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Trump Reimposes Economic Sanctions on Iran as Tensions Ratchet Up

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President Donald Trump has reimposed economic sanctions against Iran, effective at midnight Monday, assailing Tehran as “a murderous dictatorship that has continued to spread bloodshed, violence, and chaos.”

Trump, acting three months after he withdrew the U.S. from the 2015 international accord restraining Iran’s nuclear development program, said the new sanctions target the Islamic Republic’s automotive sector, its trade in gold and other precious metals, along with its currency, the Iranian rial, and other financial transactions.

He said that on November 5, the U.S. would also resume sanctions against Iran’s energy-related transactions, as well as business conducted by foreign financial institutions with the Central Bank of Iran.

Trump, in the midst of a working vacation at his Bedminster golf resort in New Jersey, renewed his attack on the international nuclear pact, calling it “a horrible, one-sided deal” that “failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb,” while giving it “a lifeline of cash” when earlier sanctions were lifted.

“Since the deal was reached, Iran’s aggression has only increased,” Trump said. He said Iran has used “the windfall of newly accessible funds” it received “to build nuclear-capable missiles, fund terrorism, and fuel conflict across the Middle East and beyond.”

He added, “To this day, Iran threatens the United States and our allies, undermines the international financial system, and supports terrorism and militant proxies around the world.”

Iranian President Hassan Rouhani, in a speech broadcast on state television, said the United States cannot be trusted because it withdrew from the international pact, whose other signatories still support it

Iranian President Hassan Rouhani, in a speech broadcast on state television, said the United States cannot be trusted because it withdrew from the international pact, whose other signatories still support it. He said Tehran has always believed in resolving disputes diplomatically.

Rouhani said Trump’s calls for direct negotiations with Iran were “only for domestic consumption in America … and to create chaos in Iran.”

Israeli Prime Minister Benjamin Netanyahu, like Trump a long-time opponent of the accord, congratulated him on the new sanctions. “This is an important moment for Israel, the U.S., the region, and the entire world,” he said.

Israeli Defense Minister Avigdor Liberman also praised the re-imposition of US sanctions on Iran.

The defense minister wrote on his Twitter account: “Tonight, the sanctions imposed by the American administration on Iran will enter into force. In a courageous decision that will be remembered for generations, President Donald Trump has changed direction with regard to Iran. No more agreements and obsequiousness, but a determined struggle to stop the murderous ayatollahs regime, which spreads terror, violence and hatred throughout the Middle East.”

In Washington, senior administration officials said while critics of Trump’s withdrawal from the Iran pact predicted that the threat of unilateral sanctions reimposed by the U.S. would be ineffective, the reality has shown the opposite.

“Three months out, we have a very different picture in front of us,” with higher unemployment, “widespread protests, social issues and labor unrest,” one Trump official said.

One of the officials said nearly 100 international firms have announced their intention to leave the Iranian market, particularly in the energy and finance sectors.

He said the U.S. expects Iran will blame it for any new hardships.

“They’ve been doing it for almost 40 years,” he added. “Now, it’s there. It’s their modus operandi. But I think you can see the Iranian people start to see through that. We would like to see a change in the regime behavior, and I think the Iranian people are looking for the same thing.”

The European Union, which remains a supporter of the three-year-old nuclear pact with Iran, said it is taking counter-measures to blunt the impact of the sanctions Trump has reinstituted.

The EU said it is simultaneously implementing a “blocking statue” as the new sanctions take effect, stopping European companies from complying with the U.S. sanctions unless they have permission to do so. It also blocks the effect of any U.S. court actions in Europe related to the sanctions.

EU foreign affairs chief Federica Mogherini and the French, German and British foreign ministers said they deeply regretted Trump’s action.

They called the international agreement “a key element of the global nuclear nonproliferation architecture, crucial for the security of Europe, the region and the entire world.”

In his statement, Trump said the U.S. “is fully committed to enforcing all of our sanctions and we will work closely with nations conducting business with Iran to ensure complete compliance. Individuals or entities that fail to wind down activities with Iran risk severe consequences.”

The two other signatories to the 2015 pact — Russia and China — also continue to support it. The International Atomic Energy Agency, which is monitoring the implementation of the deal, has said in 11 consecutive reports that Iran is in compliance and that the agreement has allowed for greater verification of Iran’s nuclear activities.

