Washington may slap sanctions on governments that fail to reduce Iranian oil imports to “zero” by early November, a senior State Department official has warned. But some partners seem reluctant to follow the demand.
The US administration has been pushing its allies to follow US President Donald Trump’s lead after he decided to pull out of the landmark nuclear agreement between Iran and six world powers.
A senior State Department official told reporters he had been traveling to Europe and Asia to convince allies to isolate the “stream of Iranian funding.”
Washington’s allies, including those dependent on Iran’s oil, should ultimately refuse the imports by November 4 or else face secondary US sanctions. It was stressed that there are no waivers planned.
This mean that the Trump administration will not allow countries to gradually phase out Iran’s oil exports over the duration of many months like the Obama White House did.
“We have a lot of diplomatic muscle memory for urging, cajoling, negotiating with our partners to reduce their investments to zero,” the unnamed State Department official said.
Their trip did not included Turkey, and the largest importers of Iran’s oil – India and China – so far, but the countries are also to be urged to stop purchases by early November.
India and China traditionally used to get a waiver from sanctions and kept trading with Iran even before the 2015 agreement, so speculation is rife as to whether they will manage to find workarounds this time.
The State Department acknowledges that cutting off Iranian oil imports completely is a “challenge” that no country “wants to do voluntarily”.
Among Iran’s most significant customers are China, South Korea, India and Japan. The State Department said that, even if reluctantly, Tokyo understands “that the Secretary and the White House aren’t kidding” about sanctions, the official said.
In Europe, where the biggest customers are France and Italy, the US is meeting resistance – especially among those countries that helped negotiate the Iran deal. The UK, France and Germany voiced opposition to Trump’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and the EU put measures in place aimed at protecting companies from secondary sanctions.
Oil prices spiked on the announcement, which already comes during concerns about shortages and crude prices hitting a three-and-a-half-year high.
The withdrawal from the nuclear deal left the US isolated, as its close allies, including France, UK, and Germany, have been working to prevent the agreement from crumbling. Meanwhile Iran vowed to reopen its second uranium enrichment facility if the nuclear deal collapses.
A new Senate GOP-authored report alleges that top officials in the Obama administration secretly authorized Iran to convert assets to the U.S. dollar, even after the officials repeatedly assured Congress that no such financial transactions would take place under the 2015 nuclear deal.
“Senior U.S. government officials repeatedly testified to Congress that Iranian access to the U.S. financial system was not on the table or part of any deal,” the report reads.
“Despite these claims, the U.S. Department of the Treasury, at the direction of the U.S. State Department, granted a specific license that authorized a conversion of Iranian assets worth billions of U.S. dollars using the U.S. financial system,” it continues.
The report cites multiple instances where top officials like Treasury Secretary Jack Lew pledged before Congress and the public that Iran would not have access to the U.S. financial system, both before and after authorizing the license.
“The Obama administration misled the American people and Congress because they were desperate to get a deal with Iran,” Portman said in a statement.
OFAC provided Bank Muscat with a specific license in February 2016, authorizing roughly $5.7 billion worth in Iranian assets to be processed through the U.S. financial system, the report says.
U.S. officials at OFAC then tried to encourage two banks to make such conversions.
“To further encourage the banks, one U.S. government official wrote ‘I agree it would be a good idea to have [Secretary] Lew engage [the U.S. bank]. If they refuse we can suggest [Secretary] Kerry will call, which will drive them nuts,” the report says.
Mr Americana, Overpasses News Desk
June 27th, 2018