THE European Union is opposed to the United States’ decision to reimpose oil and financial sanctions against Iran, European Economic Affairs Commissioner Pierre Moscovici said yesterday.
“The European Union does not approve of it,” Moscovici told Franceinfo radio, hours after further US sanctions on Iran came into force.
Washington decided to reinstate punitive measures that were lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and added 300 new designations in Iran’s oil, shipping, insurance and banking sectors.
The Belgium-based Swift financial messaging service said it is suspending some unspecified Iranian banks’ access to its messaging system in the interest of the stability and integrity of the global financial system.
Swift is used to send data, including money transfers, between banks.
In a brief statement, Swift made no mention of US sanctions coming back into effect on some Iranian financial institutions on Monday as part of US President Donald Trump’s effort to force Iran to curtail its nuclear, missile and regional activities.
The Swift statement said suspending the Iranian banks’ access to the messaging system was a “regrettable” step, but was “taken in the interest of the stability and integrity of the wider global financial system”.
Having abandoned the 2015 Iran nuclear deal, Mr Trump is trying to cripple Iran’s oil-dependent economy and force Tehran to quash not only its nuclear ambitions and its ballistic missile program but its support for militant proxies in Syria, Yemen, Lebanon and other parts of the Middle East.
Swift is caught between two contrary regulatory demands.
The US government has told Swift that it is expected to comply with US sanctions and it could face sanctions itself if it fails to do so. On the other hand, Swift is barred from doing so under the European Union’s so-called blocking statute, which could subject it to European penalties for complying with US law.
(Reuters) Iran will sell its oil and break sanctions reimposed by the United States on its vital energy and banking sectors, Iranian President Hassan Rouhani said on Monday.
“America wanted to cut to zero Iran’s oil sales … but we will continue to sell our oil … to break sanctions,” Rouhani told economists at a meeting broadcast live on state television.
The United States said on Friday it will temporarily allow eight importers to keep buying Iranian oil when it re-imposes sanctions on Monday aimed at forcing Tehran to curb its nuclear, missile and regional activities.
China, India, South Korea, Japan and Turkey – all top importers of Iranian oil – are among eight countries expected to be given temporary exemptions from the sanctions to ensure crude oil prices are not destabilised.
The restoration of sanctions is part of a wider effort by U.S. President Donald Trump to force Iran to curb its nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.
“Today the enemy (the United States) is targeting our economy … the main target of sanctions is our people,” Rouhani said.
In May, Trump exited Iran’s 2015 nuclear deal with six powers and Washington reimposed first round of sanctions on Iran in August.
The deal had seen most international financial and economic sanctions on Iran lifted in return for Tehran curbing its disputed nuclear activity under U.N. surveillance.
U.S. Secretary of State Mike Pompeo said on Sunday the penalties set to return on Monday “are the toughest sanctions ever put in place on the Islamic Republic of Iran.”
However, Iran’s clerical rulers have dismissed concerns about the impact of sanctions on the country’s economy.
“This is an economic war against Iran but … America should learn that it can not use the language of force against Iran … We are prepared to resist any pressure,” Rouhani said.
To keep the deal alive, the remaining parties to the Iran nuclear deal are trying to maintain trade with Tehran despite scepticism this is possible despite U.S. sanctions to choke off Iranian oil sales.
Khashoggi probe will exonerate leader: Alwaleed
Diplomats told Reuters last month that the new EU mechanism to facilitate payments for Iranian oil exports should be legally in place by Nov. 4 but not operational until early next year.
They cautioned, however, that no country had volunteered to host the entity, which was delaying the process.
“We are in regular contact with other signatories of the nuclear deal … setting up (a) mechanism to continue trade with the European Union will take time,” Iran’s Foreign Ministry spokesman Bahram Qasemi told a weekly news conference on in Tehran.
He also said the reimposed U.S. sanctions were part of a psychological war launched by Washington against Tehran, adding that “America’s economic pressure on Iran is futile.”
COMBO – This combination of two pictures shows U.S. President Donald Trump, left, on July 22, 2018, and Iranian President Hassan Rouhani on Feb. 6, 2018. The Trump administration is announcing the reimposition of all U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal. The Trump administration is announcing the reimposition of all U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal. (AP Photo)
WASHINGTON (AP) — The Trump administration on Friday restored U.S. sanctions on Iran that had been lifted under the 2015 nuclear deal, but carved out exemptions for eight countries that can still import oil from the Islamic Republic without penalty.
The sanctions take effect Monday and cover Iran’s shipping, financial and energy sectors. They are the second batch the administration has re-imposed since Trump withdrew from the landmark accord in May.
The 2015 deal, one of former President Barack Obama’s biggest diplomatic achievements, gave Iran billions of dollars in sanctions relief in exchange for curbs on its nuclear program, which many believed it was using to develop atomic weapons. Trump repeatedly denounced the agreement as the “worst ever” negotiated by the United States and said it gave Iran too much in return for too little.
But proponents as well as the other parties to the deal — Britain, China, France, Germany, Russia and the European Union — have vehemently defended it. The Europeans have mounted a drive to save the agreement without the U.S., fearing that the new sanctions will drive Iran to pull out and resume all of its nuclear work.
Friday’s announcement comes just days before congressional midterm elections in the U.S., allowing Trump to highlight his decision to withdraw from the deal — a move that was popular among Republicans.
Shortly after the announcement, Trump tweeted what looks like a movie poster image of himself that takes creative inspiration from the TV series “Game of Thrones” with the tagline “Sanctions are Coming, November 5.”
This image taken from the Twitter account of President Donald J. Trump @realDonaldTrump, shows a movie-style poster to announce the re-imposition of sanctions against Iran. (Donald J. Trump Twitter account via AP)
In a statement issued Friday night, Trump said, “Our objective is to force the regime into a clear choice: either abandon its destructive behavior or continue down the path toward economic disaster.”
Secretary of State Mike Pompeo said the sanctions are “aimed at fundamentally altering the behavior of the Islamic Republic of Iran.” He has issued a list of 12 demands that Iran must meet to get the sanctions lifted that include an end to its support for terrorism and military engagement in Syria and a halt to nuclear and ballistic missile development.
