Iranian Affairs

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Iran tells Russia its partial roll back of nuclear deal is legal
8 May 2019

Iranian Foreign Minister Mohammad Javad Zarif told his Russian counterpart on Wednesday that Tehran’s decision to reduce some voluntary commitments within its nuclear deal with world powers was legal, the RIA news agency reported.

Zarif, in Moscow for talks, told Russian Foreign Minister Sergei Lavrov that Iran’s actions did not violate the original terms of the nuclear agreement and that Tehran now had 60 days to take the necessary diplomatic steps.

Iran announced earlier on Wednesday it was scaling back curbs to its nuclear program under a 2015 deal with world powers, and threatened to do more - including enriching uranium to a higher level - if countries did not shield it from US sanctions.

Kremlin blames US

Earlier on Wednesday the Kremlin said that Iran had been provoked into rolling back some of the terms of a 2015 nuclear deal due to external pressure which it blamed on the United States.

“President Putin has repeatedly spoken of the consequences of un-thought-out steps regarding Iran and by that I mean the decision taken by Washington (to quit the deal). Now we are seeing those consequences are starting to happen,” Kremlin spokesman Dmitry Peskov told reporters on a conference call.

Peskov was speaking as talks in Moscow between avad Zarif and Lavrov got underway.

Peskov said Russia wanted to keep the nuclear deal alive and that its diplomats were doing all they could behind the scenes in talks with European officials to try to save it.

Asked if Russia might be ready to join other countries in imposing new sanctions against Iran over its partial roll back on the deal, Peskov said: “For now, we need to soberly analyze the situation and exchange views on this. The situation is serious.”

 

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UK says Iran will face consequences if it breaks nuclear deal
8 May 2019

Britain said Iran would face consequences if it backed away from its nuclear deal, following Tehran’s announcement on Wednesday that it was scaling back curbs to its nuclear program that had been agreed under a 2015 deal with world powers.

“Today’s announcement from Tehran is ... an unwelcome step,” junior foreign office minister Mark Field told Britain’s parliament. “We are not at this stage talking about re-imposing sanctions, but one has to remember that they were, of course, lifted in exchange for the nuclear restrictions.”

A year after Washington pulled out of the nuclear deal, Iran’s President Hassan Rouhani unveiled measures that do not appear to violate its terms yet but could do so in the future if Iran were to persist on the course he set out.

“Should Iran cease meeting its nuclear commitments, there would, of course, be consequences,” Field said.

Germany: Work on Iran SPV taking time
Work on setting up a special purpose vehicle (SPV) for business with Iran is taking longer than expected, a German government spokesman said on Wednesday.

“Currently, the last steps need to be taken for this corporation to be able to operate – that includes Iran making the necessary preparations on its side,” spokesman Steffen Seibert told a regular government news conference.

 

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France wants to keep Iran nuclear deal alive, warns Tehran over negative actions
08 May 2019
Reuters

  • France warned that if Iran were to not keep to its commitments then the question of triggering a mechanism that could lead to sanctions would be on the table
  • Other European countries also said that they will reimpose sanctions on Iran if it reneges on commitments under its nuclear deal
France’s defence minister said on Wednesday it wanted to keep the Iran 2015 nuclear deal alive and warned that if Iran were to not keep to its commitments then the question of triggering a mechanism that could lead to sanctions would be on the table.

Iranian President Hassan Rouhani earlier threatened to resume high level enrichment of uranium if world powers did not keep their promises under the agreement.

Speaking to BFM TV, Florence Parly said nothing would be worse than Iran withdrawing from the deal and that France, Britain and Germany were doing all they could to keep the accord alive.

Meanwhile, China’s foreign ministry said the 2015 Iran nuclear agreement should be fully implemented and all sides have a responsibility to ensure it happens. Foreign ministry spokesman Geng Shuang made the remarks during a daily briefing.

Israeli Prime Minister Benjamin Netanyahu vowed not to allow Iran to acquire nuclear arms after the Islamic republic said it would abandon limits on its nuclear activities agreed in a 2015 deal.

“This morning on my way here I heard that Iran intends to continue its nuclear programme,” Netanyahu said at a ceremony on Israel’s annual day of remembrance for its fallen soldiers and civilian victims of militant attacks.

“We shall not allow Iran to obtain a nuclear weapon,” he said in Hebrew.

However, Russia said it stood by the Iran nuclear deal and denounced US pressure that led to Tehran to suspend some of its commitments under the agreement.

Kremlin spokesman Dmitry Peskov said President Vladimir Putin remained committed to the agreement and that there were no alternatives “at the moment” to the deal.

