ISLAMABAD: Pakistan on Thursday signalled a cautious shift in its approach to the newly

ISLAMABAD: On 2 October, Pakistan indicated a cautious shift in its stance towards the recently imposed US sanctions on Iran. During a weekly media briefing, Foreign Office spokesperson Sajjad Haider Khan stated that Pakistan would adhere to all applicable sanctions regimes under international and domestic law. This marks a subtle but noteworthy evolution from earlier statements focusing primarily on international law and bilateral trade commitments with Tehran.

Pakistan's New Position

Implications for Relations with Iran

The shift in Pakistan's language reflects a broader understanding of the complex nature of international sanctions. Khan’s assertion that Pakistan is a 'responsible member of the international community' suggests that Islamabad is considering the practical implications of the US sanctions, even if it does not explicitly recognize them as binding laws.

- Previous statements by the Foreign Office emphasized:

- International legal obligations

- Bilateral commitments with Iran

- A narrow focus on international law

Now, the broader framing allows for consideration of 'all applicable sanctions regimes,' integrating domestic laws into the discourse. Although the change does not mean that US sanctions become legally binding for Pakistan, it does acknowledge the reality that these regulations can impact Pakistan's banking and financial systems, especially regarding dollar clearing and correspondent banking.

The Financial Landscape

Pakistan's cautious shift revolves around financial networks and the potential risks posed by secondary US sanctions. By adhering to applicable domestic laws, Pakistani banks may find themselves in a position to restrict transactions related to countries or entities under US sanctions. Notably, financial institutions operating in the international arena often depend on compliance with US laws to maintain access to the dollar-denominated transactions and SWIFT services.

- Key considerations for Pakistan include:

- Risks to financial institutions engaging with Iran

- The impact of US secondary sanctions on access to financial systems

- The State Bank of Pakistan's mechanisms requiring compliance with international laws

Pakistan has yet to announce a suspension of trade with Iran or a complete alignment with US sanctions. Instead, the Foreign Office statement leaves room for maneuvering, ensuring that any trade dealings are managed within the bounds of both local and international regulations.

Balancing Act in Foreign Policy

Khan emphasized the enduring partnership between Pakistan and the United States, highlighting the importance of maintaining strong diplomatic, economic, and security ties. This balancing act comes at a time when Pakistan seeks to preserve its intermediary role between the US and Iran, urging both nations to exercise restraint and resolve their differences.

- Pakistan's stance includes:

- Advocacy for dialogue and diplomacy

- Commitment to multilateralism

- Continuous communication with stakeholders involved in US-Iran relations

“Pakistan believes in the importance of resolving outstanding issues through dialogue and diplomacy, as this is the only viable pathway to peaceful conflict resolution,” Khan asserted.

This careful rhetoric suggests that while Pakistan acknowledges the pressure of international regulations, it seeks to maintain its diplomatic space and mitigate possible fallout from navigating such complex geopolitical waters.

In summary, as of 2 October, Pakistan's cautious shift regarding US sanctions on Iran signifies a strategic recalibration that underscores its commitment to balancing international obligations while safeguarding its national interests.