Companies have been abandoning Iran in light of the U.S. pulling out of the Joint Comprehensive Plan of Action (JCPOA) in May. With the threat of sanctions and the potential penalties, many companies are finding that it is not worth the risk, despite the efforts of European countries to keep the JCPOA alive.
AIG is the latest company to pull out of Iran. Although the company itself does not have a business relationship with the regime, one of their subsidiaries acquired in July did. Bermuda-based insurer Validus Holdings Ltd was acquired by AIG for $5.56 billion. As a result of AIG’s decision, Validus will be winding down its insurance coverage for shipping companies transporting cargo out of and into Iran. The company is abiding by the U.S. economic sanctions that went into effect on November 4.
The company provide insurance for oil cargo as well. The energy and banking industries were the target of the latest round of sanctions from the U.S. According to a filing from the company, AIG plans to exit from some of the reinsurance policies related to the regime. AIG had received a license from the U.S. Office of Foreign Assets Control when they acquired the company, thus giving them the opportunity to transition out of Iran-based business.
As Sanctions Mount, Companies and Countries Continue to Pull Out
Sanctions from the U.S. are targeting key areas of the Iranian economy, which are meant to bring the Iranian regime back to the negotiating table. Instead, the regime is defiant, even as the Iranian people continue to protest and demonstrate. Pressure continues to grow on SWIFT to cut off the regime, thus giving further weight to the sanctions and increasing their impact.
For the Iranian regime, the fact that the economy did not improve during the time that the sanctions were lifted means that there are hard questions about the mismanagement of the country by the Iranian government.
Companies and countries are finding that Iranian oil is not worth tangling with the U.S. At the same time, an unexpected result is also occurring, one that the regime is not powerful enough to stop.
Iranian Resistance Continues to Grow
The Iranian resistance has provided a focus for the Iranian people’s frustration, as they direct their anger into protests and the work of calling for change. Many Iranians are speaking out despite the repressive threats and violence from the regime and its security forces. As a result, the resistance is gaining ground as the regime is weakening.
Will the U.S. sanctions bring about regime change? While there is some question whether regime change is the real intention of the Trump administration, the fact remains that the Iranian resistance is taking advantage of the impact of the sanctions and trying to shape a new future for their country.