Iran says US sanctions preventing purchases of Covid-19 vaccines

So far, more than a million Iranians have contracted Covid-19 and more than 50,000 have died. PHOTO: AFP

TEHERAN (BLOOMBERG) - Iran's attempts to procure vaccines to curb the worst outbreak of coronavirus in the Middle East are being hampered by US sanctions, officials in Teheran said, as it's unable to utilise a payment system intended to ensure fair global access to the shots.

Iran had hoped to deploy funds worth billions of dollars locked up in South Korean won-denominated accounts to help buy vaccines under an agreement reached with Seoul months ago.

However on Monday (Dec 7), central bank Governor Abdolnaser Hemmati said US banking sanctions were effectively preventing Teheran from using the Covax facility that's jointly managed by Geneva-based Gavi, the Vaccine Alliance, and the World Health Organisation. Banks were unwilling to process transactions and convert the won into dollars, he said on Instagram.

In a statement, a spokesperson for Gavi said there was no "legal barrier" to Iran procuring vaccines through Covax as the US Treasury's Office on Foreign Assets Control (Ofac) had issued a license covering coronavirus vaccine procurement.

But an Iranian government official said the Ofac license had little effect. The money would have to be cleared through a US bank in order to be converted into dollars and then into euros before being transferred to Covax, said the official, who asked not to be named because they are not authorised to speak on the matter.

South Korea has told Iran that it can't provide an assurance the money won't be seized or blocked when it's transferred to a US bank, the official said.

Gavi didn't respond to an email requesting further details or an interview about Iran's access to the facility. US sanctions are meant to exclude purchases of food and medicines.

So far, more than a million Iranians have contracted Covid-19 and more than 50,000 have died. Officials say the numbers significantly underestimate the true scale of the outbreak.

The Trump administration reimposed sweeping economic sanctions on Iran from 2018 as it sought to force the country into a tougher agreement on its nuclear programme and downgrade its presence in the Middle East.

President-elect Joe Biden has vowed to re-engage with the Islamic Republic, triggering optimism in Teheran that sanctions could be removed.

Iran is preparing to start human trials of its own vaccine, which has been renamed after a top nuclear scientist, Dr Mohsen Fakhrizadeh, assassinated late last month, but at the earliest it will only be available next summer.

Earlier Tuesday, the semi-official Mehr news agency removed a report from its website that said Iran's Health Ministry was in talks with AstraZeneca Plc to secure 20 million doses of a coronavirus vaccine it's developing with Oxford University.

Join ST's Telegram channel and get the latest breaking news delivered to you.