«We’re hopeful that we can find a way to move forward, but it’s going to require enormous change on the part of the Iranian regime,» Secretary of State Mike Pompeo said.

Secretary of State Mike Pompeo said Iran has to start behaving like what he calls a “normal country.”

“This is just about the Iranians’ dissatisfaction with their own government and the president’s [Trump] been pretty clear. We want the Iranian people to have a strong voice in who their leadership will be,” Pompeo told reporters Sunday.

The 2015 agreement called for Iran to sharply curb its uranium enrichment program in exchange for the end of most sanctions. Iran has repeatedly denied its nuclear program was aimed at developing nuclear weapons.

Trump has said he would be willing to meet with Iranian President Hassan Rouhani anytime without preconditions. But with both presidents swapping threats and insults, a meeting seems unlikely.

“We’re hopeful that we can find a way to move forward, but it’s going to require enormous change on the part of the Iranian regime,” Pompeo said.

Moreover, as a result of Trump’s executive order, it appears that Washington and Ankara are on a collision course. Ankara insists Trump’s unilateral actions do not bind it. The looming dispute threatens to exacerbate existing tensions between the two NATO allies.

“We are going to aggressively enforce our sanctions, and that puts a very important test to those companies, to those banks and to those governments — who do they want to do business with?” said a senior official Monday. “We are very serious to enforce those sanctions, and that’s what the president has directed us to do.”

The first wave of Iranian sanctions goes into effect Tuesday and targets mainly financial transactions and commercial airline sales with Iran. In November, measures to stop the sale of Iranian energy are set to go into effect.

Turkish foreign minister Mevlut Cavusoglu has ruled out complying with U.S. measures, insisting Turkey is bound only by international agreements. Ankara identifies Tehran as a key trading partner to help boost its flagging economy.

Turkish foreign minister Mevlut Cavusoglu has ruled out complying with U.S. measures, insisting Turkey is bound only by international agreements. Ankara identifies Tehran as a key trading partner to help boost its flagging economy.

Iranian oil and gas are critical to energy-poor Turkey. In the first six months of this year, Turkey imported an average of 176,000 barrels a day of Iranian oil, accounting for 49 percent of Turkish imports.

“It’s pretty damn serious, obviously, with the Turkish economy facing difficult times. To give up on trade with Iran and not being able to buy gas and oil would really hurt the Turkish economy,” said international relations expert Soli Ozel of Istanbul’s Kadir Has University. “So, there is a big problem, and there is very little time to solve it, and at a time when both sides don’t trust one another.”

Turkish-U.S. relations are already profoundly strained over myriad differences. Last week, Washington took the unprecedented step of sanctioning two Turkish ministers over the ongoing detention of U.S. pastor Andrew Brunson. Brunson, facing terrorism charges, is under house arrest. Ankara retaliated in kind, sanctioning two unnamed U.S. officials.

With Turkey a significant importer of Iranian oil, analysts say it will be a priority of Washington to persuade Ankara to comply with its sanctions. Last month, senior U.S. officials — led by Marshall Billingslea, assistant secretary of the Treasury for terrorist financing — visited Ankara to meet with government ministers and business leaders to press the case for sanctions.

Billingslea described the talks as positive, but a source privy to the meeting described the meetings as difficult.

A Turkish business source claims Washington’s suggestion to use Saudi Arabian oil instead of Iran’s fails to take into account the costly and timely readjustment of Turkish refineries to accommodate the lower quality of Saudi oil.

Ankara also has strategic concerns about relying on Saudi Arabia.

“Turkey is being told to buy oil from Saudi Arabia, while it has a pipeline with neighboring Iran and can get crude at a lower price,” wrote Ilnur Cevik, a senior presidential adviser in Turkey’s Sabah newspaper. “Besides, who can guarantee that Turkey will be provided a steady flow of oil at reasonable prices when Saudi Arabia at times is displaying an antagonistic policy toward Ankara?”

Former President Obama granted Ankara some exemptions when imposing sanctions against Iran. However, critics point out, Ankara severely undermined U.S. sanctions by using gold to circumvent restrictions on the use of dollars to trade with Iran.

Turkey at one time was one of the world’s biggest gold importers and exporters. Washington has now closed the door to using gold in trade with Tehran.

Edited by: Walter Metuth

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