Second Round of US “Tougher” Anti-Iran Penalties Kicks in November 5

Second Round of US “Tougher” Anti-Iran Penalties Kicks in November 5

Starting on Nov. 5, anyone who unloads a tanker of Iranian oil risks the wrath of Washington. The White House has announced that “all the sanctions” lifted under the 2015 Iran deal will be reimposed on that day in order to target critical sectors of Iran’s economy. This is the second, “harsher” round. The first was introduced in August. Aimed at more than 700 Iranian individuals and entities, this “snapback” affects oil, banking, shipping, and other sectors.

The statement that was released claims that “this will be the toughest sanctions regime ever imposed on Iran.” Any company that trades with Iran has already been barred from doing business in the US. As of Nov. 5, any US company faces punishment if it does business with a company that does business with Iran. There will be waivers for some countries that have made efforts to eliminate their imports but have not been able to complete the task. The exceptions will be temporary, with six of those eight countries expected to “greatly reduce” their oil purchases, and two will eventually have to cut off their transactions with Iran completely.

About 40% of Iran's economy is dependent on oil income. “We will ultimately move Iran to zero crude oil. That’ll take us some number of months to do that,” State Secretary Mike Pompeo told Fox News, describing the final goal. Since May, when the US began to pressure countries to stop buying Iranian oil, Iran's exports have dropped by more than 1 million barrels per day.

The EU, the UK, France, and Germany said in a joint statement on Nov. 2 that they regretted the US decision to bring back the sanctions. Twelve consecutive reports from an independent watchdog have documented Iran's compliance with the 2015 nuclear agreement. The European Union wants to create a new institution, known as a special purpose vehicle (SPV), to facilitate "legitimate financial transactions" as a way to get around the US-imposed punitive measures. The SPV could also be used by countries outside of the bloc, including Russia and China. But the new EU mechanism to facilitate payments for Iranian exports will not be operational until early next year.

Iran has weathered multiple rounds of sanctions before. Its economy isn't directly reliant on the US financial system, but its Western trading partners are. Russia and China are not, however. The US policy is making Iran look eastward to fill the gap left by that lost European investment. Thus there is an opportunity to forge new links with Russia and China.

Tehran is caught in a bind and Moscow is lending a helping hand. According to Russian Energy Minister Alexander Novak, “The oil for goods mechanism, set up to boost trade between Russia and Iran, allows Tehran to use a portion of its petroleum exports to pay for Russian goods. We have historical trade ties with Iran.” He called for an exploration into new mechanisms to continue that cooperation. Under the circumstances, an “oil for goods” deal is a win-win for both nations.

The 2014 Russia-Iran oil accord might get a new lease on life. Under the terms of the five-year agreement, Russia was to help Iran coordinate oil sales, as well as “cooperate in the oil-gas industry, construct power plants and grids, and supply machinery, consumer goods, and agriculture products.” Under the deal Russia could have bought 500,000 barrels of Iranian oil a day, about a fifth of Iran’s output and half its exports at the time. But it became irrelevant after the Joint Comprehensive Plan of Action (JCPOA), or Iran deal, was reached in 2015. Now the time is right to revive the plan.

The unilateral imposition of the sanctions against Iran will produce more than just economic fallout — it will deal a blow to the international non-proliferation regime. Last month, Director General of the International Atomic Energy Agency (IAEA) Yukiya Amano once again affirmed that Iran had fully met its commitments under the JCPOA. If Iran subsequently quits the deal, other nations will launch their own nuclear programs, triggering a chain reaction. Saudi Arabia has already issued such a warning. Japan and South Korea are mulling over this option. Why not? After all, it was US President Trump himself who that additional countries, such as Japan and South Korea, may need to develop their own nuclear weapons. It other words, he said they could forgo their commitments and contribute to the erosion of the non-proliferation regime. This is a very serious issue for the 2020 Nuclear Non-Proliferation Treaty Review Conference.

It’s rather symbolic that the second wave of sanctions is taking effect at a time when armed forces and observers from eight Sunni Arab countries (or the members of the Arab NATO that are being groomed to resist the Shi’ite powerhouse Iran) are kicking off their “Shield of the Arabs 1” exercise on Nov. 3 in Egypt, which will continue until Nov. 16.

Economic and military pressure is being added by America’s regime-change efforts. This new US measure has many implications — all of which make the world less safe and all these problems more complicated. It’s the same old story, with the US continuing to rely on its favorite foreign-policy tool of blatant pressure and intimidation. This is another example of how America’s “stone age” methods only serve to unite the EU, other countries of the “collective West,” Russia, and China in their efforts to stand up against the assault, or at least to mitigate the consequences of Washington’s downright reckless foreign-policy moves.

Tags: Iran  Sanctions