Why Sanctions Won’t Hurt the Revolutionary Guards
Smugglers for the State
Sanctions can’t touch the Revolutionary Guards’ black-market empire.
The grizzled Iranian skipper strides barefoot along his wooden ship’s bulwarks, taking inventory of his cargo. There are crates of blankets and canned pineapple slices, Chinese tires, even a stack of water-purification machines waiting to be loaded, all bound for the Iranian port of Bandar Genaveh, roughly 500 miles away near the north end of the Gulf. His dhow is hauling other goods, too, but they’re best kept out of sight, whether they’re taxed or forbidden under Iranian law or banned under U.N. sanctions. The skipper doesn’t worry either way. “We can take almost anything to Iran,” he says with a grin. Cell phones and other electronics are his most profitable contraband these days, he adds. What happens if the Revolutionary Guards catch him? “They charge a ‘fee,’ ” he says—about $3,000 or $4,000—but they won’t confiscate his goods. They just want their cut.
He’s hardly an isolated case: dozens of wooden ships like his are bobbing in Dubai Creek’s waters, just across the Gulf from Iran. Thanks to the dwindling traffic of big container ships from Dubai to the Islamic Republic, business is booming for the Iranian skipper and a whole fleet of smugglers like him—as well as for the group that dominates Iran’s black market: the Islamic Revolutionary Guard Corps. The latest U.N. sanctions were designed to punish the Revolutionary Guards for running Tehran’s covert nuclear program. But the trouble with sanctions is that they squeeze out legitimate businesses and leave the field wide open for the IRGC, which has spent decades mastering the art of sanctions-busting. “You’re using pinpoint sanctions against the very entity that’s best positioned to evade those sanctions,” says Matthew Levitt, a counterterrorism expert at the Washington Institute for Near East Policy. An Iranian businessman in Dubai, asking not to be named because of the subject’s sensitivity, puts it succinctly: “You’re enriching the people the sanctions are trying to target.”
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