US reimposes sanctions on Iran with a warning for ROW; here is what it means

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The Trump administration on Monday not only reimposed economic sanctions against Iran, which had been lifted under a 2015 nuclear accord, but also threatened that the US will not conduct business with those doing business with Iran. The sanctions target various sectors, with further action against Iran’s oil trade.

In May this year President Donald Trump decided to withdraw from an international deal – Joint Comprehensive Plan of Action, also known as the Iran nuclear deal. Negotiated during the presidency of Barack Obama, the deal sought to limit Iran’s its controversial nuclear activities in exchange for sanctions relief. Though the US has withdrawn, other signatories remain committed to the original agreement.

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However, with this threat hanging over their heads European countries may find that they have to choose either the US or Iran as its trading partner.

“The Iranian government faces a choice: Either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation,” Trump said in a statement.

Iran’s President Hassan Rouhani hit out at the United States over its reinstatement of economic sanctions.

The European Union also spoke against the measures, vowing to protect firms doing “legitimate business”.

Sanctions target

  • The purchase or acquisition of US banknotes by Iran’s government
  • Iran’s trade in gold and other precious metals
  • Graphite, aluminium, steel, coal, and software used in industrial processes
  • Transactions related to the Iranian rial currency
  • Activities relating to Iran’s issuance of sovereign debt
  • Iran’s automotive sector

A second phase is likely to come into effect on November 5 which will impact Iran’s energy and shipping sectors and petroleum trading.

Trump feels the Iran deal was “one-sided” and he believes renewed economic pressure will force Iran to agree to a new deal and end its “malign” activities.  “I remain open to reaching a more comprehensive deal that addresses the full range of the regime’s malign activities, including its ballistic missile program and its support for terrorism,” he said on Monday.

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