Pompeo said eight nations will receive temporary waivers allowing them to continue to import Iranian petroleum products as they move to end such imports entirely. He said those countries, which other officials said would include U.S. allies such as Turkey, Italy, India, Japan and South Korea, had made efforts to eliminate their imports but could not complete the task by Monday.
The waivers will be valid for six months, during which time the importing country can buy Iranian oil but must deposit Iran’s revenue in an escrow account. Iran can spend the money but only on a narrow range of humanitarian items.
Pompeo defended the oil waivers and noted that since May, when the U.S. began to press countries to stop buying Iranian oil, Iran’s exports had dropped by more than 1 million barrels per day.
He said the Iranian economy is already reeling from the earlier sanctions, with the currency losing half its value since April and the prices of fruit, poultry, eggs and milk skyrocketing.
Some Iran hawks in Congress and elsewhere said Friday’s move should have gone even further. They were hoping for Iran to be disconnected from the main international financial messaging network known as SWIFT.
With limited exceptions, the re-imposed U.S. sanctions will hit Iran as well as countries that do not stop importing Iranian oil and foreign firms that do business with blacklisted Iranian entities, including its central bank, a number of private financial institutions, and state-run port and shipping firms, as well as hundreds of individual Iranian officials.
“Our ultimate aim is to compel Iran to permanently abandon its well-documented outlaw activities and behave as a normal country,” Pompeo told reporters in a conference call with Treasury Secretary Steven Mnuchin.
Mnuchin said 700 more Iranian companies and people would be added to the sanctions rolls. Those, he said, would include more than 300 that had not been included under previous sanctions.
Israel, which considers Iran an existential threat and opposed the deal from the beginning, welcomed Friday’s announcement.
“Thank you, Mr. President, for restoring sanctions against an Iranian regime that vows and works to destroy the Jewish state,” Israeli Ambassador to the U.S. Ron Dermer said in a tweet.
Mnuchin defended the decision to allow some Iranian banks to remain connected to SWIFT, saying that the Belgium-based firm had been warned that it will face penalties if sanctioned institutions are permitted to use it. And, he said that U.S. regulators would be watching closely Iranian transactions that use SWIFT to ensure any that run afoul of U.S. sanctions would be punished.
(ZH) Tankers carrying some 22 million barrels of Iranian crude are on their way to the Chinese port of Dalian, Reuters reports citing ship-tracking data, and noting this is a record-high amount of crude from Iran to be received by Chinese clients amid falling imports to other large clients, such as Japan and South Korea. The usual rate of Iranian crude oil cargoes going into China has been between 1 million and 3 million barrels monthly.
“As our leaders have said it will be impossible to stop Iran from selling its oil. We have various ways of selling our oil and when the tankers reach Dalian, we will decide whether to sell it to other buyers or to China,” the Reuters source said.
Both countries earlier this month said they had completely suspended their purchases of Iranian crude ahead of the U.S. sanctions, which will enter into effect on November 5.
Dalian is a major oil hub in China and, Reuters notes, Iran has used storage facilities at the port to keep crude during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India.
Reuters’ data confirms earlier reports from TankerTrackers.com, which repeatedly warned that Iran’s oil exports have not fallen by as much as official shipping data suggests: NIOC tankers began switching off their transponders to conceal their routes earlier this year.
The Financial Times’ David Sheppard cited the satellite imaging data from the independent tracker service in a recent story: according to it, Iran’s oil exports have not fallen by half since April’s 2.5 million bpd as most media report. In fact, he says, the data suggests they’d fallen by a modest amount and as of mid-October totaled over 2.2 million bpd.
China has never made a secret of its plans to continue buying Iranian crude despite attempts by Washington officials to persuade Chinese refiners to at least reduce their intake. At one point earlier this year, Beijing was said to have agreed not to increase the amount of Iranian crude it buys, but since then the trade row between China and the United States has deepened, casting a shadow over the likelihood of China sticking to its word.
(Haaterz) After a meeting between the countries, Britain, China, France, Germany and Russia announced their commitment to assisting Iran’s exports and continuing trade despite U.S. sanctions
The remaining parties to the Iran nuclear deal on Monday agreed to keep working to maintain trade with Tehran despite skepticism this is possible as U.S. sanctions to choke off Iranian oil sales resume in November.
U.S. President Donald Trump decided in May to abandon the pact and to restore economic sanctions on Iran, including those that seek to force the OPEC member’s major oil customers to stop buying Iranian crude.
In a statement after a meeting of Britain, China, France, Germany, Russia and Iran, the group said they were determined to develop payment mechanisms to continue trade with Iran despite skepticism by many diplomats that this will be possible.
“Mindful of the urgency and the need for tangible results, the participants welcomed practical proposals to maintain and develop payment channels notably the initiative to establish a Special Purpose Vehicle (SPV) to facilitate payments related to Iran’s exports, including oil,” the group said in a joint statement issued after the statement.
Several European diplomats said the SPV idea was to create a barter system, similar to one used by the Soviet Union during the Cold War, to exchange Iranian oil for European goods without money changing hands.
The idea is to circumvent U.S. sanctions due to be restored in November under which Washington can cut off from the U.S. financial system any bank that facilitates an oil transaction with Iran.
Speaking to reporters after the meeting, European Union foreign policy chief Federica Mogherini said the decision to set up such a vehicle had already been taken and that technical experts would meet again to flesh out the details.
“In practical terms this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world,” she said.
Many diplomats and analysts, however, are skeptical such a vehicle could ultimately thwart U.S. sanctions given that the United States could amend its sanctions laws to prohibit such barter transactions.
“The key is to keep all possibilities open so that we can signal to the Iranians that the door isn’t closing,” said a senior French diplomat.
The European Union, has so far failed to devise a workable legal framework to shield its companies from U.S. sanctions that go into effect in November and that, among other things, seek to choke off Iran’s oil sales, diplomats said.
Highlighting how difficult it will be for the Europeans to come up with concrete solutions, French state-owned bank Bpifrance on Monday abandoned a plan to set up a financial mechanism to aid French firms trading with Iran.
The crux of the 2015 nuclear deal, negotiated over almost two years by the administration of former U.S. President Barack Obama, was that Iran would restrain its nuclear program in return for the relaxation of sanctions that had crippled its economy.
Trump considered it flawed because it did not include curbs on Iran’s ballistic missiles program or its support for proxies in Syria, Yemen, Lebanon and Iraq.
