A rchive Date
[ 31-01-2019 ]
Category
[ International Relations ]
sub-Categoy
[ European Union ]
|
[https://www.cbc.ca/news/thenational/national-today-newsletter-iran-china-sidhu-humboldt-1.4996931
Europe tiptoes around U.S. sanctions on Iran with new trade system
Jonathon Gatehouse · CBC News · Posted: Jan 31, 2019 2:22 PM ET
Iran sanctions
France, Germany and Britain are setting out to help European businesses skirt U.S. sanctions on Iran by launching a workaround payment mechanism.
The new company, called INSTEX - short for Instrument In Support Of Trade Exchanges - was formally unveiled this morning. It will function as a financial instrument, specifically designed to allow the bartering of goods between Iran and Europe without direct banking transactions. The scheme has the backing of the European Union.
It's the biggest challenge to date to Donald Trump's unilateral efforts to choke off the Iranian economy via strict sanctions and threats of punitive action against nations and corporations that don't respect America's wishes.
Initially, the instrument will facilitate trade in food, pharmaceuticals and medical goods - all exempt from Washington's restrictions.
But the plan is to gingerly expand into other areas, striking balance between Europe's need to appease the U.S. president and its desire to keep the Iran nuclear deal alive.Many observers doubt that it will work, given the obvious legal and financial risks.
A statement released today by the U.S. Embassy in Berlin tried to drive home that point: "Entities that continue to engage in sanctionable activity involving Iran risk severe consequences that could include losing access to the U.S. financial system and the ability to do business with the United States or U.S. companies," it warned.
The Iranians, on the other hand, hailed the mechanism as a diplomatic victory for Tehran.
Abbas Araqchi, Iran's Deputy Foreign Minister, called it a "first step" in an interview with state television, expressing hopes that it will be "fully implemented."
The European challenge comes just two days after U.S. spy chiefs told Congress that Iran is abiding by the terms of the 2015 nuclear deal and not engaging in prohibited "key activities" that might help the country produce nuclear bombs.
Trump responded with a trademark Twitter outburst, calling his intelligence officials "extremely passive and naive" about the dangers Iran poses and suggesting that they "go back to school." Justified or not, the sanctions appear to be biting.
Yesterday, Iranian President Hassan Rouhani called them the "biggest pressure" that the country has faced in the past four decades. And he argued that his government doesn't deserve the blame for the consequences, which include 35 per cent inflation, meat shortages, and a currency that has lost more than 70 per cent of its value against the U.S. dollar.
"Today our problems are primarily because of pressure from America and its followers," Rouhani said in a national address marking the 40th anniversary of the Iranian revolution. The sanction-busting charges laid by the U.S. against Chinese telecom giant Huawei's CFO Meng Wanzhou this week certainly seem to have Beijing's attention.
Iranian authorities are complaining that China is now reneging on a promise to help redesign the country's Arak heavy water reactor, despite the facility being exempt from sanctions.
And Iranian oil exports have now fallen to about 1 million barrels a day, down from a post-nuclear-deal peak of 2.7 million barrels a year ago.
Earlier this month, Trump administration officials confidently predicted that they will soon reach their goal of "zeroing out" Iran's foreign petroleum sales, cutting off Tehran's biggest external source of income.
But there are already indications that the White House will soon have to ease the pressure.
Import waivers that were granted to eight Asian and European countries come up for renewal in May, and most of those customers haven't yet figured out how to replace the Iranian oil. India, which took in 300,000 barrels a day in December, is already in talks to extend its exemption.
And the sanctions that Trump imposed on Venezuelan oil this week may end up providing a lifeline to Tehran. If world prices rise because of the disrupted supply, the White House will face considerable pressure to let countries like Greece, Turkey, China and Japan keep buying cheap Iranian oil.
©2018 CBC/Radio-Canada. All rights reserved.
 World Fact Book (CIA)]
|