US reimposes wide sanctions on Iran

The new sanctions prohibit Iran from using US dollars, the main currency for oil sales and international financial transactions.
Tuesday 07/08/2018
US President Donald Trump after signing a proclamation declaring his intention to withdraw from the Iran nuclear agreement in the Diplomatic Room at the White House, May 8, 2018. (Reuters)
US President Donald Trump after signing a proclamation declaring his intention to withdraw from the Iran nuclear agreement in the Diplomatic Room at the White House, May 8, 2018. (Reuters)

WASHINGTON - The United States reinstated a series of sanctions against Iran on August 7 just after midnight in Washington as US President Donald Trump said he remains willing to meet Iranian leaders to reach a new, comprehensive deal.

Trump issued a 6,365-word executive order on August 6 reinstating sanctions that prohibit Iran from using US dollars, which are the main currency for oil sales and international financial transactions. The sanctions also bar purchases of Iranian-made automobiles and Iranian graphite, aluminium, steel, coal and software used in industrial processes. Additional sanctions, including those on Iranian oil, are scheduled to be reinstated on November 5.

As Trump reinstated some sanctions that had been waived under the 2015 Iran nuclear deal, he and his administration insisted the goal was not to remove Iran’s leaders or to collapse Iran’s economy but to achieve a new deal that would be more far-reaching than the Joint Comprehensive Plan of Action (JCPOA) signed by former US President Barack Obama.

“As we continue applying maximum economic pressure on the Iranian regime, I remain open to reaching a more comprehensive deal that addresses the full range of the regime’s malign activities, including its ballistic missile program and its support for terrorism,” Trump said in a statement released August 6.

Trump’s executive order was more expansive, saying the sanctions will apply “financial pressure on the Iranian regime in pursuit of a comprehensive and lasting solution to the full range of the threats,” including Iran’s “campaign of regional aggression” and the “malign activities of the Islamic Revolutionary Guard Corps.”

“There are no preconditions” to Trump meeting Iranian leaders, including President Hassan Rohani, a senior Trump administration official told journalists. “He will meet with the Iranian leadership at any time to discuss a real comprehensive deal that will contain their regional ambitions, will end their malign behaviour, and deny them any path to a nuclear weapon.”

US Secretary of State Mike Pompeo had said on July 31 that Trump would meet Iranian leaders only if they “reduce their malign behaviour” and make other changes.

Speaking to reporters August 5, Pompeo sounded more pessimistic than Trump about a possible meeting: “We’re very hopeful that we can find a way to move forward, but it’s going to require enormous change on the part of the Iranian regime.”

The reinstatement of sanctions comes as the Iranian economy falters and its currency, the rial, rapidly loses value. A senior US official credited Trump, saying Iran’s economic problems have worsened since Trump announced in May that the US would pull out of the JCPOA. “Three months out, we have a very different picture in front of us. The rial is tanking, unemployment in Iran is rising, and there are widespread protests over social issues and labour unrest,” the official said at a background briefing on August 6.

The harshest impact is expected to occur in three months when the US reinstates sanctions on Iranian oil and on transactions with the Central Bank of Iran. “This will have an exponential effect on Iran’s already fragile economy,” the senior administration official told journalists.

European leaders renewed their criticism of Trump’s action and said they plan to take action aimed at protecting European businesses that continue to do business with Iran. The European Union is activating a so-called “blocking statute” that it hopes will calm the fears of EU countries that interact with Iran.

But the EU action is unlikely to assuage European businesses, most of which do much more business with the United States than Iran and want to maintain access to the US consumer market and financial institutions. Germany automaker Daimler said in a statement that it suspended its activities in Iran, “which were anyway very limited.”

A senior Trump administration downplayed the EU action, noting that many European businesses are heeding US sanctions. “They are getting out,” the official said of EU businesses. “This is not something that we’re particularly concerned by.”

Another senior Trump administration official said the US will “aggressively enforce” the reinstated sanctions. “Make no mistake about it, we are very intent on using these authorities. We will use them aggressively.”

Iranian Foreign Minister Mohammad Javad Zarif wrote on Twitter on August 6 that the sanctions would hurt ordinary Iranians, particularly by barring sales of passenger aeroplanes that would replace the ageing and unsafe fleet in Iran.

“Trump Administration wants the world to believe it’s concerned about the Iranian people,” Zarif wrote. “Yet the very first sanctions it reimposed have cancelled licenses for sale of 200+ passenger jets under absurd pretexts, endangering ordinary Iranians. US hypocrisy knows no bounds.”

A senior Trump administration official rejected the criticism and said it was predictable that Iranian leaders would blame the US. “I think the blame for the situation is perfectly clear. It lies with the Iranian regime that has systematically destroyed that beautiful country over the last four decades,” the official said.