The impending return of U.S. sanctions has contributed to a slide in Iran’s currency. The rial has lost about two-thirds of its value this year, hitting a record low against the U.S. dollar this month.
(EUobserver) France has accused Iran of plotting a bomb attack against an anti-Iranian group in Paris, the NCRI. Danish police, last Friday, also sealed bridges and ferries on suspicion Iranian intelligence was planning a strike against another anti-Iranian group, the ASMLA, in Denmark, which Iran blames for a recent terrorist attack in Tehran. The news threatens EU-Iranian solidarity against a US plan to scrap the Iran nuclear arms treaty.
(France24) The United States re-imposed a wave of tough, unilateral sanctions against Iran on Tuesday, bringing back into effect harsh penalties that had been lifted under a historic, multi-party nuclear agreement that President Donald Trump abandoned in May.
The first of two rounds of US sanctions kicked in at 12:01 am (0431 GMT), targeting Iran‘s access to US banknotes and key industries, including cars and carpets.
Iranians are already seeing the effects of the sanctions, with Iran’s rial currency losing around half its value since Trump announced the US would withdraw from the 2015 nuclear accord.
Trump‘s contempt for the nuclear deal dates back to his time as presidential candidate and on May 8, he made good on a pledge to pull America out of the international agreement.
He blasted the agreement yet again Monday, calling it a “horrible, one-sided deal (that) failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb.”
The unilateral withdrawal came despite other parties to the agreement — Britain, China, France, Germany, Russia and the EU — pleading with Trump not to abandon the pact aimed at blocking Iran from acquiring a nuclear weapon, and highlights the US leader’s go-it-alone style and his distaste for multilateral agreements.
In an executive order Monday, Trump said the sanctions seek to pile financial pressure on Tehran to force a “comprehensive and lasting solution” to Iranian threats, including its development of missiles and regional “malign” activities.
The European Union’s diplomatic chief Federica Mogherini said the bloc, as well as Britain, France and Germany, deeply regretted Washington’s move.
“We are determined to protect European economic operators engaged in legitimate business with Iran,” she said in a statement.
Many large European firms are leaving Iran for fear of US penalties, and Trump warned of “severe consequences” against firms and individuals that continued to do business with Iran.
The impact of the return of sanctions has ramped up tensions inside Iran, which has seen days of protests and strikes in multiple towns and cities over water shortages, high prices and wider anger at the political system.
Severe reporting restrictions have made it impossible to verify the swirl of claims coming through social media.
‘Remove the knife’
Trump said he was open to reaching a more comprehensive deal with Iran “that addresses the full range of the regime’s malign activities, including its ballistic missile program and its support for terrorism.”
But Iranian President Hassan Rouhani was unimpressed by the offer.
“If you’re an enemy and you stab the other person with a knife, and then you say you want negotiations, then the first thing you have to do is remove the knife,” the Iranian leader said in an interview on state television.
“They want to launch psychological warfare against the Iranian nation,” Rouhani said. “Negotiations with sanctions doesn’t make sense.”
John Glaser, director of foreign policy studies at the Cato Institute, noted that the US sees the sanctions “as a tool to pressure Iran to come back to the negotiating table to rehash the nuclear deal on terms more to Trump’s liking. That is not going to happen.”
The second phase of US sanctions, which takes effect November 5 and will block Iran’s oil sales, is due to cause more damage, though several countries including China, India and Turkey have indicated they are not willing to entirely cut their Iranian energy purchases.
Iran’s Foreign Minister Mohammad Javad Zarif told reporters the global reaction to Trump’s move showed that the US was diplomatically “isolated,” but acknowledged the sanctions “may cause some disruption.”
Rouhani’s government has taken emergency measures to stem the collapse of the rial ahead of the return of sanctions.
(Haaretz) Middle Eastern spy agency claims Dr. Aziz Asber was working closely with Iran’s Quds Force chief on long range missiles capable of reaching Israeli cities
Israel is responsible for the car bombing assassination of a Syrian rocket scientist on Sunday, The New York Times reported Tuesday.
The account in the report, given by an official from a Middle Eastern intelligence agency who spoke on the condition of anonymity due to the highly classified nature of the operation, claims the car bombing near the northwestern Syrian city of Masyaf that killed Dr. Aziz Asber was executed by Israeli Mossad agents.
Dr. Asber ran the northern bureau for research and science in Masyaf, where he was believed to be developing an underground weapons manufacturing facility with the help of the Iranians.
The official, who said his agency was notified of the operation, alleged that this was the fourth time in the last three years Israel has covertly killed a weapons engineer on foreign soil.
Despite the attack being claimed by a Syrian rebel group, the Abu Amara Brigades, pro-Assad and Hezbollah-affiliated media outlets were quick to point the finger at Israel as responsible for the assassination.
According to the official, the Mossad had been keeping tabs on Asber for some time and believed him to be working closely with Iran’s Quds Force chief Qassem Soleimani on future plans to manufacture precision-guided missiles in Syria by modifying Syrian SM6000 Tishereen rockets.
Israel had targeted Asber as key player of the Syrian missile program long before the civil war had begun, according to a representative of the Syrian-Iranian alliance who spoke on terms of anonymity, as he was not allowed to talk to Western journalists. He was close with both Syrian and Iranian top brass, and coordinated with Iranian and Hezbollah forces working in Syria, said the intelligence official.
In recent months, in his role as chief of a classified weapons development program known as Sector 4, Asber was focused on modifying the Syrian artillery array’s range and accuracy – which the official posits made his termination more imperative for Israel, as it works to limit and suppress Iran and Hezbollah’s presence and involvement in Syria.
Several strikes on Masyaf, the city where the Scientific Studies and Research Center is located, have been attributed to Israel in recent years. The last one was on July 22. The factory Asber was said to be building with Iranian aid is set to replace the one allegedly destroyed by Israel last September.
The Israeli government has not officially commented on the report, or the allegations. Defense Minister Avigdor Lieberman, speaking to Israel’s News Company, dismissed the claims and said “Every time, they try to place the blame on us. So we won’t take this too seriously.”
In my opinion the EU has a close to zero percentage points chance of protecting its Companies,in view of the long arm of the US, or maintaining normal bussiness with Iran.
In spite of its ideas of grandeur, the EU faces an humiliating duck down on this issue.
