U.S. warns governments and bankers ‘Iran sanctions still in place’

A money changer displays U.S. and Iranian banknotes at the Grand Bazaar in central Tehran. (Reuters)

The Obama administration has privately reminded foreign governments and U.S. bankers that sanctions against Iran remain in effect, cautioning against a rush by Western companies to invest in Iran’s oil industry and other businesses until the country fully complies with the July nuclear agreement.

The U.S. State Department recently cabled a message, known as a demarche, to embassies around the world to reiterate that sanctions on Iran are still in place, diplomatic and government sources told Reuters on Friday.

The demarche stressed that sanctions on Iran would not be lifted until the International Atomic Energy Agency verifies that Tehran has complied with the terms of the deal.

'Don't get ahead of yourselves'

“The United States wants to tell governments not to get ahead of themselves when dealing with Iran,” said a London-based diplomatic source.

It is uncertain exactly when the layers of Western sanctions might be lifted, but experts have said some international financial transactions with Iran would be possible sometime next year if Iran is found in compliance.

U.S. law allows the administration to enforce sanctions by targeting financial institutions in countries that do business with the state-owned National Iranian Oil Co or its subsidiaries. Companies that breach the sanctions risk fines, asset freezes and being cut off from the U.S. dollar banking system.

In 2014, the United States imposed a record fine on French bank BNP Paribas, which agreed to pay almost $9 billion to resolve accusations it violated U.S. sanctions against Sudan, Cuba and Iran.

The Joint Comprehensive Plan of Action hit on July 14 by Iran and six world powers, including the United States, imposes strict limits on Iran’s nuclear program in exchange for relief from sanctions. Iran is counting on an end to sanctions to boost its battered economy, particularly an oil and gas sector that has shriveled under Western sanctions.

Last Update: Wednesday, 20 May 2020 KSA 12:04 - GMT 09:04