Sanctions Against Iran Hurt Persian Rug Importers

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New U.S. economic sanctions were imposed against Iran this month. Whether the sanctions will have the intended effect on Iran's government is uncertain. But they'll certainly cause hardship for some Iranian workers and those American companies that import Iranian goods.

RENEE MONTAGNE, host:

Tougher economic sanctions against Iran kicked in this month. Americans can no longer import big-ticket items like authentic Persian rugs.

The new sanctions are intended to send a message to Iran's government. But as Sergio Quintana reports from San Francisco, those sanctions will also affect small businesses, in Iran and in the U.S.

(Soundbite of door opening)

SERGIO QUINTANA: For the last nine years...

Mr. DODD RAISSNIA (Co-owner, Peace Industries): I'll show you some.

Ms. MELINA RAISSNIA (Co-owner, Peace Industries): Oh no. That's okay.

QUINTANA: ...Dodd and Melina Raissnia have been the purveyors of an old Persian tradition.

Ms. RAISSNIA: It's an ancient craft. Felt making is very primitive. It's very low tech. It dates back about 6,000 years to, you know, the Neolithic Age.

QUINTANA: Dozens of examples of their craft are sprawled throughout their small San Francisco shop, called Peace Industries. The Persians felt rugs are produced by 30 workers at a factory in Tehran that was set up by Melina and Dodd. He is originally from Iran. Customers have gladly paid nearly $3,000 for some of their larger pieces. It's been a comfortable business. They're part of a Persian import rug market worth up to $70 million a year. But now the new sanctions against Iran are threatening to shut down Peace Industries.

Ms. CATHY BAILEY: That's not the intent, but that's the reality.

QUINTANA: That's Cathy Bailey, one of the shop's customers. She was surprised to learn how international relations are affecting one of her favorite local shops.

Ms. BAILEY: I can understand other things that are more directly related, but really, how do the rugs, how is this going to help anything as far as the relations?

Professor STEPHEN ZUNES (University of San Francisco): With these strict sanctions in place, the regime is going to be able to say, hey, it's not our fault that the economy is in the tank, it's these hypocritical U.S.-led sanctions.

QUINTANA: Professor Stephen Zunes is the chair of Middle East Studies at the University of San Francisco. He says the expanded embargo will have minimal effect on the Iranian government, which didn't back down in the face of popular uprising in the streets last year, but it will be devastating for Iranian workers and will be difficult for U.S. importers.

Shop owner Dodd Raissnia recently traveled to Istanbul to explore the possibilities of setting up a new factory there.

Mr. RAISSNIA: We have to find a third country like Turkey or Georgia, or people suggested Iraq even, believe it or not.

QUINTANA: Setting up in Turkey means they may be able to stock their San Francisco shop with new pieces as early as December.

Mr. RAISSNIA: So far it looks good. I went and looked at some factory places for our workshop and it looks doable. And they actually, the whole country has got their act together. It's very easy to start a business here.

QUINTANA: But the change in location means Dodd and Melina Raissnia will have to sacrifice some of their product's pedigree. And more importantly, it jeopardizes the relationship with their workers in the Iranian factory, relationships they've been building for nearly a decade.

Ms. RAISSNIA: When families have a mutual interest and share in their prosperity, I do believe that that is the essence of peace-making. And to prevent that from happening seems counterproductive.

QUINTANA: To try and save some of those jobs, Melina and Dodd have considered setting up a store in Canada where these sanctions don't apply. But it's not clear to what extent the new sanctions could penalize U.S. citizens doing business with Iran in a third country.

For NPR News, I'm Sergio Quintana in San Francisco.

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