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Abu Dhabi, UAEMonday 17 December 2018

US officials visiting Gulf allies to co-ordinate Iran sanctions

Senior US Treasury and State Department officials will visit Gulf states this week to discuss imposing sanctions on Iran following Washington's withdrawal from the 2015 nuclear deal.

The US sanctions that were suspended under the agreement take effect again from August 6 – 90 days after President Donald Trump pulled out of the deal on May 8 by declining to extend their waiver.

Brian Hook, the State Department director of policy planning, said on Monday that he and the Treasury under secretary for terrorism and financial intelligence, Sigal Mandelker, would be leaving for the Gulf region “in the coming days”, accompanied by senior officials, to co-ordinate efforts on Iran.

The State Department has not released the itinerary of the visit but the delegation is expected to make stops in Riyadh and Abu Dhabi before heading to Europe in an effort to to prepare the groundwork with Gulf and transatlantic allies for reimposing sanctions on Iran.

“The first part of our sanctions will snap back on August 6. These sanctions will include targeting Iran’s automotive sector, trade in gold, and other key metals," Mr Hook said.

"The remaining sanctions will snap back on November 4. These sanctions will include targeting Iran’s energy sector and petroleum-based transactions, and transactions with the Central Bank of Iran."

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The US strategy is based on increasing economic pressure on Iran and is aimed at “a change in the behaviour of the Iranian leadership of Iran, and not regime change”, Mr Hook said.

He recalled the 12 demands US Secretary of State Mike Pompeo laid out for Iran on May 21 “to make it a normal country” that does not terrorise other nations, engage in weapons proliferation and impoverish its people.

That is the “road map for the better deal” that the US is seeking, he said.

Delegations from State and Treasury departments have visited 13 countries to co-ordinate the return of sanctions, and more than 50 international firms have announced their intent to leave the Iranian sector since May, Mr Hook said.

He warned that the US “will not hesitate to take action when we see violation to sanctions”.

“We are not looking to grant licences or waivers in the Iranian market … but we are prepared to work with countries who are reducing imports,” he said.

The Trump government is asking its international partners for a full halt to oil imports from Iran by November 4, and is hoping to reduce Tehran's crude oil sales to zero while minimising disruption to the market.

Mr Hook attacked Iran’s support of terrorism, and anticipated robust international backing for the US pressure on Tehran on that front. “No one supports Iran’s terrorism in the world except maybe [Syrian President Bashar] Al Assad,” he said. “Iran in Syria and Yemen are backing all wrong people.”

Michael Singh, a fellow at the Washington Institute for Near East Policy, told The National that the US government “appears to be replicating key elements of the North Korea strategy with respect to Iran”.

This entails “application of “maximum pressure on a compressed schedule together with a bold diplomatic opening that aims for a grand bargain rather than just a nuclear deal”, he said.

Iran “may be especially vulnerable to pressure at the moment given its pre-existing economic and political troubles at home.”

But the strategy also faces challenges.

“This will be the first time that the US has sought to erect a secondary sanctions regime in defiance of our traditional partners in Europe and Asia rather than in co-operation with them, and Iran and others will surely seek to exploit this Western divide” Mr Singh said.

Compared to North Korea, Iran "may prove less susceptible to US diplomatic overtures than Kim Jong-un” because it does not have the leverage that comes with nuclear weapons, and the anti-American ideology of the Iranian regime.

For now, “simple reality dictates that US secondary sanctions will have a strong impact”, Mr Singh said, because “the choice between the US and Iranian markets is an easy one for most businesses".

However, “sanctions alone won’t cut it – we’ll need to use all of our policy levers, and the help of our allies,” he said.