US works to quash European attempts to bypass Iran sanctions

“To continue to create mechanisms to fund the world’s largest state sponsor of terror is disastrous policy and I hope they will reconsider it.” - Mike Pompeo, US Secretary of State.
Sunday 30/09/2018
US National Security Adviser John Bolton speaks during the United Against Nuclear Iran Summit on the sidelines of the UN General Assembly in New York, on September 25.      (Reuters)
Ratcheting up the pessure. US National Security Adviser John Bolton speaks during the United Against Nuclear Iran Summit on the sidelines of the UN General Assembly in New York, on September 25. (Reuters)

WASHINGTON - US President Donald Trump went to the UN General Assembly to build international support for his effort to isolate and bankrupt Iran but by the end of the week he was trying to quash attempts by the European Union, China and Russia to bypass US sanctions.

US officials are fighting off a plan by the European Union, China and Russia that could undercut US sanctions by creating a system to facilitate financial transactions with Iran by circumventing the US financial sector. The plan would enable countries to buy Iranian goods — most notably oil — without triggering penalties from the United States.

The Trump administration responded by intensifying its verbal attacks on Iran, which shot back with its own vitriol that left the two sides further apart than at any time since Trump said in May that he was pulling the United States out of the Iran nuclear agreement.

“What’s worrying the [Trump] administration is that the Europeans and Iran are trying to create mechanisms to bypass the sanctions,” said Shibley Telhami, a former US State Department adviser and Middle East scholar. “They (administration officials) have become very angry with that prospect because that obviously is a direct challenge to them.”

US officials minimised the significance of the alternative-payment plan, saying European businesses have been pulling out of Iran in droves to avoid US sanctions. US Special Envoy for Iran Brian Hook said revenue that the plan would generate for Iran “is so small that it’s insignificant. All the major corporations have made their decisions to leave the [Iranian] market.”

Suzanne Maloney, a former State Department adviser on Iran, wrote in a blog that “US measures are highly successful: International firms are running for the exits to avoid US penalties and the value of Iran’s currency has plummeted.”

However, in a television interview on September 26, US Secretary of State Mike Pompeo denounced Europe, China and Russia and urged them to reverse course. “Here’s what I’d say about their decision yesterday: To continue to create mechanisms to fund the world’s largest state sponsor of terror is disastrous policy and I hope they will reconsider it,” Pompeo said.

The United States reinstated some sanctions in August and plans to implement limits on Iran’s oil sector in early November.

The Trump administration is “doubling down on its pressure strategy with Iran” but very few countries are going along with it, said Brian Katulis, a Middle East specialist and former consultant to the US State and Defence departments.

The United States began assembling a Middle East Strategic Alliance to counter Iran and other threats such as cyber-attacks. Members would include Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and the United States.

Pompeo met with foreign ministers of those countries on September 28 to discuss the alliance. “All participants agreed on the need to confront threats from Iran directed at the region and the United States,” State Department spokeswoman Heather Nauert said.

“It’s a pretty hostile posture towards Iran and that hasn’t changed,” said Khaled Elgindy, a foreign policy analyst in Washington and former Palestinian adviser.

Holly Dagres, a Middle East analyst, wrote in her blog: “Iran seems to be gambling on time, waiting out the Trump administration,” while trying to gain “the sympathy of the European Union and the P4+1 — Britain, France, Russia, China and Germany — which are unhappy with Trump’s handling of world affairs in general.”

Richard Grenell, the US ambassador to Germany, said in an interview on Fox News that the country’s leaders don’t realise the extent to which Iran is causing problems in Germany. “I’ve been telling Germans, all of your migration problem you can blame on Iran and the chaos they created in Syria. So you must stop funding this regime.”

Trump appeared to stand by his strategy of trying to strong-arm Iran into negotiating a new deal with the United States that restricts not only Iran’s nuclear-weapons programme but activities such as its development of long-range missiles that can carry nuclear warheads and its destabilisation of the Middle East.

“Iran has to come back and they have to talk,” Trump said at a news conference on September 27.

1