In Coronavirus' Shadow, Israel and Iran Wage a Diplomatic Battle Over Sanctions

Not only strikes in Syria: Israeli diplomats are pushing the message that Tehran is exploiting the pandemic to get sanctions against it lifted

Noa Landau
Noa Landau
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A volunteer sprays disinfectant as he sanitizes a bus station, in Tehran, Iran April 3, 2020.
A volunteer sprays disinfectant as he sanitizes a bus station, in Tehran, Iran April 3, 2020. Credit: AP/Ebrahim Noroozi
Noa Landau
Noa Landau

Even in the midst of the fight in recent months against a common enemy, the coronavirus, the struggle between Israel and Iran has not stopped for a moment. As efforts were in full swing to bring Israeli tourists back home and to obtain ventilators and virus test swabs from countries with or without diplomatic ties with Israel, Iran continued to top the Israeli Foreign Ministry’s agenda. The issue even intensified amid concern over Iran’s attempts to get the economic sanctions against it eased in light of the major humanitarian crisis that the coronavirus outbreak has inflicted on the country.

As a result, in addition to open confrontation in Syria that returned to the headlines this week with the air strike near Aleppo that has been attributed to the Israel Air Force, Iranian-Israeli tensions have also been mounting behind the scenes in the international arena. And while senior Israeli defense officials have lately been trumpeting an Iranian withdrawal from Syria, on the quieter diplomatic front, for the time being no one is rushing to prematurely declare victory. That’s particularly the case when the main battle – over extending the arms embargo against Iran – is just heating up now ahead of its scheduled expiration in October.

On Wednesday, U.S. State Secretary Mike Pompeo is expected in Israel to discuss Iran and other issues with Prime Minister Benjamin Netanyahu and Benny Gantz, who would replace Netanyahu under the terms of their coalition deal.

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Meanwhile, reports say that Iran used U.S. servers for a cyber-attack against Israeli water and sewage systems, and that concurrently Iranian hackers attacked a U.S. company developing a coronavirus drug.

Israel’s diplomatic efforts against Iran include not only a pressure campaign around the world and at international institutions against any easing of the sanctions, as a humanitarian gesture, but also a campaign to outlaw the Lebanese Shi’ite group Hezbollah, particularly its political wing, as well as attempts to curtail Tehran’s influence and capabilities inside Syria and Lebanon. That’s in addition to the ongoing effort against Iran’s violations of its international nuclear accord, senior Israeli diplomats have told Haaretz in recent weeks.

A funeral of a victim who died of coronavirus, at a cemetery in the outskirts of the city of Babol, in north of Iran, April 30, 2020Credit: AP /Ebrahim Noroozi

Iran’s coronavirus battle

The main message that Israel has been relaying through these channels is the need to maintain a policy of maximum pressure against Iran during the coronavirus crisis. And that if any humanitarian aid is provided to Iran, it is essential to ensure that it is really being used to deal with the pandemic.

As a result of its close ties with China, Iran was one of the first countries to be hard hit by the coronavirus. These links include air routes and trade ties that were not severed even as the major scope of the outbreak was becoming apparent. The number of deaths in Iran from the virus is among the world’s highest, with the official toll, as of Thursday, topping 6,400 out of more than 100,000 confirmed cases. Western intelligence agencies, including Israel’s Mossad, believe the real number is much higher, with the discrepancy due in part to flaws in the way the figures are tallied and in part to deliberate concealment.

The economic damage that Iran has sustained in the pandemic has also been considerable. The Iranian economy was already on shaky ground as a result of American sanctions and the plunge in world oil prices, but when the pandemic hit, even sectors that had managed to survive until then were severely affected.

The outbreak in Iran spread as the country marked the Persian New Year, Nauruz, and the general lockdown that was imposed during the holiday, as with the Passover lockdown in Israel, hurt many businesses.

Protesters hold placards as U.S. Secretary of State Mike Pompeo attends a House Foreign Affairs Committee hearing on Trump administration policies on Iran, on Capitol Hill, February 28, 2020. Credit: REUTERS/Carlos Barria

The bid for sanctions relief

Like many other countries’ economies, Iran’s was hurt by the border closings that were meant to head off the virus. But Israeli officials believe that Iran was also hurt because its secret smuggling channels to circumvent the sanctions were also impacted. Though the Iranian regime has announced an array of aid to its citizens, the jobless and bankruptcy case numbers in the country appear to be multiplying.

