U.S. Imposes Sanctions Against Iran Financial Network

The U.S sanctioned a network of Iranian companies worth billions on Tuesday, including banks and funds accused of financing the country’s paramilitary apparatus. Washington’s move increases pressure on Tehran, sending a message to governments and companies still working with Iran to stop or face penalties.

The U.S.’s goal in targeting the Basij militia’s financing network, emphasizing the network’s use of child soldiers and other humans rights abuses in its announcement of the sanctions, is to undermine the financing of the prominent Islamic Revolutionary Guard corps unit and disincentivize the doing of business with the nation.

“The IRGC is pervasive within the Iranian economy,” a senior administration official said. “This is precisely the kind of activity that we have warned other companies and governments about extensively.”

Firms are leaving Iran as the U.S. increases sanctions meant ensure Tehran renegotiates a new nuclear and security deals that addresses Trump administration concerns, writes the Wall Street Journal.

Companies and governments in China and Europe may still trade with Tehran in order to have access to the country’s oil – effectively amounting to an opposition to Washington’s having left the 2015 Iran nuclear deal.

U.S. Treasury sanctions claim Basij’s ownership of banks and companies spans across the entire Iranian economy. These entities are subject to U.S. sanctions effective November 5 – the second phase in Washington’s new pressure campaign meant to cut Iran from financial and trade ties to the world.

Human-rights groups condemned the sanctions, which were announced on Tuesday. The European Union and other Western governments blacklisted the sanctions. Companies or banks could face U.S. penalties for preserving ties with Iran.

Alireza Miryousefi, spokesman for Iran’s mission to the United Nations, called the sanctions a “unilateral campaign of bellicosity against Iran.”

The Treasury says Mehr Eqtesad Bank is integral to the Basij network. U.S. officials claim it provides hundreds of millions of dollars to the militia’s foundation through dividends and interest-free credit lines.

Bank Mellat, which in part financed Iran’s nuclear program, sent similar amounts to Mehr Eqtesad Bank, claims the U.S..

“This vast network provides financial infrastructure to the Basij’s efforts to recruit, train and indoctrinate child soldiers who are coerced into combat under the IRGC’s direction,” U.S. Treasury Secretary Steven Mnuchin said. “The international community must understand that business entanglements with the [Basij] network and IRGC front companies have real world humanitarian consequences.”

A senior U.S. official added: “We’re going to make sure, whether it’s through SWIFT or through other means, that sanctions are enforced. If there are prohibited transactions, going through SWIFT or any other entity, we’re going to make sure we enforce those sanctions quite vigorously.”

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40% of Venezuelan Businesses Close After 3000% Minimum Wage Increase

Venezuelan workers who got a pittance are now getting a slightly higher pay, thanks to a 3000% increase in their minimum wage. What they may not have, though, are jobs.

Seven million employees are now guaranteed 1,800 bolivars per month, which is worth about $20 at the black-market rate, after a minimum wage hike. Venezuelan President Nicolas Maduro proposed the change to increase his popularity, but it’s having the opposite effect. Businesses, already hit by Venezuela’s financial collapse, tell employees they can’t afford to pay them.

“The government sector has the monopoly on imports, the currency market is dysfunctional and there’s hyperinflation,” said Economist Orlando Ochoa. “So, if salaries are increased by decree, and the commercial and industrial sectors cannot sell their products because of these problems, and on top of that because of electricity blackouts, infrastructure problems and the loss of qualified personnel, which is leaving the country, then it’s easy to understand that many may prefer to close.”

Even though there have been multiple comparable moves in the past, none has ever been so disruptive, arriving amid a depression, hyperinflation, and devaluation.

Some companies are restructuring expenses and arranging settlements with employees. Other businesses are just firing workers. Much of the development occurs secretively as employers attempt to evade backlash by the government, which has been detaining those it considers are breaking the rules.

“We have inspections, and they force us to sell at last month’s prices,” said María Carolina Uzcátegui, president the National Council of Commerce and Services of Venezuela. “That takes money away from the business because of the hyperinflation when you can’t even sell at yesterday’s prices because you lose money.”

She adds: “And anyone who protests against these measures runs the risk of going to jail, without the right to appeal, without the right to anything, simply because the official whose turn it was to inspect the store just felt like arresting you. He did it, and that’s all.”

Marcos Vizcaino, 56, a garage owner in Caracas, stated that the wage rise was the definitive setback for his family business of two generations. Vizcaino said the lack of spare parts and hyperinflation had already complicated matters and ended up bringing in less than one customer each day.

“I already told my four employees to go find other jobs,” he said. “I’ve decided to close. There’s no need for me to keep losing money for a third year in a row.”

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