First round of sanctions on Iran come into effect
The US resumed the sanctions against Iran following Washington’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA). The restrictions will cover the automotive sector, the purchase and sale of gold and key metals.
US State Department Director of Policy Planning Brian Hook noted that the sanctions against Iran will be resumed in two stages - on August 7 and on November 4. It is expected that the first part of the restrictive measures will cover the automotive sector of Iran and the purchase and sale of gold and other key metals, and the remaining sanctions, which will be introduced by the end of autumn, will affect Iran's energy sector, oil-related deals, as well as transactions with the central Bank of Iran.
According to Hook, Washington’s "goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude oil sales." Hook noted that the US authorities are working on how to minimize the destabilization of the global market. He added that Washington is confident that there are sufficient opportunities to increase oil production.
The first batch will kick in on August 7 (at midnight on August 6 - US time), 90 days after the country’s withdrawal; the second round will take effect on 4 November, at the 180-day mark after the US departure. The transition period was intended to provide companies already doing business with Iran some time to wind down their activities.
On May 8, US President Donald Trump announced his country’s withdrawal from JCPOA and promised not only to resume the old sanctions but also to introduce new ones against Iran.
On May 18, the European Commission passed the first package of measures on protecting the interests of EU companies investing in Iran from US sanctions, nullifying them on the EU territory.
The first step was to activate the "blocking statute" that "forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgments based on them," the document says.
The second step will be to "remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the European Union, in Iran."
The European Commission will also "continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies."
The European Commission is also encouraging member-states to "explore the possibility of one-off bank transfers to the Central Bank of Iran." "This approach could help the Iranian authorities to receive their oil-related revenues, particularly in case of US sanctions which could target EU entities active in oil transactions with Iran," the document says.
The deputy head of the Council of the Russian Diplomats Association, Andrey Baklanov, speaking to Vestnik Kavkaza, noted that this step is a continuation of US destabilization policy toward the Middle East. "By withdrawing from the JCPOA and restoring sanctions, the US has firmly resolved to create instability in the Middle East, and continue to promote formation of two seriously opposing groups of states, led by Saudi Arabia and Iran. Trump came to the conclusion that without rebuilding such an environment and giving Iran the status of a source of great danger, it is impossible to ensure the export of weapons planned by the Americans for the coming years," he explained.
"Washington is trying, with the help of unilateral sanctions, to accustom the whole world to the fact that any business needs to consider the American political will. Of course, it is also beneficial to American companies and is one of Trump's goals. However, judging by the reaction of Western Europe, it may cause a resistance unpleasant for the US," Andrei Baklanov pointed out.
The diplomat drew attention to the fact that the issue of sanctions is very important for Iran. "When I was in Iran, it seemed to me that the issue of lifting sanctions is of a national nature there. It is necessary to proceed from the fact that everyone is interested in the abolition of economic restrictions, and only the US seeks to involve Iran in a tougher confrontation with neighbors. Hassan Rouhani has already made tough statements about both sanctions and Trump, and we have to state that the US hope for the division of the Middle East is beginning to work. Due to sanctions the regional situation becomes increasingly tough and dangerous," he stressed.
"At the same time, we can expect Iran's return to a well-thought-out and successful compensatory policy. When the previous sanctions were introduced, the people's living conditions worsened, many contracts broke down, but Iran did not give up. With such a fragmented front of Western countries, it is possible that Iran will have new opportunities to conduct a flexible line bypassing the sanctions regime," the deputy head of the Council of the Russian Diplomats Association concluded.