Under Secretary for Terrorism and Financial Intelligence David S. Cohen was interviewed on Sunday by Bloomberg's Peter Cook on Capitol Gains about the effects of Treasury’s stifling financial sanctions on Iran. He emphasized sanctions as an innovative tool of financial pressure – the purposes of which are to compel Iran's leadership to change its calculus about its nuclear program.
Under Secretary Cohen discussed the stark reality that Iran’s economy is under great pressure from a combination of the Iranian government’s gross mismanagement of its economy and the impact of these internationally coordinated actions. One measure of this impact can be seen in the dramatic decline in the value of the Iran’s currency, the rial:
“The value of the rial has declined in the last several weeks by about 40 percent and over the course of the year it has declined about 80 percent. This is due to a variety of measures that we have implemented to put pressure on Iran's access to the financial sector, and to put pressure on Iran's ability to sell its oil. And so that is why we're seeing the manifestation of that today in Iran's economy.”
Bloomberg's Peter Cook asked what difference the sanctions in place today have with those in the past, and what the increased impact should be attributed to. Under Secretary Cohen said:
“A couple of things have changed, one is that we have taken direct aim at Iran's most significant source of revenue, which is its oil sales… Their sale of oil is down by at least a third over the course of this year and so the oil revenue that Iran earns is very significant for their budget, very significant for their economy. By restricting their ability to sell oil, that puts an impact on their economy. But what has multiplied that impact has been the financial sanctions. We have worked for a number of years now, ourselves and with our partners around the world, to put in place a very strict set of rules about Iran's access to the international financial system. And what that has meant in the last year is that the oil revenue Iran has been earning, which has been decreasing, it has had less ability to have access to that revenue.”
Under Secretary Cohen reiterated the dual-track strategy of the Obama administration in convincing Iran to address concerns with its nuclear program, making clear that Iran's leadership has a choice between engagement with the international community or facing intensified financial sanctions and pressure.
To watch the full interview on Bloomberg.com visit here.