"Trump's assumption is that in a military campaign you cannot defeat the Iranians, only through economic pressure"

In recent weeks, the American administration, led by US President Donald Trump, has made a strategic shift in the war with Iran. From managing a military campaign and using the closure of the Strait of Hormuz and preventing the passage of Iranian oil tankers as a leverage, Trump has moved to a massive financial-economic campaign, using military force as a stick.

"His working hypothesis, with which I completely agree, is that in a military campaign you cannot defeat the Iranians," says Dr. Udi Levy, former head of the 'Tzelem' unit in the Mossad that dealt with economic warfare against terrorist organizations and a senior researcher at the Jerusalem Institute for Strategy and Security. "How can you win? Or reach a situation where they will be open to negotiations that will lead to understandings and agreements? Only through economic pressure."

But it takes time and Trump has mid-term elections soon.

"True, and here the United States and Israel are paying a price for ten years of neglect of everything related to Iran's economic campaigns. Israel and the United States neglected strategic and critical information, while Iran understood from 2015 that it was entering another significant campaign, and built an amazing financial infrastructure. Because it understands that this is its weak point.

Trump is not relying only on restrictions he imposes on banks and economic sanctions, but he has transferred the management of the campaign against Iran from Central Command (CENTCOM) to the US Treasury. He is running across the whole field, and understands that he cannot manage a total campaign because he has no cooperation from Europe, Israel does not provide him with enough information, the Gulf states are not entirely with him, and Russia is tightening relations with the Revolutionary Guards. He wants that for every dollar the Iranians earn, they will pay so much, so that they will only have ten cents left from it."

How do they do it?

"The US Treasury system not only wants to choke the financial and logistical infrastructure and those who assist them, but to cause the Iranians to invest more resources in transferring the money. For years they built an extraordinary infrastructure of crypto, and here and in the world they do not understand how strategic and important this tool is for countries like North Korea, Russia, Iran and criminal organizations. The supervision and control over virtual currencies are low, and the big disaster is that some of the decision-makers are making a lot of money from it. President Trump earned billions from crypto, and the Ben-Artzi family, which is related by first-degree ties to the Netanyahu family, also made a lot of money from crypto.

The American administration is closing many channels in crypto, so the Iranians cannot transfer the money there directly. Let's say the Iranian Central Bank needs to transfer money earned from oil. It transfers it to Iranian money changers outside the country, who are not under sanctions. Those money changers set up shell companies to hide the transfers. But every week the US adds more and more shell companies to the blacklist. This concealment mechanism costs a lot of money, and every time you have to build another layer and another layer.

Suppose they managed to transfer a ship with oil, which they are selling at a discounted price anyway. To launder this money and get it back, instead of a payment of 70 dollars per barrel that they received from the Chinese, they will receive only 30 dollars per barrel, and that is the goal. One must pay attention to another thing. Three weeks ago, the US State Department issued a tender to the public according to which anyone who brings information about financial infrastructure companies, about shadow companies, or any information that can assist in locating assets of senior Iranian officials, will receive a payment of 15 million dollars.

On one hand it is excellent, but on the other hand, they are outsourcing it. Many entities and financial people saw this, and started the work of collecting. But in such a critical war do you turn to the public for help? That is what they should have done years earlier.

Inside Iran we hear two voices. One that says, let's end this whole story because we will collapse economically. And the second voice, led by the Revolutionary Guards, argues that one must breathe deeply because the Americans will surrender. If Trump had laid a hand on the private property of the Revolutionary Guards' senior officials, they would not have had a dilemma. They would have closed the war yesterday. Stanley Fischer once told me, a person can be worth hundreds of billions, but if he cannot use them, he is poor."

And what is happening inside Iran?

"They are in a survival economy. Of course, those who are still in the top priority are the leadership. Every dollar that comes in goes to the public and economic system, and crumbs of it reach the people. I am not sure the people will take to the streets, because they understand there is no alternative, and they do not believe the West will come to their aid. Moreover, the Revolutionary Guards invest a lot of inputs to suppress any uprising. I predict it will take at least a few more months until we start seeing results."

That is encouraging. It is not about years until the regime collapses economically.

"Because information is starting to flow about the assets of the Revolutionary Guards' leaders. It depends on how much the Americans will go for it. It is a very, very delicate game. If they manage to hit their private assets, it will shorten the timelines. Even if the Chinese close the money tap to the Iranians and stop buying oil from them, that is the end of the story. But for that to happen, they need to receive a significant bribe from the US, and I do not see the Americans doing that, at least not right now."