Trump Restores Iran Sanctions as Rouhani Feels Economic Pressure

The Trump administration moved to restore some U.S. sanctions on Iran and reaffirmed plans to impose tougher penalties on the country’s oil sales in November, as President Hassan Rouhani comes under increasing economic and political pressure to address the crisis.

President Donald Trump signed an executive order on Tuesday restricting purchases of dollar banknotes by Iran, preventing the government from trading gold and other precious metals and blocking the nation from selling or acquiring various industrial metals. The measures, which take effect Aug. 7, also target the auto industry, and will ban imports of Persian carpets and pistachios to the U.S.

While the penalties were expected, they drew fresh condemnation from European allies who are standing by the 2015 nuclear accord — known as the JCPOA — that Trump quit in May. They presage tougher sanctions against imports of Iranian oil that will go into force in early November, although the administration signaled it will consider partial exemptions to that ban.

“We deeply regret the re-imposition of sanctions by the U.S., due to the latter’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA),” according to a statement Monday from the foreign ministers of the U.K., Germany, France and the European Union. “Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security.”

Rouhani, who has denounced Trump’s decision to quit the accord, is expected to address his nation later on Monday.

Iran’s central bank, acting on the eve of the U.S. move, scrapped most currency controls introduced this yearin a bid to halt a plunge in the rial that has stirred protests against the government.

Under the measures, the central bank will let the market determine the rate of foreign-exchange transactions except the imports of essential goods and drugs, Governor Abdolnaser Hemmati told state television Sunday night. Licensed currency houses whose trading had been halted will be allowed to resume operations from Tuesday, he said.

Earlier this year, the central bank said it would unify the exchange rate at 42,000 rials to the dollar in an attempt to root out unregulated trading. It banned exchange houses from selling foreign currencies, and authorities arrested dozens of people for allegedly manipulating the rules for personal gain. Among those detained is a central bank deputy governor in charge of foreign-currency affairs.

Read more: China Is Said to Reject U.S. Request to Cut Iran Oil Imports

But the policies backfired, with the rial weakening to more than 100,000 to the dollar on the black market this month.

The U.S. is weighing case-by-case exemptions for some countries from the next set of sanctions — which take effect in 90 days — targeting Iranian oil exports, according to Trump administration officials who briefed reporters on Monday, despite its announced goal of allowing “zero” Iranian oil exports. The administration had previously signaled that countries that don’t eliminate their imports of Iranian oil need to show “significant” reductions in those purchases to qualify for temporary waivers.

The U.S. goal is to get the Iranian regime to stop meddling in countries from Syria to Yemen, halt its ballistic missile program and commit to stricter limits on its nuclear program, not to overthrow the government, the administration officials said.

“We’re very hopeful that we can find a way to move forward, but it’s going to require enormous change on the part of the Iranian regime,” Secretary of State Michael Pompeo told reporters Sunday en route to Washington from Asia. “They’ve got to — well, they’ve got to behave like a normal country. That’s the ask. It’s pretty simple.”

Trump is still willing to meet with Iranian President Hassan Rouhani at any time, without preconditions, the officials told reporters on Monday.

— With assistance by Arsalan Shahla

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