The United States Tuesday imposed punitive measures on two Syrian money services it said help the government maintain access to the international financial system in violation of sanctions.
This was Washington's first action targeting Syria since its readmittance to the Arab League.
The US Treasury Department in a statement accused the two money service businesses, Al-Fadel Exchange and Al-Adham Exchange Company, of helping President Bashar al-Assad's government and its allies, Hezbollah and Iran's Quds Force, an arm of its Revolutionary Guards (IRGC).
The sanctions, imposed under the Caesar Act that also levied a tough round of sanctions on Syria in 2020, come after Arab states earlier this month turned the page on years of confrontation with Assad and readmitted Syria to the Arab League, a milestone in his regional rehabilitation even as the West continues to shun him after years of civil war.
The move came as what seemed to be policy change by Saudi Arabia as it restored diplomatic ties with Iran in March after seven years tensions.
Regional countries - including Saudi Arabia, Qatar and others - had for years supported anti-Assad rebels, but Syria's army - backed by Iran, Russia and allied paramilitary groups - regained most of the country. The icy ties with Assad began to thaw more quickly after devastating earthquakes in Syria and Turkey in February.
The United States has said it will not normalize ties with Assad and has said Syria did not merit readmission into the Arab League.
With reporting by Reuters
“The government of Azerbaijan has misunderstood the self-restraint and good-neighborliness policies of the Islamic Republic of Iran as its weakness and inferred out country’s determination to avoid conflict with itself,” the report released by MEK-affiliated Telegram account GhyamSarnegouni (Uprising till Overthrow) Monday says.
The group released a trove of secret and top-secret document on Monday that it said were obtained by hacking the government’s servers.
Describing Baku’s actions as “serious threats,” the report provides a summary of recent developments in bilateral relations and a summary of Azerbaijan’s relations with other regional players, Turkey and Israel, in the context of its relations with the Islamic Republic of Iran and says failing to redefine relations will lead to “increased hostility” from Azerbaijan.
“Undoubtedly, the Zionist regime will be the principal beneficiary of heightened tensions between the two sides,” the report says.
The report, which MEK claims was among thousands of other documents it acquired, was apparently made by the foreign intelligence and security department of the ministry. The undated report, possibly a draft, is marked as “very confidential” but does not bear a reference number or signature.
An official of the presidential office, Mohammad-Mehdi Rahimi, claimed Monday afternoon that the presidency website had only temporarily been deactivated to carry out site security maintenance for a new version launched last week.
Tensions have been high between Iran and Azerbaijan since November 2022 when both sides accused each other of engaging in terrorism and espionage in the other’s territory.
Iran has suggested Azerbaijani involvement in the October 26 attack in Shiraz claimed by the Islamic State group (Isis-Daesh) and, also in the report accuses Baku of harboring Israeli intelligence and military elements that plan to use its territory in a possible attack against Iran’s nuclear facilities.
The two countries in early May expelled each other’s diplomats after incidents that Baku also dubbed as "terrorist attacks". These included a gunman’s attack on Azerbaijani diplomatic mission in Tehran in January after which Baku shut down the embassy and an attack on Azerbaijani lawmaker Fazil Mustafa in March, who is an outspoken critic of the Islamic Republic.
Ethnic and religious issues complicate relations between Tehran and Baku and both parties have been using these factors against each other.
Around a quarter of Iran’s population is Turki-speaking Azari, with analysts and activists disagreeing over the closeness of their cultural-linguistic links to their neighbors to the north. Iran fears separatism in its northwestern regions encouraged by Azerbaijan.
On the other hand, Azerbaijan has a large Shiite population that is susceptible to agitation by the Islamic Republic, which considers itself the leader of the Shiite world. Supreme Leader Ali Khamenei is often referred to as the "leader of world Muslims".
The Albania-based opposition group claimed it had breached 120 servers of the presidential office and accessed internal communications and minutes of meetings as well as President Ebrahim Raisi’s online conference platforms and about 1,300 computers inside the office.
Hackers posted images of MEK leaders, Maryam Rajavi and her husband Masoud who has not been seen in public since 2003, and defaced pictures of Supreme Leader Ali Khamenei and President Ebrahim Raisi on the compromised websites.
Without any details, some Iranian news websites reported -- a few hours after the MEK’s announcement Monday that they had hacked the website of the presidency – that the website could not be reached.
In early May the group released hundreds of identification documents, minutes of meetings, copies of correspondence, phone numbers of foreign ministry officials, and the names of 11,000 employees.
In a May 25 article entitled “Revolutionary Government Breaks 81-Year Inflation Record in Iran”, Aftab News, a website close to former President Hassan Rouhani listed the annual inflation rate over the years for comparison, pointing out that in 1990, a year after the end of the eight-year Iran-Iraq War, inflation was only 9 percent, in 1996 it had risen to around 23 percent, in 2006 it was less than 12 percent while in 2015 it was slightly over 11 percent.
Official figures released by the CBI indicate that prices in the food group rose by 79 percent between April 20, 2022, and April 20, 2023.
The CBI and the Statistics Center of Iran have only published partial figures on inflation and other economic indicators over the past two years, with many doubting the veracity of the official numbers.
Economist Mohsen Ghobadlou told Aftab News that many people believe prices of items in the food basket have increased by over 100 percent.
Ghobadlou also said to reduce inflation the government needs to take “real” measures including resolving the issue of sanctions and Iran's accession to the international watchdog, the Financial Action Task Force (FATF), reducing its own expenditures, and reducing liquidity, rather than “making promises and hackneyed slogans”.
Iran has been on the FATF blacklist, along with North Korea, since February 2020 for failing to pass legislation introducing transparency measures designed to combat money-laundering, corruption, and financing of ‘terrorism.’ FATF members – who host most of the world’s financial centers – are required to undertake enhanced diligence and countermeasures against blacklisted states.
Economist Mehdi Pazouki told Aftab News, a website close to former President Hassan Rouhani, that the government and parliament have estimated astronomical revenues from oil exports, which could only be realized if oil prices reach $300pb.
“Naturally failure to realize such revenues means a budget deficit,” he said, which in turn will force the central bank to print money. Printing money causes liquidity growth and higher inflation and eventually a drop in purchasing power of the people, he added.
Rahim Mombeini, deputy head of Iran’s Planning and Budget Organization, said Saturday that Iran’s budget deficit for the previous Iranian year –which ended on March 20 – was about 8,000 trillion rials (about $16 billion in today’s exchange rates), or over 30 percent of the operating budget.
A report published by the Parliament’s research center on May 23 said that currently over one-third of Iranians live under the official poverty line and that anything such as a rise in rents or costs of treatment for an illness could quickly push many among the middle class down to below the poverty line. According to the same report, the rate of poverty rose from 19.4 percent in 2011 to over 34.4 percent in 2021 and 11 million Iranians dropped below the poverty line during this period.
“The middle class, particularly the cultural middle class, is the driving force of cultural, social, and political change but in these circumstances, the middle class will shrink considerably while the lower classes will become more dependent on government aid to survive and may even be driven to rioting,” an Iranian political analyst who requested anonymity told Iran International.
“People’s priorities in spending will also drastically change with the drop in their purchasing power and become limited to bare necessities such as food and housing which they will no longer afford to buy due to lack of savings,” he added.