“Putin has repeatedly spoken about the consequences of ill-considered steps towards Iran, meaning the decision taken by Washington” to reimpose sanctions, Peskov said.

He said Russia would work with European countries to maintain the “continued viability” of the nuclear deal and that it was too early to discuss the possibility of Russia joining sanctions against Tehran.

“Putin has said that it is ill-conceived and arbitrary decisions that put unreasonable pressure on Iran and cause the adverse steps that we are facing.”

Reimpose sanctions
Other European countries said on Tuesday that they will reimpose sanctions on Iran if it reneges on commitments under its nuclear deal, a source at the French presidency said on Tuesday, after Tehran said it would scale back its compliance a year after Washington pulled out.

Iran dismissed a US announcement of the deployment of an aircraft carrier to the Middle East as old news, recycled for psychological warfare, and said it would soon announce plans to roll back some of its commitments under the 2015 deal.

Tensions have risen on the eve of the anniversary of President Donald Trump’s withdrawal from the nuclear deal, under which Iran agreed to curbs on its nuclear program in return for the lifting of international sanctions.

The Trump administration has restored US sanctions and extended them, effectively ordering countries around the world to stop buying Iranian oil or face sanctions of their own.

Washington’s European allies, which oppose the US pull-out, have tried and failed to come up with ways to blunt the economic impact of the US move while urging Iran to continue to comply.

‘Psychological warfare’
US national security adviser John Bolton said on Sunday the United States was deploying the Abraham Lincoln carrier strike group and a bomber task force to the Middle East in a warning over threats by Iranian forces.

But Keyvan Khosravi, spokesman for Iran’s Supreme National Security Council, said the Abraham Lincoln was already due in the Gulf and dismissed the announcement as a “clumsy” attempt to recycle old news for “psychological warfare.”

The United States typically rotates an aircraft carrier in the Gulf to serve as the flagship of its Fifth Fleet based in Bahrain. The previous carrier in the area, the John C Stennis, left in April to sail for home at the end of its deployment.

Acting US Defense Secretary Patrick Shanahan said on Monday he had approved dispatching the carrier strike group and bombers due to indications of a “credible threat by Iranian regime forces.” He gave no details of underlying intelligence.

Iranian Foreign Minister Mohammad Javad Zarif said on Twitter: “If US and clients don’t feel safe, it’s because they’re despised by the people of the region — blaming Iran won’t reverse that.”

Iran’s state-run Press TV earlier said: “The deployment seems to be a ‘regularly scheduled’ one by the US Navy, and Bolton has just tried to talk it up.”

A military adviser to Supreme Leader Ayatollah Ali Khamenei said the United States was “neither willing nor capable” of military action against Iran,” the semi-official news agency ISNA reported.

As jitters over the war of words rose, Iran’s rial currency extended its fall on Tuesday, hovering around a seven-month low of 150,500 against the US dollar on the unofficial market, foreign exchange websites reported.

Since withdrawing from the nuclear deal, Washington has given waivers to some countries, mainly in Asia, to keep buying Iranian oil for a limited time. But last week it said it would now end the waivers to reduce Iran’s crude exports to zero.

The administration also blacklisted Iran’s elite Revolutionary Guard Corps as terrorists. The Guards control a large swathe of Iranian industry, so their blacklisting could make it harder for foreign companies to do business with Iran.

Iran has responded by declaring all US forces in the Middle East to be terrorists. It has also made threats to close the strategic Strait of Hormuz in the Gulf if Tehran were barred from using it. Around 30 percent of the world’s seaborne oil exports pass through the strait.

While neither Shanahan nor Bolton elaborated on the gist of US intelligence, other US officials told Reuters there were “multiple, credible threats” against US forces on land, including in Iraq, by Iran and proxy forces, and at sea.


 

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Zarif Suggests Establishing Security Zone on Turkish Borders
08 May, 2019


Moscow – Raed Jabr

Russian Foreign Minister Sergey Lavrov has met today (Wednesday) with his Iranian counterpart Mohammed Javad Zarif in Moscow.

Their meeting focused on developments in Syria, especially in the northern region, Ankara’s willingness to establish a security zone along its borders with the war-torn country, and the Iranian nuclear crisis.

The two parties seek “coordinating positions” on international and regional issues, especially in regards to the Syrian crisis, according to Russia’s Foreign Ministry.

“The two ministers have also discussed the current situation of the multifaceted relations between Russia and Iran and the concrete steps to continue their progress,” the statement added.

Zarif paved the way for his discussions in Moscow by emphasizing that “Syria’s stability and security are linked to securing the Syrian-Turkish border, taking into account ending Ankara's legitimate concern.”

