As Trump Takes His Sanctions Battle to Europe, Who Is More “Isolated”: Iran or US?

BRUSSELS – The U.S. has made good on its threats to reimpose sanctions on Iran following Washington’s unilateral withdrawal from the six-party nuclear deal. The new package of restrictions on the Iranian economy came despite widespread friction between Washington and its transatlantic allies who sought to do business with Iran.

The sanctions were accompanied by a characteristically blustery tweet from President Donald Trump early Tuesday. The former reality television star promised that any European company that continues to do business in the country would do so at the cost of its business interests in the United States:

The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!

— Donald J. Trump (@realDonaldTrump) August 7, 2018

Analysts have little doubt that despite the vocal pleas by European leaders, the anti-Iran hawks in Washington will have their way in terms of peeling large corporations headquartered in the West from their hopes that they could continue doing work with Iran.

Such has been the case already with German automaker Daimler, French car company PSA, and French oil group Total, among others.

The German government has already quietly moved to restrict Iran’s ability to retrieve upwards of 300 million euros, or nearly $400 million, from the European-Iranian Trade Bank. The bank is owned by Tehran but registered with the Bundesbank, Germany’s central bank.

According to reports, the new anti-money-laundering rules will complicate Iran’s ability to have “at least two planeloads of cash” returned to Iran, on the basis of U.S. claims that the money will fund “terrorism.” The new rules were allegedly the result of lobbying by hawkish anti-Iran U.S. Ambassador to Germany Richard Grenell.

Quiet diplomacy from U.S. Ambassador to Germany @RichardGrenell appears to have stopped a large 400 million dollar cash transfer to Iran. An impt uncovered story arc is Trump admin efforts in Europe to decouple continent from Iran deal https://t.co/tK8wPdBia8

— Saagar Enjeti (@esaagar) August 2, 2018

 

Brussels seeks to salvage financial involvement with Iran

According to Austria’s envoy to Iran, Stefan Schulz, the suspension of oil, goods and service exports from Iran will cost Europe $10 billion.

Officials from the European Union have vowed to continue to protect European business interests in Iran alongside the foreign ministers of Britain, France and Germany. On Monday, EU diplomatic chief Federica Mogherini stressed that countermeasures by Brussels will kick in Tuesday and ensure that “effective financial channels” will remain open, protecting such firms as French auto manufacturer Renault, which doesn’t sell cars in the U.S. and plans to remain in Iran.

The joint statement from Brussels noted:

We are determined to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council resolution 2231. This is why the European Union’s updated Blocking Statute enters into force on 7 August to protect EU companies doing legitimate business with Iran from the impact of U.S. extraterritorial sanctions.”

The Iranian nuclear deal is "crucial for the security of Europe, the region, and the entire world"

📃 Read the statement by @Jeremy_Hunt, German, French and EU Foreign Ministers following the re-imposition of US sanctions on Iran: https://t.co/Kieq9bVf2V pic.twitter.com/rLfjo0it1x

— Foreign Office 🇬🇧 (@foreignoffice) August 6, 2018

The updated Blocking Statute allows the EU to recover any damages resulting from U.S. sanctions while outlawing European businesses from complying with the sanctions. Damage recovery would take the form of relevant EU member states seizing the assets of anyone involved in the implementation of the sanctions. However, there is still a major caveat that the member states themselves would be tasked with enforcing the statute. Also, if a firm risks facing massive damage to its business interests due to non-compliance with Washington’s sanctions, as would be the case with larger firms doing business with the U.S., Brussels would grant exceptions to the statute — thus potentially drastically weakening its overall impact and thereby further empowering the sanctions.

Andrei Baklitsky, an analyst with the PIR Center, told Russian newspaper Kommersant:

Medium and small companies, which have no representatives in the U.S. and whose bulk of trade is in euros, could stay in Iran. It is not improbable that, with the EU Blocking Regulation coming into force, Europe will be able to create a reasonable system, under which contacts with Iran will be possible.” (Translation by Russian news agency TASS)

He added that other companies who aren’t dependent on the U.S. market — including companies from China, India, and Turkey — will find it far easier to do business in Iran.

 

Will an “isolated” U.S. succeed in isolating Iran?

Iranian President Hassan Rouhani has been careful to temper Iranian reactions to Trump’s aggressive policies with a balanced mixture of asserting Iran’s right to defend its interests and moves that are calculated to not provide grounds for the U.S. to escalate its anti-Iranian campaign.

Iranian figures were universally dismissive of Trump’s July 30 offer to meet Rouhani “any time they want to.”

Reflecting Iran’s exasperation with the deceptive nature of Washington’s diplomacy and Trump’s last-ditch offer of negotiations, Foreign Minister Javad Zarif derided the invitation as a “publicity stunt.” The top diplomat also stressed that the U.S. withdrawal from the 2015 Joint Comprehensive Plan of Action (JCPOA) was proof of the disingenuous nature of the U.S. leader’s offer, according to Iran’s PressTV.

Speaking to journalists in Tehran Monday, Zarif said:

The hours of our negotiations with America were perhaps unprecedented in history; then Trump signs something and says all [those negotiations] are void; can you negotiate with this person? Is this [new negotiations offer] anything but a publicity stunt?”

Iranian officials largely see the U.S. push to squeeze its economy as a plan to provoke popular unrest and an anti-government backlash against the Islamic Republic in pursuit of the regime-change efforts of anti-Iran hawks in the U.S., Israel and Saudi Arabia.

Such policies, like the sabotage of the Iranian nuclear deal, have isolated those countries from the international community, Zarif asserted:

Today, all speak about the isolation of Trump, [Israeli Prime Minister Benjamin] Netanyahu and [Saudi Crown Prince Mohammad] bin Salman. These three persons are the symbol of suppression, violence and mistrust in the world.”

“The fact is that in today’s world, it is the U.S. that has become isolated,” the foreign minister added.

Despite the seeming isolation of the declining global hegemon and its unpredictable president, the next several months will flesh out Washington’s ability to succeed in its concerted campaign to decouple Europe and other nations from the Iranian economy.

Top Photo | European Union foreign policy chief Federica Mogherini, left, and New Zealand Foreign Minister Winston Peters address a press conference after their meeting at Parliament in Wellington, New Zealand, Aug. 7, 2018. Mark Mitchell | New Zealand Herald via AP

Elliott Gabriel is a former staff writer for teleSUR English and a MintPress News contributor based in Quito, Ecuador. He has taken extensive part in advocacy and organizing in the pro-labor, migrant justice and police accountability movements of Southern California and the state’s Central Coast.

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