The US Treasury Department arranged two windows of time before the sanctions would take effect to allow businesses and foreign countries time to cut ties with the Iranian Regime.
The first round of sanctions, targeting Iran’s automotive industry, precious-metals trade, major transactions in its currency, the Regime’s buying or selling of US dollars, and more, came into place on August 6, 90 days after Trump pulled out of the nuclear deal.
This put some pressure on Iran, but it is the second round of sanctions, imposed on Sunday, November 4, that will put more pressure on the mullahs as it targets their oil industry, which is the Regime’s biggest source of income, accounting for roughly 80% of its exports and 30% of the country’s GDP.
Of course, many companies, including France’s Total, who has signed a $5 billion deal with Iran, have already packed up and left Iran to avoid US sanctions. Many countries also reduced or completely cut their oil imports from Iran – Iran’s oil exports actually dropped to 1.1 million barrels per day (bpd) in early October; a drop of over 50% from their high of over 2.5 million bpd in April.
Dr. Majid Rafizadeh wrote: “Today’s sanctions are also significant because they will cut off the flow of funds to the regime and significantly impact its efforts to fund and sponsor terrorist and militia groups across the region…Despite Tehran’s efforts to dismiss US sanctions, Iranian leaders are very concerned and apprehensive as they have already witnessed the financial repercussions of the previous sanctions.”
Iran has tried to shrug off the sanctions as something that will only affect US citizens and therefore won’t jeopardise Iran’s deals with other countries, but the US Treasury Department has warned foreign companies that if they continue to do business with Iran they may face legal action and risk of losing their business with the US and being sanctioned.
And, as was displayed by the massive pullouts from Iran, foreign businesses are unwilling to take the risk, as well they should be.