London, 7 August - The first round of US sanctions on Iran have now snapped back into place and companies that continue to do business with Iran can expect penalties and restrictions on their American enterprises. Here’s a brief explainer about the US sanctions.
Why are the sanctions back?
In May, the US withdrew from the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), which had lifted sanctions on Iran in exchange for restrictions on its nuclear programme.
Donald Trump advised that Iran had violated the deal on several occasions and that the deal did nothing to address the other problems caused by Iran, so he pulled out and announced that sanctions would follow in two rounds: one in August and one in November. This was designed to give US and foreign companies a reasonable period of time to wind down their activities in Iran before they would come under sanctions.
What has the effect been?
Many companies have pulled out of Iran, even foreign firms who have been promised protection by their own governments, to avoid US sanctions. This includes Boeing, Peugeot, Total, and Maersk.
This has hit Iran’s already unstable economy hard and the value of the rial has fallen considerably. It has also spurred on the anti-government uprising that began in December, leading more people than ever to speculate that Regime change is coming and coming soon.
The EU has tried to save the Iran nuclear deal, but has failed to strike a compromise or meet Iran’s demands of compensating for the money lost by the US withdrawal.
What sanctions are now in effect?
There are many Obama-era sanctions on Iran that are being imposed across many sectors in Iran, from restrictions on buying gold to restrictions on selling rugs. Let’s look at some of them
• Iran’s access to buy or trade using the US dollar
• The trade of gold and precious metals
• The sale and supply of aluminium and steel
• The purchase of the Iranian rial in large quantities
• The sale of civilian aircraft and related parts to Iran
• The sale of Iranian carpets and foodstuffs
According to the US Treasury Department, certain payments made to Iran after August 7 will be protected from sanctions is they relate to trade agreements made prior to May 8.
More sanctions are coming on November 4 that affect energy and shipping sectors, but many firms have already pulled out.