Snapback sanctions on Iran set; EU acts to protect deal

This news has been read 9894 times!

WASHINGTON, Aug 6, (Agencies): The Trump administration expects economic sanctions that it is re-imposing on Iran this week to have a significant impact on the Iranian economy and will aggressively enforce the measures, senior US administration officials said on Monday.

The so-called snapback sanctions, due to come into force early on Tuesday, would target Iran’s purchases of US dollars, metals trading and other dealings, coal, industrial-related software and its auto sector. Iran’s rial currency has lost half its value since April under the threat of revived US sanctions. The plunge in the currency and soaring inflation have sparked sporadic demonstrations in Iran against profiteering and corruption, with many protesters chanting anti-government slogans.

The sanctions aim to modify Iran’s behavior and not bring about a “regime change” targeting President Hassan Rouhani, the US officials said. They said the Iranian government’s handling of social and labor protests was a concern.

Trump is aiming to cut off the Iranian leadership’s access to resources, the officials say. The United States also plans to re-introduce potentially more damaging sanctions on Iranian oil in November. The sanctions being brought back on Tuesday were among those lifted under the 2015 deal between world powers and Tehran on curbing Iran’s nuclear program. Foes for decades, the United States and Iran have been increasingly at odds over Iran’s growing political and military influence in the Middle East since President Donald Trump took office in January 2017.

Trump announced in May this year he would withdraw the United States from the Iran nuclear deal. The European Union voiced regret on Monday. “We deeply regret the reimposition of sanctions by the US,” the bloc said in a joint statement with the foreign ministers of France, Germany and Britain. One EU measure to mitigate the impact of US sanctions, known as the blocking statute, will come into force on Tuesday. One officials said the United States was deeply concerned about reports of the Iran’s violence against unarmed citizens. “The United States supports the Iranian people’s right to peacefully protest against corruption and oppression without fear of reprisal,” the official added.

The US officials added that Trump was ready to meet with Iran’s leaders at any time to try to forge a new agreement with Tehran. Trump “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 behavior and deny them any path to a nuclear weapon,” one official said.

Asked about any possible exemptions to the renewed sanctions, officials said they would examine any requests on a case-by-case basis. The EU wants to salvage the Iran nuclear deal, which provides the Islamic Republic relief from economic sanctions in exchange for curbs on its nuclear programme. Europe sees the deal as an important element of international security.

“The lifting of nuclear-related sanctions is an essential part of the deal,” German Foreign Minister Heiko Maas said in the joint statement. Maas said Germany, France and Britain deeply regretted the reimposition of sanctions by the US and the three countries were determined to protect European companies engaged in business with Iran using an updated version of the EU’s socalled Blocking Statute.

By updating the 1996 regulation — which bans any EU company from complying with US sanctions and does not recognise any court rulings that enforce American penalties — the EU will protect European firms, the ministry said. The German Economy Ministry said the German government would continue to offer export and investment guarantees for firms doing business with Iran, adding Berlin remained in dialogue with the US on exemptions for German companies.

The update of the regulation will most likely “come into effect on 7th August, coinciding with the reintroduction of the first US secondary sanctions,” the ministry told Reuters. The blocking regulation has never been used and is seen by European governments more as a political weapon than a regulation because its rules are vague and difficult to enforce, serving mainly as a warning to the United States. The regulation does not provide for any legal claim for damages by companies against the EU or EU member states if they are to be affected by the US sanctions, the ministry said. But the claim would be directed against the “initiator” of the damage, meaning the US in Iran case, it added. The German Chamber of Commerce and Industry (DIHK) said the announcement of US sanctions against Iran was already refl ected in current German export figures.

This news has been read 9894 times!