Senator Lieberman & Ambassador Wallace Encourage Trump Administration to Impose Maximum Pressure on Iran
United Against Nuclear Iran (UANI) Chairman Senator Joe Lieberman and CEO Ambassador Mark Wallace today welcomed the announced re-imposition of a second round of sanctions on Iran, the world’s leading state sponsor of terrorism:
“A policy of maximum pressure is needed to force Iran into making real, substantive changes to its behavior. The imposition of a full and complete economic blockade will force Tehran to recognize that it can no longer satisfy the needs of the Iranian people while also spending tens of billions to fund global terrorism and its nuclear program. We encourage the Trump Administration to fulfill the promise of a maximum pressure campaign – no exceptions – until Iran permanently and verifiably changes its behavior. Oil and gas firms, including those from friendly countries like India, South Korea and Japan, should not be granted sanctions waivers. Similarly, financial entities – including SWIFT – must sever ties with Iranian banks and financial institutions."
The U.S. State Department recently labeled Iran an “Outlaw Regime”. A campaign of maximum pressure is appropriate to deal with such a threat. Countries and companies – particularly those friendly to the U.S. – should expect no exemptions.
UANI has prepared the background information below regarding the second round of sanctions re-impositions on Iran.
The Return Of U.S. Sanctions On Iran: What You Need To Know
The United States will re-impose sanctions against Iran on November 4. However, some European and Asian companies are still doing business with Iran, nations are still buying Iranian oil and condensate, and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has so far declined to disconnect Iran from its network. When the clock strikes midnight and the U.S. Department of the Treasury restores sanctions, what will change? And how can the United States apply the “maximum pressure” that it has promised?
The Trump Administration withdrew the U.S. from the Joint Comprehensive Plan of Action (JCPOA) on May 8 because of serious flaws in the deal, as well as Iran’s destabilizing and malignant activities. Withdrawing from the JCPOA triggered the re-imposition of two sets of U.S. sanctions. The first set went back into force on August 6. The second set goes back into force on November 4. This latter set of sanctions essentially forces businesses to choose between having access to U.S. or Iranian markets, because it includes sanctions on transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions; the provision of specialized financial messaging services to the Central Bank of Iran and Iranian financial institutions; and Iran’s energy sector, among other things.
How Has The Business Community Reacted?
All U.S. businesses and many major foreign businesses have already exited the Iranian market and/or confirmed they have no intention of doing business with the regime in Tehran. These include Air France-KLM, airBaltic Corp., Atlas-Copco, Aza Shipping Pvt. Ltd., BASF, Boeing, BP, British Airways, Caspian Marine Services Ltd., Commerzbank, Daimler, Danske Bank, ENI, General Electric, Hindustan Petroleum Corp., Hyundai, Lukoil, Maersk, Mazda, Mitsubishi UFJ Financial Group, PSA Group, Royal Dutch Shell, Siemens, Total, Wan Hai Lines Ltd., and many others.
Businesses that continue to conduct business in Iran run the risk of being blocked from U.S. markets and the financial system. UANI has called on the Trump Administration to stick to what National Security Advisor Ambassador John Bolton has called a campaign of “maximum pressure” without any waivers that would allow Tehran to continue to access foreign capital or enjoy the benefits, real or perceived, of foreign direct investment.
How Are U.S. Allies Reacting?
Some European Union (EU) political leaders are exploring different mechanisms, such as a special purpose vehicle (SPV), to help Iran evade U.S. sanctions. However, the EU cannot force private businesses to continue to do business with Iran and no EU member state has volunteered to host the SPV. Like the EU’s efforts to strong-arm businesses into staying in Iran, this idea appears destined to fail.
This leaves the world in the following position: without a U.S. sanctions waiver from the Trump Administration, any entity doing business with Iran – including those purchasing oil or condensate – will be subject to U.S. sanctions. This includes the individuals who serve on the SWIFT board of directors, which has not yet disconnected Iran from its network and the rest of the international financial system.
To date, the U.S. has not confirmed that any waivers have been issued. UANI opposes the issuance of any waivers for any business activity with Iran.
What Has Been The Impact In Iran?
Iran’s economy has slowed tremendously and what little of the global business community that had been in Iran has left. Its currency, the rial, is essentially worthless due to hyperinflation that took hold at the same time. The exchange rate has plunged from 9,600 to the U.S. dollar in September 2008 to a record low of 190,000 to the U.S. dollar just one month ago. Inflation, too, is up by more than 5.5 percent month-over-month and an astonishing 24.2 percent year-over-year. Further, unemployment remains high and the economy as a whole, according to the International Monetary Fund’s (IMF) latest World Economic Outlook, is projected to contract by 1.5 percent this year and 3.6 percent next year. If the IMF’s 2018 projections hold, it will represent a 14 percent drop in gross domestic product (GDP) over two years – larger than the 13.4 percent decline between 2010 and 2012.
Iran is now on the precipice of self-imposed economic disaster even as it continues to fund the development of ballistic missiles and terror groups such as Hezbollah, Hamas, Islamic Jihad, various Shiite militias in Iraq and Syria, Houthis in Yemen, and the Taliban in Afghanistan. Indeed, beginning long before the U.S. withdrawal from the JCPOA, the Iranian regime has been under increasing domestic pressure to focus its investments at home as tens of thousands of Iranians have protested worsening economic conditions, corruption and mismanagement.