As a result, Iran has been pressing much harder for sanctions relief on humanitarian grounds. Israel describes the effort as “an aggressive diplomatic campaign” with a dual aim: freeing up trapped funds and obtaining international aid while undermining the legitimacy of the sanctions as a whole. As part of the effort, in recent months Iran has been working at the United Nations, particularly via Russia and China, to advance declarations and resolutions opposing the sanctions – so far, without much success due to American opposition. At the same time, in light of the pandemic, Iran is putting pressure on a number of countries to free up funds that have been frozen in these countries as a result of the sanctions.

But Israeli diplomats in these countries are conveying the message that Iran is exploiting the virus crisis to get the sanctions lifted. The diplomats argue that the funds should only be used, under supervision, for the purchase of humanitarian equipment. In one instance, Jerusalem kept a close eye on Iran’s attempts to free up frozen funds in Luxembourg. Efforts to block the transfer initially seemed to succeed, but the decision was subsequently overturned on appeal.

Iran has also sought help from a number of international financial institutions. It requested a $5 billion loan from the International Monetary Fund and $200 million from the World Bank. The United States blocked the request from the IMF and the loan from the World Bank will also be reduced to $50 million – to be used solely for the purchase of medical equipment and medicine.

Along with Israel, the Trump administration and Pompeo continue to spearhead a hawkish stance against Iran amid the pandemic, but the European Union has already approved 20 million euros ($21.6 million) in humanitarian aid to Iran and has carried out an initial payment via INSTEX, the European mechanism for circumventing the sanctions.

A protest against the role that U.S. sanctions plays on Iran and the exacerbation of the coronavirus outside of the Treasury Department in Washington, U.S., March 11, 2020. Credit: REUTERS/Carlos Barria

Netanyahu government vs. Biden

Meanwhile, more and more Democrats in the United States are calling on the administration to provide relief for Iranian citizens during this difficult period, and presumptive Democratic presidential nominee Joe Biden supports a return to the nuclear accord – a disagreement that again places the Netanyahu government in direct conflict with the Democratic Party and gives the government a clear interest in seeing Trump reelected. In the past, of course, Israel always sought to foster bipartisan support, which it considered a strategic asset.

In wake of domestic criticism in the United States, Pompeo has repeatedly said that his country does not oppose direct humanitarian aid to Iran, which is already permissible under the terms of the sanctions, but it does oppose the freeing of cash that would reduce the pressure on the regime. Iran has responded that it is not interested in American aid.

“Iran is certainly using the crisis to obtain sanctions relief, but the question is whether the sanctions are causing a humanitarian crisis,” said Dr. Raz Zimmt, a research fellow and Iran specialist at the Tel Aviv-based Institute for National Security Studies. “The answer to that is not straightforward. There is no question that Iran is having difficulty acquiring medical equipment – even though that is exempt from the sanctions – because banks and companies are making it difficult for [Iran] out of concern over entanglements with the Americans. There is also no question that the economic crisis, which is a direct result of the sanctions too, is contributing to the severe impact on the medical system in Iran. On the other hand, it is also correct to say that different Iranian conduct would enable them to overcome some of the problems, even with the sanctions in place.”

In addition to its efforts to block sanctions relief, Israel is also continuing its diplomatic campaign to thwart Iranian entrenchment in Syria and arms transfers. Israeli sources say this activity is still being conducted “at high intensity” during the pandemic. That’s at variance with statements by defense sources touting an Iranian withdrawal. The officials have also said that Israel has not observed any halt or slowdown or change in Iran’s determination to attain a nuclear capability. What Israel does believe has actually been suspended for now due to the pandemic is the European conflict resolution mechanism for preserving the accord with Iran.

Now eyes are mainly turned to the key diplomatic campaign that awaits in October. That is when the UN Security Council’s international arms embargo is due to be lifted, enabling Iran to purchase advanced conventional weapons from Russia and China.

The United States and Iran have already been exchanging threats on the subject, but the concern in Israel is that the global focus on the coronavirus will harm its ability to highlight the subject. And there is also concern that the Americans cannot be a party to restoring the embargo since they withdrew from the accord.

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