonstrates that Iran has the capacity to survive them. They have a record of finding a way to sell oil and also build on their previous experience. Although the Iranian people are forced to endure the bitter taste of economic sanctions, it can exacerbate grievances of economic, political and social hardship. Sanctions have a great effect on social life and economic activities, but Iran strives to maintain commercial ties with its trading partners.

Iranian Foreign Minister Javad Zarif said in New York on September 29, 2018, “Sell things in your own currency, buy things in the other country’s currency and at the end of a specific period, balance it out. them in a currency other than the dollar. This may be possible and even profitable for all of its business partners. Therefore, Tehran has formatted the policy of offering incentives to its trading partners and to countries that oppose Washington’s policies such as Beijing and Moscow. China and Iran are each other’s biggest trading partners, as Iran meets China’s oil needs and China helps Iran with diplomatic, political, defense and economic benefits. The yuan trade is an interesting opportunity for China to improve bilateral trade and promote the yuan. Likewise, Russia also faces US sanctions due to the Ukrainian issue and the use of chemical agents. Likewise, it is moving away from dollar payments. Likewise, European Commission President Jean-Claude Juncker also said that the EU could consider increasing the use of the euro for trade, especially to buy oil and gas. For many months, European countries have been searching for an alternative electronic money transfer system that cannot be blocked by the US Treasury Department.

Additionally, the EU discussed the need for a Special Purpose Vehicle (SPV) to protect economic freedom and pursue legitimate business with Iran. Such a system could eventually make it easier for Iran to pay for exports and imports. In the past, during multilateral sanctions, Iran handled oil exports of over one million barrels per day. After the reinstatement of sanctions, the Trump administration wanted to reduce Iranian oil exports to zero, but failed. Due to the Iranian incentive program, China, India, South Korea and the EU disliked the US intentions against Iran.

At that time, Iran relied on shell companies to do business in China, Iraq and the United Arab Emirates to mitigate the effect of the sanctions. Front companies were registered under obscure names. They bought goods and shipped them legally to Afghanistan, Iraq, and the United Arab Emirates, and eventually smuggled the goods into Iran by sea and land. Iran has hired such private individuals and companies owned by Arabs, Iraqis, Syrians and Emiratis. In addition, Iranian businessmen have opened new businesses with Chinese, Russian, Arab and other partners around the world. According to The Wall Street Journal, the Iranian Revolutionary Guard Corps opened 150 shell companies in partnership with Georgian businessmen. For drugs, the Foreign Investment Company of Iran, which had also made investments in Afghanistan, Oman, Brazil and Germany, facilitated Iran. On the other hand, the Iranian parliament has considered legislation to increase imports of essential goods and subsidize exports in order to mitigate the impact of sanctions. Although French and Indian companies are pulling back from the huge promised investment projects, China is ready to replace them and reap the benefits. Meanwhile, Gulf fishermen are also complaining that Chinese boats and fishermen are entering their areas.

Another Iranian strategy has been to rely on neighboring countries to circumvent sanctions, and it has bought dollars from Afghanistan, Iraq and Pakistan. Almost three million Iranians enter Iraq as religious pilgrims and visit Karbala and Najaf. A large number of essential goods have been smuggled into Iran via the United Arab Emirates and Oman. But due to pressure from the United States, the United Arab Emirates and Oman cracked down and Iran turned to Iraq.

Due to the incompetence of the Iraqi authority, the Iranians are allowed to circumvent many rules as they have influence over Shiite groups and militias. Likewise, the Iranians use another tactic of couriers and porters. Iraqi Kurds bring money and food to their relatives in Iranian Kurdistan. It has become a profitable business for Kurds on both sides. In the past, Afghan banks have been used to pay for Iranian imports. Once the chairman of the money exchangers union in Afghanistan declares that Iranian rials “pass in trucks”, they are then converted into dollars. From this, Afghan intermediaries earned five to seven percent commission. A money exchanger in Kabul told Bloomberg TV in September 2018 that dollars are transferred to Iran in remote areas of the Afghan-Iranian border. Traders on both sides have multiple entry visas so border police don’t ask them a lot of questions. Additionally, Eastern European countries like Belarus, Hungary and Romania had enjoyed advantages during previous sanctions periods, but they are no longer clear during current sanctions.

The history of sanctions against Iran demonstrates that Iran has the capacity to survive them. They have a record of finding a way to sell oil and also build on their previous experience. Although the Iranian people are forced to endure the bitter taste of economic sanctions, it can exacerbate grievances of economic, political and social hardship. Sanctions have a great effect on social life and economic activities, but Iran strives to maintain commercial ties with its trading partners.

He is looking to China, Russia and other Eastern countries to forge new ties to fill the void left by lost Western investments. China’s role can be very critical in determining who is the largest importer of Iranian oil. President Hassan Rouhani encouraged his people by declaring: “There is no doubt that the United States will not succeed with this new plot of economic sanctions against Iran as it retreats step by step.” He further said that the Iranian nation will weather the sanctions storm.