Only a fool would think (unless given a waiver) an European Company would take the risk of doing business with Iran.
But unfortunately the European Union is full of fools.
Francisco (Abouaf) de Curiel Marques Pereira
(FinancialTribune) If it wants to keep the nuclear deal alive, the EU will need to reduce the impact of US sanctions on its trade with Iran.
As an initial step, European governments are offering legal advice to companies and seeking exemptions from US sanctions in the hope that they can continue to do business with Iran, although they are highly unlikely to obtain them.
The EU could also attempt to revive its blocking statute. Introduced in 1996, following the adoption of new US sanctions on Cuba, the statute prohibits EU-based companies from complying with certain US extraterritorial sanctions.
European countries could also set up credit lines for businesses to make it easier to make payments in Iran, without going through the international payments system, as Italy has done. However, these steps will not be enough to mitigate the impact of US sanctions.
The EU’s blocking statute did not stop European companies following US law: Firms were more fearful of US sanctions than of the statute. Likewise, if businesses have to choose between the US and the Iranian market, only companies that do limited business in the US are likely to choose Iran, reads an article published on the website of the London-based think tank Center for European Reform. Excepts follow:
In theory, the EU could take more ambitious steps to curtail the impact of US sanctions. For example, the EU could offer trade liberalization to Iran. The EU could also agree to indemnify European businesses for the costs of US sanctions and offer euro-denominated loans to Iran through the European Investment Bank.
Finally, the EU could also threaten to retaliate against US sanctions imposed on European companies by sanctioning US companies in Europe. However, all of these steps would lead to a sharp rupture in transatlantic relations and it seems doubtful the EU will have the appetite to implement them.
If US President Donald Trump thinks that the EU is sabotaging US policy and helping Iran, he is highly likely to immediately impose the so-far delayed steel and aluminum tariffs, and to hit European firms with sanctions.
Mindful of the risks inherent in starting a trade war with the US, the EU will probably not be able to provide Tehran with extensive support. The risk is that the JCPOA will unravel over time, as business dries up and the Iranian economy suffers.
The EU can take steps to preserve the deal while keeping confrontation with the US below the critical threshold of tit-for-tat sanctions. It will also have to continue the diplomatic efforts of the past few months, trying to iron out the contentious elements of JCPOA with Iran and the US.
Companies that buy Iranian crude oil must completely cut those exports by the start of November, a senior State Department official told CNBC.
That indicates the Trump administration will not allow countries to gradually phase out Iranian crude exports over many months, as the Obama White House allowed.
Oil prices spiked following the announcement, which comes at a time when oil markets are finely balanced and crude futures have recently hit 3½-year highs.
Oil buyers have to cut Iranian crude imports by November, a U.S. State official says
Companies that buy Iranian crude oil must completely cut those exports by the start of November or else they will face powerful U.S. sanctions, a senior State Department official told reporters on Tuesday.
The State Department has conveyed that message to European diplomats in recent talks, the official said. The Trump administration has not yet held talks with China, India or Turkey about their purchases of Iranian crude, but it intends to pressure them to entirely cut their imports under threat of sanctions, the official added.
Oil prices spiked following the announcement, which indicates that President Donald Trump will not follow the Obama administration model of allowing countries to gradually phase out Iranian crude exports over many months. The hardline approach comes at a time when oil markets are finely balanced and crude prices have recently hit 3½-year highs.
Iran, OPEC’s third biggest oil producer, exports more than 2 million barrels a day. OPEC and other oil producers including Russia agreed last week to ease production caps that have been in place for 18 months in order to prevent prices from spiking as Venezuela’s output continues to sink and the U.S. sanctions on Iran’s exports loom.
President Donald Trump withdrew the United States from the Iran nuclear deal in May to pursue a maximum pressure campaign. At the time, his administration gave foreign companies either 90 or 180 days to wind down their business with Iranian counterparts, depending on the type of commercial activity.
A crucial question was whether the Trump administration would follow the model President Barack Obama put in place. His administration asked buyers to cut their imports of Iranian crude by 20 percent every 180 days when it ramped up its pressure campaign against Iran.
Oil hits 1-month high on Iran sanctions
If Trump followed the same model, that could have pushed the impact into the first half of 2019, according to RBC Capital Markets. But the State Department confirmed on Tuesday that Iranian crude buyers should be reducing purchases now, with the goal of zeroing out their purchases by Nov. 4, the 180-day mark from Trump’s nuclear deal pullout and the renewal of U.S. sanctions.
“That is why we’ve offered this window since May 8, as sort of a drawdown period,” the senior State Department official said.
The United States was able to quickly cut Iran’s shipments under Obama, largely because it had the support of its European allies. European countries imposed their own sanctions on Iranian crude exports, which wiped out the Continent’s purchases in about six months.
In contrast, Britain, France, Germany and the wider European Union have voiced strong opposition to Trump’s pullout and put in place measures designed to protect their companies from so-called secondary sanctions. Those secondary sanctions punish companies that engaged in sanctioned business with Iranian entities, threatening to lock them out of the massive U.S. market and isolate them from the international financial system.
The State Department official said diplomats have been in Europe garnering support for the U.S. position among the EU3, isolating streams of Iranian funding and highlighting “the totality of Iran’s malign behavior across the region.”
“On the diplomatic front, we have had secondary sanctions in place in Iran since 1996,” the official said. “These are discussions we are extremely used to having. We have a lot of diplomatic muscle memory” for urging partners to cut Iranian oil purchases.
To be sure, the United States has had secondary sanctions on the book for more than 20 years, but Presidents Bill Clinton and George W. Bush chose not to enforce them for fear of sparking a diplomatic crisis and trade war with Europe.
The 2015 Iran nuclear deal lifted sanctions on Iran in exchanged for its leaders in Tehran accepting limits on its nuclear program and allowing inspectors into its atomic facilities. The Trump administration left the deal after failing to reach an agreement with European partners over expanding the conditions to include limiting Iran’s ballistic missile program, addressing its role in Middle East conflicts and extending key parts of the accord that begin to expire in 2025.
The administration does not expect to grant any waivers to companies that purchase Iranian oil or invest in its energy industry, the official said.
(BBG) Iran plans to establish a secondary market for foreign exchange to help get around a dollar shortage that has hurt trade and is likely to worsen as U.S. sanctions resume.
