Sanctions stir hardliners to call out enemies foreign and domestic

“The direct damage is now estimated at no less than NIS 4 billion ($1.1 billion), and the indirect damage, which has yet to be calculated, will amount to several billion more,” Tax Authority Director Shay Aharonovich said.

Major institutions, including the Weizmann Institute of Science and Soroka Medical Center, suffered heavy losses, while many businesses were forced into prolonged shutdowns, he added.

Israel launched the 12-day air campaign against Iran in June, with brief support from the United States, targeting nuclear sites and killing senior military officials and nuclear scientists. The strikes crippled much of Iran’s air defense network and damaged a significant portion of its ballistic missile arsenal, Israel said.

Property losses made up the bulk of claims. Of 41,962 filings for damaged structures, 36,928 involved private residences, with hundreds of homes completely destroyed.

The state will have to fund alternative housing for displaced families until rebuilding can be completed, a process expected to take months if not years, officials said.

The commercial sector was also hit hard. Businesses filed 5,108 claims, including hundreds of shops and offices destroyed beyond repair. Vehicle damage reached unprecedented levels, with at least 5,400 cars damaged or destroyed.

9,803 claims were submitted through a fast-track process, while 28,129 direct-damage claims were processed within two months, according to the authority.

So far, the Property Tax Compensation Fund has paid out NIS 1.6 billion ($430 million) for direct damages.

Claims for indirect losses, such as business interruptions, nearly doubled direct claims, reaching 98,569 in just under two weeks of fighting. About 60,000 of these have already been processed, with NIS 1 billion ($270 million) in partial compensation paid.

Officials cautioned that the final tally—factoring in both direct and indirect damages—will end up several times higher than the current estimates, underscoring the unprecedented financial cost of Operation Rising Lion.

The sharp drop extends a steady decline in the rial over recent weeks. Currency dealers quoted the dollar at around 1,030,000 rials on the open market, according to local reports, compared to 957,000 rials last week.

Reuters has reported that Britain, France and Germany could begin the snapback process as early as Thursday after Iran failed to resume talks or restore cooperation with the International Atomic Energy Agency. The three countries set a late August deadline earlier this month.

Markets react to snapback risk

The currency’s continued slide has heightened concerns among traders and the public, as sanctions could further restrict Iran’s access to global markets and increase pressure on imports, inflation, and employment.

Once triggered, the snapback process leads to the automatic reimposition of UN sanctions after 30 days unless the Security Council adopts a resolution to continue lifting them — a step that any permanent member can veto.

The measures would freeze Iranian overseas assets, ban arms deals with Tehran, and penalize missile development activities. They could also affect oil sales to China, one of Iran’s top customers.

Earlier this month, Iran International reported that Iran’s Intelligence Ministry has warned senior officials and companies to prepare for renewed economic disruptions. Confidential guidance cited risks of "severe currency fluctuations, reduced purchasing power, increased unemployment, layoffs, and heightened social discontent."

Business group warns of worst-case currency spike

Iran’s Chamber of Commerce this week published a report forecasting three scenarios for the economy in the event of snapback sanctions. In its most pessimistic case, the rial could fall to 1.65 million per dollar, with annual inflation reaching 90 percent by the end of the year. Economic growth was projected to remain negative under all scenarios.

Time running out

The current UN resolution allowing use of the snapback mechanism is set to expire on October 18. Russia, which will assume the rotating presidency of the UN Security Council that month, has floated proposals to extend the measure. After the resolution expires, any future effort to restore UN sanctions would likely face a veto from China or Russia.

Under the existing mechanism, any party to the 2015 nuclear deal can initiate snapback by notifying the Security Council of Iranian non-compliance. Sanctions would then be automatically reinstated after 30 days unless the Council votes to continue lifting them — a step that can be blocked by any permanent member.

In recent weeks, Iran has made only limited diplomatic efforts to prevent that outcome. Foreign Minister Abbas Araghchi said last week that talks alone were unlikely to avert further escalation, noting that negotiations had been ongoing when the June conflict with Israel erupted. “Sometimes war is inevitable,” he said in an interview with state media.

The IAEA, meanwhile, has called for inspections to resume “as soon as possible.” Inspectors were recently present to observe fuel replacement at the Bushehr nuclear reactor, operated with Russian support, but broader access to key enrichment and research sites remains suspended.

The Islamic Republic risks losing the ability to fund its health system, said Reza Jabbari, a member of parliament’s presiding board, during a meeting with Health Minister Mohammadreza Zafarghandi.

“Based on submitted reports, 70 percent of insurance resources are spent on medicine and equipment, which could be significantly reduced through strategic purchasing,” Jabbari added.

Without reform, he said, demographic and dietary pressures could create in health care the same shortage already seen in Iran’s energy sector.

Iran may soon face a surge in chronic and non-communicable diseases, Jabbari warned.

“The country will no longer be able to pay health costs if the current situation continues.”

