USA ramps up sanctions on Iran

5 November 2018

The US administration on 2 November announced the reimposition of all US sanctions on Iran that had been lifted under the July 2015 Joint Comprehensive Plan of Action (JCPOA). This is the second raft of penalties reimposed since President Donald Trump withdrew from JCPOA in May, and they cover Iran's shipping, financial and energy sectors. The sanctions that come into force on 5 November penalise countries that do not stop importing Iranian oil and foreign companies that do business with blacklisted Iranian entities, including the central bank, a number of private financial institutions and state-run port and shipping companies. Eight countries, identified by officials as US allies, will receive temporary waivers allowing them to continue to import Iranian petroleum products for a limited period. Pompeo did not identify the countries to be granted the waivers. But according to numerous reports, these include India, South Korea, Turkey, Japan and Italy.

US secretary of state Mike Pompeo and treasury secretary Steven Mnuchin said sanctions will remain until Tehran meets demands that include ending support for terrorism, ending military engagement in Syria and completely halting its nuclear and ballistic missile development. Pompeo said the sanctions are "aimed at fundamentally altering the behaviour of the Islamic Republic of Iran".

Mnuchin said 700 more Iranian companies and people will be added to the sanctions lists under the reimposed sanctions. Mnuchin defended a decision to allow some Iranian banks to remain connected to Swift, saying the Belgium-based firm had been warned it will face penalties if sanctioned institutions are permitted to use it. Pompeo and Mnuchin said the sanctions will have exceptions for humanitarian purchases.

The UK, France and Germany, and EU foreign policy chief Federica Mogherini, said they deeply regretted the reimposition of sanctions. A joint statement by Mogherini, UK Foreign Secretary Jeremy Hunt and Chancellor Philip Hammond, and their French and German counterparts, said they remained committed to implementing the JCPOA, which “is crucial for the security of Europe, the region, and the entire world”.

The statement noted that the International Atomic Energy Agency “has confirmed in 12 consecutive reports that Iran is abiding by its commitments under the agreement” and that Iran is expected to continue implementing all its nuclear commitments in full. "The JCPoA also provides for the lifting of international sanctions in order to have a positive impact on trade and economic relations with Iran, but most importantly on the lives of the Iranian people. It is our aim to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council resolution 2231."

Kelsey Davenport, Director for Nonproliferation Policy and the US-based Arms Control Association issued a statement on 2 November describing President Trumps’s decision as “reckless and irresponsible” and “another serious blow to the Trump administration’s already low credibility on nuclear nonproliferation matters”. It added that the JCPOA “has significantly reduced Iran’s capability to produce bomb-grade nuclear material, opened it up to a more robust international inspections regime, and blocked its major pathways to nuclear weapons for years to come”. The International Atomic Energy Agency has “repeatedly confirmed that Tehran is complying with the restrictions set by the JCPOA”, it noted.

The statement said: “The Trump administration’s approach is a recipe for conflict and increased proliferation risks in the Middle East. We encourage the other parties to the JCPOA to continue to meet their obligations and preserve legitimate trade with Iran. The international community must fulfill UN Security Council Resolution 2231, which endorsed the nuclear deal and called upon all states to support it, until such time as the United States comes back into compliance with the agreement and new talks can begin on win-win approaches to extend and build upon key elements of the JCPOA.”

It is unclear how the sanctions are likely to affect the work which is underway to modify Iran’s Arak reactor under the JCPOA. Originally, experts from the USA and China were redesigning the Arak heavy water reactor to reduce the amount of plutonium produced during its operation. The UK experts replaced American experts after the USA withdrew from the agreement. Iranian officials said in June that construction of the reactor would begin within three months. They also said that if the JCPOA were to be cancelled Iran would build the reactor according to its original design. It is also unclear how the sanctions may affect construction of units 2 and 3 at the Bushehr NPP which is being undertaken with Russian assistance. 



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