The secondary market will allow exporters of non-oil commodities to sell their foreign currency earnings to importers of consumer products, the state-run IRNA news agency quoted Iranian Central Bank Governor Valiollah Seif as saying.
The introduction of a secondary foreign exchange market is the latest in a series of steps Iran has taken to reduce the impact of renewed sanctions on its economy.
Even before Donald Trump announced in May that the U.S. would be leaving the nuclear accord, Iran’s central bank imposed tight restrictions on foreign currency transactions in an effort to shut down a flourishing black market and halt a slump in the value of the rial against the dollar.
The Islamic Republic has also sought to wean its economy off the dollar by doing more trade in the euro and other currencies, though traders and analysts say that will not be enough to mitigate the impact of sanctions on its economy.
(BBG) Bloomberg’s Annemarie Hordern reports on OPEC’s upcoming meeting.
Even with Iran threatening to block an increase in OPEC’s oil production, Saudi Arabia still has options.
Tehran says it has Iraqi and Venezuelan support to veto any proposal for more output, a position taken by both Saudi Arabia and Russia. “If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity,” Hossein Kazempour Ardebili, Iran’s OPEC representative, said on Sunday, before the group meets in Vienna on Friday.
The statute of the Organization of Petroleum Exporting Countries does indeed give any member the right to block any deal, under Article 11 C:
“Each Full Member Country shall have one vote. All decisions of
the Conference, other than on procedural matters, shall require
the unanimous agreement of all Full Members.”
Yet Saudi Arabia can still bypass a veto. First, it can block any formal OPEC-wide communique. Then, it can gather a coalition of supporters within the group and publish its own statement, which could outline a new production policy.
That’s exactly what happened 18 years ago, when Iran rejected a Saudi-backed plan to boost output. Back then, eight countries joined the Saudis, resulting in an OPEC-9 communique that excluded Iran and Iraq.
Saudi Arabia may not choose that option this time. Unless it has backing from beyond its core supporters within OPEC, traditionally Kuwait and the United Arab Emirates, it risks appearing isolated.
That leaves the option of no communique at all. That happened in 2011 when then-Saudi Oil Minister Ali Al-Naimi walked out, saying the group had “one of the worst meetings we have ever had”. Within hours, the Saudis set their own policy unilaterally.
Another option for the Saudis is to accept defeat on a formal production increase, but start cheating on output quotas. While that would also be in line with OPEC tradition, it would be a first for Saudi Oil Minister Khalid Al-Falih, who has stuck scrupulously to the agreements.
Iran acknowledged that both Saudi Arabia and Russia, which is part of the wider OPEC+ agreement, can bypass a veto, but warned that any such move would lead to the disintegration of the 2016 deal that has helped oil prices to more than double.
“If the two want to act alone, that’s a breach of the cooperation agreement,” Kazempour Ardebili said. “The market is well-supplied, and OPEC should abide by its decision up to the end of the year.”
Iran says it has begun work on increasing its uranium enrichment capacity, in case its 2015 nuclear agreement with world powers collapses.
The head of Iran’s atomic agency told reporters that it was developing infrastructure to build advanced centrifuges at the Natanz facility.
The agency has informed the United Nations of the move, but said it would remain within the rules of the deal.
President Donald Trump withdrew the US from the deal with Iran last month.
European powers are now scrambling to salvage the nuclear agreement, which imposes restrictions on Iran’s nuclear activities in exchange for lifting sanctions.
A spokesman for the International Atomic Energy Agency (IAEA) said on Tuesday that the agency had received a letter from Iran on 4 June informing it that there was a “tentative schedule to start production of UF6”, referring to uranium hexafluoride, the feedstock for centrifuges.
What is the work designed to achieve?
The head of Iran’s Atomic Energy Organisation, Ali Akbar Salehi, told reporters on Tuesday that preparations were under way to build new centrifuges.
“If we were progressing normally, it would have taken six or seven years, but this will now be ready in the coming weeks and months,” he said.
Mr Salehi said this was in line with instructions from Supreme Leader Ayatollah Khamenei, who has ordered officials to be prepared to step up enrichment if the nuclear deal – known as JCPOA – falls apart completely.
“If the JCPOA collapses – please pay attention, if the JCPOA collapses – and if we decide to assemble new centrifuges, we will assemble new-generation of centrifuges. However, for the time being, we move within the framework of the JCPOA,” Mr Salehi said.
Is such work allowed under the accord?
Mr Salehi insists Iran is acting “within the framework of the rules and commitments of the nuclear deal”.
The accord signed with the US, France, Germany, the UK, Russia, and China, limits uranium enrichment by Iran to 3.67%, far below the roughly 90% threshold of weapons-grade material.
In exchange, the country received relief from crippling sanctions.
Under the agreement, Iran can build parts for the centrifuges as long as it does not put them into operation within the first decade.
President Trump argued that these conditions did not go far enough to curb Iran’s nuclear ambitions and pulled out of the agreement, leaving the remaining European signatories scrambling to save it.
Iran insists its nuclear programme is entirely peaceful. Its compliance with the deal has been verified by the IAEA.
What is the purpose of the Natanz facility?
It is Iran’s largest uranium enrichment facility, and began operating in 2007 in contravention of UN Security Council resolutions.
It consists of underground buildings capable of holding up to 50,000 centrifuges. Uranium hexafluoride gas is fed into centrifuges, which separate out the most fissile uranium isotope U-235.
The facility produces low-enriched uranium, which has a 3%-4% concentration of U-235.
That can be used to produce fuel for nuclear power plants, but also be enriched to the much higher level of 90% needed to produce nuclear weapons.
A clear signal from Tehran
Analysis by Jonathan Marcus, BBC diplomatic correspondent
This is a clear signal from Tehran that it is not simply a bystander and that if the nuclear deal collapses it has options too.
It comes as key European countries struggle to keep the nuclear agreement on life support.
Major international companies are already beginning to distance themselves from Iran in fear of US sanctions.
The move inevitably increases the sense of tension and it probably does those countries eager to maintain the deal few favours.
It highlights the whole issue of Iran’s formerly ambitious enrichment programme and again raises the question as to exactly what this enrichment programme was ultimately for.
