The move was welcomed in Israel and by Republicans on Capitol Hill.
Ninety days after withdrawing from the nuclear agreement, which was premised on exchanging limits on Iran’s nuclear work for international sanctions relief, US President Donald Trump snapped back into place restrictions on Iran’s access to US dollar notes as well as gold and other precious metals. The sanctions also target financial institutions that deal in or hold Iran’s currency, the rial, which had already spiraled this week to its lowest value in history.
While additional sanctions on Iran’s sale of rugs and pistachios and its automotive sector are expected to bite, the harshest sanctions will return in November, when Washington will target Iran’s oil exports, its shipping and port sector and those transacting with the Central Bank of Iran.
“The United States 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,” Trump said, signing an executive order that brought the old sanctions back into effect.
“I am pleased that many international firms have already announced their intent to leave the Iranian market, and several countries have indicated that they will reduce or end imports of Iranian crude oil,” he continued.
“We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation.”
The move, while expected since May, riled European allies that were party to the agreement and had encouraged their businesses to enter the Iranian marketplace since the deal went into effect in 2016.
“The lifting of nuclear-related sanctions is an essential part of the deal – it aims at having a positive impact not only on trade and economic relations with Iran, but most importantly on the lives of the Iranian people. We are determined to protect European economic operators engaged in legitimate business with Iran,” said the governments of France, Great Britain and Germany in a joint statement.
“Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security,” they added.
Republicans expressed unity behind the president’s policy on Iran. While Democrats have questioned the wisdom of his diplomatic approach in withdrawing from the deal, few issued statements condemning the latest move.
Administration officials told reporters on Monday that Trump seeks a change in Tehran’s “behavior,” after US Secretary of State Mike Pompeo said over the weekend that Iran would have to act like a “normal country” if it wants sanctions permanently removed.
“We’re very 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. “They’ve got to behave like a normal country.
That’s the ask – it’s pretty simple.”
Trump has suggested direct engagement with his Iranian counterparts in recent days, stating that he would speak with Iran’s president without preconditions– once they are ready to come to the table.
“I don’t know that they’re ready yet,” he said last month. “They’re having a hard time right now.”
Indeed, protests have spread across the country ahead of the return of US sanctions, reaching major cities last week such as Isfahan and Shiraz. The rial was traded at 111,000 to the dollar over the weekend as Iran’s central bank announced it would back away from currency controls, hoping the market can salvage the local notes. It bounced back briefly to 95,000 rial to the dollar based on the move.
But Iran’s government, strapped for cash, is moving to withdraw its stashes overseas. European powers claim they will continue to negotiate with Tehran to maintain economic benefits under the nuclear deal, however, most of the largest EU companies that had engaged with Tehran at the deal’s outset have already withdrawn, fearing backlash from the US government.