He stressed that “good relations among regional countries are beneficial to the whole region, noting that fixing relations between Ankara and Damascus lies in the region and the countries’ interest.

This indicated a previous suggestion by Tehran to play a role in opening communication channels between Turkey and the Syrian government.

When asked about Washington’s relationship with Kurds and its current understandings with Ankara about the “safe zone” in the north, Zarif said Iran had to wait more and monitor future developments.

“It is not yet time to provide a detailed analysis of Washington's intention to withdraw from Syria.”

Meanwhile, Chief of the Russian Reconciliation Center for the Opposing Sides in Syria Major General Viktor Kupchishin told a press conference that Hmeymim air base was shelled from multiple launch rocket systems on Monday.

“Both times, fire was delivered from the eastern direction from the area of Zawiya settlement located in the Idlib de-escalation zone and controlled by the Hayat Tahrir al-Sham group (Nusra Front, banned in Russia),” Kupchishin explained.

“In total, 36 rockets were fired,” he added, noting that the militants fired using a drone.

He said the attack had been repelled by the air defense forces on duty, adding there were no deaths or destruction at the air base and that all the points from where militants had been firing their rockets were detected and suppressed by Russian Aerospace Forces and artillery fire of the Syrian regime troops.



 

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US Slaps New Sanctions on Iran as Tehran Suspends Some Parts of Nuclear Deal
May 08, 2019

President Donald Trump imposed new sanctions Wednesday on Iran, hours after the Iranian president said he was pulling out of parts of the 2015 nuclear deal struck with world powers.

Trump said in an executive order there would be new sanctions on Iranian metal exports: steel, aluminum, copper and iron.

U.S. sanctions on Iranian oil, its No. 1 moneymaker, have had a devastating effect on its economy. Iran's metal industry is another major source of income.

"Because of our action, the Iranian regime is struggling to fund its campaign of violent terror, as its economy heads into an unprecedented depression, government revenue dries up and inflation spirals out of control," Trump said. "We are successfully imposing the most powerful maximum pressure campaign ever witnessed, which today's action will further strengthen. Tehran can expect further actions unless it fundamentally alters its conduct."

Tensions between Iran and the United States have grown in the past week. The Pentagon sent aircraft carriers and nuclear-capable bombers to the region, accusing Iran of threatening U.S forces and planning "imminent" attacks.

Call for European help

Earlier Wednesday, Iranian President Hassan Rouhani announced he was backing out of parts of the nuclear deal and would take further action in 60 days if European nations did not help Iran deal with the effects of U.S. sanctions.

Rouhani said if there was no sanctions relief within 60 days, Iran would resume uranium enrichment at higher levels.

Rouhani's announcement came exactly one year after Trump pulled the U.S. out of the entire nuclear agreement between Iran and Britain, China, France, Germany and Russia, plus the European Union. Under the deal, Iran cut its uranium enrichment in exchange for economic benefits from sanctions relief, which it has yet to see.

"If the five countries join negotiations and help Iran to reach its benefits in the field of oil and banking, Iran will return to its commitments according to the nuclear deal," Rouhani said. "We felt the deal needed surgery and that the yearlong sedatives have not delivered any result. This surgery is meant to save the deal, not destroy it."

For now, Iran will stop selling enriched uranium and heavy water, which it had been doing to reduce its stockpiles.

U.S. Secretary of State Mike Pompeo said Iran's announcement to suspend compliance was "intentionally ambiguous."

"We'll have to wait to see what Iran's actions actually are," Pompeo said in London. "They've made a number of statements on actions they intend to do in order to get the world to jump. We'll see what they actually do."

Brian Hook, a top Pompeo adviser on Iran, accused Iran of "nuclear blackmail."

France and Germany said Wednesday that they were determined to keep the nuclear agreement alive.

French Defense Minister Florence Parly said "nothing would be worse than Iran leaving this deal."

Trump called nuclear accord a terrible deal, saying it was only temporary, did nothing about Iranian ballistic missiles and did not punish Iran for what he said was the country's involvement in terrorism and Middle East conflicts.

 

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France’s Macron calls for Iran nuke deal to be saved
AP
Reuters
May 09, 2019
  • EU concerned over Iran rhetoric, but spokesman suggests Islamic Republic committed
  • France's President Macron says Iran must remain committed to the deal
Iran wants to bring its nuclear deal with world powers “back on track” after the US unilateral withdrawal, the spokesman of the Atomic Energy Organization of Iran said on Thursday, a day after Tehran said it was scaling back curbs to its nuclear program.

