US re-imposes tough sanctions on Iran
Sanctions were re-imposed on Iran as part of unprecedented US economic pressure campaign.
WASHINGTON (Dunya News / AFP) - Following US President Donald Trump’s withdrawal from a landmark 2015 international agreement on Iran’s nuclear programme, the Unites States re-imposed sanctions on the Iranian regime today (Monday).
In a statement, US Treasury Secretary Steven Mnuchin said: "Treasury’s imposition of unprecedented financial pressure on Iran should make clear to the Iranian regime that they will face mounting financial isolation and economic stagnation until they fundamentally change their destabilising behavior."
The sanctions cover 50 Iranian banks and subsidiaries, more than 200 individuals and vessels in its shipping sector, and targets Tehran’s national airline, Iran Air, and more than 65 of its aircraft, the statement said.
However, the US has granted exemptions to eight countries allowing them to temporarily continue buying Iranian oil. The eight countries include China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea.
This action is a critical part of the re-imposition of the remaining U.S. nuclear-related sanctions that were lifted or waived in connection with the Joint Comprehensive Plan of Action (JCPOA). The move places unprecedented financial pressure on the Iranian regime to negotiate a comprehensive deal that will permanently prevent Iran from acquiring a nuclear weapon, cease Iran’s development of ballistic missiles, and end Iran’s broad range of malign activities. This brings to more than 900 the number of Iran-related targets sanctioned under this Administration in less than two years, marking the highest-ever level of U.S. economic pressure on Iran.
Oil markets on alert
Earlier today, the world oil markets were on alert, nervously set to gauge the consequences of the sanctions.
"All eyes will be on Iranian exports, whether there will be some cheating around US sanctions, and on how quickly production will fall," said Riccardo Fabiani, an analyst for Energy Aspects.
Oil is Iran’s main source of income. But the sword has two edges: Iran is also the OPEC cartel’s third-largest producer.
The US stance has already inflicted serious pain on Iranians, with the country’s currency, the rial, losing more than two thirds of its value since May.
Iranian oil exports have fallen by about a million barrels a day in that time, though India and China have continued to purchase it. Most Europeans, as well as Japan and South Korea, have stopped.
Asked if the US had firm commitments from India and China to stop all oil purchases from Iran within six months, Pompeo replied: "Watch what we do. Watch as we’ve already taken more crude oil off the market than any time in previous history."
Saudi Arabia is the only country with the capacity to make up for lost Iranian oil production.
Rouhani’s response
"I announce that we will proudly bypass your illegal, unjust sanctions because it’s against international regulations," Iran’s President Hassan Rouhani said in a televised speech as the sanctions took effect.
"We are in a situation of economic war, confronting a bullying power. I don’t think that in the history of America, someone has entered the White House who is so against law and international conventions," he added.
Rouhani said four countries had approached him during his visit to New York for the UN General Assembly in September, offering to mediate with the US but he turned them down.
"There is no need for mediation. There is no need for all these messages. Act on your commitments, and we will sit and talk," he said.
But Foreign Minister Mohammad Javad Zarif, in an interview published Monday with USA Today, said Iran would consider fresh diplomacy if there were a "different approach" by Washington.
The latest tranche of US sanctions aims to significantly cut Iran’s oil exports -- which have already fallen by up to one million barrels a day since May -- and cut off its banks from international finance.
The Belgian-based SWIFT banking network, the backbone for international monetary transfers, said Monday it had suspended several Iranian banks from its service.
The International Monetary Fund forecasts that US sanctions will cause Iran’s economy to contract 1.5 percent this year and 3.6 percent next year -- pain that Trump has boasted about as he touts his record ahead of Tuesday’s congressional elections.
Iran’s economy was already suffering major structural problems -- including widespread corruption, weak investment and a banking sector laden with toxic assets -- before Trump walked out of the deal.
Rouhani’s plan since his election in 2013 was to boost the economy by rebuilding ties with the world and attracting billions of dollars in foreign investment -- a strategy that now looks in tatters.
Eight exemptions to oil sanctions
The United States issued eight waivers to its ban on buying Iranian oil -- to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.
US Secretary of State Mike Pompeo said that the eight had demonstrated that they were reducing purchases of Iranian oil and that the United States recognized special circumstances, as well as the need not to disrupt energy markets.
One notable exemption was Iraq. Had it been granted a waiver, analysts say it would have been easier for Iran to mix its crude with production from its neighbor to sell on international markets.
The other parties to the nuclear deal -- Britain, France, Germany, China and Russia -- have vehemently opposed the US move and vowed to keep alive the accord, technically known as the Joint Comprehensive Plan of Action (JCPOA).
"We will do everything necessary in the interests of preserving and expanding international trade, economic and financial cooperation with Iran despite US sanctions," said Russia’s foreign ministry.
The only support for the US position has come from Iran’s regional rivals, notably Saudi Arabia and Israel, whose prime minister, Benjamin Netanyahu, hailed the start of sanctions as "a historic day."
Foreign companies and banks are largely unwilling to make enemies of the US Treasury, and most international firms that set up in Iran after the 2015 deal have been forced to leave, including France’s Total, Peugeot and Renault, and Germany’s Siemens.
"Unfortunately, we were treated dishonorably by both the American and Iranian governments," said Fereshteh Safarnezhad, a 43-year-old teacher, on the streets of Tehran.
"The Americans never really committed to the deal and the Iranian government did not spend the cash it got from the deal on the people."
