Explainer: How And When U.S. Sanctions On Iran Take Effect
The first round of U.S. sanctions targeting companies continuing to do business in Iran after the U.S. pullout from the nuclear deal with Iran come into force August 7. Here is how the sanctions work and which sectors will be impacted.
When U.S. President Donald Trump decided to leave the Iran Nuclear Deal, also known as the JCPOA (Joint Comprehensive Plan of Action) in May 2018, he issued a National Security Memorandum ordering several government institutions, including the Treasury Department, to prepare the framework for reimposing sanctions on both U.S. and international companies operating in Iran.
The sanctions will be reimposed in two stages, according to a guideline issued by the Treasury Department. The first batch takes effect August 7, 2018, 90 days after the U.S. withdraw from the deal. The second group comes into force 180 days after the U.S. withdraw, on November 4 this year.
The 90 and 180-day windows were given to allow companies a reasonable period of time to wind down their activities in Iran before they would be subject to U.S. sanctions. Iran’s petroleum dependent economy has already taken a hit during this wind down period, as companies scramble to cancel deals and investments in the country. Most notably, the value of Iran’s currency, the Rial, has sharply declined.
Which sanctions take effect August 7?
The Obama era sanctions which will be reimposed on Tehran August 7, are quite diverse and target different sectors. Restrictions include reducing the Iranian government’s access to the U.S. dollar, banning the trade of gold, precious metals, the sale and supply of aluminum and steel, sanctions on large purchases of the Iranian rial, as well as sanctions on Iran’s automotive sector.
The nuclear deal also included lifting the four-decade-old ban on selling civilian aircraft and related parts to Iran, a provision which will now expire, as will an agreement to allow countries to import Iranian carpets and foodstuffs without facing sanctions.
The U.S. Treasury Department has said certain payments made to Iran after August 7 honoring trade agreements made prior to the scrapping of the Nuclear Deal will be protected from sanctions.
Among the major international companies closing shop in Iran are Boeing, Peugeot, Total, and Maersk.
Companies active in Iran’s energy and shipping sectors have an additional 90 days to wind down their business in Iran, with sanctions taking effect November 4.
The U.S. sanctions being reimposed are extraterritorial and will affect not only U.S. persons and businesses, but also any non-U.S. business or individual engaging in forbidden investment or trade activity in Iran.
Most companies have already left the Iranian market or say that they will depart soon. A small group of companies have stayed, and are waiting to see what other parties to the JCPOA, especially the European Union, will do.
The EU, which was supportive of U.S. sanctions before the deal was struck, is now determined to salvage the deal. Leaders in Brussels have already announced certain mechanisms to protect European businesses against the U.S. sanctions, however many economists are skeptical as to whether or not they can offer meaningful protection to companies staying in Iran past the sanctions deadlines.
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Iran TV Fires Managers, Fearing Widening Of Shiite-Sunni Divide
Iranian State TV's Chief Ali Askari has dismissed the manager and controller of the TV's Channel 5 following a controversy surrounding a religious program that has insulted Sunni saints and Islamic sanctities.
The firing of two managers of the state TV, reflects the importance Tehran attaches to the controversy as a potential threat to the country's stability, as between 15 to 20 million Iranian Sunnis are already under pressure by religious discrimination, including limitations imposed on their religious leaders.
Videos recorded from the program which have gone viral on social media, show Ahmad Qadami, a well-known eulogist or a Maddah swearing at the second Caliph of the Sunnis without naming him. Later on the video, the eulogist is seen insulting one of the prophet's wives.
The program was broadcast live on Channel 5 of the state TV (IRIB which stands for the Islamic Republic of Iran Broadcasting) organization.
This comes while because of controversial remarks by eulogists against state officials including President Hassan Rouhani and his predecessors, a directive was issued by deputy IRIB Chief banning live broadcast of performances by eulogists.
Reports coming from Tehran on Sunday say that Javad Ramezan Nejad, the manager of the channel, and a controller who has not been maned have been fired.
IRIB deputy chief Morteza Mirbaqeri had said earlier that the producer of the program was dismissed and channel's manager and controller were "disciplined."
Ramezan Nejad was appointed to the post in July 2018 and according to Mehr news agency a deputy chief of IRIB had characterized him as "a jihadi manager with a style."
Ramezan Nejad previously managed the IRIB's Ofogh Channel which is linked with the revolutionary guards (IRGC) and broadcasts ideological program catered to hardline regime supporters.
The Eulogist, Ahmad Qadami, identified by Iranian social media users as a relative of former President Mahmoud Ahmadinejad, was questioned at a Tehran court on Sunday, detained for a few hours and finally released on bail.
Sunnis in Iran mainly live in the provinces of West-Azarbaijan and Kordestan near the borders with Iraq and Turkey, Golestan province bordering Turkmenistan, Sistan va Baluchistan province at the border with Pakistan and Hormozgan and Bushehr provinces by the Persian Gulf.
Sunnis have been for long complaining about discriminations that among other things prevents them from equal opportunities for employment in public sector and not having enough mosques even in Sunni-populated provinces.
The Iranian TV has been often criticized for biased reporting that has been fragmenting Iranian society by widening political, religious, economic and gender divides.
During the past decade, Ayatollah Khamenei has given special freedoms to less educated but otherwise loyal eulogists who are often used to mobilize mobs to attack critics and protesters.
Iranian Intelligence Shuts Down Church, Removes Cross
The Assyrian Christian community in the northwestern Iranian city of Tabriz has been left in a state of shock after intelligence agents forced a Presbyterian church to close earlier this month, Assyrian International News Agency (Aina) reports.
Religious freedom charity Article18 said: “Intelligence agents stormed the 100-year-old church, officially recognized as a national heritage site in Iran, on Thursday, May 9, changed all the locks, tore down the cross from the church tower, and ordered the churchwarden to leave.”
“They made it clear that the Assyrian people are no longer allowed to hold any worship service there,” Article18 reported.
The source also said church members had been fearful since just a few days after Christmas when agents from the intelligence ministry prevented pastors from other churches to visit the Tabriz church for a joint-worship service with other Assyrian and Armenian Christians.
Quoting a source, Aina reported on May 9, “a large number” of agents from the ministry of intelligence and a state agency called Eiko entered the “church compound and changed all the locks on the doors, removed the cross from the tower, installed some monitoring instruments and started to threaten and force our custodian to leave his place inside the compound immediately.”
Eiko, also known as the executive headquarters of Imam’s directive, is under the direct control of supreme leader Ayatollah Ali Khamenei.
Eiko was established from thousands of properties confiscated in the aftermath of the 1979 revolution. A Reuters investigation found that the organization built “its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians,” also seizing property from members of religious minorities, business people and Iranians living abroad. It falsely claimed many properties were abandoned.
The 100-year old church, owned by the Assyrian Presbytery, was “confiscated” by a revolutionary court order in 2011. The congregation, however, were able to continue using the building for services in the Assyrian language – until this month’s raid.
“Many churches owned by Protestants have been confiscated in Iran,” according to Article18’s advocacy director, Mansour Borji.
The reason can be deliberate targeting of any institution remotely linked with Americans.
“In most cases, the government has been unable to repurpose them, especially if they were listed. So they typically remain as abandoned buildings, often neglected, and turned into ruins before being demolished, as was the case with the church in Kerman.”
Christians from Iran’s historic Assyrian and Armenian communities are recognized minority, who are usually able to freely practice their faith, providing they don't open their doors to Muslim-born Iranians by holding services in Persian.
The Islamic Republic authorities have not yet responded to the news concerning the century-old church in Tabriz.
The Assyrian presence in Iran goes back 4,000 years.
The Assyrian community in Iran numbered approximately 200,000 before the 1979 revolution. Many Assyrians left the country in the after the establishment of the Islamic Republic, primarily for the United States. Current estimates of the Assyrian population in Iran range from 50,000 in 2007 to 32,000 in 2015. The Iranian capital, Tehran, is home to the majority of Iranian Assyrians; however, approximately 15,000 Assyrians reside in northwestern Iran, in the city of Urmia and various Assyrian villages in the surrounding area, in West Azarbaijan province, northwest Iran.
Assyrians were the first people who warmly welcomed an American Presbyterian missionary and linguist, Justin Perkins, on his arrival in Urmia.
Justin Perkins, known as the first U.S. citizen residing in Iran, established a missionary center in Urmia in 1835.
Perkins, later dubbed the “Apostle of Persia”, was assigned to look after the remaining members of the Assyrian Church of the East in northwestern Iran.
Appointed by the American Board of Commissioners for Foreign Missions, Perkins began preaching, generally with the full consent of the local Assyrian church clergy, and often in their churches.
Dozens of Assyrians left Iran for America through Perkins and his successors, mainly settling in Chicago.
Former Iran Revolutionary Calls Khamenei A 'Despot'
A former aide to Iran’s Supreme Leader has called Ayatollah Ali Khamenei a “despot” after being issued a new subpoena while already facing a three-year jail sentence.
Abolfazl Qadiani (Ghadiani) must attend court within 10 days but, writing for foreign-based opposition website Kalameh, he said he will refuse to do so.
The 73-year-old slammed the subpoena as an “overture to holding a session of the illegal Revolutionary Court dominated by intelligence agents, and both under the full control of Iran's current despot, Mr Khamenei”.
Qadiani who had previously called Khamenei a dictator now has used the term "despot".
He added that the warrant against him applies to a case that is three years old.
Qadiani went on to warn that recent reshuffles of top positions in the Islamic Republic suggests a period of increased violence and terror is to come.
Ayatollah Khamenei has appointed a new head of the judiciary, replaced Friday-Prayer imams and appointed a new head of the Islamic Revolution Guards Corps in recent weeks.
Responding to Khamenei’s defense of Iran’s constitution last week in a meeting with students, Qadiani added: “The Islamic Republic is incorrigible”. He said that it is impossible to limit the Supreme Leader’s powers because in case of any meaningful limitation, it would cease to exist.
Qadiani, a staunch revolutionary in the 1970s and ’80s, got into new legal troubles after calling for the position of supreme leader to be abolished, last year.
Qadiani is a leading member of the Islamic leftist political organization IRMO (the Islamic Revolution’s Mujahedeen Organization), a group that strongly supported the Islamic Republic until 2009 when they fell out with Khamenei after the disputed re-election of populist President Mahmoud Ahmadinejad. The group also initially contributed to the forming of the Islamic Republic’s internal security system as many of its members said in various interviews.
After falling out with Khamenei, many of the organization’s leaders, including Qadiani ended up in jail for a few years and one of their outspoken members, former deputy interior minister Mostafa Tajzadeh spent more than seven years in solitary confinement.
His son, Morteza, says his father has received two years for “insulting the leader” and one year for “propaganda against the regime”. He might end up serving the longer of the two sentences.
He has also been ordered to read three pro-revolution and Islamic Republic books, one praising Khamenei, and copying them by hand. Hand-copying texts is considered a punishment in Iranian elementary schools.
The former revolutionary turned opponent has been criticizing Khamenei since 2009 when highly questionable poll results, believed to be engineered by military and intelligence organs, declared hardliner Mahmoud Ahmadinejad as the winner in presidential elections.
Youth Should Enjoy The Hardship Of Sanctions, Suggests Cleric In Iran
Ultraconservatives dominating the Islamic Republic are calling on Iranian youth to find joy and fun in the “economic war” their country is engaged in.
“Cheerfulness among youth will not materialize through illegitimate music and dancing of a handful of vagrant girls,” said Ayatollah Ahmad Alamolhoda, leader Friday prayers in Mashad, Iran’s second city.
This was a reference to videos that emerged earlier this month of schoolgirls dancing to rap – a social media phenomenon authorities are now investigating.
Sermons across the country by the representatives of the Supreme Leader Ayatollah Ali Khamenei, on May 24, made similar calls.
