U.S. Gives Businesses 3-6 Months To ‘Get Out’ Of Iran
Just days after U.S. President Donald Trump withdrew from the Iranian nuclear deal, “the highest level” of American economic sanctions have snapped back into place on Tehran and foreign corporations. The American leader chose a so-called “hard exit” from the Joint Comprehensive Plan of Action, re-imposing all sanctions lifted as part of the atomic accord in 2015. The impact of the move is immense, influencing billions of dollars of existing contracts, given that countries will now be forced to decide whether to do business with the U.S., by far the largest and most powerful economy in the world, or with the Islamic Republic. In the latter scenario, companies would risk incurring penalties as well as being cut-off from the U.S. financial and banking systems. While all new contracts will immediately be subjected to the sanctions regime, existing ones will have a “wind-down” period of three to six months. The first installment of the sanctions will take effect in 90 days, and target Iran’s automotive sector and its export of metals, coal and carpets, among other commodities and goods. Iran also will be blocked from selling the rial, its national currency, and from accessing the U.S. dollar. More complex sanctions on other Iranian industries, including petroleum, energy and shipping, come into force no later than a November 4 deadline. The U.S. will also re institute sanctions on individuals directly involved in the development of Iran’s nuclear program. The new sanctions throw a wrench in any effort by European countries, which have invested heavily in Iran since the nuclear deal was forged, to save the JCPOA without U.S. support.