…Today’s announcement was only the public notice of the funeral…
…No deal can survive with a veto from the United States…
…Just imagine if the US’s legal authorities start going after all the world’s companies that deal with Iran, on reinstated full sanctions…
…No way Jose.
…Regardless of all the crap one might listen to…
Francisco (Abouaf) de Curiel Marques Pereira
(BBG) Donald Trump didn’t kill the Iran nuclear deal. He just shrank its membership by one.
That was the line taken by the European Union immediately after the U.S. president announced his withdrawal from the 2015 accord. Germany, France and the U.K. all said they’ll stick to their commitments. Iran’s Supreme Leader Ayatollah Ali Khamenei said he wants to see them deliver.
“I don’t trust these three countries either,” Khamenei said on his website. “If you want to have a deal, we need practical guarantees otherwise they will do the same as the U.S. If they can’t give definitive guarantees, it won’t be possible to continue.”
But it’s not clear whether the EU, China and Russia will be able to ensure Iran receives the promised economic benefits — including free access to international oil markets and accelerating flows of trade and investment — that persuaded the Islamic Republic’s leaders to sign up to an agreement capping its nuclear program.
Before Trump’s announcement Tuesday that he’ll pull the U.S. out of the deal, Western businesses had already been reluctant to take the plunge into a country still subject to multiple curbs imposed by Washington. The exit throws billions of dollars of European investments that had been planned into disarray. President Hassan Rouhani said Iran will push to make the deal work but may step up uranium enrichment again if the efforts of the remaining parties don’t yield tangible results.
“The international reach of U.S. sanctions makes the U.S. the economic policeman of the planet, and that is not acceptable,” French Finance Minister Bruno Le Maire said Wednesday in an interview on France Culture radio. He branded Trump’s decision a “major mistake” and said he’ll lobby Treasury Secretary Steven Mnuchin this week to grant exemptions for European firms. French President Emmanuel Macron is due to speak to Rouhani later in the day.
Oil rebounded to trade at the highest level since 2014 with the sanctions aimed at cutting exports from OPEC’s third-largest producer. Brent for July settlement climbed as much as 3.1 percent to $77.20 a barrel on the London-based ICE Futures Europe exchange and was 2.9 percent higher at 12:46 p.m. in the British capital.
Trump’s now promising to introduce a host of new restrictions that will test an economy already under strain. Iran’s rial has hit record lows against the dollar in recent months, forcing Rouhani’s government to impose currency controls. Protests that spread through several Iranian cities in December and January were linked to stagnation and rising costs of living, as the nuclear deal failed to deliver economic liftoff.
In Iran’s capital, where many were glued to Trump’s speech on TV, 32-year-old masters student Golnaz said she’s worried that hard times may be ahead. “What if the Europeans also apply sanctions,?” she said by phone from north Tehran. “If people go back to those times when money was tight, food was even difficult for many to buy, it’ll be really bad.” She declined to be identified by her family name because of the sensitivity of speaking to foreign media.
“Iran will now turn to the Europeans and say: “This happened. What are you going to do?’,” said Amir Handjani, a senior fellow at the Atlantic Council.
“Iran wants more than just political rhetoric from European leaders,” he said — and that won’t be easy to deliver. “It’s one thing for the EU to say we remain committed and we won’t take steps that will undermine the deal. It’s another for European companies and banks to trade and invest in Iran.”
The EU has policy tools available that it’s used in the past to protect companies from U.S. sanctions — but they’re often outweighed, in the eyes of executives, by the risk of losing access to the world’s biggest economy.
Pulling the Plug
French oil giant Total SA, for example, says it will pull out of a joint venture in Iran if Trump re-imposes sanctions and it can’t win an exemption. Siemens AG Chief Financial Officer Ralf Thomas said he is assessing the impact for business in the country and the company will always comply with export regulations. Volkswagen AG, which began selling vehicles in the Islamic Republic last year, also vowed to stick to the rules.
Chancellor Angela Merkel said Germany will also be seeking talks with the Iranian government to work out what happens next, describing the U.S. decision as “grave.” U.K. Prime Minister Theresa May acknowledged Trump’s criticisms of the deal — Tehran’s ballistic missile program, the sunset clause on the nuclear restrictions, and its regional meddling — but insisted the accord should serve as a foundation for broader agreement.
“Those are issues are need to be addressed and we are working with our European and other allies to do just that,” May told lawmakers in London Wednesday.
Russia said late Tuesday it was “deeply disappointed” by the U.S. decision to pull out of the deal, and ready to work with other parties to keep it alive. China urged all parties involved to continue efforts to implement the agreement.
Rouhani said in a televised address that it was already clear the U.S. under Trump wasn’t committed to an accord also signed by Russia and China. He said his foreign ministry will start talks with all the other participants on how it can still be made to work. But Iran has ruled out renegotiation.
…I would argue that Iran is not exactly a law abiding Country in any way…
(BBG) Now that President Donald Trump has officially withdrawn the U.S. from the Iran Joint Comprehensive Plan of Action, the world has to figure out how to live with that decision. Strategic reappraisals are taking place in Tehran, Europe and, most importantly, Moscow.
There are only two leaders who are happier today than they were yesterday: One is Trump himself; the other is Israeli Prime Minister Benjamin (“Bibi”) Netanyahu. Tearing up the Iran deal was Trump’s call, but it would not have happened without Netanyahu’s stubborn willingness to stand up to the world — and especially Israel’s own generally hawkish security experts.
The prevailing view among Israeli security experts remains one of pragmatic opposition to scrapping the deal. But Netanyahu rejects that view as accepting an unstable status quo when more radical action could achieve lasting change that would enhance Israeli and global security. Bibi may just be right.
In a recent interview with The Daily Beast, former Prime Minister Ehud Barak aired the consensus view: “Is it smarter to tear the deal apart or keep it in place?” he mused. His conclusion: “There’s a lot of logic in maintaining it in place.”
Barak’s rhetorical question recalls something I heard last October from Isaac Ben Israel, a retired major general who now heads the National Council for Space Research and chairs the Department of Security Studies at Tel Aviv University. “Before the deal, Iran was two months away from having enough fissile material to complete its project,” he told me. “It had enriched uranium, not only 3.5 percent but also 19.7 percent. This was acquired despite an international sanctions regime. If the deal collapses, is it likely that more sanctions will deter Iran from resuming its project?”
