President Trump will renew sanctions on Iran while providing “temporary” waivers for certain key customers of the regime’s oil industry, a pair of Cabinet officials said Friday.
“We’re very confident that our sanctions will be incredibly effective,” Secretary of State Mike Pompeo told reporters.
Pompeo confirmed that eight jurisdictions that purchase oil from Iran will be given “temporary” waivers from the sanctions, which otherwise take effect on Monday. Treasury Secretary Steven Mnuchin also confirmed that the United States would not push for the total expulsion of the Iranian financial industry from a key international financial entity known as SWIFT.
The decision is a disappointment for Iran hawks who wanted a more aggressive approach in imposing sanctions that had been lifted by President Obama’s 2015 nuclear deal. But Mnuchin maintained that the policy would still be more forceful than maneuvers under the previous administration.
“Humanitarian transactions to non-designated entities will be allowed to use the SWIFT messaging system as have been done before, but banks must be very careful that these are not disguised transactions,” Mnuchin said.
He added that the list of banks disconnected from SWIFT “will be substantially longer than last time,” even if it stops short of the total blacklisting that some Republican allies of the administration had favored.
“It’s our expectation that that will be implemented as soon as technologically feasible,” Mnuchin said.
Even if Mnuchin softened the drive to disconnect all Iranian banks from SWIFT, which helps entities conduct international transactions, the announcement Friday was still welcome news for Iran hawks who had expected the administration to allow Iranian banks to remain connected to SWIFT as recently as last night.
“Treasury either caved overnight on its position due to pressure from Capitol Hill or failed to properly communicate its position to anyone until this morning,” Richard Goldberg, a senior fellow at the Foundation for Defense of Democracies, told the Washington Examiner. “That is the letter of U.S. law and it’s important to enforce that law as soon as possible. Disconnecting the Central Bank of Iran from SWIFT will have an important economic and psychological impact on the Islamic Republic.”
But Goldberg, who helped draft Iran sanctions legislation when he was a Senate Republican aide, warned that Treasury will have to take an aggressive posture in implementing the sanctions.
“It’s a start but not where we need to be going forward,” he said. “In my view, there is no part of Iran’s financial sector that is ‘clean.’ The administration should designate Iran’s financial sector in its entirety and preclude any services provided to the sector as a whole. Iran has had six months to prepare its sanctions-evasion schemes. The United States will need to increase the sanctions pressure on a sustained basis.”
The decision to grant several waivers for oil imports also caused consternation among Iran hawks Thursday evening, but the administration mitigated some of that frustration by making clear that the money used to pay for the oil will be deposited in foreign accounts that Iran will be allowed to draw upon only to make permissible purchases related to trade or humanitarian goods. “Starting today, Iran will have zero oil revenue to spend on any [illicit activity],” Pompeo said. “These new sanctions will accelerate the highly-successful effects of our sanctions that have already occurred.”
Pompeo predicted additional sanctions pressure, emphasizing that Friday’s announcement is one of “many lines of effort” to pressure Iran. “While important, these economic sanctions are just a part of the U.S. government’s total effort to change the behavior of … the Iranian regime,” he said.
