The U.S. Ratchets Up Sanctions On Iran And North Korea
NOEL KING, HOST:
The Trump administration has been talking about military action against Iran, but it is also taking economic action against companies doing business with Iran, using the U.S. financial system as leverage. Now international companies are scrambling to make sure they don't violate these new sanctions. NPR's Jackie Northam has the story.
JACKIE NORTHAM, BYLINE: If you drill down into some quarterly financial reports with the Securities and Exchange Commission, you'll come across documents filed by Amazon. It's a declaration that the company sold and or delivered books, clothes, jewelry, toys, even pet products, to Iranian embassies and consulates since 2012. Here's how detailed it gets. They mention one $20 delivery to someone who may have been working with the Iranian government. Amazon states it will stop selling to those accounts. Amazon is not the only company checking and rechecking if it's done business with Iran, North Korea or other countries on the U.S. sanctions list.
HDEEL ABDELHADY: In the last few years, sanctions have really gotten on the radar of entities, you know, including companies that may not have been aware that they need to comply.
NORTHAM: Hdeel Abdelhady is principal with MassPoint Legal and Strategy Advisory, which consults on sanctions compliance.
ABDELHADY: Basically the United States is saying, if you do business with parties that we have sanctioned, we will penalize you, as well.
NORTHAM: Daniel Wager, a global sanctions expert at the consulting firm LexisNexis Risk Solutions, says that penalty could include huge fines or losing access to the U.S. financial system.
DANIEL WAGER: No company or financial institution, or even most jurisdictions, they have no desire to be barred from the U.S. dollar clearing systems. So they avoid it very carefully.
NORTHAM: The penalties apply to both U.S. and international firms. Many companies are spending enormous amounts of money to ensure they're complying with the U.S. sanctions.
ELIZABETH ROSENBERG: There is a very healthy pipeline of Treasury officials being snapped up by foreign banks and companies to go help them observe U.S. sanctions law.
NORTHAM: That's Elizabeth Rosenberg, herself a former senior Treasury official, now at the Center for a New American Security. She says the U.S. is regarded as a stable, safe place for global entities to park their money, and the U.S. dollar is the most commonly used hard currency in the world.
ROSENBERG: The thing about the dollar in the global financial system is that it is preeminent. The majority of transactions, global wires, are done in the dollar.
NORTHAM: Rosenberg says those transactions run through about a half a dozen major banks in New York City, often where sanctions violations are spotted.
ROSENBERG: So you can imagine they're just doing trillions of these transactions at an extremely rapid pace. And they all have software set up so that they ideally will be able to see whenever there's someone on a sanctions list that is trying to do a payment.
NORTHAM: Wager, with LexisNexis Risk Solutions, says the U.S. will pursue both large and small sanctions violations.
WAGER: The U.S. has the investigative resources and intelligence resources to identify transactions of concern and then act aggressively.
NORTHAM: And there have been some big busts. Four years ago, the French bank BNP Paribas was fined about $9 billion for violating Iranian sanctions. But lawyer Abdelhady warns the U.S. could face a backlash.
ABDELHADY: There is a risk, in my view, that it can be abused, that the power can be diminished by overuse.
NORTHAM: Russia, China and the European Union have objected to the U.S. unilaterally imposing sanctions and are trying to develop their own payment systems. But so far, they haven't found a way around the U.S. dollar.
Jackie Northam, NPR News, Washington.
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