“Our goal is to strengthen the JCPOA (the acronym for the nuclear agreement) and bring it back on track,” Behrouz Kamalvandi was quoted as saying by IRNA.

His comments came a day after concerns were raised that Iran was about to default on at least parts of the nuclear deal.

French President Emmanuel Macron later said the Iran nuclear deal must be saved and that the accord’s signatories should do all they can to ensure that the Islamic Republic respects it.

Macron told reporters on Thursday that “Iran must remain in this agreement and we must do everything we can to ensure that it stays in.”

Speaking ahead of an EU summit in Romania, Macron lauded the 2015 deal curbing Iran’s nuclear ambitions as “a good agreement."

But he said it should be completed with other pacts governing Iran’s missile development and its potentially destabilizing role in the Middle East.

Amid heated rhetoric from Tehran and Washington in recent days, Macron urged the signatories not to “get caught up in any escalation” and to “jointly watch over our collective security.”

Meanwhile the European Union on Thursday urged Iran to respect the international agreement curbing the Islamic Republic’s nuclear ambitions, saying it aims to continue trading with the country despite US sanctions.

The EU and major European powers — Britain, France and Germany — also said that they “note with great concern the statement made by Iran concerning its commitments” to the nuclear deal.

The joint statement came as the bloc struggles to preserve the 2015 nuclear deal with Iran, a day after a new deadline from Tehran on finding a solution to make up for last year’s unilateral US withdrawal from the accord and re-imposed US sanctions on Iran.

“We remain fully committed to the preservation and full implementation” of the deal, endorsed by the UN Security Council, said the EU statement.

The Trump administration pulled America out of the 2015 deal a year ago, saying it does nothing to stop Iran from developing missiles or destabilizing the Middle East. The Europeans insist that the pact is an important pillar of regional and global security and was never meant to address those other issues.

Iranian President Hassan Rouhani said in a televised address Wednesday that signatories to the deal now have 60 days to come up with a plan to shield his country — already laboring under economic hardship — from the sanctions imposed by President Donald Trump.

The EU powers say they “regret the re-imposition of sanctions” by the US and remain “determined to continue pursuing efforts to enable the continuation of legitimate trade with Iran.”

The Europeans have set up a complicated barter-type system to skirt direct financial transactions with Iran and so evade possible US sanctions. The workaround, dubbed INSTEX, is not yet operational as Iran has not completed its part of the scheme.

The bloc said it plans to push ahead with "the operationalization of the special purpose vehicle 'INSTEX'."

The EU has also introduced a so-called “blocking statute” protecting European companies from the effects of US sanctions, but many international corporations do more business in the United States than in Iran and have already severed ties there rather than risk running afoul of Washington.
In a message implicitly directed at the US administration, the EU powers said “we call on countries not party to the (deal) to refrain from taking any actions that impede the remaining parties’ ability to fully perform their commitments.”

Despite the heated rhetoric, the Europeans insist that only the International Atomic Energy Agency can judge whether Iran remains in compliance with the nuclear agreement. More than a dozen reports have shown that Tehran is respecting it so far. A new report is due at the end of May.

 

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U.S CENTCOM Cheif General Kenneth McKenzie: "It sends a clear and unmistakable message to the Iranian regime, that any attack on US interests will be met with unrelenting force... If a fight is to be had, we'll be fully prepared to respond, and defend our interests. And it won't be a fair fight."

 

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Iran Supreme National Security Council: Iran suspended some commitment in JCPOA (Iran nuclear deal) and gives 60 days to EU before further Action




 

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Iran Foreign Minister Javad Zarif: failure of EU INSTEX will led to Iran exiting NPT

Leaving NPT one of Iran's numerous options: FM Zarif

 

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EU, 3 nations reject Iran demands over nuclear deal, U.S. sanctions
By Nicholas Sakelaris
MAY 9, 2019

An Iranian newspaper depicts Iranian President Hassan Rouhani and U.S. President Donald Trump on its April 8 front page. File Photo by Abedin Taherkenareh/EPA-EFE


May 9 (UPI) -- The European Union, Britain, France and Germany on Thursday rejected an ultimatum from Iran that gave the nations two months to protect Tehran from U.S. sanctions.

The ultimatum was given Wednesday by Iranian President Hassan Rouhani, who blasted the United States for withdrawing from the 2015 nuclear deal. After the Trump administration abandoned the agreement, it reimposed sanctions against Iranian exports, most significantly oil.

In his remarks Wednesday, Rouhani said the other parties to the agreement -- the EU and the governments of Britain, Germany, France and China -- have 60 days to implement promises to protect Iranian oil exports and banking sectors. Tehran said it will end compliance with two key parts of the deal if the EU doesn't resume trade with Iran, which would defy U.S. sanctions.