These comments reflect considered expert opinion more broadly. But decades in office have convinced Netanyahu that he knows more, and sees further, than his advisers and generals.
After all, it was against the better judgment of the same experts that Netanyahu made a long-odds bet on Donald Trump winning the presidency in 2016. Not only was Trump electable, he wagered, but for the first time there would be an American president who saw the dangers of Iran in his way.
After Trump’s Iran decision, Netanyahu no doubt feels vindicated. It appears that the two leaders now share the same playbook. But what happens next is crucial. For both Trump and Netanyahu, scrapping the Iran deal is only a first step to a bigger goal.
If Iran’s supreme leader, Ayatollah Ali Khamenei, reacts with threats or a visible move to restart Iran’s nuclear weapons program, a devastating, American-backed Israeli military response will likely follow. Netanyahu doesn’t want this (and it’s unlikely Trump does either). What they want in the short-term is regime change in Tehran. This does not mean an Iraq-style invasion; Trump would never have the public support for that. But tough new American sanctions could destabilize the Iranian regime. So, too, would Iranian casualties and military humiliations of the kind Israel is presently inflicting on Iranian proxies in Syria.
Trump and Netanyahu can’t do this alone, of course. Tomorrow Netanyahu will fly to a previously scheduled meeting with Putin. Netanyahu will tell Putin that Russia and the U.S. now have a once in a century chance to wipe away dysfunctional borders and redraw the map of the Middle East into mutually acceptable spheres of influence. Russia has its own strategic interests in Syria: It wants to keep Syrian President Bashar al-Assad in power and project military influence in the region through its air and naval bases there. But Netanyahu will tell him that they are not necessarily inimical to U.S. or Israeli interests. Putin may want to stand by Iran to the bitter end, but that seems unlikely; the Russian leader is in the Middle East as an opportunity seeker, not a bodyguard for the Ayatollah or even the Syrian president at any price.
A Middle East without a “Death to America” government in Tehran — or a Hezbollah in Lebanon — has been a key U.S. interest since the administration of Ronald Reagan. Mediterranean seaports in Syria have been a Russian dream since the time of Peter the Great. And brokering a deal like this has been Netanyahu’s goal from the day Donald Trump entered the White House.
Back in October, Ben Israel, the retired general, dismissed the Trump-Netanyahu plan to end the Iranian nuclear deal as impractical. “They are two people who have their own opinion,” he said. “In both cases, it is not shared by their professional advisers and intelligence communities.” That is still true. But what Trump and Putin have to consider is a bigger picture. Expert opinion is important, but Netanyahu is betting that sometimes great deals just take two (or even three).
(BBG) Deadly protests in Iran have intensified talks within the Trump administration about imposing fresh sanctions against the Islamic Republic, as the U.S. president seized on the crisis to justify his long-standing opposition to a 2015 nuclear agreement.
President Donald Trump met Tuesday with Vice President Mike Pence and members of his national security team to discuss the protests amid deliberations already under way about reimposing suspended sanctions or adding new ones, according to two White House officials who asked not to be identified discussing internal deliberations. The meeting came about 10 days before Trump must decide whether to continue waiving sanctions that were lifted under the nuclear deal between Iran and world powers.
“We certainly keep our options open” on adding to U.S. sanctions, White House press secretary Sarah Sanders told reporters Tuesday. Trump took to Twitter earlier in the day to say the “people of Iran are finally acting against the brutal and corrupt Iranian regime,” while U.S. Ambassador to the UN Nikki Haley said she’ll call for an emergency session of the United Nations Security Council.
“We must not be silent,” said Haley, who rejected Iranian government accusations that the protests have been orchestrated from abroad. “The people of Iran are crying out for freedom.”
An administration official said that no decision on sanctions had been made, but one of the options being discussed was imposing targeted sanctions on Iranian officials. A more drastic option would be reinstating the sanctions suspended by the nuclear accord, but that would almost certainly destroy the agreement, and the official, who spoke on the condition of anonymity, said such a step would not be taken lightly.
Trump last year requested that Congress set specific trigger points that would automatically re-impose sanctions unless Iran meets a list of U.S. demands, including to curb its ballistic missile program.
Unrest in Iran began Dec. 28 with a rally against rising prices and the government’s handling of the economy, before turning into a wider protest against the political establishment. Nine people were killed in various cities during clashes Monday, according to state-run television, bringing the death toll to about 20. Since Saturday, 450 people have been held in the capital Tehran, 150 were arrested in Hamedan and an additional 138 have been detained in Mashhad, according to local officials.
Now, the protests may be slowing. There were no demonstrations or gatherings on Tuesday evening in downtown Tehran’s Enghelab Square, the vast intersection close to Tehran University that has historically been a focus of political protests in the capital and was the site of protests over the weekend.
Black armored police vans dotted the corners of the square. Scores of uniformed regular police holding batons and riot police clad in black anti-riot gear were deployed in the middle of the square and lined the main thoroughfare bisecting it, Enghelab Street. Many shops closed early while others were back to regular hours after having been forced to shut down over the past few nights because of clashes.
“They’re not out tonight, thank God,” said a shop owner who didn’t want to be named because of the sensitivity of speaking to foreign media.
The U.S. threat comes ahead of deadlines Trump faces this month on whether to continue waiving the sanctions that were frozen in return for Iran agreeing to curb its nuclear program. Trump declined last year to certify Iran’s compliance with the agreement, though Congress didn’t pass new sanctions that would probably scuttle the accord.
Oil hovered close to a 30-month high as the unrest in Iran heightened concern about potential supply disruptions in OPEC’s third-biggest crude producer. The country pumps about 3.8 million barrels a day.
The crisis has given Trump an opportunity to pressure critics of his approach to Iran and the nuclear accord, which he has long criticized as the “worst deal ever.” And by publicly praising protesters, Trump is also separating himself from the approach President Barack Obama took to street demonstrations that followed Iranian elections in 2009. At the time, the Obama administration said too much American support for protesters would only delegitimize their cause.
Referring to the nuclear deal, Trump tweeted on Tuesday that “All of the money that President Obama so foolishly gave them went into terrorism and into their ‘pockets.’ The people have little food, big inflation and no human rights. The U.S. is watching!”
