U.S. Slaps Sanctions on Iran After Saying It Meets Nuclear Deal

  • Administration required to certify compliance every 90 days
  • Officials say Iran remains a malign influence in the region

U.S. Says Iran Meets Letter, Not Spirit of Nuclear Deal

President Donald Trump’s administration said Iran is complying with an international accord to curb its nuclear weapons program but isn’t living up to the spirit of the pact, and it imposed new sanctions on the Islamic Republic to punish what it calls persistent efforts to destabilize the Middle East.

Secretary of State Rex Tillerson said in a report to Congress required every 90 days that Iran has continued to meet the conditions laid out in the 2015 agreement with the U.S. and five other major powers -- an agreement the president has called the “worst deal ever.” Hours later, the departments of State and Treasury announced sanctions against 18 people and entities in a bid to punish Iran for its actions.

In announcing the sanctions Tuesday, the State Department made clear the administration’s dislike for the nuclear deal, saying its implementation was meant to contribute to peace and security in the Middle East.

Instead, “Iran’s other malign activities are serving to undercut whatever ‘positive contributions’ to regional and international peace and security were intended to emerge” from the accord, State Department spokeswoman Heather Nauert said.

Broader Review

The finding that Iran is complying with the agreement was delivered as the White House conducts a broader review of U.S. policy toward the Islamic Republic. At the same time, U.S. allies in the Gulf are engaged in a diplomatic spat and Congress is considering legislation to toughen non-nuclear sanctions against Iran.

The report reflects the difficult position in which the administration finds itself over the deal. Trump frequently criticizes the agreement, but his administration has repeatedly said it’s waiting for the results of the Iran policy review and so far hasn’t been willing to go against the other countries, including Germany and France, that helped forge the accord and strongly support it. Companies from Total SA to Boeing Co. have begun signing major deals with Iranian companies as the country’s market reopens.

Read More: How Iran’s Gas Wealth Lured Total to Take a Dose of Political Risk

Iran’s foreign ministry condemned the new sanctions as “contemptible and worthless” and vowed retaliation.

Iran “will reciprocate the move by imposing sanctions on a number of American natural and legal persons who have taken steps against the Iranian people and other Muslim nations in the region,” the foreign ministry’s said in a statement. “The names of these individuals will be announced soon.”

Several of the targets on the latest U.S. sanctions list are accused of working on Iran’s ballistic missile program or developing advanced military hardware such as drones and fast-attack boats. Other targets include transnational criminal organizations based in Iran that stole U.S. and other western software programs, according to the Treasury Department. Companies based in China and Turkey are among those cited for their work with Iran.

Treasury also imposed sanctions on procurement networks, including people and companies in China and Turkey that allegedly sought to acquire U.S. and Canadian electronic components or supported and supplied equipment and maintenance for Iran’s Revolutionary Guard Corps.

‘Never Expires’

Iran’s Foreign Minister Javad Zarif said Monday that his country’s vow not to seek nuclear weapons “never expires.” Still, he cautioned that Iran would withdraw from the accord in the event of a “major violation” on the part of the U.S. He didn’t say what would qualify.

“Iran is committed to not producing nuclear weapons,” Zarif said at the Council on Foreign Relations in New York. “Nuclear weapons do not augment anybody’s security.”

Under the agreement, Iran is allowed to enrich and store some uranium for energy production, although it had to reduce its uranium stockpile by 96 percent, idle many of its enrichment centrifuges and pour concrete into its heavy water nuclear reactor. The Obama administration insisted the provisions would slow the time it would take Iran to produce nuclear weapons.

Uranium Enrichment

Opponents of the nuclear agreement have called for renegotiating the accord with the goal of making permanent its 15-year moratorium on uranium enrichment close to the level needed to make a bomb. Reimposing sanctions that were explicitly tied to Iran’s nuclear program would face particular opposition from European allies and give the government in Tehran grounds to walk away from the accord.

In Iran’s view, the U.S. isn’t living up to its end of the bargain. By pressing businesses not to work with Iran, officials in Tehran say, it’s undermining the accord’s objective of supporting normalized trade with the Persian Gulf nation.

The Trump administration’s certification of the deal -- its second this year -- became even more politically charged with the announcement that Iran had sentenced 37-year-old Xiyue Wang, who has both U.S. and Chinese citizenship, to 10 years in jail for allegedly “infiltrating” the country. Wang is a graduate student at Princeton University and was arrested while researching his doctorate dissertation.

After the administration certified Iran’s compliance in April, Tillerson said the nuclear deal “represents the same failed approach of the past.” He said the administration was seeking to determine whether the decision to suspend sanctions “is vital to the national security interests of the United States.”

In his briefing Monday, White House spokesman Sean Spicer suggested the administration might change course after its ongoing review is completed.

‘That Time Is Up’

The president “recertified it because he had the luxury of having an entire team here, both from State, DOD, NSC, to review it,” Spicer said, referring to the Department of Defense and the National Security Council. “That time is up, and State will make its announcement very shortly.”

One U.S. official, briefing reporters on a call Monday, said the administration would work closely with allies to build a case that the agreement has serious flaws.

Normalized Trade

As the U.S. announced the new sanctions, the Iranian parliament moved to introduce a bill that would add funding to the Revolutionary Guards and the country’s missile program in reaction to Washington’s “adventurism” in the Middle East, the state-run Iranian Students News Agency reported. The bill would need to be approved by parliament and the influential Guardian Council of Islamic law experts and jurists.

Despite the Trump administration’s frustrations, other countries involved in implementing the agreement have continued to support it, and the lifting of European sanctions against Iran has allowed new business deals to go forward. The International Atomic Energy Agency, the group responsible for monitoring compliance, has found that Iran has largely complied with its obligations under the deal.

A $1 billion natural gas bet by Total, signed this month, marked the first investment in Iran by an international energy company since the nuclear accord. In June, Iran’s Aseman Airlines signed a $3 billion contract with Boeing for 30 737 Max jets and an option for 30 more.

Nevertheless, the U.S. Congress is considering new sanctions to punish Iran over its ballistic missile program. The sanctions measure, S. 722, passed the Senate last month in an overwhelming 98-2 vote, in an effort to punish Iran.

The legislation has been stalled in the House due to concerns over Russian sanctions that are also included in the bill amid the dispute over Moscow’s meddling in last year’s U.S. presidential campaign and whether anyone close to Trump colluded in that effort.

— With assistance by Kambiz Foroohar, and Ladane Nasseri

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE