Trump's Iran Sanctions Disputed by Deal Members
On Sunday, November 4th, the White House reinstated economic and trade sanctions on Iran, effectively ending the United States’ participation in the Joint Comprehensive Plan of Action. These sanctions specifically target Iranian oil, which makes up 70% of Iran’s economy.
Commonly dubbed the “Iran Nuclear Deal,” JCPOA was forged in 2015 between Iran, UN Security Council members, Germany, and the European Union. This recent move reflects President Trump’s promise to pull out of the deal, which he says is “horrible” and “one-sided.” Secretary of State Mike Pompeo said the sanctions are meant to influence Iran into renegotiating the deal. The Trump administration has also justified the sanctions as a means to condemn Iran’s poor human rights record, support for terrorist organizations, and destabilizing actions within the Middle East. JCPOA lifted previous sanctions held on Iran since 1979 to limit and monitor its nuclear program.
The American sanctions predominantly target Iran’s banking, shipping, and petroleum sectors. They stipulate that countries that do business with Iran without U.S. waivers will face hefty fines or may be prevented from doing business with the United States. Eight countries have been given temporary waivers: China, India, Greece, Italy, Taiwan, Japan, Turkey, and South Korea. With a term length of six months, the releases are intended to allow the granted countries enough time to eliminate their Iranian imports and avoid disrupting global oil markets. The importing countries must deposit Iran’s earnings into an escrow account, which Iran can spend on a limited range of humanitarian items. Although governments can still trade humanitarian goods with Iran, the sanctions will likely make purchasing more expensive.
The U.S. will be able to globally enforce these sanctions given that most international transactions are made in U.S. dollars. Any transaction that is made in U.S. dollars or passes through American banks is subject to American sanctions.
Iranian Foreign Minister Mohammad Javad Zarif said the sanctions would backfire on the U.S. He claims the sanctions will only make the U.S. more isolated, as the international community will oppose the sanctions. Both the European Union and China have criticized the sanctions.
However, the European Union indicates that it may shift sides and pivot closer to the United States. Both France and Denmark have recently uncovered Iranian intelligence plots in their respective territories. Denmark suspects Iran of trying to carry out an assassination on its soil in October. France has concluded Iran’s intelligence ministry was behind a plot to attack Iranian exiles protesting in Paris this past June. Both countries have said they are considering sanctions at an EU-wide level due to the attempted operations.
The E.U. is also exploring a loophole that would allow continued trade with Iran. They propose to create a “Special Purpose Vehicle” - a third-party institution that would process transactions between Iran and businesses seeking to trade with them. Under the SPV, the deals would be subject to E.U. law, not international law. Iran has threatened to abandon the agreement if the E.U. does not protect its trade and financial benefits.