Relations ‘On The Right Track’, Iranian FM Says In Saudi Arabia

"There is a heightened threat, a heightened risk to regional mariners in terms of seizures" by Iran in the strait, Commander Tim Hawkins, spokesman for the US Navy's Fifth Fleet said Wednesday.

A deal announced a week ago will see five US citizens held hostage in Iran to leave the country in exchange for the United States agreeing to release $6 billion dollars of Iranian funds frozen in South Korea due to sanctions.

The deal is said to be a first step to reduce tensions with Tehran, but the US Navy has been beefing up it forces in the Persian Gulf to prevent attacks by Iran’s Revolutionary Guard on commercial shipping, especially in the Strait of Hormuz.

"Right now, our focus is on … increasing our presence in and near the Strait of Hormuz to ensure security and stability in a very critical waterway," Hawkins told AFP at the US Naval base in Bahrain. This casts a shadow of doubt on the theory that tensions with Iran would ebb by a prisoner release in return for its frozen assets.

This is the second warning issued by the US Navy in less than a week, when a naval coalition in the region led by the United States warned ships to stay away from Iranian territorial waters.

"The International Maritime Security Construct is notifying regional mariners of appropriate precautions to minimize the risk of seizure based on current regional tensions, which we seek to de-escalate," Commander Timothy Hawkins, spokesman for the Bahrain-based US Fifth Fleet, said late on Saturday. The US Navy has deployed squadrons of F-16 and F-18 warplanes, more warships, and Marines to its forces in the region since early July, a sign of serious concern over Iran’s intentions.

However, multiple media reports indicate that the deal to release $6 billion from South Korea for the US hostages might be the prelude to more informal agreements between Tehran and Washington. In fact, the US has also agreed to Iraq releasing around $11 billion of Iranian funds frozen at its banks, and Japan appears to be the next country to release $3 billion.

The Biden administration on a track of secret talks to convince Tehran to perhaps put a temporary cap on its uranium enrichment, denies any informal deals.

The State Department without denying secret talks said, “we are not close to any kind of deal. We do not have any kind of agreement.” A spokesperson asked during a press briefing to categorically deny that there is an unwritten or informal understanding with Iran said, “Iran must first de-escalate to create any kind of space for future diplomacy. But at this time, we have – do not have any kind of agreement on any purported nuclear agenda.”

However, The Wall Street Journal reported August 11 that “Iran has significantly slowed the pace at which it is accumulating near-weapons-grade enriched uranium and has diluted some of its stockpile.” Also, if there were no secret deals beyond the release of hostages, the US would have hardly agreed to the release of $11 billion from Iraq and possibly more from Japan. Without a larger deal, the total amount would mean that the Biden administration paid more than $3 billion for each hostage, a historic ransom.

Whether Washington reached only a hostage deal with Tehran or a wider informal nuclear agreement, it knows that none of these means Theran has deescalated. Hence the warnings to commercial ships traversing the Persian Gulf.

This is the first time the two nations' military representatives have met since Riyadh and Tehran agreed to resume diplomatic relations.

According to an official announcement from the Ministry of Defense of Saudi Arabia, Talal bin Abdullah Al-Otaibi, the Deputy Minister of Defense, engaged in a productive discussion with Aziz Nasirzadeh, the Deputy Chief of Staff for the Armed Forces of Iran. This dialogue took place during the 11th Moscow International Security Conference, organized under the patronage of the Russian Ministry of Defense.

The IRNA state news agency reported that the primary focus of the meeting was to underscore the commitment of both nations to the China-brokered agreement that restored diplomatic relations between Iran and Saudi Arabia in March.

One of the significant outcomes of this meeting was the mutual decision to facilitate the expedited exchange of military affiliates between the two countries, added IRNA.

This thawing of relations comes against the backdrop of years of severed ties between Tehran and Riyadh, originating from the organized attack on Saudi Arabia's diplomatic installations in Tehran and Mashhad in 2016. Tensions escalated in the proceeding years, with notable incidents including the Houthi-led assault on Saudi oil facilities in September 2019. While Saudi Arabia attributed the attack and related maritime incidents to the Islamic Republic, Tehran consistently refuted these allegations.