Declaring war against fun, joy, and music in Iran goes back to early days of the Islamic Republic, when its founder, Ayatollah Ruhollah Khomeini banned all music from Iranian radio and television on July 23, 1979.
Fresh back from exile, the 76-year-old cleric was conducting an audience with the employees of Radio Darya, a radio station that aired songs for holidaymakers heading to the Caspian shores of northern Iran.
“Music stupefies persons listening to it and makes their brain inactive and frivolous. Music is no different from opium,” the Ayatollah said.
Since then, Friday-prayer leaders have repeatedly stressed the necessity of following Khomeini’s guidelines.
Referring to the devastating eight-year war with Iraq, Alamolhoda said: “Joyous were the Iranian youth engaged in military battles, and the joy of our youth today is stepping into economic war", which refers to the country's struggle in the face of U.S. sanctions.
Despite such directives, Iranian youth have always found a way to ignore the government approach towards music and fun, taking music and dance underground – at great risk.
Social media has opened a new horizon for the Iranian youth to share their favorite music and dancing clips. And of course, many of them have paid the price for it.
In July last year, state TV aired the so-called confession of a teenage girl whose Instagram account had close to a million followers.
The clips showed 18-year-old Maedeh Hojabri dancing to Persian music or songs by artists such as Justin Bieber and Shakira.
In her so-called confession, Maedeh said that she did not intend to encourage others to copy her.
Nonetheless, the Islamic Republic judiciary sentenced Maedeh to four years in prison and 80 lashes.
Hundreds of Iranians circulated videos of themselves on social media dancing in protest, while thousands more posted Maedeh’s pictures and wrote posts supportive messages on Insta.
The battle against fun is still going on Iran, but the youth of the country have never surrendered; they believe that they will ultimately win the war.
Why U.S.-Iran Tensions Could Quickly Escalate Into A Crisis
WASHINGTON/UNITED NATIONS, May 24 (Reuters) -
Three years ago, when Iran's military captured 10 U.S. sailors after they mistakenly strayed into Iranian waters, U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif jumped on the phone in minutes and worked out the sailors' release in hours.
Could a similar crisis be so quickly resolved today?
"No,” Zarif said in a recent interview with Reuters. “How could it be averted?”
Zarif and the current Secretary of State, Mike Pompeo, have never spoken directly, according to Iran's mission at the United Nations. They instead tend to communicate through name-calling on Twitter or through the media.
“Pompeo makes sure that every time he talks about Iran, he insults me,” Zarif said. “Why should I even answer his phone call?”
The open rancor between the nations' two top diplomats underscores growing concern that the lack of any established channel for direct negotiation makes a military confrontation more likely in the event of a misunderstanding or a mishap, according to current and former U.S. officials, foreign diplomats, U.S. lawmakers and foreign policy experts.
The Trump administration this month ordered the deployment of an aircraft carrier strike group, bombers and Patriot missiles to the Middle East, citing intelligence about possible Iranian preparations to attack U.S. forces or interests.
"The danger of an accidental conflict seems to be increasing over each day," U.S. Senator Angus King, a political independent from Maine, told Reuters as he called for direct dialogue between the United States and Iran.
A senior European diplomat said it was vital for top U.S. and Iranian officials to be on "speaking terms” to prevent an incident from mushrooming into a crisis.
"I hope that there are some channels still existing so we don't sleepwalk into a situation that nobody wants," said the diplomat, speaking on condition of anonymity. "The rhetoric that we have is alarming."
State Department spokeswoman Morgan Ortagus declined to address how the administration would communicate with Iran in a crisis similar to the 2016 incident, but said: “When the time to talk comes, we are confident we will have every means to do so.”
The administration’s “maximum pressure campaign” against Iran, she said, aims to force its leaders to the negotiating table.
“If the Iranians are willing to engage on changing their ways to behave like a normal nation,” Ortagus said, “we are willing to talk to them.”
In 2016, Kerry and Zarif knew one another well from the complex negotiations to reach a 2015 pact to limit Iran's nuclear capabilities.
Three years later, top-level diplomatic relations have all but disintegrated in the wake of the Trump administration’s withdrawal from the nuclear pact, its tightening of sanctions on Iranian oil, and its recent move to designate part of Iran's military as a terrorist group.
U.S. military officials cite growing concern about Iran's development of precise missiles and its support for proxy forces in Syria, Iraq, Yemen and beyond.
In the absence of direct talks, Twitter has become a common forum for U.S. and Iranian officials to trade biting barbs. On Wednesday, an advisor to Iranian president Hassan Rouhani fired off a tweet at Pompeo castigating him for provoking Iran with military deployments.
“You @SecPompeo do not bring warships to our region and call it deterrence. That’s called provocation,” the advisor, Hesameddin Ashena, tweeted in English. “It compels Iran to illustrate its own deterrence, which you call provocation. You see the cycle?”
That followed a Trump tweet on Sunday threatening to "end" Iran if it sought a fight, and a long history of bitter insults traded by Pompeo and Zarif.
Pompeo in February called Zarif and Iran's president "front men for a corrupt religious mafia" in a tweet. That same month, another official at Pompeo's State Department tweeted: "How do you know @JZarif is lying? His lips are moving."
Zarif, in turn, has used the social media platform to condemn Pompeo and White House National Security Adviser John Bolton's "pure obsession with Iran," calling it "the behavior of persistently failing psychotic stalkers."
'AMERICANS HAVE OPTIONS'
U.S. officials, diplomats and lawmakers said they doubted Zarif would refuse to take a call from Pompeo in a crisis, given the risks for Iran in any conflict with the U.S. military.
In a Tuesday briefing with reporters, Pompeo appeared to dismiss concerns about Washington's ability to communicate and negotiate with Iran.
"There are plenty of ways that we can have a communication channel," Pompeo said.
Diplomats say Oman, Switzerland and Iraq are nations with ties to both countries that could pass messages.
"It's a little bit like the Israelis - when they need to get messages to people, they can get messages to people," said a second senior European diplomat.
Representative Michael Waltz - the first U.S. Army Green Beret elected to Congress, said he favored the diplomatic freeze as a way to force Iran into serious negotiations.
"If you don't have diplomatic isolation, you're having one-off talks, that lessens the pressure," said Waltz, who is also a former Pentagon official.
But indirect message-passing can be too cumbersome in a fast-moving crisis, said Kevin Donegan, a retired vice admiral who oversaw U.S. naval forces in the Middle East as commander of the Fifth Fleet when the U.S. sailors were captured by Iran.
Such dealings through intermediaries "require time and will not allow an opportunity to de-escalate a rapidly unfolding tactical situation," said Donegan, now a senior adviser at the Center for Strategic and International Studies, who added that he was not commenting on current U.S. policy.
Donegan and Waltz both said it would be helpful to have some kind of hotline between the U.S. and Iranian militaries, but Donegan and other experts were skeptical Iran would agree to such an arrangement.
BACK CHANNELS THROUGH OMAN, IRAQ … RUSSIA?
On May 3 - after Washington became alarmed by intelligence indicating that Iran might be preparing for an attack on the United States or its interests - it sent messages to Iran via "a third party," one U.S. official said, speaking on condition of anonymity.
Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, also told Congress on May 8 that messages had been sent to "to make sure that it was clear to Iran that we recognized the threat and we were postured to respond."
Waltz said Dunford told lawmakers at a closed-door hearing that he had sent a message to Qassem Soleimani - the influential commander of the Revolutionary Guards' Quds Force - warning him that Iran would be held directly accountable if one of its proxy forces attacks Americans.
"The message now was: 'We're not going to hold your proxies accountable'" if they attack U.S. citizens or forces in the region, he said. "'We're going to hold you, the regime, accountable.'"
Another official said the United States had authorized Iraq "to let the Iranians know that there is no plausible deniability about attacks on Americans in Iraq" after U.S. intelligence flagged preparations for a possible attack by Iran-backed militias in Iraq.
Joseph Votel, the now retired four-star general who oversaw U.S. troops in the Middle East until March, noted earlier this year that the U.S. military might be able to indirectly get a message to Iranian forces through an existing hotline with Russia meant to avoid accidental conflicts in Syria.
"The Iranians can talk to the Russians,” he said. “We have a well-established professional communication channel with the Russians."
But the prospect of relying on the Russian government to get United States out of a crisis with Iran is hardly reassuring to many current and former officials in the United States.
"That would be a risky choice," said Wendy Sherman, an under secretary of state in the Obama administration.
Khamenei Evades Responsibility For Nuclear Deal, Having Endorsed It At Every Turn
Iran's Supreme Leader Ayatollah Ali Khamenei has said once again that he did not agree with the way the nuclear deal with the West was implemented. "I have repeatedly warned the president and the foreign minister about it," he said during a May 22 meeting with students.
This is not the first time Khamenei evades his responsibility about the 2015 nuclear agreement also called the Joint Comprehensive Plan of Action (JCPOA), although he has played the main part in forging the deal at five different points.
Former foreign minister Ali Akbar Salehi wrote in his memoirs that he told Khamenei about a letter he received from Oman's officials about secret talks with the U.S. over the nuclear issue. "Khamenei said that talks could be harmful, but I said let us try it just to make sure that we haven't left any stone unturned, …and he said he had no objection to talks as a last resort," wrote Salehi.
Later Khamenei said that he had been "fooled" to accept Salehi's suggestion, although, admitting his mistake would not change the result. Khamenei did endorse the talks.
In March 2013, the secret talks were temporarily suspended at Khamenei's order, but it was already too late, because some concrete results had been achieved. At that stage even Hassan Rouhani, then a member of the Supreme National Security Council, and his colleagues did not know about the secret talks.
In an interview in August 2015, Salehi said that Rouhani could not believe there were secret talks when he told him about it.
The second direct intervention by Khamenei in furthering negotiations with the United States was in September 2013 when he used the keywords "heroic flexibility" which strongly encouraged Iranian diplomats to further the talks.
The third juncture, was when Khamenei allowed Foreign Minister Mohammad Javad Zarif to hold talks with his U.S. counterpart John Kerry. Khamenei who had previously banned talks at this level, later said his decision was a mistake.
The fourth intervention by Khamenei took place in October 2015. A Tehran MP Mehdi Kouchakzadeh says that at the time, Security Chief Ali Shamkhani, Majles Speaker Ali Larijani, and Ali Asghar Hejazi Khamenei’s deputy chief of security and political affairs "decided" in a meeting that the JCPOA should be approved by the Majles.
Later, the Foreign Ministry announced that it did not know about such a meeting, and some lawmakers questioned Hejazi's presence at the meeting. Khamenei's office subsequently announced that Hejazi did not take part at the meeting as "an independent individual," clearly meaning that Hejazi was there to convey Khamenei's message and endorsement of the approval of the JCPOA bill at the Majles.
Responding to protests at the voting session where no one was allowed to put forward questions or suggestions, Larijani explained that "The country has decided that there should be no suggestions." Kouchakzadeh asked: "What do you mean by “the country?”, and Larijani said: "The same person you know," alluding to Khamenei's direct involvement in the decision.
The fifth and last intervention by Khamenei was made in October 2015 when in a letter to Rouhani, Khamenei endorsed "ratification number 634, dated 23 July 2015," and therefore, approved the JCPOA on behalf of the Islamic Republic of Iran.
At the same, while approving the JCPOA, Khamenei set 9 conditions in a letter to Rouhani about how to "implement" the JCPOA. Khamenei told the students in his May 22 meeting that those were conditions for approving the JCPOA. This is clearly a distortion of the truth, as he had already approved the JCPOA before setting the conditions for implementing the agreement.
Meanwhile, members of Iran's negotiating team have said that all along during the talks, Khamenei was briefed on the details of negotiations and no steps were taken without his prior approval.
