Currency converter
^
All news
News Search Topics
ОК
Use filter
You can filter your feed,
by choosing only interesting
sections.
Loading

First part of US sanctions against Iran comes into effect on Monday

August 06, 7:25 UTC+3 WASHINGTON

The restrictions will cover the automotive sector, the purchase and sale of gold and key metals

Share
1 pages in this article

WASHINGTON, August 6. /TASS/. The US authorities are to resume the first part of sanctions against Iran following Washington’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA). The restrictions will cover the automotive sector, the purchase and sale of gold and key metals.

Sanctions are back

On May 8, US President Donald Trump announced his country’s withdrawal from JCPOA and promised not only to resume the old sanctions but also to introduce new ones against Iran.

The US president called for signing a new deal with Tehran. Meanwhile, Washington put forward demands, which cannot be implemented.

US President Donald Trump sharply criticized the Iran nuclear deal, branding it as "one of the worst" in the history of the United States. He also accused Tehran of supporting terrorist groups in the region. Trump believes that maintaining the JCPOA on the Iranian nuclear program may trigger a nuclear arms race in the Middle East. Later, the US authorities said they were deploying a campaign of maximum economic and diplomatic pressure on Iran.

US State Department Director of Policy Planning Brian Hook said that the sanctions against Iran will be resumed in two stages - on August 6 and on November 4. It is expected that the first part of the restrictive measures will cover the automotive sector of Iran and the purchase and sale of gold and other key metals, and the remaining sanctions, which will be introduced by the end of autumn, will affect Iran's energy sector, oil-related deals, as well as transactions with the central Bank of Iran.

According to Hook, Washington’s "goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude oil sales." Hook noted that the US authorities are working on how to minimize the destabilization of the global market. He added that Washington is confident that there are sufficient opportunities to increase oil production.

Iranian response

The resumption of US sanctions may have a significant impact on the situation in Iran. On the eve of the renewal of restrictive measures, the country's population was massively buying currency and gold to save their savings ahead of economic uncertainty. This aggravates the situation in the financial sector, which is already complicated.

In recent days, the rate of Iranian rial against the dollar on the black market has fallen to a record 120,000 rials for the dollar, while at the end of May the rate was 65,000 rials per dollar. This led to hikes in prices for consumer goods and fuel and already triggered protests in several cities of Iran against the worsening financial situation. In some cases, the police were forced to use tear gas and water cannons to disperse the crowd.

In the long term, the return of the US to sanctions may affect Iran's trade with other countries and also force most large Western companies to withdraw from the Iranian market.

France’s Total and CMA CGM Group, Germany’s Wintershall and Adidas, Denmark’s Maersk Tankers and several others have already announced the termination of cooperation with Tehran.

However, since Russia, China and Europe did not support Trump's decision, this process may not be as dramatic as it was in the days of Barack Obama.

Iranian President Hassan Rouhani is confident that the people will stand the US sanctions. He states that "financial problems are not connected with sanctions and US pressure." The Iranian authorities see the main cause for the economic difficulties in corruption and violations of financial legislation. More than 30 people were arrested in Iran on suspicion of economic crimes amid a sharp collapse of the national currency.

Tehran stressed that it will not negotiate with Washington in conditions when the pressure is being exerted on it.

Iran’s Foreign Minister Mohammad Javad Zarif said his country does not see any sense in meeting with the US because the US should first prove that such a meeting would lead to an agreement that will be observed.

European Commission launches process of blocking US sanctions against Iran in EU

On May 18, the European Commission passed the first package of measures on protecting the interests of EU companies investing in Iran from US sanctions, nullifying them on the EU territory.

"Following the green light of EU leaders at the informal meeting in Sofia (the EU-Western Balkans summit on May 16-17) , the European Commission has today taken steps to preserve the interests of European companies investing in Iran and demonstrate the EU's commitment to the Joint Comprehensive Plan of Action (JCPOA) - the Iran nuclear deal," the EC said in a statement.

The European Commission acted on four fronts. The first step was to activate the "blocking statute" that "forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them," the document says. The goal is to have the measure in force before August 6, 2018, when the first batch of US sanctions take effect.

The second step will be to "remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran."

The European Commission will also "continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies."

The European Commission is also encouraging member-states to "explore the possibility of one-off bank transfers to the Central Bank of Iran." "This approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran," the document says. According to European sources, this measure may become the EU’s first step towards ditching dollar in trade with Iran.

40 years of sanctions

For the first time, the United States imposed unilateral sanctions against Iran in 1979 shortly after the victory of the Islamic Revolution. Since then, the sanctions regime for that country has been repeatedly adjusted - some of the bans were abolished, the other was toughened, new restrictions were introduced.

Support for terrorism, violation of human rights and development of the nuclear missile program were named as the reasons for imposing sanctions.

The Joint Comprehensive Plan of Action (JCPOA), known as the deal on Iran’s nuclear program, was signed between Iran and six international mediators (the United Kingdom, Germany, China, Russia, the United States, and France) on July 14, 2015.

On January 16, 2016, the parties to the deal announced the beginning of the agreement’s implementation. Under the deal, Iran undertakes to curb its nuclear activities and place them under control of the International Atomic Energy Agency in exchange of abandonment of the sanctions imposed previously by the United Nations Security Council, the European Union and the United States over its nuclear program. On the same day, then US President Barack Obama signed a decree abolishing "secondary sanctions" concerning foreign firms and foreign affiliates of American companies.

On October 7, 2016, dollar deals between Iran and offshore banking institutions were allowed, but on condition that they do not affect the US financial system.

Show more
Share
In other media
ADVERTISEMENT
Partner News
ADVERTISEMENT