WASHINGTON -- The United States reimposed stiff economic sanctions on Iran on Monday, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after President Donald Trump pulled the U.S. out of the international accord limiting Iran's nuclear activities.
Trump declared the landmark 2015 agreement had been "a horrible, one-sided deal, [that] failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb, and it threw a lifeline of cash to a murderous dictatorship that has continued to spread bloodshed, violence, and chaos."
Iran accused the U.S. of reneging on the nuclear agreement, signed by President Barack Obama's administration, and of causing recent Iranian economic unrest. European allies said they "deeply regret" the U.S. action.
Trump said in a statement, "We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation."
A first set of U.S. sanctions that had been eased under the accord were to go into effect at 12:01 a.m. Eastern time today, senior administration officials said. Those sanctions affect financial transactions that involve U.S. dollars, Iran's automotive sector, the purchase of commercial planes and metals, including gold.
A second batch of U.S sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.
Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."
European officials have said that the Iran nuclear agreement is crucial to their national security, and international inspectors have concluded that Tehran is complying with the accord. "We are determined to protect European economic operators engaged in legitimate business with Iran," the foreign ministers of Britain, France and Germany said in a joint statement Monday. Russia and China also signed on to the 2015 deal.
Despite Trump's claims, the accord "is working and delivering on its goal" of limiting Iran's nuclear program, said the statement by European Union foreign policy chief Federica Mogherini and the foreign ministers.
The ministers said the Iran deal is "crucial for the security of Europe, the region and the entire world," and the European Union issued a "blocking statute" Monday to protect European businesses from the impact of the sanctions.
The mechanism stops European companies from complying with the U.S. sanctions unless they have authorization from the EU's executive commission. National governments could impose "effective, proportionate and dissuasive penalties" on any of their companies that cave in.
The statute also blocks the effects of U.S. court actions in Europe and allows European firms to recover damages arising from the sanctions from anyone who causes them.
The law was originally passed in 1996 to protect companies against penalties imposed for doing business in Cuba, Libya and Iran. For years, the United States largely ignored European investments in Cuba to avoid friction.
But faced with a choice between the tiny Iranian market, which never lived up to expectations, and the huge U.S. market, major European companies overwhelmingly indicated they would observe the sanctions.
"We have suspended our activities in Iran, which were anyway very limited, until further notice according to applicable sanctions," Daimler, the German maker of Mercedes-Benz cars and trucks, said in a statement.
The Bundesbank, Germany's central bank, introduced a change to its rules last month that could block the transfer of hundreds of millions of euros from an Iranian bank in Hamburg back to Iran. The Bundesbank is the conduit for major international transfers of money.
A senior Trump administration official, briefing reporters under ground rules requiring anonymity, said the United States is "not particularly concerned" by EU efforts to protect European firms from the sanctions.
Top U.S. officials said Monday that more than 100 major businesses had already announced an intent to leave Iran, before the sanctions.
Some analysts worry that the Trump administration's decision to go ahead with sanctions would encourage Europe, Russia and China to find ways around the U.S.-led financial system and undermine the success of economic penalties in other areas.
REACTION FROM TEHRAN
Iranian President Hassan Rouhani said Iran still can rely on China and Russia to keep its oil and banking sectors afloat. Speaking in a television interview, he also demanded compensation for decades of American "intervention" in the Islamic Republic.
While saying he had "no preconditions" for talks, Rouhani said that "If someone has knife in the hand and seeks talks, he should first put the knife in his pocket."
Rouhani fell back on the rhetoric of many of his predecessors by referring to the 1953 CIA-backed coup that overthrew Iran's elected prime minister and cemented the shah's rule.
"I have no preconditions" for negotiating with America "if the U.S. government is ready to negotiate about paying compensation to the Iranian nation from 1953 until now," Rouhani said. "The U.S owes the Iranian nation for its intervention in Iran."
Months of uncertainty surrounding the sanctions have already hurt Iran's economy. The country's rial currency has tanked, and the downturn has sparked protests across the nation, something that Rouhani again blamed Monday on the U.S.
"The Americans thought that they can add to our social and economic problems through increasing pressure," he said.
Iran's central bank has lifted a ban on exchange offices, allowing them to resume work in a move aimed at bringing in badly needed hard currencies.
The decision goes into effect today.
The ban on the exchange offices, introduced in March, had left the offices idle overnight: Gone were the daily long lines of Iranians waiting to buy or sell dollars. The measure backfired, and the black market flourished.
Abdolnasser Hemmati, the bank's governor, said the government's decision in April to enforce a single exchange rate to the dollar had caused "serious problems" for the country.
He maintained that the central bank's decision reflects Iran's "strength" in the face of renewed U.S. sanctions.
"We are facing an economic war and the U.S. government is restoring sanctions and also trying to increase them," he said. "But our government is powerful ... and is capable of opening up the foreign currency market on the same day."
The "Trump Administration wants the world to believe it's concerned about the Iranian people," Iranian Foreign Minister Mohammad Javad Zarif said in a statement posted to Twitter. But, he said, the reimposed sanctions would endanger "ordinary Iranians" -- particularly those who would feel the effects of the penalties on passenger jets.
"US hypocrisy knows no bounds," he said.
Veteran Iran watchers say Washington's demands are tantamount to seeking a new government in Tehran or urging Iranians to overthrow their leaders. Administration officials denied that was the Trump administration's official goal.
U.S. officials insisted the American government stands with the people of Iran and supports many of their complaints against their own government.
National security adviser John Bolton said Iran's leadership is on "very shaky ground," but he insisted economic pressure from the Trump administration is not an attempt at "regime change."
Secretary of State Mike Pompeo said sanctions are an important pillar in U.S. policy toward Iran and will remain in place until the Iranian government radically changes course.
"They've got to behave like a normal country. That's the ask. It's pretty simple," said Pompeo, en route from a three-nation trip to Southeast Asia.
Israeli Prime Minister Benjamin Netanyahu, a firm foe of the Iranian government, said the sanctions symbolize "the determination to block Iran's regional aggression as well as its continuous plans to arm itself with nuclear weapons."
He called on the countries of Europe to join the U.S., saying, "The time has come to stop talking; the time has come to do."
Information for this article was contributed by Susannah George, Zeke Miller, Nasser Karimi, Ian Deitch, Lorne Cook and Jon Gambrell of The Associated Press; by Gardiner Harris and Jack Ewing of The New York Times; and by Tracy Wilkinson of the Los Angeles Times.
A Section on 08/07/2018
Print Headline: U.S. reinstates Iran sanctions; EU moves to protect firms