In another development, explaining why he has not “set fire” to the JCPOA after the U.S. pull-out from the agreement as he had threatened, he said he did not do that for the sake of expediency.
He also said on May 22 that "even if his conditions are not met, it is not the leader's responsibility to get involved in the matter," which means he does not like to directly endorse a possible withdrawal from the JCPOA in the same way that he lacked the courage to accept responsibility for the nuclear agreement.
Khamenei's strategy is blaming the Rouhani administration to save face before his supporters, is similar to what his predecessor Ayatollah Rouhollah Khomeyni did at the end of the Iran-Iraq war in 1988. After years of stubbornly continuing a useless war, he finally accepted UN Resolution 598, saying he drank the "chalice of poison". Meanwhile, Iran's human and economic resources were drained.
At least in this instance, Khamenei has so far tried hard not to be a copycat of his predecessor.
Rouhani: Iran Won't Surrender, Even If It's Bombed
Iranian President Hassan Rouhani has said that his country will not surrender to U.S. pressure even if it is bombed, amid growing tensions between Tehran and Washington.
Rouhani made the comments on May 23, as Iran's top military chief warned that any enemy "adventurism" would meet a crushing response.
Relations between Tehran and Washington have plummeted since President Donald Trump a year ago pulled the United States out of a 2015 nuclear accord between world powers and Iran that curbed the country’s nuclear program in exchange for relief from crippling economic sanctions.
Since then, Washington has stepped up its rhetoric and reimposed sanctions.
Earlier this month, the United States beefed up its military presence in the Middle East and Persian Gulf, citing "imminent threats" from Tehran, prompting growing concerns of a possible military conflict with Iran.
Tehran denied the allegations.
Addressing a ceremony commemorating the 1980-88 Iran-Iraq war, Rouhani said that the Iranians “have not bowed to pressures despite facing difficulties in their lives,” according to the official IRNA news agency.
He told a group of veterans that Iran will not "withdraw from independence and dignity even if our land is bombed."
Earlier in the day, the semiofficial Fars news agency quoted the Iranian Army's chief of staff, Major General Mohammad Baqeri, as saying that the U.S.-Iran standoff was a "clash of wills."
Baqeri warned that Iran would have a "hard, crushing and obliterating response" for any enemy "adventurism."
European backers of the landmark 2015 nuclear deal -- Britain, France, Germany -- have been trying to salvage the agreement, but Tehran has complained that the process is too slow. The other signatories are Russia and China.
Earlier this month, Iran said it was suspending several commitments under the deal, and threatened to step up uranium enrichment if European countries did not act to protect it from the effects of the U.S. sanctions.
Kayvan Khosravi, a spokesman for the Supreme National Security Council, on May 23 reiterated that Iran will not hold talks with the United States "under any circumstances," IRNA reported.
Khosravi also urged the other signatories to the landmark 2015 nuclear deal to fulfill their commitments as its patience was running thin.
"As long as the rights of our nation are not satisfied, as long as words don't change into action, our path will stay the same as now," he said.
In Moscow, Russian Foreign Ministry spokeswoman Maria Zakharova accused Washington of trying to provoke Iran into a “direct confrontation” by "imposing sanctions, piling on such military pressure, and using aggressive rhetoric."
Zakharova made the comments as Reuters reported that the Pentagon is analyzing a U.S. military request to send 5,000 more troops to the Middle East.
Speaking to reporters at the White House, Trump said he doubted the United States needs to send more troops to the Middle East to counter Iran, but that he was willing to consider such plans.
Acting U.S. Defense Secretary Patrick Shanahan earlier confirmed that the Pentagon was considering sending additional U.S. troops to the region, but he denied that specific numbers of troops were being considered at this point.
"What we're looking at is: Are there things that we can do to enhance force protection in the Middle East?" Shanahan said. "It may involve sending additional troops."
Meanwhile, Iranian Foreign Minister Mohammad Javad Zarif has arrived in Islamabad to hold talks with Pakistani officials on May 24.
Upon arriving in the Pakistani capital, Zarif called on the international community to take steps to counter the United States' "aggressive" and "bullying approach" against Iran, according to Fars.
"Currently our region is in a very critical situation and dangerous measures are being formed in the region, so we need consultations with all our neighbors," Zarif said.
In a statement, Pakistan's Foreign Ministry said that "the situation in the region is serious and needs to be addressed through dialogue by all parties."
"We expect all sides to show restraint, as any miscalculated move, can transmute into a large-scale conflict," the ministry added.
With reporting by Reuters, TASS, AFP, AP, and RFE/RL’s Radio Mashaal
Minister's Son-In-Law In Iran Accused Of Embezzling $50 million
Mohammad Hadi Razavi – the son-in-law of Iran’s labor minister, Mohammad Shariatmadari – has been charged with embezzlement and “disruption of the economy” after receiving 2.11 trillion rials (around $51m) in loans from banks, which he has failed to pay back.
Tehran’s deputy prosecutor Rasoul Qahremani accused Hadi Razavi along with 30 other suspects during the second hearing into alleged corruption at the Sarmayeh Bank, Monday May 20, at a special court in Tehran.
Citing the Central Bank of Iran’s report on the case, Qahremani alleged that Razavi had received 1,07 trillion rials ($25.5m) loan from Sarmayeh, and another 1.04 trillion rials ($24.m) loan from other banks.
In the initial hearing, Qahremani had alleged that Hadi Razavi had bribed Sarmayeh Bank managers, from 2012 to 2015, to borrow $25.5m with no collateral.
“Mohammad Hadi Razavi spent the loans for traveling overseas, boozing at lush parties, buying luxury cars and real estate,” Qahremani told the court.
The prosecutor claimed that Razavi deposited a part of the loans in front-companies registered under the names of homeless individuals.
“One of the companies, Golgoon Tejarat Jahan, is owned by a young orphan, and Razavi borrowed three trillion rials ($23.7m) under its name. Although the owner of the company was promised to receive 50 million rials ($1,200) in return, Razavi never fulfilled his promise," the prosecutor told the court.
But the case of Razavi’s embezzlements havs another twist, and that goes back to Sarmayeh Bank as the main repository of Iran Teachers’ Reserve Fund and a complex corruption case, which revolves around raiding the fund by corrupt bank officials and well-connected regime insiders.
Several trials concerning the Sarmayeh Bank have been held in Iran. Earlier this year, Parviz Kazemi labor minister from 2005 to 2006 in hardline president Mahmoud Ahmadinejad’s cabinet, was sentenced to 20 years, and 24 lashes.
Sarmayeh Bank managers Ali Bakhshayesh, and Mohammad Reza Tavassoli have also been convicted.
Sarmayeh bank’s principal shareholder is Iran’s Teachers’ Reserve Fund. The current legal suit was filed when an irregularity amounting to 150 trillion rials (about $3.6bn) was discovered at the fund.
The fund has 800,000 members, all employed by the education ministry or retirees, who receive annual interest based on their monthly deposits. The prosecutor claims 150 trillion rials (roughly $3.6bn) of the fund's assets went missing as a result of fraud committed by the defendants.
Mohammad Emami, the producer of the popular TV series, Shahrzad, is also implicated in the case.
There are currently at least 10 economic-corruption trials under way in the special courts in Tehran, including cases involving financial institutions and petrochemical companies
Iran Says Its Intranet Almost Ready To Shield Country From 'Harmful' Internet
Iran’s national information network (ININ) – the country’s intranet – is 80 per cent complete, the Supreme Council of the Cultural Revolution announced Sunday 19 May, ironically to mark world telecommunications day (Friday 17 May).
With the ININ, Tehran hopes to cut the country's dependency on international cyberspace.
Saied Reza Ameli, professor of communications at Tehran university, and a mid-ranking cleric, said the government and the private sector have so far allocated nearly 120 trillion rials (approximately $285m), and 70 trillion rials ($166m) to create the national cyber platform.
President Hassan Rouhani's government said in August 2016 it aimed to create an isolated domestic intranet (halal internet) that can be used to promote “Islamic content” and raise digital awareness among the public.
The government’s official news agency, IRNA, said at the time that the initiative would offer “high quality, high speed” connections at “low costs”.
It was in 2010, however, that the plan for a national internet platform was first announced – it was then expected to be fully operational within five years.
Critics insist the real aim is to tighten censorship and the authorities’ control over people’s use of the internet.
Iran has already blocked access to tens of thousands of websites and to overseas-based social media services, including Twitter and Facebook, but many users still have access to them through proxy sites and virtual private networks (VPNs).
Initially hesitant about the project, President Rouhani has been lambasted by its conservative advocates, including Iran’s prosecutor-general, Mohammad Ja'far Montazeri.
Comparing internet to a “slaughterhouse”, Montazeri warned in February: “Blasphemy, anti-national security teachings, and destroying the identity of the youth are among issues we face in cyberspace.”
During the Sunday event the minister of information and communication technology (ICT), Mohammad Javad Azari Jahromi boasted of 142 successful tests to “weigh the independence of Iran’s national intranet network, against a possible internet disconnection”.
Without elaborating on the nature of the tests, Azari Jahromi asserted that, based on his estimation, the Islamic Republic is capable of confronting cyberspace threats.
It was announced last February that Iran was set to hold an “internet disconnection drill”. A day later, however, Azari Jahromi said the plan was delayed.
International organizations have frequently blamed the Islamic Republic for censorship, suppressing social media users, and filtering websites and apps.
The latest global ranking on media freedom shows that out of 180 countries, Iran has dropped six points to 170th place.
Azari Jahromi told reporters on Sunday that the country has succeeded in developing its own firewall to counter cyberattacks.
“The indigenous firewall is currently installed on all industrial control systems operating under the Siemens brand,” Azari Jahromi said.
He stressed that the firewall will soon become compatible with all other industrial-control-system brands operating in Iran.
According to the state-run Mehr news agency, Azari Jahromi said the computer worm Stuxnet – “believed to be made by the U.S. and Israel” and used in the past to target the Islamic Republic's nuclear program – had infected computers that were connected to the country’s industrial facilities.
In an Instagram post on Thursday 15 May, the ICT minister said that the national firewall, Dezhfa, has been designed and developed by young Iranian scientists and successfully tested on industrial automation systems.
Azari Jahromi added that while 600,000 cyberattacks were dispelled last year, this year 33 million cyberattacks have been neutralized.
He said this confirmed the Islamic Republic has become 50 times more potent in defending itself against cyberattacks.
White House Hopefuls Turn To Foreign Policy, Slam Trump On Iran
WASHINGTON, May 19 (Reuters) -
Some Democrats vying for the party's 2020 presidential nomination shifted the focus of the race to foreign policy on Sunday, criticizing Republican President Donald Trump as a weak commander in chief who is escalating tensions with Iran.
The relationship between Washington and Tehran has become increasingly strained in recent weeks, raising concerns about a potential U.S.-Iran conflict.
Trump and hawkish foreign policy advisers like national security adviser John Bolton and Secretary of State Mike Pompeo want Tehran to give up its nuclear and ballistic missile programs.
Trump has tightened economic sanctions against Iran, aimed at forcing its leaders into negotiations. Pompeo last year outlined a list of demands on Iran that critics said showed he was pushing for regime change.
Representative Tulsi Gabbard, one of 24 Democrats vying for the White House nomination, said on ABC's "This Week with George Stephanopoulos" that Trump was "leading us down this dangerous path towards a war with Iran."
"He says he doesn't want it, but the actions of him and his administration, people like John Bolton and Mike Pompeo, tell us a very different story. They are setting the stage for a war with Iran that would prove to be far more costly, far more devastating and dangerous than anything that we saw in the Iraq war," Gabbard said.
Trump has said he is not pushing for war with Iran. During the 2016 presidential campaign, he promised to stay out of overseas conflicts, saying the wars in Afghanistan and Iraq were too costly.
