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China and Iran Working to Evade Sanctions from the US

China and Iran Working to Evade Sanctions from the US

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By William Tucker
Columnist, In Homeland Security

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When international sanctions are levied against an individual, government or nation-state, there are enforcement mechanisms to go along with those sanctions. Unilateral sanctions, however, require cooperation from economic or security partners to ensure some form of compliance.

When the U.S. reapplied sanctions against Iran, it did so without international support, meaning that Washington had to provide the enforcement. The U.S. government can enforce its sanctions through nations or companies that do not comply with Washington’s wishes. There are other methods for securing support, but the punitive action of denying access to the U.S. market can be incentive enough for non-compliant nations or businesses.

China’s Need for Iranian Oil Is Problematic

In a recent New York Times article, Chinese oil tankers were described as skirting U.S. sanctions on Iran by “going dark” in the Strait of Hormuz and using the bare minimum communications required by international standards. For China, this is a tricky game because of its current trade war with the U.S. For example, several Chinese companies have been sanctioned by Washington for violating U.S. sanctions on Russia.

Additionally, the indictment of Huawei’s CFO for violating Iranian sanctions prior to the nuclear deal is another example. If China is caught red-handed buying Iranian crude oil, the U.S. could respond harshly.

The problem for China is that this nation has a profound need for imported crude oil. Losing Iran as a source will have immediate consequences. Iran uses its oil production to support regional allies and raise funds for its militant proxy groups in addition to domestic economic needs.

UK Becoming Involved in US-Iran Sanctions

One week ago, the United Kingdom seized an Iranian tanker heading to Syria.

Syria’s Assad regime is under EU sanctions, but it seems the U.K. acted upon a request from the U.S. Iran threatened to retaliate by seizing a U.K. vessel, which demonstrates the risks taken to enforce sanctions and suggests that economic sanctions may stray into military confrontation.

Iran has not yet acted on its threat, but its naval reach is limited. If Iran tried to seize a British vessel, then it would have to be in the Persian Gulf.

Trump Clearly Does Not Want Conflict with Iran, but Needs to Maintain Truce with China

The challenge for the Trump administration is avoiding a conflict with Iran while maintaining a truce with China in the trade war. The truce will be difficult, if not impossible, to maintain because no matter how much Xi Jinping and Donald Trump talk, the demands the U.S. has made of China are too much for the country to bear.

China’s violations of U.S. sanctions on Iran are just one strategy. Both China and Iran will use a variety of tactics to avoid U.S. sanctions and tariffs, but Washington will have to eventually close these gaps in enforcement if the U.S. wants these actions to influence a change in other countries’ behavior.

 

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