The Swiss Humanitarian Trade Agreement (SHTA): What It Is and Why It Matters

In September 2019, the Swiss government announced the launch of the Swiss Humanitarian Trade Agreement (SHTA), a landmark initiative aimed at enabling the delivery of humanitarian goods to Iran despite US sanctions. The agreement is the first of its kind in the world, and represents a significant breakthrough in the efforts to alleviate the suffering of the Iranian people affected by the sanctions.

What is the SHTA?

The Swiss Humanitarian Trade Agreement is a payment mechanism designed to facilitate humanitarian trade between Switzerland and Iran. Under the agreement, Swiss companies are able to export to Iran humanitarian goods such as pharmaceuticals, medical devices, and foodstuffs without violating US sanctions. The payments are made through a special channel created by the Swiss and Iranian governments, which allows Iranian importers to pay for the goods without using the US dollar, thus avoiding the risk of penalties.

Why does it matter?

The SHTA is of crucial importance for the humanitarian situation in Iran, which has been severely impacted by the US sanctions. According to the United Nations, more than 10 million Iranians are in need of humanitarian assistance, including life-saving medicines and medical equipment. The sanctions have led to shortages of essential goods, skyrocketing prices, and reduced access to humanitarian aid. The SHTA is expected to help alleviate the suffering of the Iranian people by facilitating the delivery of much-needed humanitarian supplies.

Moreover, the SHTA is a significant step towards preserving the nuclear deal with Iran, known as the Joint Comprehensive Plan of Action (JCPOA). The US withdrawal from the JCPOA in May 2018 and the subsequent reimposition of sanctions have put the agreement in jeopardy. The SHTA, by enabling the delivery of humanitarian goods to Iran, is a tangible example of how the international community can work together to uphold the principles of the JCPOA and prevent a humanitarian disaster.

What are the challenges?

While the SHTA is a promising initiative, it still faces several challenges. One of the main challenges is the limited scope of the agreement, which only covers humanitarian goods and does not include other sectors such as energy or finance. This means that the impact of the agreement on the Iranian economy is likely to be limited.

Another challenge is the reluctance of some Swiss banks to participate in the payment mechanism due to fears of US sanctions. While the Swiss government has provided assurances that the SHTA is in compliance with international law, some banks remain cautious and are hesitant to engage with Iran.

Conclusion

The Swiss Humanitarian Trade Agreement represents a significant breakthrough in the efforts to alleviate the suffering of the Iranian people affected by the US sanctions. The agreement is a tangible example of how the international community can work together to uphold the principles of the JCPOA and prevent a humanitarian disaster. While the SHTA still faces several challenges, it is a promising initiative that has the potential to make a difference in the lives of millions of Iranians in need of humanitarian assistance.