In May 2018, Trump withdrew the United States from a multinational deal with Iran negotiated by the Obama administration that reduced economic sanctions on Tehran in exchange for scaling back its nuclear program. Trump criticized the deal as weak, saying he would negotiate a stronger one.
Gabbard, 38, enlisted in the U.S. Army National Guard after the Sept. 11, 2001 attacks and was twice deployed to the Middle East. Gabbard has said she is running for president to end regime-change wars, though she currently trails most of her 2020 opponents in opinion polls.
Another White House hopeful, Representative Seth Moulton, a 40-year-old former U.S. Marine Corps officer who did four tours in Iraq, told "This Week" that if the Trump administration sends additional troops to the Gulf it could "drag us into war."
"Make no mistake, this is exactly what John Bolton wants to have happen," said Moulton, who also trails in 2020 opinion polls. "The world is so dangerous when you have a weak commander in chief in the president of the United States."
Moulton counts as a mentor former Vice President Joe Biden, who currently leads the 2020 Democratic field in support. When asked why Democratic primary voters should back him over his mentor, Moulton said: "I think it's time for the generation that fought in Iraq and Afghanistan to take over for the generation that sent us there."
Gabbard resigned her post at the Democratic National Committee in 2016 when Hillary Clinton was the nominee because she said the former secretary of state's foreign policy positions were too hawkish. Gabbard was asked by ABC if that also applied to Biden, given both he and Clinton served in the Obama administration.
"We'll see what Vice President Biden's foreign policy vision is for this country. We may agree on some issues, disagree on others," Gabbard said.
Outcry Against Heavy Sentences For Three Prominent Iran Writers
A social media backlash has followed the decision to jail three writers in Iran for a total of 18 years.
Baktash Abtin, Kayvan Bazhan, and Reza Khandan-Mahabadi were each given a six-year sentence May 15 for “acting against national security” and “propaganda against the state”.
The ruling was made at branch 28 of the Revolutionary Court in Iran by Mohammad Moghiseh, a judge known for his harsh line on human rights activists, lawyers, and members of religious minorities.
A statement from the Iran Writers Association (IWA) condemned the verdict, insisting that Abtin, Bazhan, and Khandan-Mahabadi were being punished for their membership of the organization.
It claimed they had been involved in research for a book on five decades of the IWA history and organizing memorial ceremonies for IWA members allegedly murdered by state agents in the 1990s.
This amounted to “assembly and collusion against national security” which the IWA believes is the real reason behind the verdict.
“This trial is not just the condemnation of three writers. This was not a trial against the IWA alone. It condemns all writers and others who want to enjoy the right to free expression,” the organization said.
The statement added: “What kind of national security gets threatened with the publication of newsletters and protest statements? Whose security gets threatened when IWA members organize gatherings at the grave of poets and writers?
“No court with the least measure of care for justice, impartiality, and human rights could accept such activities as evidence of a crime. In fact, it would see it as a frame-job".
Civil rights activists in Iran have repeatedly maintained that whenever the Islamic Republic recognizes an individual as “troublesome”, it charges them with vaguely defined accusations, such as “propaganda against the establishment”, “disrupting public peace and order”, “collusion for illegal assembly”, and “attempts against national security”.
The IWA – which was set up in 1968 during the monarchy to highlighted state censorship – said: “Such sentences are highly regrettable and should be repealed.”
Since the verdict, dozens of Iranian writers have turned to social media to express dismay and anger at Judge Moghishe’s decision.
Journalist and author Mehdi Yazdani Khorram wrote on Instagram: “What I should I say about such a verdict? Where could I go to seek justice? 18 years behind bars for three writers? On what charges? Have they committed murder? Are they convicted of stealing? For a 'little bit of embezzlement' or smuggling?”
His last phrase is a broadside at Islamic Republic insiders who are often exposed for corruption and embezzlement.
Author Hengameh Hovayda said that drives such as the “Free the Writer!” campaign have proven futile.
Referring to the writers Mohammad Mokhtari and Mohammad Ja'far Pouyandeh who were allegedly killed by the Islamic Republic intelligence agents in 1990s, Hovayda has said: “I have never been able to take any effective step against such actions of the regime. I have not only been able to save anyone from being jailed or executed, but I have witnessed many of my friends' lives taken away by the ruling establishment.”
She added: “Out of helplessness, I have always surrendered to the will of the establishment … I am ashamed of my impotence. We are facing a wolf, and one cannot talk to a wolf in sheep's language.”
Author Zahra Abdi reminded Iranian authorities of the last days of the Shah’s rule: “Once again we are putting reason in chains. We have placed ecologists, teachers, and writers behind bars, opening up the way for 'visionless protests,' and paving the way for the foreigners to invade the country easily”.
“We are our own Trojan Horse,” she added.
Hadi Ghaemi of the New York-based Center for Human Rights in Iran said Iran’s use of “kangaroo courts” to jail writers and artists was a “travesty of justice”.
Earlier this month PEN International’s Rebecca Sharkey said: “We stand in solidarity with our Iranian colleagues who are targeted due to their writing and peaceful activism. We call on the Iranian authorities to drop all charges against them and to respect their right to freedom of expression.”
Trump Says Iran, Too, May Be Confused About War Signals
WASHINGTON (AP) —
After two weeks of mixed signals on Iran, from high-profile U.S. military moves to administration assertions that it's not angling for war, President Donald Trump said Friday that even the Iranians may be confused about what comes next.
"With all of the Fake and Made Up News out there," Trump wrote on Twitter, "Iran can have no idea what is actually going on."
Trump said on Thursday he hoped the U.S. was not on a path to war with Iran, but some wonder if his two most hawkish advisers could be angling for such a confrontation. A day earlier he expressed a desire for dialogue, tweeting, "I'm sure that Iran will want to talk soon." But Tehran has showed no outward sign of preparing to talk.
Trump's recent tone contrasted with a series of moves by the U.S. and Iran that have sharply escalated tensions in the Middle East in recent days. For the past year, national security adviser John Bolton and Secretary of State Mike Pompeo have been the public face of the administration's "maximum pressure" campaign against Tehran.
On Friday, an official with Iran's powerful Revolutionary Guard warned that Iranian missiles can "easily reach warships" in the Persian Gulf and elsewhere in the Middle East. The semi-official Fars news agency quoted Mohammad Saleh Jokar as saying that Iran's missiles have a range of 2,000 kilometers — about 1,250 miles— and can attack any target in the region.
The escalating rhetoric has rattled lawmakers who are demanding more information on the White House's claims of rising Iranian aggression. Top leaders in Congress received a classified briefing on Iran on Thursday, but many other lawmakers from both parties have criticized the White House for not keeping them informed.
Iran poses a particular challenge for Trump. While he talks tough against foreign adversaries to the delight of his supporters, a military confrontation with Iran could make him appear to be backtracking on a campaign pledge to keep America out of foreign entanglements.
Lawmakers and allies, however, worry that any erratic or miscalculated response from Trump could send the U.S. careening into conflict.
Tensions rose dramatically May 5, when Bolton announced that the USS Abraham Lincoln Carrier Strike Group would be rushed from the Mediterranean to the Persian Gulf ahead of schedule in response to "a number of troubling and escalatory indications and warnings," without going into details.
Since then, four oil tankers, including two belonging to Saudi Arabia, were targeted in an apparent act of sabotage off the coast of the United Arab Emirates, according to officials in the region, and a Saudi pipeline was attacked by Iranian-backed Houthi rebels from Yemen. The U.S. also ordered non-essential staff out of Iraq and has dispatched additional military assets to the region.
The Senate will receive a classified briefing on Iran on Tuesday, according to Jim Risch of Idaho, the chairman of the Foreign Relations Committee. The House has requested a classified briefing as well.
House Speaker Nancy Pelosi said briefings are necessary because informing leaders "is no substitute for the full membership of the Congress." She said a failure to inform lawmakers is "part of a pattern" for the Trump administration "that is not right," because the power to declare war resides with Congress.
"I hope that the president's advisers recognize that they have no authorization to go forward in any way" against Iran, Pelosi said.
Trump has dismissed suggestions that any of his advisers, particularly Bolton, are pushing him into a conflict.
"John has strong views on things, but that's OK. I actually temper John, which is pretty amazing isn't it?" Trump said recently when asked if he was satisfied with Bolton's advice. "I have different sides. I mean, I have John Bolton, and I have other people that are a little more dovish than him. And ultimately I make the decision."
Mark Dubowitz, an advocate of a hardline policy toward Iran and chief executive of the Foundation for Defense of Democracies, said, "Trump is smart to let these advisers play the roles they play and it really does help him lay the table for negotiation, but ultimately, it comes back to his ability to oversee a negotiation and do so wisely and judiciously, and that's an open question."
Tensions started to spiral last year when Trump pulled out of a deal the U.S. and other world powers signed with Iran during the Obama administration. The deal lifted economic sanctions on Iran in exchange for curbing of its nuclear program.
Trump agreed with critics of the deal that it didn't address Tehran's work on ballistic missiles or its support of militant groups around the region. His administration reinstated sanctions and has piled on more.
Trita Parsi, an adjunct associate professor at Georgetown University who advised the Obama administration on Iran, thinks the Iranians are trying to exploit Trump and Bolton's divergence on foreign policy issues.
He cited a recent tweet from Hessamoddin Ashena, an adviser to Iranian President Hassan Rouhani, directed squarely at Trump and Bolton, who is easily recognized in public by his white, bushy mustache.
"You wanted a better deal with Iran. Looks like you are going to get a war instead. That's what happens when you listen to the mustache," the Iranian adviser said.
Bomb-Laden Drones Of Yemen Rebels Threaten Arabian Peninsula
DUBAI, United Arab Emirates (AP) —
A Yemen rebel drone strike this week on a critical Saudi oil pipeline shows that the otherwise-peaceful sandy reaches of the Arabian Peninsula now are at risk of similar assault, including an under-construction nuclear power plant and Dubai International Airport, among the world's busiest.
U.N. investigators said the Houthis' new UAV-X drone, found in recent months during the Saudi-led coalition's war in Yemen, likely has a range of up to 1,500 kilometers (930 miles).
That puts the far reaches of both Saudi Arabia and the United Arab Emirates, the two main opponents of the Iranian-allied Houthi rebels in Yemen, within reach of drones difficult to detect and track. Their relatively simple design, coupled with readily available information online, makes targeting even easier, analysts say.
"These installations are easily findable like on Google Earth," said Tim Michetti, an expert on illicit weapons technology with experience in Yemen. "Once you get in the vicinity, that alone has that kind of effect of showing that the reach is there."
The drone attacks come amid heightened tensions between Iran and the U.S., a year after President Donald Trump pulled America out of Tehran's nuclear deal with world powers. The White House has ordered an aircraft carrier and bombers into the region over a still-unexplained threat from Iran, while nonessential employees at U.S. diplomatic posts in Iraq have been ordered to leave the country.
On Sunday, the United Arab Emirates alleged four oil tankers off its eastern coast were targeted by sabotage. On Tuesday, the Houthis say they launched seven drones to target Saudi Arabia. The drones stuck pumping stations along the kingdom's crucial East-West Pipeline, causing minor damage, Saudi officials say.
A satellite photo obtained by The Associated Press of one of the pumping stations showed two black marks near where the pipeline passes that weren't there the day before.
In the months after the March 2015 start of the war in Yemen, Houthi rebels began using drones in combat. The first appeared to be off-the-shelf, hobby-kit-style drones. Later, versions nearly identical to Iranian models turned up. Iran denies supplying the Houthis with weapons, although the U.N., the West and Gulf Arab nations say Tehran does.
The rebels have flown drones into the radar arrays of Saudi Arabia's Patriot missile batteries, according to Conflict Armament Research, disabling them and allowing the Houthis to fire ballistic missiles into the kingdom unchallenged.
