Trump Administration Announces New Iran Sanctions, Possible Waivers for China, Others

November 4, 2018 Updated: November 4, 2018

The Trump Administration announced additional sanctions on Iran on a teleconference on Nov. 2 led by Secretary of State Michael Pompeo and Secretary of the Treasury Steven Mnuchin.

The new sanctions will be directed toward energy, shipping, shipbuilding, and financial sectors, representing the “final round of snapback sanctions” as a result of the United States’ withdrawal from the Obama-era Iran nuclear deal (formally known as the Joint Comprehensive Plan of Action, or JCPOA), they said.

In a separate press release, the White House called the sanctions the “toughest ever,” and said “reimposing sanctions will cut off revenues the [Iranian] regime uses to bankroll terrorist groups, foment global instability, fund nuclear and ballistic missile programs, and enrich its leaders.”

Pompeo emphasized how increased U.S. sanctions on Iran leading up to today’s announcement had ensured “that Iran is not able to increase its revenue from oil as its exports plummet,” while keeping prices stable for the American consumer.  “We will, we expect, have reduced Iranian crude oil exports by more than 1 million barrels even before these sanctions go into effect,” he added.

Mnuchin particularly spoke to SWIFT, an international financial transactions messaging system.  Contrary to what he called “fueled misinformation,” he stated that SWIFT, “if it provides financial messaging services to certain designated Iranian financial institutions…could be subject to sanctions.”  He qualified that transactions for “humanitarian” purposes would be exempt, as they had been in the past, but cautioned that “banks must be very careful that these are not disguised transactions.”

Pompeo also explained that “eight jurisdictions” would receive “temporary allotments” to the newly-announced sanctions.  He said the list would be provided on Monday, when the new sanctions are set to take effect.  When questioned about whether the European Union or other nations or jurisdictions would receive waivers (or SREs, “significant reduction exemptions”), he answered “[T]he EU will not be receiving an SRE.”  Similarly, Secretary Mnuchin said a list of banks subject to the new sanctions would also be provided on Monday.

Bloomberg News reported that China was negotiating to continue purchasing Iranian oil under an SRE, and that similar agreements were already reached with Japan, India, and South Korea (citing a senior administration official and other anonymous sources).

Senator Marco Rubio of the Senate Foreign Relations Committee responded to the administration’s announcement, specifically noting the SWIFT transactions issues as well as the issuance of SREs: “More must be done to press the SWIFT financial messaging service to once again sever connections with the Central Bank of Iran and other sanctioned Iranian banks by a certain date. Sanctions waivers being given to key purchasers of Iranian oil, most alarmingly China, give Iran a financial reprieve, and should be eliminated as soon as possible.”

Senator Rubio has been a strong critic of China on its human rights record and foreign policy, as well as having questioned Trump Administration policy toward it.  He strongly criticized a Commerce Department deal with the Chinese telecommunications firm ZTE this past July.

Secretary Pompeo noted in his statement today that the SREs were being granted to the eight jurisdictions  (to be named Nov. 5)  “only because they have demonstrated significant reductions in their crude oil and cooperation on many other fronts and have made important moves towards getting to zero crude oil importation. These negotiations are still ongoing.”

Also in its press release, the administration declared it is “providing fewer exceptions to sanctions than the last administration.”

RECOMMENDED