Daily Management Review

Who will be allowed to trade with Iran?


11/05/2018


The administration of US President Donald Trump has announced that it would restore all the sanctions lifted from Iran in the 2015 nuclear deal, the Associated Press reported.



Gage Skidmore
Gage Skidmore
The new restrictions come into force following Trump’s May 8 decision to withdraw the United States from the Joint Comprehensive Action Plan with Iran, which he called the worst agreement in US history. The sanctions involve restrictions on the purchase of oil from this country, as well as blocking the assets of individuals and companies associated with the Iranian government.

The sanctions will come into force on Monday, while the United States temporarily removes eight countries from the effects of anti-Iranian oil sanctions, said US Secretary of State Mike Pompeo and Finance Minister Steven Mnuchin.

The State Department will publish a list of countries on Monday - they must demonstrate a "significant" reduction in oil supplies from Iran, Pompeo stressed. Among them are Italy, India, Japan and South Korea, writes AP. According to the Secretary of State, these countries will make efforts to stop imports, but they cannot complete this task by Monday, when the sanctions take effect.

The United States agreed to allow the purchase of Iranian oil from Japan, India and South Korea, a senior official in the US administration told Bloomberg earlier. China is also among eight countries, but negotiations are still ongoing.

Presidential adviser on national security, John Bolton, also promised earlier that Washington would not create difficulties for its allies and partners dependent on Iranian oil, despite the intention to prevent the export of energy from Iran.

According to Pompeo, the ultimate goal of the United States is the complete cessation of the export of Iranian oil. The Secretary of State said that the United States had already achieved a reduction in exports of 1 million barrels without the resumption of sanctions. Iran is the third largest producer of oil among OPEC countries (after Saudi Arabia and Iraq).

Earlier, the Washington Free Beacon, citing sources, reported that the United States authorities were ready to soften their position on the introduction of new sanctions against Iran.

According to the publication’s interlocutors, State Department officials persuaded Pompeo not to disconnect Tehran from the international banking system for transmitting information and making SWIFT payments. During the briefing, Mnuchin confirmed that some Iranian banks would be allowed to remain connected to SWIFT. The headquarters of the system in Brussels has already been informed about the resumption of sanctions, he said. Earlier, Mnuchin noted that the US Treasury would identify banks that can conduct transactions with Iran to provide humanitarian aid to the country.

“I can assure you that our goal is to ensure that transactions falling under sanctions do not pass through SWIFT or through any other mechanism. Our task is to make the sanctions take effect,” the US Treasury Secretary said earlier.

Publication sources also warned that the United States could introduce exceptions to its anti-Iran sanctions so that some countries could continue to buy Iranian oil. The publication noted that such steps are related to the position of the European Union on the Iranian issue.

The Wall Street Journal reported that Chinese oil companies China National Petroleum Corp. (CNPC) and China Petrochemical Corp. refused to supply oil from Iran in November. The Kunlun Bank, which is owned by CNPC, has already notified the Iranian counterparties that it will stop interacting with them on November 4, sources said.

According to Pompeo, the sanctions "are aimed at a fundamental change in the behavior of the Islamic Republic of Iran." 

Earlier, the State Department has published a list of 12 requirements that Iran must fulfill in order to lift the sanctions. These include the cessation of support for terrorism, the cessation of military participation in Syria and the cessation of the development of nuclear and ballistic missiles. Pompeo called the new round of sanctions "maximum pressure."

In addition, the United States will add another 700 businesses and individuals to the sanctions list, said Mnuchin. Sanctions will not affect humanitarian supplies.

 






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