Prelims: Current events of national and international importance| International relations
Why in News?
United States has launched “Operation Economic Outcast” against Iran to intensify economic pressure on Tehran.
About
It is a US economic pressure campaign aimed at isolating Iran from the global economy.
It targets not only Iranian entities but also foreign companies, banks and countries that continue to facilitate Iran-related transactions.
Aim – To weaken the financial networks supporting the Iranian government and Islamic Revolutionary Guard Corps (IRGC).
Features
Secondary sanctions – Foreign banks and companies can face US penalties if they facilitate prohibited transactions involving Iran.
This gives the US influence over entities that may not directly fall under US jurisdiction.
Targeted sectors – 5 major areas
Digital assets and cryptocurrency
Technology and dual-use goods
Gold
Aviation
Shipping
Shipping and oil networks – Iran has used complex ownership structures, intermediaries and ship-to-ship transfers to continue oil trade despite sanctions.
The US is targeting these networks to reduce Iran's oil revenues.
Technology procurement – Iranian networks are accused of procuring dual-use technologies that can support nuclear research and missile development.
Dollar-based leverage – The US has warned that entities facilitating financial transactions for Iran could be excluded from the US dollar financial system.
Since the dollar plays a major role in international trade, such exclusion can seriously affect banks and businesses.
China as a challenge–
China is a major buyer of Iranian oil, making it crucial to the success of the US strategy.
Strong sanctions against Chinese entities could create a wider US-China economic confrontation.
China has opposed the use of unilateral sanctions and favours diplomatic solutions.
US objective– To force Iran to choose between greater economic isolation, or Reintegration into the global economy after meeting US demands.
