US vows pain to com­pa­nies found evad­ing re­newed Iran sanc­tions

Gulf Times Business - - FRONT PAGE -

The US gave a stark warn­ing to com­pa­nies around the world: Evad­ing sanc­tions on Iran will hurt.

“I prom­ise you that do­ing busi­ness in Iran in de­fi­ance of our sanc­tions will ul­ti­mately be a much more painful busi­ness de­ci­sion than pulling out of Iran,” Sec­re­tary of State Michael Pom­peo said on Mon­day at a news con­fer­ence in Wash­ing­ton, af­ter the US im­posed penal­ties on 700 in­di­vid­u­als, banks, ships, air­craft and com­pa­nies tied to Iran’s en­ergy and fi­nan­cial in­dus­tries. Vow­ing “swift, se­vere penal­ties” to those caught vi­o­lat­ing sanc­tions, Pom­peo said the US pres­sure’s cam­paign has cost Iran $2.5bn in oil rev­enue since May. But oil traded close to a six­month low as Pom­peo’s tough talk was soft­ened by his an­nounce­ment of tem­po­rary waivers from penal­ties for eight gov­ern­ments.

Fac­ing crit­i­cism from some US con­ser­va­tives who didn’t think he should is­sue any waivers, Pres­i­dent Don­ald Trump said on Mon­day that he didn’t want to shock en­ergy mar­kets by forc­ing all buy­ers to halt Ira­nian oil pur­chases.

“We want to go a lit­tle bit slower be­cause I don’t want to drive the oil prices in the world up,” Trump told re­porters on Mon­day in Wash­ing­ton. “It would cause a shock to the mar­ket.” Trump is try­ing to force Iran to give up its nu­clear am­bi­tions and what he calls its sup­port for ter­ror­ism in the Mid­dle East by chok­ing off its oil rev­enue. The move came af­ter he aban­doned the deal that the US and five other world pow­ers reached in 2015 to ease sanc­tions in re­turn for curbs on Iran’s nu­clear pro­gramme. Pom­peo con­firmed that the eight gov­ern­ments granted waivers from oil sanc­tions are China, In­dia, Italy, Greece, Ja­pan, South Korea, Tai­wan and Turkey. He said the waivers were only tem­po­rary mea­sures to ease their tran­si­tion from Ira­nian crude and avoid desta­bil­is­ing the en­ergy mar­ket. But some Repub­li­cans in Con­gress have vowed leg­is­la­tion to elim­i­nate the waivers, and Iran’s Pres­i­dent Has­san Rouhani ridiculed them on Mon­day.

“That the US is forced to ex­empt eight na­tions from sanc­tions on oil sales when it had pre­vi­ously said it wants to cut Iran’s oil sales to zero, isn’t that a sign of Iran’s vic­tory and the US back­ing off?” Rouhani said.

Pom­peo said more than 100 com­pa­nies have al­ready with­drawn from the Ira­nian mar­ket since May, and the US has shown in the past its will­ing­ness to heav­ily fine vi­o­la­tors of Amer­i­can sanc­tions. French bank BNP Paribas SA agreed to pay $8.9bn in July 2014 for vi­o­lat­ing US sanc­tions against Su­dan, Cuba and Iran. Ger­many’s Com­merzbank AG agreed to pay $1.45bn for mov­ing funds through the US fi­nan­cial sys­tem for Su­dan and Iran.

The waivers an­nounced on Mon­day largely con­firmed ex­pec­ta­tions in the en­ergy mar­ket and eased con­cerns about the prospects of a tight global mar­ket at the end of the year.

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