These sanctions affect
imports, exports and contracts to develop infrastructure in Iran. Russia and China may step up and fill in the
gaps as companies choose to end their contracts with Iran in order to keep
doing business with the US. Some countries
like China, Russia, India and Turkey will continue to do business with Iran. The
EU warns countries of sanctions against them if they stop doing business with
Iran.
U.S. to Restore Sanctions on Iran, Deepening Divide With Europe, By Gardiner Harris and Jack
Ewing, 8/6/18, NYT
WASHINGTON
— The United States said Monday it was reimposing economic sanctions against
Iran that were lifted under a 2015 nuclear accord, ratcheting up pressure on
Tehran but also worsening relations with European allies.
The
sanctions are a consequence of President Trump’s decision in May to withdraw
from an international deal that sought to limit Iran’s nuclear program in
exchange for easing pressure on the country’s shaky economy.
The Trump
administration is betting that backing out of
it will force Iran to shut down its nuclear enrichment efforts, curb its
weapons program and end its support of brutal governments or uprisings in the
Middle East.
In a
statement, Mr. Trump said the Iranian government “faces a choice: Either change
its threatening, destabilizing behavior and reintegrate with the global
economy, or continue down a path of economic isolation,” and then he returned
to the issue on Twitter on Tuesday morning.
The Iran sanctions have officially been cast. These are
the most biting sanctions ever imposed, and in November they ratchet up to yet
another level. Anyone doing business with Iran will NOT be doing business with
the United States. I am asking for WORLD PEACE, nothing less! 8/7/18.
International
inspectors have concluded that Tehran is complying with the accord, and
European officials have said that the Iran nuclear agreement is crucial to
their national security.
“We are
determined to protect European economic operators engaged in legitimate
business with Iran,” the foreign ministers of Britain, France, Germany and the
European Union said in a joint statement on Monday. Russia and China also
signed on to the 2015 deal.
By
restoring the sanctions, the United States is effectively forcing its allies to
go along with the penalties, pressuring major European companies to choose
between the tiny Iranian market and the huge American market.
“We have
suspended our activities in Iran, which were anyway very limited, until further
notice according to applicable sanctions,” Daimler, the German maker of Mercedes-Benz
cars and trucks, said in a statement on Monday.
The
sanctions ban any transactions with Iran involving United States dollar bank
notes, gold, precious metals, aluminum, steel, commercial passenger aircraft
and coal, and they end imports into the United States of Iranian carpets and
foodstuffs.
Foreign
Minister Mohammad Javad Zarif of Iran said the sanctions would endanger
ordinary Iranians — particularly those who would feel the effects of the
penalties on passenger jets.
Every
other signer of the nuclear deal has opposed Mr. Trump’s action and argued that
the agreement was the best chance at slowing, and ultimately ending, Iran’s
nuclear ambitions. They now worry that once Tehran is no longer receiving any
economic relief, pressure in Iran will rise to resume its nuclear activities.
The
current agreement prevents Iran from amassing enough fuel to build a nuclear
weapon until 2030. Mr. Trump argued that was not long enough.
But the
other world powers have argued that delaying the problem another dozen years —
after which Iran may have a new leader — is vastly preferable to the potential
of provoking a conflict in the near future.
Two weeks
after the United States withdrew from the deal, Secretary of State Mike Pompeo outlined a
strategy for opening new negotiations with Iran.
He
demanded that Iran end all nuclear enrichment and development of
nuclear-capable missiles; release all American citizens; end its support for
Hezbollah, Hamas, Islamic Jihad and Houthi militias; and withdraw its forces
from Syria.
He said
such changes would be consistent with “global norms,” although the enrichment
of nuclear material for civilian purposes and the development of rockets is, in
most states, allowed under international law. Additionally, Russia, Turkey,
Iraq and the United States also have forces fighting in Syria’s seven-year
civil war.
In a
conference call with reporters on Monday, senior administration officials said they
wanted a change in behavior from Tehran, and were not demanding a change in
government. They noted that the threat of sanctions had already had an effect
on the Iranian economy, including a plunge in the value of the rial, Iran’s
currency; growing unemployment; and increasing protests.
Some
analysts worry that the Trump administration’s decision to go ahead with
sanctions will encourage Europe, Russia and China to find ways around the
American-led financial system and undermine
the success of economic penalties in other areas.
The
European Union on Monday updated a so-called blocking statute that seeks to
protect European companies from any penalties imposed by the United States for
doing business with, or in, Iran. The measure threatens companies with
penalties if they comply with American sanctions, putting some in a bind.
The law
was originally passed in 1996 to protect companies against penalties imposed
for doing business in Cuba, Libya and Iran — all of which were under American
sanctions. For years, the United States largely ignored European investments in
Cuba to avoid friction.
But while
top American officials said on Monday that they would continue talking to
foreign counterparts to cooperate on sanctions, they vowed to undertake
vigorous enforcement of the restored penalties against Iran — regardless of
European concerns. They also said more than 100 major businesses had already
announced an intent to leave Iran, ahead of the sanctions.
In practice, the
blocking statute is likely to be difficult to enforce. “The idea that the
European Commission would come after Siemens or Total for not doing business in
Iran is legally dubious and politically very tricky,” said Jacob Funk
Kirkegaard, a senior fellow at the Peterson Institute for International
Economics in Washington. “I can’t imagine that happening.”
While European leaders
insisted they would resist the sanctions, some have quietly taken actions to
comply.
The Bundesbank,
Germany’s central bank, introduced a change to its rules last month that could
block the transfer of hundreds of millions of euros from an Iranian bank in
Hamburg back to Iran. The Bundesbank is the conduit for major international
transfers of money.
European leaders’
powerlessness to counter American sanctions has only widened a divide over a
host of issues including NATO, immigration and relations with Russia that could
undercut current efforts to defuse tensions over trade.
Sanctions could also
further irritate China and India, both of which have significant economic
relations with Iran.
For Beijing, the
threat of American sanctions arising from transactions with Iran is just one in
a growing portfolio of disputes, including a worsening trade war, restrictions
related to North Korea and military tensions in the South China Sea.
Many large Chinese
firms are state owned and have limited exposure to the American market, leaving
them able to continue dealings with Iran. Beijing is unlikely to seriously curb
economic ties with Tehran unless it receives significant concessions on other
issues — something the Trump administration is unlikely to grant.
India is
one of the largest buyers of Iran’s oil, and has pledged to invest millions in
Iran’s Chabahar Port. Recent demands by top American officials that India
reduce its oil imports from Iran to zero by November led to hard feelings in
New Delhi. Those demands were later softened, but the damage was done.
An even
tougher round of sanctions is scheduled to go into effect in November,
including sanctions on Iran’s sale of crude oil and transactions with its
Central Bank.
Europe
could undertake the provocative step of instructing state-owned banks and
energy companies — which are largely insulated from American penalties — to do
business with Iran.
“But I
don’t see Europeans ready to pull the trigger on those types of measures, so
most companies are making the unhappy decision to side with the U.S.,” said
Peter Harrell, who was a sanctions official in the Obama administration.
“The Trump
administration’s approach to Iran is to build a coalition of the unwilling that
has to pull out,” Mr. Harrell said.
Gardiner Harris reported
from Washington, and Jack Ewing from Frankfurt. Milan Schreuer contributed
reporting from Brussels, and David E. Sanger from San Diego.
Norb Leahy, Dunwoody
GA Tea Party Leader
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