Despite the limited reach of the United States to directly affect some areas of the Iranian economy with sanctions, it does have room to add effective secondary sanctions.The United States, reacting to the shooting down of a U.S. unmanned aerial vehicle last week, launched two sanctions-related salvos against Iran on June 24. It layered sanctions on top of those already targeting commanders in Iran’s Islamic Revolutionary Guard Corps (IRGC), which are unlikely to have more than a limited effect on the Iranian economy. The second set of sanctions, targeting Iranian Supreme Leader Ayatollah Ali Khamenei and his appointees, could bite much deeper than typical sanctions issued by the United States by hampering Iran’s engagement with the world and damaging its economy.An Executive Order Lays the GroundworkAn executive order signed by U.S. President Donald Trump freezes all property subject to U.S. jurisdiction that is held by Iran’s supreme leader or the supreme leader’s office. In addition, the order allows the U.S. Treasury Department to similarly sanction any person or entity the supreme leader, or his office, appoints, such as a state official or the head of an entity such as a company leader. The order also extends that connection a step further, allowing sanctions to be placed on any appointment made by an appointee of the supreme leader, as well. It also threatens sanctions against anyone who provides support for people or entities sanctioned under those designations.
