US introduces first batch of sanctions on Iran

US introduces first batch of sanctions on Iran

US introduces first batch of sanctions on Iran

After the United States withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May, the U.S. Treasury Department re-imposed sanctions on a number of key Iranian sectors and activities on Aug. 6, including the purchase or acquisition of U.S. dollar banknotes by the Iranian government and Iran’s automotive sector.

As part of the global sanctions, the U.S. expects Turkish companies and banks to wind down their businesses within the given period too.

The first batch of sanctions targets Iran’s automotive, Iranian rial transactions and civilian aircraft sales, its trade in gold or precious metals, direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes.

A second batch of U.S. sanctions targeting Iran’s oil sector and central bank will be re-imposed in early November.

The first round of sanctions are relatively minor compared with the sweeping oil sanctions due to resume in November, but they could still put another dent in Iran’s strained economy and create new urgency on Tehran to solidify business ties with other countries.

Secretary of State Mike Pompeo said renewed U.S. sanctions on Iran will be rigorously enforced and remain in place until the Iranian government radically changes course. He said the Trump administration is open to looking beyond sanctions but that would “require enormous change” from Tehran. Pompeo called the Iranian leadership “bad actors” and said President Donald Trump is intent on getting them to “behave like a normal country.”

Turkey had told American officials it opposes U.S. sanctions on Iran and is not obliged to implement them and will not cut trade ties with Iran at the behest of other countries, Foreign Minister Mevlüt Çavuşoğlu said late July after a U.S. Treasury delegation visited Ankara to brief about the upcoming sanctions.

After meeting the U.S. delegation in Ankara on July 20, the Turkish Foreign Ministry said authorities were working to avoid the U.S. sanctions from harming Turkey.

“What we explored with the government of Turkey are potential implications for Turkish companies and Turkish economy for different measures. We agreed today that as allies this is something that we have to continue to study and continue to exchange details on,” Assistant Secretary of the Treasury for Terrorist financing Marshall Billingslea told a group of journalists on July 20.

He held talks with representatives of the Finance Ministry as well the Turkish companies conducting trade with Iran. “We need Turkish companies and Turkish banks to recognize that the reason we gave a full 180 days before those sanctions was to allow those companies enough time to wind their businesses down,” Billingslea said.

Trump initially planned to totally shut Iran out of global oil markets, demanding all other countries stop buying its crude by November.

The U.S. later said it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.

“We are very sensitive about the effect that there could be on the Turkish economy. That’s why we are discussing the very, very specific matters of concerns of both countries. At this stage, we are not at a position to suggest that we are issuing waivers or exemptions. It would be premature to discuss that. Rather, we have to understand the content, the specifics of all these different business transactions so we can make assessments in Washington and make the best recommendations as possible,” said Billingslea.

Turkey imports almost all its crude oil and supplies most of it from Iran due to geographical proximity, product quality and reasonable price.

Turkey’s biggest oil importer Tüpraş has cut back purchases of Iranian crude since May, when the U.S. said it would re-impose sanctions on Tehran.

In the first four months of 2018, Tüpraş, Turkey’s largest refiner, bought an average of 187,196 barrels per day of Iranian oil, data from Turkey’s energy watchdog EPDK showed. In April alone, Tüpraş imported eight cargoes - equivalent to just over 240,000 bpd - from the OPEC member. But since May, when Trump announced the re-imposition of U.S. sanctions on Tehran after pulling out of a 2015 nuclear deal, Tüpras’s purchases of Iranian oil have gone down.

Tehran shipped four cargoes of crude oil per month to Tüpraş, equivalent to around 130,000 bpd, in May and June, tanker tracking and shipping data showed, down from six to eight earlier in the year. So far in July, Tüpraş bought three more

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