Debt to the pharmaceutical supply chain

The warning came a day after Shahram Kalantari, head of Iran’s Pharmacists Association, described the government as “the main debtor to the pharmaceutical supply chain.” Insurers have failed to pay most of their obligations this year, he said.

“Health Insurance owes us $100 trillion rials ($100 million), Social Security owes $150 trillion rials ($150 million), and the Daroyar plan owes $90 trillion rials ($90 million) since July,” Kalantari said Tuesday.

The drug industry can only remain stable for 170 to 180 days if payments continue to be delayed, he cautioned. After that, shortages of essential medicines are likely.

Kalantari has previously said 80 percent of pharmacies in the country are on the brink of bankruptcy due to mounting debts from insurers and subsidy programs.

Rising burden on households

Other lawmakers have also highlighted the growing strain on families. Fatemeh Mohammadbeigi, deputy chair of the parliament’s Health Committee, said Iranians now pay about 70 percent of medical costs out of pocket.

She described the insurance system as “inefficient and near bankruptcy” due to poor management and a failure to consolidate coverage.

“This figure should be reversed, with people paying 30 percent and the government 70 percent,” Mohammadbeigi said earlier this month. Falling insurance coverage particularly harms low-income groups, she added.

Labor activists have also pointed to shrinking access. Abbas Shiri, a board inspector for the National Construction Workers’ Union, said on August 2 that fewer than 50,000 workers have gained insurance since 2020, leaving hundreds of thousands waiting.

The combined warnings from lawmakers, pharmacists, and labor groups underscore a health system burdened by debt, demographic pressures, and inadequate insurance coverage, with officials conceding that sustainability is in doubt.

Abouzar Rahmati, 43, a naturalized US citizen and resident of Great Falls, Virginia, received a 12-month sentence in US District Court in Washington after pleading guilty in April to acting as an unregistered agent of the Iranian government and to conspiracy.

Judge Loren L. AliKhan also ordered three years of supervised release.

“By secretly doing the bidding of the Iranian government, Mr. Rahmati violated the trust placed in him as a US citizen and as a federal contractor with access to sensitive information,” US Attorney Jeanine Ferris Pirro said in announcing the sentence.

“Ensuring that sensitive US information does not fall into the hands of hostile foreign intelligence services remains one of our highest priorities.”

Rahmati began cooperating with Iranian officials in 2017 after offering his services to a former Ministry of Intelligence contact, according to prosecutors.

He traveled to Iran later that year, meeting intelligence officers and agreeing to gather information under the guise of academic research.

On his return, Rahmati collected both public and restricted materials on the US solar energy industry and provided them to Iranian officials. He later took a job with a Federal Aviation Administration contractor, where prosecutors said he accessed sensitive non-public data on aviation systems.

In 2022, Rahmati traveled to Iran with more than 170 gigabytes of FAA contractor files stored on removable media. Iranian intelligence officers told him they sought advanced technology unavailable in Iran and promised financial rewards for useful material, according to court records.

“Rahmati exploited his trusted position to obtain sensitive information about the US aviation sector and share it with the Iranian government,” FBI Special Agent in Charge Daniel Wierzbicki said.

“Today’s sentencing demonstrates the FBI’s commitment to disrupt threats to US critical infrastructure.”

The FBI and FAA's counterintelligence division were involved in the investigation. Rahmati will begin serving his sentence immediately.

Satellite images analyzed by the Institute for Science and International Security show damaged buildings being cleared at the Mojdeh site, also known as Lavisan 2, over a period of several weeks this summer.

“The rapid work by Iran to quickly demolish and clear the rubble of these important buildings appears to be an effort to sanitize the site,” the institute said.

The group added that the clean-up “will likely remove evidence of undeclared nuclear and nuclear-weapons related research and development activities.”

Site linked to earlier weapons program

The Mojdeh site has been linked by the International Atomic Energy Agency (IAEA) to Iran’s Amad Plan, a covert nuclear weapons program that US and IAEA assessments say ended in 2003. The agency has said it found a direct connection between the Mojdeh site and that effort, though it was never allowed to inspect the area or question key personnel.

The institute, a Washington-based research group led by former UN inspector David Albright, cited high-resolution satellite imagery from MAXAR Technologies showing clean-up operations underway between early July and mid-August. By mid-August, buildings at the Mojdeh site associated with the Institute for Applied Physics and the Shahid Karimi Group, both struck in Israeli airstrikes during the June conflict, had been razed and cleared, the report said.

Pattern of site sanitization

Iran has previously conducted clean-up operations at other sites believed to have hosted undeclared nuclear-related activities. “Iran has previously sanitized sites to stonewall IAEA inspectors and hide its past nuclear weapons development work,” the institute said.

The Shahid Karimi Group has been sanctioned by the US Treasury for involvement in explosives and missile work under Iran’s Organization of Defensive Innovation and Research (SPND), viewed by Western governments as the successor to the Amad Plan.

Tehran has not commented on the Mojdeh site or the recent imagery. Iranian officials deny seeking nuclear weapons and maintain that the country's nuclear program is peaceful.