US intensifies pressure on Iran with new set of sanctions

The new sanctions aim to reduce global trade with Iran in various sectors, such as the automotive and petro-chemical industries, while also targeting Iran’s Rial currency for the first time

US intensifies pressure on Iran with new set of sanctions

The US administration has announced a new wave of sanctions against Iran implemented on July 1, aiming to dissuade Tehran from pursuing a nuclear program that the West suspects is meant to produce weapons.

With the 9th package of new sanctions on Iran approved by US President Barack Obama, the US aims to reduce global trade with Iran in various sectors, such as the automotive and petro-chemical industries, targeting Iran’s second largest source of foreign revenue.

The new sanctions also target Iran’s Rial currency for the first time by prospecting financial restrictions on the banks making larger transactions with Rial, and on individuals and institutions possessing sheer volumes of Rial. The goal is to reduce the amount of Rial in global financial transactions.

With the aim of restricting Iran’s capacity to overcome sanctions, the US also prohibits the selling and transferring of precious metals. As of July 1, it is only possible to purchase oil and/or natural gas if the customer pays the price in an open bank account which Iran could use by selling or purchasing legal goods and service.

Sanctions include some restrictions on energy, port management, transportation and the ship building sectors. The 9th package also contains punishment for the companies selling or supplying graphite, aluminum, steel and products related to ship building and nuclear energy to Iran.

Assets of 37 companies frozen by US

From the beginning of July, the US blacklisted and froze the assets of 37 companies operating in Germany, Croatia and South Africa which have strong ties with, or are possessed by, the Iranian regime. These 37 companies are run directly by Iranian Supreme Guard Ali Khamanei.

Sanctions on Persian Gulf nation’s automotive sector, which creates substantial income for the Iranian market, is predicted to stir up trouble for the already crippled economy.

Iranian petro-chemical firms, Abu Ali Sina, Mubin, Nuri, Pars, Martyr Tondguyan, Shazend, Tabriz and Imam’s companies along with Nik Sima and JLT, two catering companies operating in United Arab Emirates, were also blacklisted.

10 countries suspend buying Iranian oil

As these sanctions started to be implemented, released news for the Iranian economy came from the US.

At the beginning of June, the Washington administration announced that 9 of the countries, including Turkey, which accepted to carry out sanctions against Iran are exempted from implementing them for 6 months.

In a written statement, US Foreign Secretary John Kerry said the US and international community stand shoulder to shoulder in putting pressure on the Iranian regime to alleviate the concerns resulting from Tehran’s nuclear program.

Kerry also noted that Turkey, China, India, Malaysia, South Korea, Singapore, South Africa, Sri Lanka and Taiwan would be exempted to implement sanctions regarding buying oil from Iran. The reason for the exemption is the suspension of, or considerable decrease in, these countries’ oil purchases from Iran, Kerry added.

In accordance with the sanctions imposed by either the UN, EU or individually, 20 countries have suspended, or continue to decrease to low levels, oil purchases. Reports publicized in early March said Japan, Belgium, Czech Republic, France, Germany, Greece, Italy, Netherlands, Poland, Spain and Britain were exempted to realize the sanctions they agreed to previously. Apart from Japan all these countries suspended oil purchases from Iran.

Sanctions on Iranian oil would be reviewed in 6-month periods and could be extended with regards to the international oil market’s sensitivities.

Iranian Rial in decline in recent years

The recent sanctions imposed by the US against Iran, which targeted the country’s currency for the first time, have created serious outcomes for the Iranian Rial.

These sanctions would be implemented to foreign financial institutions which are currently making financial transactions with Iranian Rial.

The sanctions, approved by US President Barack Obama, include severe punishments to those individuals and institutions holding large amounts of Iranian Rial out of Iran and using it as a transaction currency.

With these new measures, global circulation of Iranian Rial would be prevented. For the reason that many financial institutions would sell out the Rial in the near future, the currency which depreciates immensely is predicted to weaken.

However, it is claimed that newly-elected Iranian president Hasan Rouhani’s discourse in foreign policy would influence the Rial’s fluctuation.

Source: Kuzey News Agency

Güncelleme Tarihi: 09 Temmuz 2013, 17:48