Thursday, the EU's high representative and foreign ministers of France, Germany and Britain rejected the demand but said they're still committed to the agreement, which lifted Iranian sanctions in exchange for Tehran's promise not to develop nuclear weapons.

"We reject any ultimatums and will assess Iran's compliance on the basis of Iran's performance regarding its nuclear-related commitments under the [nuclear deal] and the [Nonproliferation of Weapons Treaty]," the parties said in a joint statement.

"We regret the re-imposition of sanctions by the United States following their withdrawal."
Rouhani's demand is part of an effort to get other nations to begin buying Iran crude oil again, which is barred by U.S. sanctions.

"The path we have chosen today is not the path of war, it is the path of diplomacy," Rouhani said. "But diplomacy with a new language and a new logic."

The EU said it will continue "legitimate trade" with Iran.

The International Atomic Energy Agency, which sends inspectors into Iran, will publish its next report in August to ensure Iran's compliance.

The Trump administration reimposed tough sanctions on Iran last year after leaving the Obama-era pact. Last fall, they expanded to include Iran crude oil exports to most countries. U.S. officials tightened sanctions again this monthwhen U.S. President Donald Trump ended waivers for a few countries that had been excepted from the sanctions.

 

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US Sanctions Hit Two of Iran's Top Non-Energy Exports
May 08, 2019
Michael Lipin
FILE - In this photo taken May 31, 2012, a furnace of the Mobarakeh Steel Complex is seen, 280 miles (460 kilometers) south of Tehran.

FILE - In this photo taken May 31, 2012, a furnace of the Mobarakeh Steel Complex is seen, 280 miles (460 kilometers) south of Tehran.

This article originated in VOA’s Persian service. Farhad Pouladi contributed from Washington.


New U.S. sanctions targeting Iranian industrial metals will hit two of the country's most lucrative non-energy exports, according to Iranian government data seen by VOA Persian.

President Donald Trump signed an executive order Wednesday, seeking to deny Iran revenue from its exports of iron, steel, aluminum and copper. The measure blocks the assets of people involved in producing those metals inside Iran. It also authorizes sanctions against foreign financial institutions that sell goods and services to Iran to help it produce or export those metals.

An Iranian government trade report for the Persian year that ended March 20 shows iron, cast iron and steel were the nation’s fourth-biggest non-energy export, earning $3.8 billion. The report, published online by Iran’s Trade Promotion Organization, says iron, cast iron and steel accounted for 8% of Iran’s exports, excluding oil and gas, for the year. The $3.8 billion marked a 12% increase from the previous Persian year, the report also showed.

The same report also showed copper and copper products were Iran’s 10th-biggest non-energy export in the last Persian year, drawing $699 million in revenue, a 217% increase from the year before. That revenue accounted for 1.6% of Iran’s non-energy exports for the year.

Aluminum did not feature in the Iranian trade report’s list of the top 10 non-energy exports for the last Persian year.

Other nations 'on notice'
In his statement, Trump said Iranian exports of industrial metals accounted for 10% of its export economy. “Today’s action … puts other nations on notice that allowing Iranian steel and other metals into your ports will no longer be tolerated,” he said.

Washington has widened sanctions against Iran repeatedly over the past year, calling it part of a campaign to impose maximum pressure on Tehran to change perceived malign behavior.

Iranian Deputy Foreign Minister Sayyed Abbas Mousavi denounced the new U.S. sanctions, in remarks published by state media Thursday. "This measure of the United States is in violation of international obligations and it will be [held] responsible," Mousavi said. Iran has vowed to defy U.S. sanctions and rely on its own resources to sustain its economy.

Behnam Ben Taleblu, an Iran analyst at the Washington-based Foundation for Defense of Democracies (FDD), said Iran's industrial metals industry is one of several that U.S. officials can sanction in order to dry up revenues of the Islamic Revolutionary Guard Corps, the most powerful Iranian military branch, which Trump designated as a terrorist organization last month.

"Petrochemicals, in my view, is one [such industry], while metallurgy is another that contributes to Iran's [ballistic] missile efforts," Taleblu told VOA Persian at an FDD event Wednesday.

In a Thursday interview with VOA Persian, Patrick Clawson, research director for the Washington Institute for Near East Policy, said the new U.S. sanctions also would hurt Iran's labor market.

"They hit [economic] sectors that employ quite a few people in Iran and [that make] products used in metal industries such as the automobile industry," Clawson said. "So there are quite a few workers who could lose their jobs as a result of difficulties in these industries."

