Despite all evidence that sanctions are hurting Iran’s economy, four rounds of nuclear talks failed to prove that Iran’s regime is now more malleable to a compromise. Diplomacy will continue, but with Iranian proposals falling short of Western minimum requirements, it is time to ask whether sanctions are working.

It is true that the U.S.-EU partial oil embargo that began on July 1 will cost Iran dearly, but so far sanctions failed to persuade Iran’s leaders to abandon its pursuit of nuclear weapons. Part of the reason is that the regime has managed to circumvent the sanctions by creating shell companies, both at home and overseas, with the sole purpose of taking over business that Iran’s sanctioned entities can no longer handle.