In June, Saudi Arabian Foreign Minister Prince Faisal bin Farhan met with Iranian officials in Tehran on his first visit to the country after the resumption of diplomatic ties with the Islamic Republic in March.

The two countries had no diplomatic relations for seven years from January 2016 when government-backed Iranian mobs attacked and ransacked Saudi missions after Riyadh executed a pro-Iran Shiite cleric. Saudi Arabia cut diplomatic ties after the incidents.

In March, Iran and Saudi Arabia agreed in a China-brokered deal to end the diplomatic rift and reestablish relations following years of hostility that had endangered regional stability in the Persian Gulf, as well as in Yemen, Syria and Lebanon.

The official government news agency IRNA reported that Iran’s first ambassador in more than seven years accompanies the foreign minister. Earlier this week Amir-Abdollahian announced that the Saudi ambassador will soon arrive in Tehran and the two embassies are already staffed.

The United States has been engaged in an effort to normalize ties between Saudi Arabia and Israel to expand the Abraham Accords launched under the Trump administration in 2020, when the United Arab Emirates and Bahrain, close Saudi allies, established ties with Israel.

The health ministry’s food and drug administration website announced last week that it will no longer issue permits for production or imports of pregnancy associated plasma protein-A (PAPP-A) and free beta human chorionic gonadotropin (Beta-hCG) test kits. 

Media have also reported that the ministry has been refusing to allow production or importation of enzyme linked immunosorbent assay (ELISA) tests. 

These tests usually carried out during the first trimester of pregnancies are used to identify and assess the risk of various congenital conditions such as Down Syndrome and fetal aneuploidy (chromosomal anomalies) such as trisomy. 

When asked about the discontinuation of the production and imports of these kits on Monday, the ministry spokesman, Pedram Pak-Ayeen, claimed that there was no ban and fetal screening has only been “standardized”.

The spokesman’s denial of the ban does not seem to be convincing to many including genetics experts and women’s rights activists who say denying them to women to preclude possibility of abortion is interfering in people’s personal decisions and violates women’s right to their bodies. 

Calling the ministry’s decision “shocking”, Dr Mohammad-Amin Tabatabei, a member of the board of directors of the Iranian Genetics Society, said Monday that Iranians will be facing a greater risk of babies born with congenital and genetic anomalies due to the ban.

Tabatabaei stressed that the ministry has not consulted the genetics society and that the society will officially protest to the decision soon and demand a re-evaluation and warned that the ban could result in illegal imports of “notoriously expensive kits of uncertain standards.” 

“Until now we had underground abortions, now we are going to have underground screening too,” a medical professional, Dr Mohammad Mir-Mohammadkhan, said in a post on X (former Twitter) Sunday. 

Abortions have always been illegal in Iran, but termination was allowed during the first 18 weeks of pregnancy if the fetus was diagnosed with genetic disorders or carrying the fetus to term threatened the mother’s health or life. 

On April 17, Soleiman Haydari, an official of the health ministry, told the Iranian Students News Agency (ISNA) that annually as many as 10,000 abortions were legally carried out.

In the past ten years the Iranian healthcare system has hugely limited screening tests and legal abortions and completely stopped its decades-old family planning programs. 

Iran’s primary healthcare program had introduced several screening tests In 1991 that were routinely carried out as part of the existing mandatory premarital blood tests to prevent and control non-communicable diseases which have now been abandoned. 

The government has also banned the sale of contraceptives and taken tough action against doctors and midwives who assisted terminations outside the healthcare system and shut down their clinics. 

In July 2022 the health ministry announced that it had established a portal for medical professionals to register all pregnancies as a preventative measure against illegal abortions.

Iran's Supreme Leader Ali Khamenei believes efforts to increase the country's population are among the most urgent duties and essential policies of the Islamic Republic as the leading Shia country in the Muslim world and has repeatedly demanded that the population increase to 150 million. 

The childbirth rate in Iran has been steadily declining over the past few decades. In the early 1980s, the population growth rate reached 4.8 percent. This rate has dropped to below one percent in the past decade. 