Iron
New York-based investment bank Jefferies said Iran's exports of iron ore were likely to collapse. "We had expected Iranian exports to increase to 20 million tonnes this year as a result of … supply issues [at a Brazilian iron ore mine operated by Vale SA]," Jefferies said in a Thursday note sent to news outlets. "Now, Iranian iron ore exports are likely to approach zero for as long as these sanctions last."

A Thursday report by Britain's Financial Times said the U.S. sanctions were likely to "further tighten" global supplies of iron ore, a key steelmaking ingredient, and drive its price up to $100 a tonne for the first time since May 2014. It said the commodity was currently trading at $95 a tonne.

In another report published Thursday, London-based commodity markets news service Argus said Iran exports 96% of its iron ore output, sending the vast majority of it, 94%, to China. It said another 2% of Iran's iron ore output is exported to India, Turkey, Egypt and Gulf Co-operation Council
member states.

Steel
A U.S. Commerce Department report published in March said Iran exported 9.24 million tons of steel in 2018, a 24% increase by volume from the year before. It said Iran was the world's 18th-largest steel exporter in 2017, selling the metal to 120 countries and territories.

The Associated Press, in a Thursday report from Tehran, said Iran has dozens of mainly government-owned steel mills that employ about 50,000 workers. It said those mills have an annual output of 25 million tonnes of steel, with less than one-third of it being used for the domestic market to produce consumer goods and provide parts for offshore oil rigs, military vehicles and car manufacturing plants.

Copper
U.S. news agency Bloomberg published a Wednesday report citing Bloomberg Intelligence analyst Andrew Cosgrove as saying Iran's copper exports in 2018 amounted to 138,000 tonnes.

Aluminum
Texas-based research company Harbor Aluminum, in an email to VOA Persian, said Iran’s main customers for aluminum exports from 2013 to 2018 were Turkey, India, Taiwan, South Korea and China. It said the volume of Iran’s aluminum exports had fluctuated between 100,000 to 200,000 tonnes a year.

 

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China, India Seen as Europe's Last Hope to Save Iran Deal
May 09, 2019
Reuters
FILE - A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005.

FILE - A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005.

BRUSSELS/PARIS/BERLIN —
The European Union will defend the Iran nuclear accord despite Tehran's decision to backtrack on its commitments in response to U.S. sanctions, diplomats believe, but European powers expect it to collapse without a deal to sell Iranian oil to China or India.

Britain, France and Germany, which signed the 2015 deal along with the United States, China and Russia, are determined to show they can compensate for last year's U.S. withdrawal from the accord, protect trade and still prevent Tehran from developing a nuclear bomb.

But with Iran's economy dependent on crude exports that are traded in U.S. dollars, a promised European trade channel to bypass American sanctions has proved complicated, is not yet operational, and may never be able to handle oil sales.

"This situation now risks deteriorating, but it will be step by step and not a collapse all in one go," said a senior European diplomat. A French diplomat talked of a "negative spiral" in which trade in food and medicines was simply not enough, while another European envoy spoke of Iran's "phased exit" from the deal.

The Iran accord, one of the West's biggest foreign policy achievements until U.S. President Donald Trump pulled out in May 2018, lifted punishing United Nations' sanctions on Iran in return for Iranian compliance with the deal.

Iran has met its terms but Trump withdrew because he believes the accord did not curtail Tehran's ballistic missile program or address Iranian involvement in Syria's civil war, something Europeans argue the 2015 deal was not designed to do.

By reimposing punitive sanctions, the United States says it aims to dramatically weaken Iran's clerical rulers and force Tehran to renegotiate a broader arms control deal.

The European Union says that can still be done without tearing up the nuclear accord, which put strict limits on Iranian enrichment.

Iranian President Hassan Rouhani warned on Wednesday that Tehran could resume enrichment at a higher grade if the European powers, China and Russia did not do more to circumvent U.S. sanctions on banking and energy to boost trade.

Food, medicine not enough
European diplomats and officials reject any ultimatum and some believe they still have time to save the deal. One senior EU official said it is too early to consider European sanctions that can snap back in case of Iranian non-compliance.

"Iran's announcements are not a violation or a withdrawal of the nuclear deal," the senior EU official said. "It is for the International Atomic Energy Agency to assess Iran's compliance ... if Iran breaches the agreement, then we would react.”

Others are more pessimistic.

Once Europe's biggest supplier, Iran has seen its exports gradually cut off from European buyers by sanctions, starting last November and then on May 2, when Washington removed the last waivers to Italy and Greece. China, India and Turkey are also among those who lost their waivers this month.

