Patients in Iran are dying of treatable diseases because of
shortages in life-saving medicines.
Posted March 19, 2013
Blocking Medicine to Iran:
By SIAMAK NAMAZI
- The New
York Times: Patients in Iran are dying of treatable diseases
because of shortages in life-saving medicines. The past year has
been nothing short of catastrophic for the Iranian health-care
sector: Imports from American and European drug makers in 2012
were down by an estimated 30 percent since 2011, and they
continue to fall.
Over the past three months, I led a group of independent
business consultants with expertise in Iran to evaluate the
problem. After conducting extensive interviews in Tehran and
Dubai with Iranian importers and manufacturers of
pharmaceuticals and medical equipment and their Western
counterparts, we concluded that even though in theory the
sanctions regime imposed on Iran by the United States and the
European Union is supposed to allow humanitarian trade, in
reality it impairs the delivery of drugs and medical equipment
Although the Iranian government deserves firm criticism for
incompetence in handling the crisis, poor allocation of scarce
foreign currency resources and failing to crack down on corrupt
practices, the main culprit are the U.S. and European sanctions
that regulate financial transactions with Iran.
The system is irrational: There is a blanket waiver to the
sanctions to facilitate humanitarian trade, but other laws
restricting financial transactions with Iran make it impossible
to implement that exception. So the trade of medical supplies is
legal in theory and virtually impossible in practice because
Iran cannot pay for the Western medicine it needs.
One problem is that when sanctions were tightened in 2012,
Iranís ability to sell oil was further limited and its main
source of hard currency restricted. Another problem is that
Iranís main banking infrastructure ó including the Central Bank
of Iran and Bank Tejarat, Iranís main trading bank ó is
blacklisted by Washington.
Sanctions have also choked-off Iranian banks from the global
financial arena by putting draconian restrictions on
international banks that deal with Iran, including by cutting
them off from the Society for Worldwide Interbank Financial
Telecommunication. Penalties for violating U.S. sanctions are so
stern as to discourage most international banks, which are
generally risk-averse anyway, from engaging in humanitarian
A senior representative from a reputable Iranian pharmaceutical
company told our study group that when he presented a French
bank in Paris with documentation showing that a deal to ship
vaccines to Iran was fully legal, he was told, ďEven if you
bring a letter from the French president himself saying it is
O.K. to do so, we will not risk this.Ē Today, only one
international bank ó in Turkey ó is willing to take the chance.
In simple terms, even when Iran can get its hands on dollars or
euros to buy medical supplies, it cannot find a banking avenue
to clear the trade. A senior representative at one American
pharmaceutical company told me about a $60 million order for an
anti-rejection drug for liver-transplant patients that fell
through even though the sale was fully legal, all the needed
licensing from the U.S. Treasury was in place, and Iran had
allocated the needed hard currency. No bank would perform the
To compensate, Iran has been importing more drugs, or the active
ingredients for them, from China and India. But these products
are usually of inferior quality and more limited effectiveness
than the equivalent from American and European manufacturers.
And in the highly patented world of pharmaceuticals,
substitution often isnít an option at all, particularly when it
comes to advanced medicines used to treat complex diseases like
cancer and multiple sclerosis.
There are solutions. With fewer than 100 American and European
companies holding patents to the most advanced medicines needed,
it should be possible to craft narrow exemptions authorizing
Iranian and international banks to do business with those
companies for the exclusive purpose of providing medication to
Iranian patients without undermining the sanctions regime
This would mean carving out special exceptions for at least some
of the 20 or so Iranian banks that the U.S. government currently
blacklists wholesale, at least for the narrow purpose of
purchasing medical drugs and supplies.
Washington must also reassure international financial
institutions by clarifying existing regulations and stating
unambiguously that no sanctions will be imposed on international
banks that facilitate licensed or exempted humanitarian trade
Another solution would be to narrowly adjust the terms of the
exemptions allowing foreign countries and companies to purchase
Iranian crude oil.
Despite existing restrictions, Iran currently sells around one
million barrels of oil annually. But the terms of these special
sales translate into a complex bartering system that ultimately
leaves Tehran short of U.S. dollars and euros. For example,
Iranís oil sales to China are bought in renminbi, which it must
keep in Chinese banks and can only use to pay Chinese companies
for imports into Iran.
Iran should be allowed to convert some of its current holdings
in Chinese, Indian and other banks around the world into hard
currencies for the exclusive purpose of buying medical supplies.
European states could also be authorized to buy small quantities
of Iranian oil and hold the funds in escrow for Iran to use
solely to that end.
The West must relax and rationalize the terms of its sanctions
regime against Iran to allow more medical goods into the
country. If it doesnít, more Iranian men, women and children
will suffer needlessly.
Siamak Namazi is a Dubai-based business consultant and a former
Public Policy Fellow at the Woodrow Wilson Center for
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