Some have been used for surveillance purposes, while others have been loaded with explosives and ball bearings to deadly effect. In January, a bomb-laden Houthi drone detonated at a military parade near Aden, killing at least six people, including the commander of military intelligence for Yemen's internationally recognized government.
Saudi officials haven't offered any photographs of the sites attacked, nor given any explanation of what kind of drone the Houthis used Tuesday. However, the UAV-X is a likely culprit.
The drone, with a wingspan of 4.5 meters (14.7 feet), has a V-shaped tail fin. It's powered by a rear-mounted engine and has been found with what appears to be extra fuel tanks welded it to, a U.N. panel of experts found. It carries a 18-kilogram (40-pound) warhead.
The drone is likely programmed to strike a specific latitude and longitude and cannot be controlled once out of radio range, Michetti said. In the case of Tuesday's attack, the latitude and longitude of the pumping stations could be easily found online.
The U.N. put the drone's maximum range at 1,500 kilometers.
"It would give credence to the claims by the Houthis that they have the capability to hit targets such as Riyadh, Abu Dhabi and Dubai," the U.N. panel said.
For Saudi Arabia, that range puts the oil fields of its Eastern Province in range. Saudi Aramco declined to comment when reached by the AP.
In the neighboring UAE, an immediate target is the under-construction Barakah nuclear power plant, which is deep in its western desert. The $20 billion, four-reactor plant being built with help from South Korea, has been considered a target by the Houthis since December 2017, when they claimed without offering evidence to have fired a cruise missile at it, something immediately denied by the UAE.
Asked about the possible drone threat, the UAE's Federal Authority for Nuclear Regulation said it had "in place regulations to ensure the protection of the nuclear power plant from all kinds of threats, including physical or cyberattacks," without elaborating.
Also within reach is the skyscraper-studded city of Dubai, a crucial link in worldwide global travel. Dubai International Airport bills itself as the world's busiest for international travel.
Officials at the airport declined to comment, referring the AP to the UAE's General Civil Aviation Authority. The authority did not immediately respond to a request for comment. The Houthis have claimed without evidence to have targeted both airports in Abu Dhabi and Dubai, something denied by authorities.
Speaking to journalists Wednesday night, a top Emirati diplomat sought to play down the danger faced by the federation of seven sheikhdoms, while still acknowledging the threats to regional stability.
"We live in a region where we can't come and be happy because we are the only house in the neighborhood that has not been arsoned or burgled," said Anwar Gargash, the UAE's minister of state for foreign affairs.
COLUMN-Brent spreads point to tightest market since 2014: Kemp
LONDON, May 16 (Reuters)
Oil traders anticipate a big draw down in crude stocks in the second half of this year as sanctions on Iran and Venezuela coupled with other supply disruptions and a sluggish response from OPEC cause a severe shortage.
Brent's six-month calendar spread has moved into a backwardation of almost $3.80 per barrel up from $2.20 a month ago and a contango of more than $1 per barrel at the beginning of the year (https://tmsnrt.rs/2EeQkNf).
Brent spreads cycle between backwardation and contango as the market alternates between periods of under- and over-supply, making spreads rather than spot prices the most useful indicator of market balance.
Backwardation is associated with periods of under-supply and falling inventories, while contango is associated with the opposite, so the current backwardation implies stocks are expected to fall sharply.
Brent futures are now in the biggest backwardation since June 2014, when Libya's oil exports had been reduced to a trickle by civil war and Islamist fighters were threatening the oilfields of northern Iraq.
The six-month spread is in the 94th percentile for all trading days since 1990, indicating traders expect a very large draw down in crude stocks over the next six months.
U.S. sanctions on exports from Venezuela and Iran, coupled with attacks on pipelines and tankers in the Middle East, and the disruption of Russia's exports due to contamination, have all cut immediate crude availability.
Renewed fighting has increased uncertainty about continued exports from Libya while there is heightened uncertainty about future movements through the Strait of Hormuz as tensions in Gulf regions intensify.
At the same time, U.S. crude production has started to grow more slowly after the decline in prices from last year's highs and a slowdown in drilling and well completions.
Crude availability is expected to tighten sharply over the next couple of months as U.S. refineries complete their maintenance.
Crude processing is likely to ramp up significantly to meet increased demand for gasoline over the summer and then distillate fuel oil with the introduction of new IMO shipping regulations from the end of the year.
Tighter calendar spreads are usually associated with a rise in spot prices but the recent surge into backwardation has not (so far) been accompanied by a significant rise in front-month futures.
Front-month futures prices have changed little over the last month and remain well below the recent peaks of $80-85 per barrel set last year, even as the backwardation has surged.
Spreads point to an anticipated shortage while spot prices indicate a market expected to remain balanced. Either the backwardation will have to fall, or spot prices will have to rise to eliminate the apparent contradiction.
The anticipated shortage of crude could be relieved by several means (which are not exclusive):
* Saudi Arabia and its allies in the OPEC+ group could increase the supply of crude to the market
* U.S. shale firms could accelerate well drilling and completions to make more crude available
* The United States could ease sanctions pressure on Venezuela and Iran to contain prices
* IEA members could release crude and products from strategic stocks
* Temporary disruptions to production and pipelines could ease
* Consumption growth could slow as a result of economic slowdown
In 2014, the anticipated shortage was eliminated by a combination of higher supply from OPEC and U.S. shale producers, an end to temporary disruptions, and a global economic and consumption slowdown.
Something similar is likely in 2019, though the balance between faster output growth and slower consumption growth remains unclear, mostly because of intense uncertainty about the global economic outlook.
Tehran Will Drop Nuclear Deal If Its Case Is Referred to UN - Spokesman
If E.U. countries take Iran's nuclear case back to the U.N. Security Council, Tehran will withdraw from the Joint Comprehensive Plan of Action (JCPOA), or its nuclear deal with world powers, the spokesman of Iran's Atomic Energy Organization (IAEO) has warned.
Speaking to the state-run English language channel, Press T.V., May 14 Behrouz Kamalvandi warned that Iran might also take further "drastic and major steps" in tandem with dropping JCPOA.
Earlier, several Persian language websites, including Zaytoon, had reported that in a confidential session attended by local media managers, the Deputy Foreign Minister, Abbas Araghchi (Araqchi), has said that if Tehran's nuclear case is referred to the Security Council, and a resolution against the Islamic Republic issued, Iran would withdraw from NPT.
Without going into details, Kamalvandi maintained, "We cannot exclude any measure --- We have so far talked about different measures. It could be leaving the JCPOA, and it could be other actions [such as] leaving the NPT (Non-Proliferation Treaty) or others. It is for the senior officials of the country to decide."
Kamalvandi reiterated that if Europeans (France, Germany, and the U.K.) take Iran's case back to the Security Council, they will ruin the deal ... and the agreement will not be alive anymore."
In his interview with Press TV, Kamalvandi asserted that if Europe takes no steps toward saving JCPOA, Iran will raise its level of uranium enrichment to more than 3.6% and "will make a decision" about its heavy water reactor in Arak.
"We are waiting for practical steps by Europeans, and after sixty days, we will decide whether or not to end our other voluntary commitments," Kamalvandi noted.
On May 8, Iran announced it will suspend some of its obligations related to the JCPOA, pending steps by other signatories of the agreement to fully abide by it. This mainly refers to Iran's demands that Europe should facilitate trade despite U.S. sanctions.
"INSTEX has not worked properly so far --- We think they [Europeans] are willing to do something but are not able to take practical and major steps --- we have given them time to deal with this problem and take major steps," the Islamic Revolution Guards Corps (IRGC)-run Tasnim news agency cited the nuclear official as saying.
Three European states party to JCPOA, Germany, France and the U.K., have set up INSTEX (Instrument in Support of Trade Exchanges) to help Tehran with limited trade despite U.S. sanctions.
"The main objective of the JCPOA was the removal of sanctions against Iran in a bid to help the country avail itself of the benefits of the deal; however, the restrictive measures are still in place despite Tehran's full compliance, and the goal has not been realized so far," Kamalvandi lamented.
Based on JCPOA, Iran has voluntarily accepted to implement NPT's Additional Protocol, which allows the International Atomic Energy Organization's inspectors to visit Iran's nuclear facilities without prior notice and at any time they wish.
Houthis Take responsibility For Drone Attack On Saudi Pipeline
DUBAI, United Arab Emirates (AP) —
An oil pipeline that runs across Saudi Arabia was hit by drones Tuesday west of its capital of Riyadh, the Saudi energy minister said, shortly after rebels in Yemen claimed they carried out coordinated drone strikes against the kingdom.
The attacks followed reports of sabotage against oil tankers in the Persian Gulf off the coast of the United Arab Emirates on Sunday, with tensions rising between the U.S. and Iran.
Oil prices rose Tuesday, with benchmark Brent crude trading over $71 a barrel, up more than $1 on the day.
Saudi Energy Minister Khalid al-Falih Al-Falih vowed that production and export of Saudi oil would not be interrupted. In a statement carried by the state-run Saudi Press Agency, he called the pipeline attack "cowardly," saying that recent acts of sabotage against the kingdom's vital installations were targeting not only Saudi Arabia, but also the safety of the world's energy supply and global economy.
Yemen's Houthi rebels said they launched seven drones against vital installations in Saudi Arabia, which borders Yemen to the north. Saudi Arabia has been at war with the Houthis and their allies in Yemen since March 2015, targeting the Iranian-allied rebels with near daily airstrikes.
"This is a message to Saudi Arabia: Stop your aggression," Houthi spokesman Mohammed Abdel-Salam told The Associated Press. "Our goal is to respond to the crimes they are committing everyday against the Yemeni people."
The two oil pumping stations targeted in Saudi Arabia are over 800 kilometers (500 miles) from Yemen's northern border with the kingdom. It wasn't immediately known where the Houthis launched the drones.
The attacks demonstrated the increased risks in a region vital to global energy supplies amid heightened tensions following the Trump administration's withdrawal from the 2015 nuclear deal between Iran and world powers, and the subsequent reimposition of U.S. sanctions to cripple the Iranian economy. Iran has since said it would begin enriching uranium at higher levels by July 7 if world powers failed to negotiate new terms for the deal.
Al-Falih said the drone attacks reaffirm the need of the international community to confront the activities of groups like the Houthis, whom he accused of being backed by Iran, Saudi Arabia's regional rival.
He said the drones had targeted petroleum pumping stations supplying a pipeline running from its oil-rich Eastern Province to the Yanbu Port on the Red Sea.
Saudi Aramco, the government-controlled oil company, said that as a precaution, it temporarily shut down the East-West Pipeline and contained the fire, which caused minor damage to one pumping station. It added that Saudi Aramco's oil and gas supplies have not been affected by the attack.
Saudi Arabia said the two petroleum pumping stations that were struck by drones are located in the greater region of Riyadh, home to the landlocked capital. The stations, targeted around the same time early Tuesday, are located in al-Duadmi and Afif, about 200 kilometers (125 miles) west of Riyadh city and 400 kilometers (250 miles) west of Riyadh city, respectively.
Saudi Arabia built its pipeline in the 1980s amid fears that the Iran-Iraq war would cut off shipping traffic through the Strait of Hormuz. The 1,200-kilometer (746-mile) pipeline is actually two pipes that have a total capacity of 4.8 million barrels of crude oil a day, according to the U.S. Energy Information Administration.
The four oil tankers that were targeted Sunday off the coast of the UAE's port of Fujairah were allegedly damaged in what Gulf officials described as sabotage, although satellite images obtained Tuesday by the AP showed no visible damage to the vessels.