Iran's population has doubled from around 40 million in the early 1980s to 84 million, but a declining birth rate means the median age at 32 is about the same as Saudi Arabia at 31.8, but higher than Iraq at 21. 

"It is really a battle, because the people benefiting from this situation and those harmed (by the new measures) will try in various ways to continue their illegal activities," Allaq told Reuters, referring to implementing US dollar supply restrictions on Iraq to prevent smuggling of banknotes to Iran.

Allaq did not mention Iran by name and said he did not have data on how much of Iraq's dollars has been smuggled to Iran or other neighboring countries, including Turkey and Syria, before the United States tightened regulations in November.

Muhammad Nuri Aziz, a member of the Iraqi parliament, said on a television show last week that Iraqi Prime Minister Mohammed Shia al-Sudani and the country’s central bank are aware of the schemes Iran uses to get hold of US dollars it desperately needs amid US sanctions. The lawmaker noted that the smuggling started during Mustafa Al-Kadhimi's term as prime minister and still continues. Without providing any context or details, the Iraqi lawmaker alleged that Iran prints Iraqi dinars in Argentina, exchanges the money to US dollars in Iraq, from where it is smuggled to Iran by trucks.

Reuters’ Timour Azhari said in a report, “Iraq's government is reliant on Washington's continued goodwill to ensure oil revenues and finances do not face US censure, but it came to power with the support of powerful, Tehran-backed groups and so cannot afford to alienate Iran. The latter groups have accused the US of meddling in Iraq's internal affairs and creating a currency crisis, as businesses either struggling or unwilling to abide by the new measures sourced dollars from exchange shops, driving down the value of the Iraqi dinar.”

Iraq has more than $100 billion dollars in reserves, Allaq said, but could not freely intervene in the market to bring the rate down due to the restrictions.

Late in July, 14 Iraqi private banks sanctioned by Washington as part of a wider crackdown over helping to siphon US dollars to Iran said they were ready to challenge the measures and face audits and called on Iraqi authorities to provide assistance. The credibility of the Iraqi banking system has been tarnished due to the Islamic Republic's influence, and US financial restrictions have tightened on Baghdad because evidently all Iraqi banks have had interactions with the Islamic Republic.

The US barred the Iraqi banks from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran. The latest sanctions, along with earlier ones, have left nearly a third of Iraq's 72 banks blacklisted, two Iraqi central bank officials said. The dinar has been falling against the dollar since the New York Federal Reserve imposed tighter controls on international dollar transactions by commercial Iraqi banks in November to halt the illegal siphoning of dollars to Iran.

Allaq said that action related to transfers from 2022, before a new platform that aimed to improve transparency went live. He said the central bank was undertaking a review of the banking sector and introducing new regulations that he said would likely see some banks close.

"It would be very normal in the coming period to see a reduction in the (number of private banks)," he said. "There are always side-effects, but at the same time we have a responsibility to protect the country's interests by trying to find the necessary means for monitoring and oversight so as not to expose the country to any issues on this front," he said.

'TRANSFORMATION'

The US measures have targeted Iraq's so-called dollar auction, where the central bank requests dollars from the US Federal Reserve before selling them to commercial banks, which in turn sell the funds to businesses in the highly import-dependent economy.

US and Iraqi officials have said the auction allowed large sums of money to be illegitimately acquired by groups who would provide fake invoices and then either transfer or physically smuggle the funds to neighboring countries, chiefly Iran.

A feature of a highly informal economy, the system was also used by thousands of small businesses that are not registered with the state, Allaq said, a widespread phenomenon in Iraq that allows them to dodge taxes and customs fees.

Since January the central bank has asked banks to provide detailed information on senders and recipients of transfers via an online platform.

When companies began trying to use the platform in January, less than 20% of requests were approved by US authorities, Allaq said. That number had now risen to around 85 percent, signaling growing ease with the new regulations, he said.

"It is not just an electronic platform, it will lead to a total reorganization of trade and the movement of money, and control on a lot of avenues for suspicious activity."

(With Reporting by Reuters)