Reimposition of Iran sanctions spells uncertainty for Korean businesses

Posted November 07, 2018

Washington re-introduced sanctions against Iran on November 5, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and banking sectors.

Washington in May withdrew from a 2015 nuclear deal signed between world powers and Iran under which worldwide sanctions against Iran were lifted in return for curbs on its nuclear program. The Administration has granted waivers to eight countries that have reduced their oil purchases from Iran but not stopped them entirely.

South Korea was granted a waiver that will temporarily allow it to continue importing Iranian oil after the US reinstated all sanctions on Iran on Monday, according to the US State Department.

President Donald Trump has called the agreement a "disaster" and, as of Monday, the United States will sanction countries and companies that do business with Iran or buy its oil.

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The renewal of the sanctions follows USA president Donald Trump's announcement in May that the U.S. was withdrawing from the Joint Comprehensive Plan of Action (JCPOA), the deal signed between Iran, China, Russia, France, Germany, the United Kingdom and US, and the European Union in 2015.

The second batch of USA sanctions against the Islamic Republic took effect on Monday, November 5.

"America wanted to cut to zero Iran's oil sales. but we will continue to sell our break sanctions", Rouhani told economists, adding the sanctions were illegal and unfair.

The sanctions hit oil exports, shipping and banking. That is because virtually every country in the world was behind the previous sanctions, while all but a handful of nations oppose their reimposition. "We are intent on ensuring that global funds stop flowing to the coffers of the Iranian regime".

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Oil prices rallied above $85 per barrel in October on fears of a steep decline in Iranian exports.

Kevin Book, managing director of Clearview Energy Partners research firm in Washington DC, said the first round re-imposed in August have already had a significant impact on the Iranian economy.

Addressing a presser here, Pompeo cited Denmark's intelligence uncovering an Iranian assignation plot as proof for the need to impose the sanctions and warned Iran to "either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble".

"But U.S. bullying is backfiring, not just because JCPOA (nuclear deal) is important, but because the world can not allow Trump to destroy global order". The legislation also implies that European courts could nullify USA decisions regarding sanctions. Over the a year ago, the exchange value of Iran's currency has dropped sharply against the USA dollar.

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"We are in the war situation", President Hassan Rouhani said in a television address as the sanctions snapped into place.