International inspectors — and the five other countries than joined the U.S. in signing the nuclear deal with Iran — have found it’s abiding by its restrictions on its nuclear program, and Iranian official have protested that the purported benefits for their economy have been slow to materialize.
Trump’s tweets on the protests have drawn anger and ridicule from Iranians, who point to the inconsistency between his apparent support for them and his policy to bar them from getting U.S. visas. Iranian politicians are likely to use the president’s remarks to suggest that the U.S. and Saudi Arabia, Iran’s chief regional rival, are stoking unrest to weaken the Islamic Republic.
The protests are a rare public display of anger against a political establishment that has kept a tight grip on power since the 1979 Islamic Revolution against the pro-Western shah. The demonstrations, however, are smaller than the 2009 protests and don’t pose an “existential” threat to the regime, according to Trita Parsi, head of the National Iranian American Council.
“It doesn’t seem to have the organization and the leadership to really pose an existential threat to the regime, but it can really force to change the conversation and shake up the political landscape,” Parsi told Bloomberg TV.
While Iran’s president is elected every four years by a popular vote, his influence is kept in check by unelected officials within the judiciary and the powerful Revolutionary Guard Corps, whose job is to protect the principles of the 1979 Islamic Revolution. Ultimate authority rests with Supreme Leader Ayatollah Ali Khamenei.
President Hassan Rouhani, who was elected for a second term last year, promised voters improved living conditions after the 2015 nuclear deal. His supporters point to a drop in the inflation rate to about 10 percent from more than 40 percent under his hard-line predecessor.
Foreign investments, however, were slow to follow in the final year of the Obama administration, with investors increasingly concerned after Trump took office with threats to tear up the accord.
“If there is a kind of scapegoat to Iran’s economic problems post-the nuclear deal, it would be the U.S. administration,” Jean-Paul Pigat, Dubai-based head of research at Lighthouse Research, told Bloomberg TV. “Donald Trump continues to threaten to renegotiate the nuclear deal. That does not encourage foreign investors to enter the market.”
TEHRAN, Iran — Protests across Iran saw their most violent night as “armed protesters” tried to overrun military bases and police stations before security forces repelled them, killing 10 people, Iranian state television said Monday.
Later in the day, Iran’s semi-official Mehr news agency said an assailant using a hunting rifle killed a policeman and wounded three other officers during a demonstration in the central city of Najafabad, about 320 kilometers (200 miles) south of Tehran.
It was the first report of a police officer dying during five days of unrest and raised the death toll to at least 13.
The demonstrations, the largest to strike Iran since its disputed 2009 presidential election, began Thursday in Mashhad over economic issues and have expanded to several cities, with some protesters chanting against the government and the supreme leader, Ayatollah Ali Khamenei. Hundreds of people have been arrested.
Iranian state television aired footage of a ransacked private bank, broken windows, overturned cars and a firetruck that appeared to have been set ablaze. It said 10 people were killed by security forces during clashes Sunday night killed.
“Some armed protesters tried to take over some police stations and military bases but faced serious resistance from security forces,” state TV said.
In a later report, state TV said killed six people were killed in the western town of Tuyserkan, 295 kilometers (185 miles) southwest of Tehran, and three in the town of Shahinshahr, 315 kilometers (195 miles) south of Tehran. It did not say where the 10th person was killed.
Earlier Monday, the semi-official ILNA news agency quoted Hedayatollah Khademi, a representative for the town of Izeh, as saying two people died there Sunday night. He said the cause of death wasn’t immediately known, though authorities later described one of the deaths as the result of a personal dispute.
Two protesters also were killed during clashes late Saturday in Doroud, some 325 kilometers (200 miles) southwest of Tehran in Lorestan province, authorities have said.
On Sunday, Iran blocked access to Instagram and the popular messaging app Telegram used by activists to organize.
President Hassan Rouhani acknowledged the public’s anger over the Islamic Republic’s flagging economy, though he and others warned that the government wouldn’t hesitate to crack down on those it considers lawbreakers.
That was echoed Monday by judiciary chief Ayatollah Sadegh Larijani, who urged authorities to confront rioters, state TV reported.
“I demand all prosecutors across the country to get involved and the approach should be strong,” he said.
Rouhani also stressed Monday that Iran “has seen many similar events and passed them easily.”
U.S. President Donald Trump, who has been tweeting in support of the protesters, continued into the New Year, describing Iran as “failing at every level despite the terrible deal made with them by the Obama Administration.”
“The great Iranian people have been repressed for many years,” he wrote. “They are hungry for food & for freedom. Along with human rights, the wealth of Iran is being looted. TIME FOR CHANGE!”
Israeli Prime Minister Benjamin Netanyahu, calling the protesters “brave” and “heroic,” said in a video posted to YouTube on Monday that the protesters sought freedom, justice and “the basic liberties that have been denied to them for decades.”
He criticized the Iranian regime’s response to the protests and also chided European governments for watching “in silence” as the protests turn violent.
While some have shared Trump’s tweets, many in Iran distrust him because he has refused to re-certify the nuclear deal and his travel bans have blocked Iranians from getting U.S. visas.
State TV has reported that some protesters invoked the name of the U.S.-backed shah, who fled into exile just before Iran’s 1979 Islamic Revolution and later died.
Iran’s economy has improved since its 2015 nuclear deal with world powers, which saw Iran agree to limit its enrichment of uranium in exchange for the end of some international sanctions. Tehran now sells its oil on the global market and has signed deals to purchase tens of billions of dollars’ worth of Western aircraft.
That improvement has not reached the average Iranian, however. Unemployment remains high, and official inflation has crept up to 10 percent again. A recent increase in egg and poultry prices by as much as 40 percent, which the government has blamed on a cull over avian flu fears, appears to have been the spark for the economic protests.
While the protests have sparked clashes, Iran’s paramilitary Revolutionary Guard and its affiliates have not intervened as they have in other unauthorized demonstrations since the 2009 election.
It wasn’t immediately clear if the Guard would change its posture given the reported attacks on police stations and military bases. In Tehran on Monday, streets were calm, though a heavy police presence was noticeable.
Brig. Gen. Massoud Jazayeri , the Guard commander and deputy chief of staff for Iran’s military, said Monday that Trump’s support of the protesters “indicates planning by the U.S. for launching a new sedition in Iran.”