Policy Alert #172 | August 14, 2018

On August 6, 2018, the United States re-imposed the first set of economic sanctions on Iran as part of its exit from the 2015 Joint Comprehensive Plan of Action (JCPOA). These initial sanctions included the ban of transactions with Iran using US banknotes, precious metals, passenger aircraft, and Iranian-made products like carpets and automobiles. The second wave of sanctions, which will include penalties to companies in third countries that continue to do business with Iran and sanctions against Iranian oil, is scheduled to take effect on November 4, 2018. In response, the European Union (EU) issued an updated Blocking Statute “to protect EU companies doing legitimate business with Iran from the impact of US extra-territorial sanctions.” The Blocking Statute allows affected EU companies to sue the US for damages, but also allows suits against EU companies that back out of Iran. Although the EU’s countermeasures have taken the spotlight, the Rising Powers aren’t taking the development lying down.

 

CHINA

The Ministry of Foreign Affairs (MFA) strongly disapproved of the US’s re-imposition of sanctions on Iran. Foreign Ministry Spokesperson Lu Kang said that China opposed unilateral sanctions and “long-arm jurisdiction,” and stressed China’s own transparent and normal relations with Iran. The MFA reiterated its stance that US and Iran should resolve their issues through normal channels: “China always believes that reckless imposition of sanctions or threatening to use them will not help solve the issues. The only viable way out of the issues is through dialogue and negotiation.”

• An editorial in the state-directed China Daily expressed consternation with the sanctions: “The US does not regard and treat other countries as deserving of respect. With such a mentality, the US government believes it can do whatever it pleases as it considers itself to be exceptional and above others.” Another Daily editorial argued that “the unilateral action by Washington at a time when Iran has not violated its nuclear deal lacks a moral basis and legal justification.”
• The nationalist Global Times characterized the re-imposition of sanctions as “an end to the era of solving problems through peaceful negotiations in the Middle East.”
• The independent South China Morning Post called for the international community to resist the US’s efforts to undermine the JCPOA: “As long as Tehran complies with the accord by limiting its nuclear activities and allowing UN inspections of facilities, signatories should do their best to thwart the sanctions.”
• Wang Jin, a research fellow at the Charhar Institute and Northwest University, penned an op-ed for state-owned CGTN which stated that, “With the unyielding and steadfast adherence of China, Russia and European states’ commitment to the JCPOA, Iran is not alone in the international arena.[…] New sanctions might bring economic hardship to Iran, but not make Iran succumb to Donald Trump’s wishful expectations.”

 

INDIA

Following the India-Iran Foreign Office Consultations on July 15, 2018, the Ministry of External Affairs published a press release that among other topics, “Views were […] exchanged on regional and international issues of mutual interest, including the efforts being made by various Parties to address issues that have arisen over the Joint Comprehensive Plan of Action.” The press release also announced the two countries’ intentions to hold another Joint Commission meeting in Iran in November 2018.  

• Vikram S. Mehta, Chairman of Brookings India, wrote in an op-ed for the liberal Indian Express that India can securely “stay true to its principles” on Iran because “Trump’s demand is not grounded in law; nor does it have the support of the international community; nor is there any evidence that Iran has failed to comply with the conditions of the JCPOA. [..I]t is not even clear if Trump will stay with his position. He may do a flip-flop once he has appeased his political base”.
• In the left-leaning The Hindu, International Affairs Editor Stanly Johny juxtaposed the US’s recent outreach to North Korea against its hostility toward the JCPOA: “[T]he Trump administration is punishing the country which agreed to scuttle its nuclear programme and engaging with the country that built nuclear weapons. The U.S. President is proving Iran’s hardliners right. How will they trust America again?”
• Pranab Dhal Samanta, editor of the business-focused Economic Times, called for the Indian government to craft its own plan for dealing with the Iran sanctions to avoid “a very tricky situation in November.” Samanta suggested India do what it could to symbolically comply to minimize the effects of the sanctions domestically, but “it must not allow Washington the comfort to think that it will go with the US all the way. India’s early bird gesture must carry stiff conditions […] because any concession on Iran has a direct bearing on India’s regional strategic environment.”

 

JAPAN

On August 2, 2018, Foreign Minister Taro Kano reported that he had “welcomed Iran’s continuous execution of the nuclear agreement and stated that Japan would continue to support the nuclear agreement and that the actions and role requested of Iran are critical for realizing regional stability” during a meeting with his Iranian counterpart on the sidelines of the Japan-ASEAN Foreign Ministers’ Meeting. At a press conference following a Cabinet meeting on August 7, 2018, Minister of Economy, Trade, and Industry Hiroshige Seko replied to questions regarding the Iran sanctions that Japan would tenaciously continue its dialogue with the US on the issue to limit adverse effects to Japanese business (Japanese only).

• The conservative Yomiuri Shimbun criticized Trump’s actions as being “devoid of proper strategy,” and urged the Japanese government to pursue an exemption waiver: “While cooperating with countries concerned, Japan should continue calling on the United States to exempt it from the sanctions, so Japan can continue importing crude oil from Iran.”
• The left-leaning English paper The Japan Times lambasted the US’s action: “Tehran is now theoretically free to disregard the JCPOA and resume its nuclear weapons program. Trump’s unhappiness with the Iran deal is no reason to tear it up — especially when he has no real alternative.”
• In an interview with the Nikkei Asian Review, Keio University professor and Iran expert Koichiro Tanaka advised that “the Japanese government should pursue its own diplomatic efforts to secure Iranian crude for companies that can’t make their own moves, instead of following the U.S., which violated the nuclear deal.”

 

RUSSIA

In a press release, the Ministry of Foreign Affairs said that Russia was “deeply disappointed” with the US decision to impose sanctions on Iran: “This is a graphic example of Washington’s continued violation of UN Security Council Resolution 2231 and trampling upon the norms of international law. We denounce any unilateral sanctions in circumvention of the UN Security Council’s decisions, all the more so if they have exterritorial applications and affect the interests of third countries, as is the case with the current US restrictions against Iran. […] We will do everything possible in the interests of preserving and effectively implementing the JCPOA in full measure.”

• Lyuba Lulko, a correspondent with the nationalist Pravda Report predicted that the US would eventually “choke on its sanctions” given the global resistance to Washington’s unilateral action. Lulko argued that the EU’s Blocking Regulations to protect the JCPOA and the euro’s place as the second largest reserve currency was evidence that the US had “bitten off more than it could chew” on the issue.
• Government-funded RT featured an article by British analyst John Laughland that characterized the EU’s response as demonstrative “that the 28-nation bloc is little but a bumbling old fool in international politics” due to the limits of Blocking Regulations, and another by Irish journalist Finian Cunningham that criticized US narratives on Iranian regime change “as if it’s their divine right.”
• State-owned Sputnik News also featured foreign experts in its coverage of the sanctions. German journalist Dr. Ludwig Watzal was “skeptical about the ability of the Europeans to save the deal in the long run” and London-based analyst Lawk Ghafuri suggested that “China and India are the biggest winners in the Iranian sanctions” due to their ability to increase trade with Iran despite the sanctions.

 

RPI acknowledges support from the MacArthur Foundation and Carnegie Corporation of New York for its activities.