EU officials estimate Iran needs to sell about 1.5 million barrels a day to keep its economy afloat, but sales risk falling below 1 million a day, bringing hardship and potentially economic crisis to Iranians.

The EU's special trade channel, known as INSTEX, was proposed by Russia as a barter system for Iranian oil in exchange for European goods, but it may not be operating before the end of June and its capability is limited.

"Instex isn't the solution because it will only serve food and medicine needs, not oil," a second European diplomat said.
"Anyway, the structure is not completed.”

China to the rescue?
Led by a German banker, INSTEX relies on Iran to set up a so-called mirror company that must meet international anti-fraud requirements. Officials and diplomats say progress is slow.

Draft laws are still pending, while a lack of transparency in Iran's financial system is also a problem. The U.S. decision to sanction Iran's Revolutionary Guard (IRGC), which controls part of Iran's economy, is another complication.

"As a partner to Iran, those who use INSTEX have to be extremely vigilant that at the other end of the operation it doesn't benefit entities linked to the IRGC," the European diplomat said.

Europe's plan B is for China or India to buy Iranian oil.

China, which increased imports of Iranian crude in April, says it opposes unilateral U.S. sanctions against Iran and will defend the rights of its companies. Foreign ministry spokesman Geng Shuang said the Iran deal should be fully and effectively implemented, although it was not clear what China would do to support it.

India, Iran’s biggest oil client after China, has by contrast almost halved its Iran oil purchase since November. So far, Indian officials have said they will seek oil from other suppliers.

'Europe's impotence'
EU officials say Delhi has expressed interest in joining INSTEX to buy Iran's oil, but discussions have barely begun, and questions remain about whether this is even feasible.

"It shows Europe's impotence that they are pushing China and India to do what they can't," said Sanam Vakil, a senior research fellow with the Middle East North Africa Programme at Chatham House.

"I'm not sure the Europeans are thinking in a big way about what to do. It's very clear there are no meaningful economic options they can offer Iran," she said.

EU foreign policy chief Federica Mogherini met Chinese State Counselor Wang Yi on the margins of a China-EU summit in Brussels in April and discussed whether China could buy Iranian oil, three EU officials said.

China can still do that but would risk U.S. sanctions.

Beijing has also held talks with Washington over the issue, the officials said, but it was not clear how far they had progressed.

"The Iranians say the Europeans must do more, but what about the Chinese and the Russians? They have not done much. The Chinese have dragged their feet in several areas because of U.S. sanctions," a third European diplomat said.

Vakil said the three European powers should focus on high-level diplomacy to kick-start negotiations between the deal's remaining stakeholders and Washington to preserve the accord.

"It will (die) without a mandated effort on behalf of the E3 to keep the deal alive," she said.

 

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EU Leaders Say Escalation Must Be Avoided In Iran Crisis; Trump ‘Open To Talk’ To Iran
May 09, 2019
French President Emmanuel Macron (left) and German Chancellor Angela Merkel in Sibiu, Romania, on May 9

French President Emmanuel Macron (left) and German Chancellor Angela Merkel in Sibiu, Romania, on May 9

French President Emmanuel Macron and German Chancellor Angela Merkel have cautioned against an escalation in the dispute over Iran’s nuclear deal after Tehran said it would stop abiding by parts of the deal and U.S. President Donald Trump said he was open to talks with Iranian leaders.

Tehran on May 8 said it had stopped observing limits on its nuclear activities agreed under the 2015 deal until they find a way to bypass renewed U.S. sanctions. The same day, the U.S. envoy for Iran, Brian Hook, accused Tehran of resorting to "nuclear blackmail."

Macron, speaking in Romania ahead of an EU summit on May 9, told reporters that "Iran must remain in this agreement, and we must do everything we can to ensure that it stays in."

He urged the agreement's signatories not to "get caught up in any escalation" and to "jointly watch over our collective security."
For her part, Merkel said the EU wants to avoid an escalation, adding that Tehran must recognize that it is in its own interests to remain committed to the nuclear deal.

"Our hand remains outstretched at this point; we want to continue to push for a diplomatic solution," Merkel said after the EU meeting.

Trump did not address Iran’s latest move. But he told reporters at the White House that he wants the Iranian leadership to contact him.
"What I would like to see with Iran, I would like to see them call me," Trump said.

Amid rising tensions between the two countries, Trump said Washington was not looking for a conflict with Tehran.

"I want them to be strong and great, to have a great economy," Trump said, adding that "we can make a fair deal."

Macron said the landmark 2015 deal curbing Iran's nuclear ambitions is "a good agreement" but added that it should be completed with other pacts governing Iran's missile development and its potentially destabilizing role in the Middle East.

