Banking Sanctions take Center Stage

To grasp the impact of lingering fears about engaging with Iranian banks and businesses, one must consider the motivations for Iran’s strategic decision to negotiate over its nuclear program. Moreover, one must grasp the nature of decision-making in the Islamic Republic.

The economic pain of the sanctions did not decisively bring Iran to the table. Rather, what contributed to changing calculations was concern over who Iranians may blame for the pain. Iran is no exception to the rule that all politics is local.

Thus, a key motive for the Islamic Republic’s decision to seriously engage with the six world powers was to prove to Iranians that it has reasonably and in good faith sought a resolution to the nuclear issue. Khamenei’s aim was to show Iranians that their leadership has left no stone unturned in pursuing their interests. The centrality of avoiding blame extends to the very heart of Iran’s complex decision-making.

While Khamenei has final say on key national security and foreign policy issues, there are many decision shapers. The supreme leader’s ultimate role is to act as the check in a state void of institutions strong enough to provide systemic balance. Thus, while having final say on important matters of state, the supreme leader often also acts as a bellwether of the political climate.

Though complex and cumbersome, Iranian decision-making has certain benefits — at least for the political leadership. One member of the Supreme National Security Council, the highest decision-making body in Iran, told Al-Monitor in late 2014, amid the nuclear negotiations, “Once a decision is made, it is very strong … if anything goes wrong, there is no one person to blame.

The [political] system will say, ‘OK, we did our best, but … everybody was involved, [and] it seems we took the wrong decision.’ Otherwise, this blame game will cripple the country.” It is against this backdrop that one must view Khamenei’s specific and repeated reference to the continued troubles of Iranian banks in his Nowruz speech.

To be fair, Khamenei’s anti-American discourse, which centers on words like “treachery” and “animosity,” has been amplified by a series of bad experiences stretching over the terms of four Iranian presidents. In the 1990s, then-President Ali Akbar Hashemi Rafsanjani’s outreach to US oil firms was met with Congress’ passage of the Iran and Libya Sanctions Act, the foundation for subsequent secondary US sanctions targeting the Iranian energy sector.

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