U.S. administration reimposes a first round of sanctions on Iran

By Guido Lanfranchi.

Starting from the midnight of August 7^th, the US will reimpose a first round of unilateral sanctions against Iran. This move comes as a part of a broader strategy of putting unprecedented financial pressure on Tehran – Senior US Administration Officials say – in order to counter Iran’s foreign policy endeavors throughout the Middle East.

On May 8^th, US President Donald Trump publicly announced that the United States would withdraw  from the Joint Comprehensive Plan of Action, also known as the Iran Nuclear Deal. Under such deal, the Iranian government had accepted several limitations on its nuclear program, in exchange for the lifting of sanctions previously imposed by the international community. Since the day of the withdrawal’s announcement it was therefore clear what would happen in the near future: the reimposition of US nuclear-related sanctions on Iran.

Three months after President Trump’s announcement, the US administration has taken the expected step, announcing that a first batch of sanctions would come back into full effect as of August 7^th. These sanctions – Senior US Administration Officials explained – are part of a coordinated campaign of maximum pressure on Iran, aimed at countering what the US administration sees as “Iran’s malign behavior” throughout the Middle East.

President Trump has repeatedly criticized the JCPOA, finalized during President Obama’s second term, as a terrible deal. According to the President and other US officials, the deal has provided Iran with money that the country’s government has unfortunately invested in controversial foreign policy endeavors, rather than on Iran’s development. Hence, the US administration’s decision to withdraw from the deal, and to put an unprecedented level of economic and political pressure on Iran’s government to change its behavior.

It is on the backdrop of such a strategy – Senior US Administration Officials explained – that the current and future rounds of Iran sanctions should be understood. The first batch, set to be effective as of August 7^th, comprises a set of financial and commercial restrictions in certain sectors of the Iranian economy, such as those of carpets, cars, and commercial aviation. The next round of sanctions, expected to take effect on November 4^th, will involve more sensitive issues, such as Iran’s energy and shipping sectors, as well as restrictions on financial institutions engaged in deals with the Central Bank of Iran.

The combination of the US sanctions regime and the opaque nature of Iran’s economy – Senior US Administration Officials say – is expected to drive more and more businesses out of Iran, reinforcing a trend that has already been seen over the last months. If the Iranian government wants to reverse such trends – the US administration maintains – there are several issues that Iran should address. Chief among them, Iran’s foreign policy enterprises, such as the country’s involvement in Syria alongside Bashar al-Asad, as well as Iran’s support to groups that the US considers as terrorists, such as Lebanon’s Hezbollah.

The Iranian government strongly condemned the reimposition of US nuclear-related sanctions. On Twitter, Iran’s foreign minister Mohammad Javad Zarif openly expressed his country’s rejection of “US unilateralism”,  highlighting the alignment between Iran and the remaining signatories to the JCPOA.

While US allies such as Israel and Saudi Arabia have welcomed the US move, the reimposition of unilateral US sanctions has been openly criticized by the European Union, China, and Russia. In a joint statement, the EU diplomatic chief Federica Mogherini and the foreign ministers of France, Germany, and the UK have said that they “deeply regret ” the US decision.

Similarly, China and Russia condemned President Trump’s move, praising the JCPOA and defending their bilateral relationship with Tehran.

Over the last months, European, Chinese, and Russian leaders have repeatedly tried to persuade the United States not to leave the agreement, and they are currently engaged in negotiations with the Iranian government in order to salvage the deal.

However, the extraterritorial nature of US sanctions and the administration’s pledge to aggressively enforce them might create tensions, and consequently put at risk the survival of the deal. Only time will tell how such disputes and tensions will unfold.

Link to Diplomat Magazine previous article on the subject:

• https://diplomatmagazine.eu/2018/05/17/us-withdrawal-from-the-iran-nuclear-deal-comments-from-the-us-state-department/
• https://diplomatmagazine.eu/2018/07/01/in-the-name-of-god-the-compassionate-the-merciful/
• https://diplomatmagazine.eu/2017/12/12/foreign-minister-zarif-europe-must-work-with-iran/