His statement came shortly after the European Union and three European powers issued a joint declaration urging Iran to respect the deal.

The EU's foreign policy chief, Federica Mogherini, and the foreign ministers of Britain, France, and Germany said they still backed the accord but rejected "ultimatums" from Tehran to keep it alive.

"We reject any ultimatums and we will assess Iran's compliance on the basis of Iran's performance regarding its nuclear-related commitments" under the agreement, the European statement said.

Iran has said its move was in response to the sweeping unilateral sanctions that Washington has reimposed since it quit the agreement one year ago. The reimposing of sanctions has dealt a severe blow to Iran's economy.

The EU powers say they "regret the reimposition of sanctions" by the U.S. and remain "determined to continue pursuing efforts to enable the continuation of legitimate trade with Iran."

They were "determined to continue pursuing efforts to enable the continuation of legitimate trade with Iran" in an effort to keep the deal afloat, the statement added.

But it said that Iran must at the same time "implement its commitments under the 2015 Joint Comprehensive Plan of Action (JCPoA) in full as it has done until now and to refrain from any escalatory steps."

With reporting by Rikard Jozwiak, AFP, AP, Reuters, and dpa

 

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U.S. Warns Iran While Urging Leaders To Sit Down For Talks
May 09, 2019
U.S. Secretary of State Mike Pompeo has warned Tehran of a swift and decisive response to any provocations.

U.S. Secretary of State Mike Pompeo has warned Tehran of a "swift and decisive" response to any provocations.

The United States appears to be taking a carrot-and-stick approach to Tehran, threatening “swift and decisive” response to any Iranian attack, while at the same time urging the country’s leaders to sit down for talks.

Secretary of State Mike Pompeo on May 9 said in a statement that “our restraint to this point should not be mistaken by Iran for a lack of resolve."

"The regime in Tehran should understand that any attacks by them or their proxies of any identity against U.S. interests or citizens will be answered with a swift and decisive U.S. response," Pompeo said.

"We do not seek war," he said.
"But Iran's 40 years of killing American soldiers, attacking American facilities, and taking American hostages is a constant reminder that we must defend ourselves," said Pompeo, in a reference to the 1979 Islamic Revolution during which U.S. diplomats were taken captive.

Pompeo’s comments came after President Donald Trump asked Iranian leaders to “call me.”

"What I would like to see with Iran, I would like to see them call me," Trump told reporters at the White House.

Still, the president said he could not rule out a military confrontation given the tense environment.

"I guess you could say that always, right? I don't want to say no, but hopefully that won't happen," he said.

Tensions have been building on several fronts between Washington and Tehran.

The United States on May 8 tightened the screws further on Iran with sanctions on its metals industry on the day Tehran said it was suspending some of its commitments under the 2015 nuclear deal with world powers.

Washington had already moved to restrict Iran’s oil exports, the country's largest source of hard currency.

The U.S. military has also sent an aircraft carrier battle group to the waters near Iran, and Pompeo on May 7 paid an unannounced visit to Baghdad, where he met with Iraqi officials to discuss U.S. security concerns amid what he called “escalating” Iranian activity.

The moves come around the May 8 one-year anniversary of Trump's decision to withdraw the United States from the landmark 2015 nuclear accord, which was aimed at curbing Iran's nuclear program in return for relief from sanctions.

Tehran did not immediately respond to the latest remarks by Pompeo and Trump.

But it earlier said that it would no longer sell its surplus enriched uranium and heavy water to other nations as stipulated in the nuclear agreement. It also threatened to enrich its uranium stockpile closer to weapons-grade levels in 60 days if world powers fail to negotiate new terms.

In Washington, the special assistant to the U.S. president and senior director for weapons of mass destruction, Tim Morrison, said Iran’s announcement was "nothing less than nuclear blackmail of Europe."

Britain, France, Germany, and the European Union on May 9 reiterated that they remain committed to the nuclear deal but also warned that they would "reject any ultimatums" by Tehran regarding the terms of the accord.

"Iran must remain in this agreement and we must all work to make sure it remains," French President Emmanuel Macron said.

"We must not get jumpy or fall into escalation," Macron said. "That's why France is staying in [the deal], and will stay in, and I profoundly hope Iran will stay in."

When Trump withdrew from the deal, he said it was “fatally flawed” because it did not address Iran’s ballistic-missile program or Tehran’s alleged state sponsorship of terrorism, which it denies.

Britain, France, and Germany have attempted to keep the deal alive, but they have also expressed concerns about Tehran's continued testing of ballistic missiles. China and Russia also signed the accord and have vowed to remain part of the deal.

With reporting by AFP, dpa, and Reuters


 

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