In a cruel twist of fate, USA has re-imposed economic sanctions on Iran, exactly 39 years after the US embassy was taken under siege by Iran for 444 days and 52 hostages. On November 4 1979, Mohammed Reza Shah Pahlavi, the Shah of Iran had to concede power to the religious leader Ayatollah Ruhollah Khamenei.
In 2015, the Joint Comprehensive Plan of Action (JCPOA) was signed by Iran, EU and P5+1, which included USA – a tacit agreement about Iran’s nuclear programme. Following the implementation of the JCPOA, economic sanctions were lifted in January 2016, potentially reopening Iran to business to the world. It was also a historic decision under the Obama administration, and lifting Iran sanctions was one of the most important political and economic efforts undertaken by him.
However, after Donald Trump assumed the position of President of United States, one of the foremost priorities was to reimpose sanctions on Iran. He was of the firm belief that Iran was a terrorist state, and funded multiple terror outfits. Washington also says it wants to stop what it calls Tehran’s “malign” activities including cyber attacks and ballistic missile tests, in addition to supporting terrorist activities.
On November 4, the Trump administration reinstated all sanctions removed under the 2015 nuclear deal, targeting both Iran and states that trade with it. As part of these new, stricter sanctions, oil exports, shipping and banks have been affected.
Protests have begun across the Middle East nation, with Iranians chanting “Death to America”, rejecting calls for talks. BBC News reported that Iran’s military would hold air defence drills this week to prove the country’s capabilities. The demonstrations took place on the 39th anniversary of the occupation of the US embassy in Tehran, which led to four decades of mutual hostility.
Before travelling to a campaign rally for the US mid-term elections, President Donald Trump said Iran was already struggling under his administration’s policies. “The Iran sanctions are very strong. They are the strongest sanctions we’ve ever imposed. And we’ll see what happens with Iran, but they’re not doing very well, I can tell you.”
The reimposition of sanctions will gravely affect Iran’s livelihood, which had been on an overdrive to re-establish economic ties with European and Asian nations, Reports state that more than 700 individuals, entities, vessels and aircraft are on the sanctions list, including banks, oil exporters and shipping companies. Secretary of State Mike Pompeo has said that more than 100 big international companies had withdrawn from Iran because of the looming sanctions. He also said Iranian oil exports had dropped by nearly one million barrels a day, choking the main source of funding for the country.
In addition, the Brussels-based SWIFT network for making international payments is expected to cut off links with targeted Iranian institutions, isolating Iran from the international financial system.
As part of the P5+1, UK, Germany and France have objected to the harsh sanctions. They have promised to support European firms that do “legitimate business” with Iran and have set up an alternative payment mechanism – or Special Purpose Vehicle (SPV) – that will help companies trade without facing US penalties.
This isn’t expected to be a long-term fix, given the stronghold USA has over majority of nations. US Treasury Secretary Steven Mnuchin said the US would “aggressively” target any firm or organisation “evading our sanctions”.
However, BBC has reported that the Trump administration has exempted eight countries from the sanctions on oil trading, supposedly these nations are Italy, Japan, South Korea, Turkey, China and India among couple others as these nations have “already made significant reductions in their crude oil exports” but needed “a little bit more time to get to zero”.