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US Sanctions Snap Back On Iran, Hitting Financial Sector First

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The US reimposed sanctions on Iran early Tuesday as Washington sought to increase pressure on Tehran after unilaterally pulling out of a globally-agreed nuclear deal reached in 2015.

The first set of sanctions target the Iranian financial system, including Iranian government purchases of US dollars, gold trade and government bond sales. Further measures against the central bank are expected in three months.

The US defines its policy as applying “maximum economic pressure on the Iranian regime.” Washington is insisting it does not want regime change, but “to modify the Iranian regime’s behaviour.”

Increasingly, the US is focusing on Tehran’s regional role in the Middle East, though that was never part of 2015’s multilateral nuclear agreement. There has been no evidence Iran violated that deal.

The auto sector and the exports of carpets and foodstuffs will also be affected by the sanctions, as will Iranian imports of graphite, aluminium, steel, coal and some software. Iran will also be banned from buying certain aircraft.

Iranian Foreign Minister Javad Zarif pointed to the aviation sector restrictions and said the US sanctions are “endangering ordinary Iranians.”

In November, energy sector sanctions will return, with the US working to draft countries around the world into reducing their oil imports from Iran to zero. President Donald Trump vowed to enforce “complete compliance.”

Sanctions imposed by then-president Barack Obama ahead of the 2015 deal enjoyed wide international support, amid efforts to ensure Tehran did not obtain a nuclear weapon.

However, Trump has struggled to build a global coalition for his latest efforts as many of Washington’s partners – including European allies – continue to support the agreement, known as the JCPOA, and do not see signs Iran violated its terms.

“The JCPOA, a horrible, one-sided deal, failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb,” Trump said Monday as he signed an order formally reintroducing sanctions.

The deal “threw a lifeline of cash to a murderous dictatorship that has continued to spread bloodshed, violence and chaos,” Trump said.

The Iranian rial has been in sharp decline this year, in part due to concerns over the incoming sanctions. Oil sector sanctions will bite harder, while there are broad signs of unrest over the economy.

The US’ dominant role in the world’s financial system allowed it to pressure countries and companies into compliance with its unilateral moves, though China and Russia remain key exceptions.

A US administration official said the Iranian government was using financial resources freed up by the nuclear deal “to spread human misery.” The US was seeking now to address the “totality of the Iranian threat” in the Middle East.

“None of this needs to happen,” the official said of sanctions.

Trump is willing to meet the Iranian leadership at “any time” for talks, though Iran has been cool to the offer, saying the US had shown itself to be untrustworthy by withdrawing from the nuclear deal.

Iranian President Hassan Rowhani told state television that he was open to talks with the US, but only if it is willing to compensate Tehran for interventions it has staged against the country since 1953 and “apologize to us.”

Rowhani said Iran would abide by the terms of the 2015 deal. “Despite the sanctions, we will prove that we stick to our word and honour international deals,” he said.

US National Security Advisor John Bolton told Fox News the Iranians “flatly turned them down” on previous offers of talks.

“If the ayatollahs want to get out from under the squeeze they should come and sit down,” Bolton said.

 



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