The MT Andrea Victory, one of the alleged targets, sustained a hole in its hull just above its waterline from "an unknown object," its owner Thome Ship Management said in a statement. Images Monday of the Norwegian-flagged Andrea Victory, which the company said was "not in any danger of sinking," showed damage similar to what the firm described.
Details of the alleged sabotage to two Saudi, one Norwegian and one Emirati oil tanker remain unclear, and Gulf officials have refused to say who they suspected was responsible.
Satellite images provided to the AP by Colorado-based Maxar Technologies showed a boom surrounding the Emirati oil tanker A. Michel, indicating the possibility of an oil leak. The other three showed no visible damage from above.
A U.S. official in Washington, without offering any evidence, told the AP that a U.S. military team's initial assessment indicated Iran or Iranian allies used explosives to blow holes in the ships. The official was not authorized to discuss the investigation and thus spoke on condition of anonymity.
The U.S. has recently warned ships that "Iran or its proxies" could be targeting maritime traffic in the region. Washington has deployed an aircraft carrier, the USS Abraham Lincoln, and B-52 bombers to the Persian Gulf to counter alleged, still-unspecified threats from Tehran.
Speaking in New Delhi, Iran's Foreign Minister Mohammad Javad said he spoke with Indian officials about concerns of "suspicious activities and sabotage in the region."
"We announced that we had previously predicted these sorts of activities aimed at escalating tension in the region," he said.
United Nations deputy spokesman Farhan Haq called on "all concerned parties to exercise restraint for the sake of regional peace, including by ensuring maritime security."
On Tuesday, Spain temporarily pulled one of its frigates that was part of a U.S.-led combat fleet from near the Persian Gulf because of the mounting tensions. The Ministry of Defense said the Méndez Núñez, with 215 sailors aboard, will not cross the Strait of Hormuz into the Gulf with the USS Abraham Lincoln. The Spanish frigate was the only non-U.S. vessel in the fleet.
The drone strikes on Saudi oil facilities reflect how the Houthis have expanded their capabilities during the four-year war. The rebels have targeted Riyadh with missiles and used drones to disrupt air traffic at Saudi airports near the Yemen border.
The Houthis also have flown into the radar arrays of Saudi Arabia's Patriot missile batteries, according to the research group Conflict Armament Research, disabling them and allowing the rebels to fire ballistic missiles into the kingdom unchallenged.
Iran has been accused by the U.S. and the U.N. of supplying ballistic missile technology and arms to the Houthis, which Tehran denies.
Such drones remain difficult to shoot down with either light or heavy weapons. Iraqi forces learned this from driving out the Islamic State group from northern Iraq, where the extremists would load drones with grenades or simple explosives to target their forces.
The U.S. supports Saudi Arabia and its allies in the war against the Houthis, despite criticism that Saudi-led coalition airstrikes have killed civilians.
Report Links Vast Online Disinformation Campaign To Iran
LONDON (AP) —
When an attractive young Middle Eastern woman contacted Saudi dissident Ali AlAhmed over Twitter last November, he was immediately suspicious.
The Associated Press was on the verge of publishing a story about how AlAhmed, who is based in the Washington area, had been targeted by hackers posing as a female journalist. Now, just two days before the article was set to go live, another young woman had sidled up to him over the internet, trying to entice him to read an article and share it online.
"They will never stop," AlAhmed wrote in a Nov. 6 message to the AP. "They think a hot girl can lure me."
The AP flagged the exchange to Canadian internet watchdog Citizen Lab, which was already helping AlAhmed deal with the hackers. Citizen Lab quickly determined that the Twitter account, purportedly belonging to an Egyptian writer named Mona A.Rahman , was part of a separate operation. In fact, she wasn't even trying to hack AlAhmed — she was trying to enlist him in an ambitious global disinformation effort linked to Tehran.
In a report published Tuesday, Citizen Lab said A.Rahman was but a small piece of a years-old, multilingual campaign aimed at seeding anti-Saudi, anti-Israel and anti-American stories across the internet. Citizen Lab, which is based at the University of Toronto's Munk School, said it believes "with moderate confidence" that the operation is aligned with Iran. The campaign is another indication of how online disinformation is being tested by countries well beyond Russia, whose interference into the 2016 U.S. presidential election was laid out in vivid detail in special prosecutor Robert Mueller's report .
"What this shows is that more and more parties are entering the disinformation game," said John Scott-Railton, a Citizen Lab researcher, "and they're constantly learning."
In London, Iranian Embassy press secretary Mohammad Mohammadi denied that his government had anything to do with digital disinformation, saying that Iran was "the biggest victim" of such campaigns and had called for international regulations to curb them. He referred further questions to the Iran's Communications Ministry, whose deputy minister did not immediately return a message Tuesday.
Scott-Railton and his colleagues ended up identifying 135 fake articles that were published as part of the campaign, which they dubbed "Endless Mayfly" because, like the short-lived insect, the bogus stories tended to disappear soon after they began to spread.
The article A.Rahman was trying to get AlAhmed to share — a claim that Israel's then-defense minister, Avigdor Lieberman, had been fired for being a Russian spy — was typical: The article had startling news, it was hosted on a fake version of a Harvard University website and had a host of spelling and grammatical mistakes. Articles shared by other fake personas followed a similar pattern. They made inflammatory claims about Israel, Saudi Arabia and the United States presented on lookalike versions of respected news sites.
"Ivanka Trump says its unbelievable that women cannot drive in saudi arabia," said one article posted to a site dressed up to look Foreign Policy magazine. "Saudi Arabia funds the US Mexico border Wall," said another, hosted on a site imitating The Atlantic.
The campaign seems to have been largely ineffectual — Scott-Railton noted that "most of their stories got almost no organic buzz" — but a couple did break through.
In March 2017 a fake Belgian newspaper article claiming that then-French presidential candidate Emmanuel Macron's campaign was being one-third funded by Saudi money was widely shared in French ultra-nationalist circles, including by Marion Marechal, the granddaughter of French far-right leader Jean-Marie Le Pen. A few months later another site mimicking a Swiss publication tricked the Reuters news agency and other outlets into publishing a false report that Saudi Arabia had written a letter to FIFA, soccer's governing body, demanding that archrival Qatar be barred from hosting the 2012 World Cup. The report was later withdrawn .
Citizen Lab said it first got wind of the suspected Iranian disinformation campaign when a British web developer debunked one of the fake articles on Reddit two years ago. The developer pointed out that the story — which suggested that British Prime Minister Theresa May was "dancing to the tune" of Saudi Arabia — had been published on a website using the URL "indepnedent," imitating the legitimate British news site, The Independent, and was linked to a network of other suspicious sites, including "bloomberq," a clone of the news agency Bloomberg. A third site, "daylisabah," was a fake version of the Turkish publication Daily Sabah.
"Did we just get an insight into a fake news operation?" the developer asked at the time.
Citizen Lab confirmed his hunch, later connecting the sites to an incident in which another Twitter user, Bina Melamed, tried to persuade Israeli journalists to share the same fake Harvard article that AlAhmed received.
When one of the reporters privately confronted Melamed about why she was pushing nonsense, the answer was unusually straightforward.
"I like challenging and controversial stories," Melamed said. "Sometimes they are fake and sometimes they are not."
Outside experts who reviewed Citizen Lab's report gave a qualified verdict. Both FireEye and ClearSky Cyber Security, U.S. and Israeli companies respectively, said they recognized elements of the digital infrastructure flagged by Citizen Lab from their own reporting, but ClearSky researcher Ohad Zaidenberg said he wanted to see more evidence before attributing the social media personas to Iran.
Speaking generally, he said the apparent clumsiness of the online disinformation should not be a reason to dismiss it.
"It gets better each day," he said.
Most of the personas mentioned in Citizen Lab's report — such as A.Rahman and Melamed — have been suspended. Messages left with a handful of surviving accounts — sent via Twitter and Reddit — elicited no response. Emails sent to half a dozen addresses used to register several bogus websites — including bloomberq, daylisabah, foriegnpolicy, theatlatnic and indepnedent — either weren't returned or bounced back as undeliverable.
AlAhmed said he was intrigued to hear that A.Rahman had been tied to the Iranian government. Despite knowing from the start that the whole thing was a charade, AlAhmed struck a wistful note in a recent interview about his interactions with the attractive-looking A.Rahman. At one point, she had written to him inviting him to stay at an apartment she claimed to have in London.
"A small part of me thought, 'I hope this is real,'" AlAhmed said.
He quickly made clear that he was kidding.
"I told my wife," he said.
Iran Mulling 'Drills' To Deal With Any 'Threat' To Internet From U.S.
Iran is concerned about the U.S. cutting off internet connection to the country and is mulling "drills" to make sure its banking and other vital services could work in such an environment
A "task force" has been set up to "combat U.S. cyber threats," Iran's Minister of Communication and Information Technology said on Monday, May 13.
"To neutralize those threats, we have set up a task force in the National Center of Virtual Space since a year ago, which has studied various scenarios, threats and sanctions, and the necessary approaches have been adopted," Mohammad Javad Azari Jahromi maintained, without mentioning the nature of cyber threats posed the United States.
But the discourse about possible internet threats in the past, reveal that Iran is concerned about losing its cyber connection with the outside world and how it can impact its internal digital communications.
Meanwhile, without any elaboration, Azari Jahromi asserted that the necessary plans have been devised to address a possible need to disconnect the internet, saying his ministry's initiatives to combat the U.S. sanctions will be soon publicized.
On January 27, it was announced that Iran would perform an "internet disconnection exercise," but, a day later, Azari Jahromi said that the drill had been canceled.
Earlier, in October 2018, the head of Iran's Passive Defense Organization, the Islamic Revolution Guards Corps Brigadier General Gholam Reza Jalali had also maintained that necessary arrangements were made to counter the U.S. hostile strategies and its potential move to block Iran's access to the Internet.
One point of concern for Iran is its internal banking operations, which completely depend on the internet. What would happen if it loses connection to the world-wide web? How that would impact its banking operations?
Jahromi’s allusions to “threats” and “drills” to disconnect the internet partly are meant to address this issue. Has Iran set up the necessary infrastructure to survive without being connected to the internet? Have they set up a viable intranet to maintain vital banking and other operations?
However, none of the promises to conduct internet disconnection drills have materialized so far.
However, the head of Iran information technology organization, Amir Nazemi claimed last November that none of the scenarios studied point to an imminent threat of Iran being denied internet connection with the outside world.
Nazemi referred to threats to “Iranian sites on foreign data centers," and possible denial for “Iranian users to access services rendered by different foreign sites and apps" as one of the scenarios the Islamic Republic should expect under U.S. sanctions or retaliatory moves.
Now that the sanctions are implemented, none of these speculations have materialized, so far.
While, admitting that U.S. sanctions have put pressures on Iranian online businesses, Azari Jahromi said on Monday, "The bulk of U.S. sanctions on Iran's cyber sector have been imposed over the past year, but the country's cyberspace has not been disturbed although all international cloud computing providers have ceased providing Internet service to Iranian companies."
The Islamic Republic government has been attempting for years to establish a local internet, separate from the global web system. In August 2016, Iran launched the first phase of its so-called "national data network" after a gap of eleven years.
In the meantime, many analysts believe that a local internet will have "low quality," and it will also tighten government control over Iranian internet users.
Parliament Passes Bill Granting Citizenship To Children With Iranian Mothers
The Iranian Parliament has passed the general outlines of a bill authorizing the government to grant citizenship to children born to Iranian mothers and foreign fathers.
The bill was ratified on May 12 by 188 votes in favor, 20 votes against, and three abstentions out of 226 legislators present in the public session.
If the details of the bill are included in the next session of the parliament and endorsed by the Guardian Council (GC), children born to Iranian mothers can apply for citizenship at age 18 and before then the application should be submitted by the mother.
