Focusing on Livelihoods Can Lessen Sanctions’ Impact

TEHRAN (Iran News) Over the past decade, Iran’s economy has faced severe challenges from U.S. unilateral sanctions and maximum-pressure policies. More recently, Europe’s attempt to trigger the “snapback mechanism” despite opposition from China and Russia, and the expiration of UN Resolution 2231, have raised new questions about Iran’s economic future. However, the ratification of Iran’s membership in the Palermo and CFT conventions — related to the Financial Action Task Force (FATF) — has revived hopes among business leaders for improved international trade relations.

Speaking to IRNA, Hariri noted that Iran’s trade problems are primarily due to U.S. banking sanctions, not FATF restrictions. “We are under U.S. financial sanctions, which means we are shut out of the global banking system entirely. Banks that deal with Iran face heavy fines, so FATF compliance makes no difference while sanctions remain in place,” he said.

He explained that even during the 2015 nuclear deal (JCPOA), Iran struggled to use international banking channels. “Our problem is not FATF — it’s the sanctions. We are like a bird trapped in a cage. Even if we grow new wings, we still can’t fly out,” Hariri remarked.

Nevertheless, he said joining international conventions has two advantages: first, if sanctions are ever lifted, Iran can quickly reconnect with global banks; and second, it eliminates the excuse that FATF non-membership is to blame for the country’s economic challenges.

Despite restrictions, Hariri noted that Iran managed around $140–150 billion in trade in 2024, proving that “it’s possible to conduct significant business even under sanctions.”

Addressing concerns about the so-called “snapback mechanism,” Hariri said it has “nothing to do with normal trade.” The mechanism concerns reinstating UN sanctions related to Iran’s nuclear and missile programs, not regular commercial activity. “These political issues are often exaggerated. They have political implications but no major economic consequences,” he added.

Russia’s Foreign Ministry, he said, has already declared the mechanism ineffective and called for related UN sanctions to be removed from the organization’s website. “Those who amplify these fears, knowingly or not, fall into the trap set by sanctioning powers — spreading fear to magnify the impact of sanctions,” Hariri warned.

Hariri argued that Iran has learned to live under sanctions. “In 2010, when the harshest sanctions were imposed, our oil exports and non-oil trade actually hit record highs. Since 2017, when sanctions intensified again, we’ve learned to adapt. Last year we traded about $140 billion with the world,” he said.

He also noted that Iran is no longer alone in facing sanctions: “There’s now a global ‘club of sanctioned nations’ — countries with major natural resources that still manage to assert economic power.”

The real problem, he insisted, is domestic: “Mismanagement and factional disputes worsen the effects of sanctions. If our leaders prioritize people’s welfare and economic stability, sanctions’ impact will be much less severe.”

Hariri urged Iranian authorities to reduce dependence on the U.S.-led financial system and diversify trade partners beyond the current limited group — mainly China, the UAE, Iraq, Afghanistan, and Turkey. “The global banking system is dominated by the U.S. We should have freed ourselves from that influence long ago,” he said.

He also called for using China’s yuan in bilateral trade instead of the euro to cut transaction costs. “About 30% of Iran’s direct trade and another 15% indirect trade is with China, but much of it is still settled in euros. If we used the yuan, we could cut transaction costs by two to three percent — saving hundreds of millions of dollars annually,” Hariri said.

He blamed “sanctions profiteers” for resisting such changes: “Some benefit from currency conversions and deliberately maintain these costly arrangements.”

Hariri highlighted the difference between Iran’s relations with Russia and China. “Russia is our competitor in oil, gas, and metals — but China is our economic complement. Whether sanctions exist or not, Iran and China’s economies naturally fit together,” he stated.

China and Russia’s opposition to Europe’s attempt to reimpose UN sanctions, he said, shows continued political and economic alignment with Iran.

In conclusion, Hariri urged Iranian leaders to focus on fairness and economic justice. “After recent conflicts, we’re in a special economic situation. People will support the government when they feel their livelihoods are protected. Today, inequality and corruption are greater threats than sanctions,” he warned.

He criticized the rise of a “new rich class” flaunting wealth through luxury cars and extravagant lifestyles while ordinary citizens struggle. “If corruption and inequality are not addressed seriously, we will face much deeper crises,” Hariri cautioned.

“Sanctions hurt, but mismanagement and neglect of people’s livelihoods hurt even more,” he concluded.