Based on Article 976 of the Iranian Civil Code, children of "mixed marriages" are currently eligible for citizenship if their father is Iranian.
If the law passed by the parliament and endorsed by GC, tens of thousands of children will gain access to social and healthcare services.
The May 12 session was attended by Deputy President for Legal Affairs Laya Joneydi and Deputy President for Women and Family Affairs Masoumeh Ebtekar.
Several MPs, along with Joneydi, defended the bill, while a number of others such as Tehran's reformist MP Mostafa Kavakebian and hard-line conservative legislators Farhad Tajjari of Kermanshah and Nader Qazipour of Urmia argued against it.
Civil activists in Iran have been campaigning for more than a decade for an amendment to Article 976 granting citizenship to children born to Iranian mothers.
The parliament rejected a similar bill in 2015.
Referring to renowned mathematician Maryam Mirzakhani, Iranian Vice President Eshaq Jahangiri announced in April that the government had delivered a new bill to the parliament calling for an amendment to Article 976.
Mirzakhani was an Iranian mathematician and a professor of mathematics at Stanford University. In 2014, she received the Fields Medal, the most prestigious award in mathematics. According to The Guardian, she became both the first and to date the only woman and the first Iranian to be honored with the award.
Married to Jan Vondrák, a Czech theoretical computer scientist and applied mathematician who is an associate professor at Stanford University, Mirzakhani died in 2017 of breast cancer at the age of 40. She had repeatedly sought Iranian citizenship for her daughter but never succeeded.
Nevertheless, the MPs against the bill repeated the old argument rejecting the idea.
"While we have so many unemployed educated youth in our country, why should we bring in unidentified youth from abroad?" said hard-line MP Nader Qazipour.
While describing his opposition as "conditional," another hard-line conservative, senior MP Farhad Tajjari, said, "It is irrational to demand the Islamic Revolutionary Guards Corps (IRGC) and intelligence organizations identify more than 1 million individuals and endorse their qualifications."
Echoing Tajjari’s concerns, Kavakebian said, "Granting citizenship without planning ahead might pour nearly 50 million immigrants into Iran within the next two decades."
In response, Joneydi insisted that intelligence matters had nothing to do with granting citizenship since the government was paving the way to grant citizenship to children born to Iranian mothers.
Referring to the large number of children who are born to Iranian mothers in Iran but are not recognized as Iranian, Joneydi asserted, "These youngsters deeply suffer from discrimination and confront numerous hurdles in their education."
The precise number of children born to Iranian mothers and foreign fathers is not known, but a member of the parliament's Commission for Cultural Affairs, Tayyebeh Siavoshi, has estimated that 1 million children are living in Iran without identity cards.
Social media users circulated the hashtag #MyMomIsIranian, saying I am also Iranian in support of the amendment of Article 976.
The bill is considered a significant breakthrough in protecting women's rights, the government's official news agency, IRNA, reported on May 12.
Europe Should Pay For Afghan Refugees In Iran 'If They Support The U.S.'
Iranian Deputy Foreign Minister Abbas Araqchi (Araghchi) said on May 11 that Iran does not intend to deport Afghan refugees but that those who have “caused problems for the Afghan people” should “bear responsibility.”
Explicitly warning European countries, he reiterated, "The issue is that those who have caused problems for Afghans should fulfill their responsibility. Our audience is not Afghanistan and Afghans. Our audiences are Westerners and Europeans. They should fulfill their responsibility toward Afghanistan and help them solve their problems," Araqchi said in an interview aired by the monopolized state-run TV.
"We have no problem with the presence of Afghan refugees in Iran. However, it cannot happen that Westerners impose sanctions and economic pressure on us and forget their own responsibilities in this respect," he said.
Despite Araqchi's claims, the great majority of Afghans play an important role in Iran's economy, sometimes taking difficult jobs that Iranians shy away from. Iran has also conducted refugee expulsion back to Afghanistan.
Earlier on May 10, in an interview with official news agency IRNA, Araqchi had said that Western countries have caused many problems for the Afghan people and should fulfill their duties in helping Afghan refugees.
"European governments should pay their share for hosting refugees, be it through helping them financially or granting them asylum,” he said.
In another interview with the local Channel 2 on May 8, he had explicitly announced that Iran may order Afghan refugees to leave the country.
Two days later, he was forced to downplay his remarks in another interview with IRNA.
"The issue of the expulsion or return of Afghan refugees is not at all on the agenda of the government of Iran, but considering new options is a separate matter," IRNA cited him as saying.
"More than 3 million Afghans are living in Iran, with 2 million having been employed," Araqchi told IRNA, maintaining, "Afghan refugees cost Iran 3 billion to 5 billion euros (approximately $3.37 billion to $5.61 billion) every year."
He also claimed, "About 468,000 Afghan students are being educated in Iran’s government schools, and each student costs us 600 euros a year."
Referring to U.S. sanctions on Iran, Araqchi said that the issue of Afghan refugees living in Iran and the related costs has existed for many years, but under the present circumstances with "cruel and illegal" sanctions imposed on Iran and the U.S. government trying to curtail the financial resources of Iran, the demands on the Iranian nation are gaining "new dimensions."
Furthermore, he said that since Europeans are responsible for many of the Afghans' problems, they should either bear their share of costs for Afghan refugees living in Iran or accept them in their countries.
Araqchi's comments triggered a barrage of criticism on social media and from local news outlets.
Veteran legislator and member of the Commission for National Security and Foreign Policy of the Iranian Parliament Alauddin Boroujerdi endorsed Araqchi's remarks as "true" but criticized the way they had been “presented and circulated.”
Boroujerdi said that, in a telephone conversation with members of the commission, Araqchi had expanded on his controversial comments.
"Instead of bearing the costs [of Afghan refugees living in Iran], Europe is supporting the sanctions," Boroujerdi quoted Araqchi as saying. "The Europeans' position on Iran hosting refugees and combating the flow of narcotics to Europe is absolutely unacceptable."
Moreover, Boroujerdi complained that while Europe pays 6 billion euros (roughly $6.8 billion) a year to Turkey for hosting Syrian refugees, it has not paid “a penny” for Afghan refugees living in Iran.
Araqchi's comments sparked considerable reactions in Afghanistan. The spokesman of the Afghan Foreign Ministry, Sebghat Ahmadi, told RFE/RL’s Afghan Service that “the questions of Afghan refugees and Washington’s sanctions are two separate issues, and based on international conventions, the issue of refugees should not be mixed with political motivations."
Afghan political analyst Ahmad Saeedi told Tolo News website, "Iran wants to tell the European Union that if you do not want to take practical steps against the U.S. sanctions on Iran, we are compelled to open a flood of refugees and drugs to Europe."
Islamabad May Halt Iran-Pakistan Gas Pipeline Project Due To U.S. Sanctions
Pakistan has informed Iran of its inability to abide by the agreement to build a gas pipeline planned to carry Iran’s natural gas to Pakistan and India, due to U.S. sanctions, Pakistan’s leading English language Dawn newspaper reported last week.
Construction work on the Pakistani part of the pipeline was inaugurated in March 2013 and was planned to be completed within 22 months. But the work could not get underway after six years.
Another leading Pakistani English language newspaper The News International, quoting Arab News, reported that Pakistan has informed Iran on Friday that it cannot execute the project as long as Tehran remains under the U.S. sanctions regime.
Quoting Managing Director of Pakistan’s Inter State Gas, Mobin Saulat, the report states that “it is impossible to execute the IP (Iran-Pakistan) gas pipeline project because of U.S. sanctions on Iran and we have conveyed it to them (Iran) in writing recently.”
In February this year, Tehran formally issued a notice to Islamabad warning of going to an arbitration court if Pakistan failed to lay down the pipeline as mentioned in the bilateral agreement.
Nevertheless, according to pro-government Daily Pakistan, Pakistan's Prime Minister Imran Khan has sent letters to the leaders of EU and the United States asking for their final views about the pipeline and Pakistan's plans to buy natural gas from Iran.
Pakistan officially had declared its inability to complete the project in a letter to Iran on Friday, May 10. However, the Pakistani Prime Minister told Western powers in his letter on Sunday that "Pakistan is committed to executing the project, but only if international sanctions on Iran are lifted," reported ARY News on Sunday.
The idea of the Iran-Pakistan pipeline, also called the Piece Pipeline, started in 1995 and India also agreed in 1999 to join the project. Eventually, the project which started between Pakistan and Iran under President Mahmoud Ahmadinejad in 2009 was frozen in 2013 due to the imposition of international sanctions against Iran. It was revived again in 2017 after the U.S. lifted most of its sanctions following the 2015 nuclear agreement.
Based on the initial contract, Pakistan should have purchased 21.5 million cubic meters of LNG per day from Iran since 2015. But the pipeline has not been laid yet on the Pakistani side although Iran has completed its part. Under the gas pipeline deal each party had to lay down the pipeline on its territory.
Iran has complained repeatedly that Pakistan should have paid $200 million per month for its failure in taking delivery of natural gas from Iran.
According to ARY News on Sunday, Pakistan replied to Iran’s legal notice over the delay in the completion of the pipeline, telling Tehran that there were obstacles in execution of the project, as Tehran is under U.S. sanctions. However, Imran Khan has reportedly directed Pakistani authorities to tackle the gas line project issue with Iran "in a conciliatory manner."
Iran’s Largest Dailies Cut Back On Pages Due To Paper Scarcity
Two of Iran’s largest-circulation dailies have cut back on pages due to paper scarcity, amid U.S. sanctions and economic crisis.
Amid a "paper crisis," state-run dailies Iran and Hamshahri have reduced by eight pages, saying their newspapers will be published with only 16 pages until further notice.
Hamshahri (Fellow Citizen), founded in 1992 and published by the municipality of Tehran, is the first color daily newspaper in Iran and used to have over 60 pages of classifieds. The journal is distributed within the limits of Tehran municipality. Reportedly, Hamshari's circulation in Tehran is nearly 180,000.
In the Iranian new year (which began March 21) paper has gone from being expensive and scarce to "nonexistent," Hamshahri announced on its Twitter account.
Meanwhile, Iran's editor-in-chief, Javad Delbari, revealed another aspect of the paper scarcity in a tweet, admitting that Iranian dailies will be out of paper within one or two days.
Daily Iran was launched in 1995 and is owned by the government's official news agency (IRNA) and sells 110,000 copies a day.
"Paper scarcity is so tight that many dailies have lost two-thirds of their circulation in the last two months," Delbari said.
Other reports also confirm that the price of paper has skyrocketed to the extent that not only newsprint paper but all different types have practically become nonexistent.
The price of paper in the past year has increased up to 340 percent, while it is a commodity bought and imported by governmental subsidies. While Iran's currency has sunk to as low as 155,000 rials to the dollar on the open market, the government provides much cheaper foreign currency for essential imports, at 42,000 rials to the dollar.
The Iranian authorities have repeatedly reported paper merchants violating the law and caching imported paper for more profit.
Tehran police chief and Islamic Revolutionary Guards Corps (IRGC) Brigadier General Hossein Rahimi recently said a wholesaler dubbed the "Sultan of Paper" had been arrested.
"The Sultan of Paper, along with 16 others, has imported 30,000 tons of paper with subsidized currencies, but sold it in the open market," Rahimi said. "The detainee is accused of pocketing 17 trillion rials (about $110 million based on open market rate)."
Based on local news reports, more than 90 percent of the Iranian publishing industry’s paper is imported.
Apparently, the current paper crisis in Iran is not unprecedented. Culture and Islamic Guidance Minister Abbas Salehi said on April 4 that the country has just enough newsprint paper in storage to meet two months worth of demand. In response to the shortage, some newspapers have been forced to cease publishing, while others, including the popular reformist newspaper Shargh, have put up a paywall.
Mahmoud Sadri, a veteran journalist, sees the paper crisis as just the latest manifestation of "Iran's economic inefficiency." Speaking to Bourse & Bazaar, Sadri explained, "We have no phenomenon called a paper crisis as a separate and standalone phenomenon. It's not accurate to just say paper is in crisis since many goods are in crisis."
The volume and price of paper imported to Iran in 2018 almost doubled compared with the previous year, more than 800 million tons and $700 million, respectively.
Iran Says Financial Reforms Not Required For Trade With Europe
An Iranian trade official has insisted that complying with international financial transparency rules has nothing to do with Europe’s efforts to facilitate trade with Iran.
The UK, Germany and France have established the Instrument for Trade and Exchanges (INSTEX) in a bid to satisfy Iran’s demands for trade despite U.S. sanctions. Iran in turn has set up a matching channel called Special Trade and Finance Instrument (STFI). But for nearly two years Iranian hardliners have prevented legislation demanded by the international watchdog FATF to make the country’s financial system transparent and guard against money laundering and financing of terrorism.
On May 10, the German foreign ministry spokesman Maria Adehbar commented that Europe’s efforts to facilitate trade depend on Iran complying with international financial standards. But the Iranian official in charge of STFI says implementation of the European trade channel has nothing to do with the ratification of the Financial Action Task Force (FATF) legislation by Iran.
"Iran has established the coordinating company with INSTEX, and now the ball is in Europe's court to make it operational," said Ali Asghar Nouri.
"Before the U.S. withdrawal from Joint Comprehensive Plan of Action (JCPOA or Tehran's nuclear deal with world powers), European banks used to work with Iran. So, there should not be any specific issue for them to do as before," Nouri said, adding, "INSTEX minimizes banking relations between the two sides to the least degree and such issues are of the least importance for this mechanism", Asghar Nouri said.
However, while the bills related to FATF have not yet been approved by Iran, Nouri claimed, "The related regulations to combat money laundering are approved and being implemented in Iran's banking system, now."
Insisting on the complexity of INSTEX, as a system that should be able to deal with U.S. sanctions, Ali Asghar Nouri marked that Iran had given about a year to Europeans to implement the mechanism, which seems an adequate length of time, and now expects them to implement the arrangement.
It has been apparent for months that Iranian foot-dragging in adopting full financial reforms would impede European efforts to help limited trade with Iran. A tug of war between the two sides has been going on quietly, with Iran saying Europe’s INSTEX should kick-in first and Europe moving at a leisurely pace, partly because Iran has failed to approve the required legislation.
Meanwhile, the U.S. Secretary of State Mike Pompeo has affirmed that as long as INSTEX is limited to "humanitarian deals," it would not be targeted by Washington sanctions imposed on the Islamic Republic.
The U.S. Representative to the EU, Gordon Sondland, also reiterated on April 11, that the era of the U.S.-Europe dispute over the Joint Comprehensive Plan of Action (JCPOA) or Tehran's nuclear deal with world powers is over.
"The SPVs (INSTEX) are Europe's attempt to appease Iran by showing that they are still trying their very best to facilitate proper transfers of payments to Iran. We believe that those SPVs are really nothing more than, and I've said it before, a paper tiger," said Sondland.
The Islamic Republic's Supreme Leader, Ayatollah Ali Khamenei has repeatedly called INSTEX a "meaningless" measure and "a bitter joke," adding that "Europeans should have stood up to the U.S. after it left the JCPOA and should have lifted all sanctions against Iran."
Iran Says U.S. Violating Prior Treaties By Sanctioning Metals Industry
In a statement on Thursday, May 9, the Islamic Republic strongly condemned the latest U.S. sanctions targeting Iran's industrial metals sector.
Iran's Foreign Ministry spokesman, Abbas Mousavi, said Washington's decision to impose sanctions on the Islamic Republic's industrial metals violates the U.S. international commitments and makes the "regime" internationally accountable.
"These sanctions, like other unilateral U.S. sanctions, are in contravention of the basic principles and rules of international relations, and specifically in contravention of the international commitments under the UN Charter, the Algeria Declaration, the Treaty of Amity, and the International Court of Justice's ruling," the spokesman added.
By "Treaty of Amity" Mousavi was referring to a friendship agreement signed by Tehran and Washington in 1955 during the reign of the last Shah of Iran, Mohammad Reza Pahlavi. The treaty emphasizes friendly relations while encouraging mutual trade and investments.
One of the most important ideological tenants of the overthrow of the Shah was to reduce ties with the U.S., which became a reality by the 444 days of keeping American diplomats hostage in Tehran in 1979-1980.
Moreover, Secretary of State Mike Pompeo said on October 3, 2018, that the United States was terminating the Treaty of Amity reached with Iran in pre-Islamic Revolution days, calling it an "absolute absurdity" given the tensions between the two countries.
Following Mr. Pompeo's announcement, the Islamic Republic's Foreign Minister Mohammad Javad Zarif immediately branded the United States in a tweet as an "outlaw regime."
In legal terms, the United States withdrawal means that the termination of the 1955 treaty will come into effect a year after Mr. Pompeo's announcement, i.e., October 3, 2019.
Algeria Declaration mentioned by Mr. Mousavi is also a set of agreements between Tehran and Washington to resolve the Iran hostage crisis, brokered by the Algerian government and signed in Algiers on January 19, 1981.
In a new executive order, signed by President Donald Trump on May 8, he authorized sanctions on Iranian iron, steel, aluminum, and copper sectors, which the White House said comprise 10% of the Islamic Republic's export economy. The new sanctions could also target financial institutions or foreign countries that facilitate Iran's export of those industrial metals.
Even before the imposition of direct sanction on Iranian metals, the country's steel industry was badly hit by the earlier banking sanctions.
Condemning the new sanctions, Mousavi said in the statement, "The onus is on the U.S. regime to compensate for the damages caused by the fresh sanctions on Iran's metal industry."
Based on the annual report of the Industrial Development and Renovation Organization of Iran (IDRO), Tehran has exported nearly $3.9 billion of iron and its alloys in the last Iranian calendar year (ended March 20, 2019), while it also exported almost $700 million of copper, as well as more than $840 million iron ore.
Fourteen percent of Iran's non-oil exports are industrial metals, IDRO says.
The Guards Celebrate Forty: Aging But Agile
On May 5, 1979, Iran’s new government founded the Islamic Revolutionary Guard Corps (IRGC). Almost from the beginning, the IRGC had a built-in malleability—one enshrined in Iran’s constitution. Pursuant to Article 150, the IRGC is “to be maintained so that it may continue in its role of guarding the revolution and its achievements. The scope of the duties of this corps… [is] to be determined by law with emphasis on brotherly cooperation and harmony.” Thus the IRGC was birthed with vagueness and versatility. Forty years later, this structural adaptability has resulted in a mixed record for the organization:
The IRGC is aging but still agile
The top brass of the IRGC is graying. They are all of the same military generation. Its three longest-serving commanders-in-chief—Mohsen Rezaee, Yahya Rahim Safavi, and Mohammad Ali Jafari—were all born in the 1950s. Its new leader, Hossein Salami, was born in 1960. They are all veterans of the Iran-Iraq War—a crucible which birthed the IRGC’s strategy, strength, and stratum within Tehran’s power hierarchy. And many have held almost decades-long tenures in their current roles—the commander of the Quds Force Qassem Soleimani has been in place since 1998; the head of the Aerospace Force, Amir Ali-Hajizadeh, has held his post since 2009; and ditto for both Mohammad Pakpour, who manages the Ground Force, and Hossein Taeb, the director of the IRGC’s fearsome Intelligence Organization.
But nevertheless, the IRGC has managed to adapt itself to the changing environment in the Middle East, leading Iran's efforts to counter Washington's pressures. The Guards' crown jewel – the Quds Force, led by Qassem Soleimani – has evolved from a secret and lucrative elite force in the 1980's and 1990's, into an Iranian "command" and headquarters for Iranian and Shia forces operating throughout the region. Responsible for dozens of terror attacks in the region and beyond, Soleimani's organization has overshadowed its parent organization. Other less "prestigious" organs in the IRGC network have grown to become masters evading sanctions, financing Iran's nuclear program, and projecting Iran’s military might.
The IRGC is career-making but also career-ending
It is an Ivy League brand in the Islamic Republic, and has launched the careers of politicians, senior policymakers, and businessmen. Mohsen Rezaee, the longest serving chief of the IRGC (1981-1997), leveraged his wartime experience to run for parliament and presidency. Mohammad Bagher Qalibaf, who headed the IRGC’s air force, went on to become mayor of Tehran and another presidential contender. Mahmoud Ahmadinejad himself, who joined the IRGC in 1986, served two terms as president. Additionally, according to one study, the amount of ex-IRGC legislators in Iran’s parliament “doubled” from 2000-2008.
The Guards have also filled the Islamic Republic’s cabinets, past and present: Ali Shamkhani, Hossein Dehghan, Ahmad Vahidi, and Rostam Ghasemi all managed divisions of the IRGC, before their appointments as ministers of defense and oil, respectively. Many senior commanders of the IRGC have also monetized their experience. Mohsen Rafighdoost, the first minister of the IRGC in the nascent years of the Islamic Republic, when it held its own cabinet ministry, was later appointed as head of the Bonyad Mostazafan, one of the largest charitable foundations in Iran, eventually making him as one of Iran's wealthiest men.
At the same time, service in the IRGC has not proved to be decisive electorally. Rezaee’s career stagnated after running for the presidency three times since 2005 – only to eventually stay in his current post of secretary of the Expediency Council for over 20 years. Likewise for Qalibaf, whose meteoric rise from the head of the IRGC’s air force, to the head of Iran’s national police, and finally to mayor of Tehran for over a decade has been thwarted by multiple unsuccessful presidential campaigns. In fact, to date, only one of Iran’s presidents has served within the IRGC’s rank and file—Mahmoud Ahmadinejad—as has only one of Iran’s speakers of parliament, Ali Larijani. In the end, the IRGC pedigree has advanced the lives of Iran’s appointed power players, but hasn’t had the same effect on the polls at the presidential level.
The IRGC is an economic balm but also a bugbear
The IRGC has been one of Iran's main economic engines for decades, controlling important sectors such as construction, infrastructure, and energy. Notably, Khatam al-Anbiya, one of the Guards' major affiliates, is employing tens of thousands of Iranians in huge projects worth billions of dollars. The company's former commander General Abdollahi remarked in 2018 that his organization would complete 40 "mega projects" in various fields by March 2019. The IRGC is also an important tool by the regime to implement its "Resistance Economy" doctrine – aimed at increasing self-reliance of the Iranian economy and decreasing its vulnerability to external pressures. Only recently did Khatam al-Anbiya enter oil-related projects in order to fill the void caused by the withdrawal of foreign companies.
Yet the Guards' influence on the economy has also been a major problem for Iran. Its close relationships with many companies expose them to international sanctions, especially after the IRGC was designated by the U.S. government as a Foreign Terrorist Organization. In addition the IRGC is perceived to be a main impediment to implementing anti-money laundering and terrorist financing norms in the country. By hindering the chances of any successful reform in this field, the IRGC has so far prevented Iran from joining the Financial Action Task Force, thus deterring international companies from doing business with Tehran. The IRGC's hold on the economy has also caused continuous rifts between the IRGC and President Rouhani, who has repeatedly called on the IRGC to distance itself from Iran's budgeting and economics, and solely retain its position as a military organization.
Looking in retrospect, the IRGC has fulfilled its number one goal – guarding the Islamic Republic for over four decades, and exporting its revolution to Lebanon, Iraq, Syria, Yemen, and beyond. Yet the challenges that Iran is facing put a big question mark on the IRGC being able to celebrate another successful decade.
The opinions expressed are those of the authors and do not necessarily reflect the views of Radio Farda