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U.S. Reclassifies Iran Metals Sanctions Under Human Rights

File photo - Steel and metals factory in Isfahan. Photo shows production of rails in the factory.
File photo - Steel and metals factory in Isfahan. Photo shows production of rails in the factory.

The United States has amended its Iran sanctions regulation, linking iron, steel, copper and aluminum sanctions to Tehran’s abuse of human rights.

President Donald Trump on May 8, 2019 issued new sanctions on Iran’s iron, steel, aluminum and copper sectors. In his Executive Order 13871 the president said: " It remains the policy of the United States to deny Iran all paths to both a nuclear weapon and intercontinental ballistic missiles, and to counter the totality of Iran's malign influence in the Middle East."

Now, a statement issued by the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) on Wednesday August 1 says the office has changed the heading of the Iranian Human Rights Abuses Sanctions Regulations to Iranian Sector and Human Rights Abuses Sanctions Regulations and has also amended the renamed regulations to implement

Executive Order 13871 of May 8, 2019 which imposed “Sanctions With Respect to the Iron, Steel, Aluminum and Copper Sectors of Iran."

However, the statement did not further elaborate on the link between human rights violation and the metal sector in Iran. The practical impact of this change is also not explained. One possible reason could be that Iran’s human rights sanctions might last much longer than anything related to its nuclear or missile programs.

While a deal might be made on the nuclear or missile issues resulting in suspension of related sanctions, Iran’s human rights record will not change under the Islamic republic and therefore, sanctions on the metals sector will last longer.

The amendment was made however at a time Iranian when news agencies have been boasting about the "continuation of the export of Iranian steel," and the two-fold rise in the country's steel export.

OFAC issued the Iranian Financial Sanctions Regulations On August 16, 2010, and the Iranian Human Rights Abuses Sanctions Regulations on February 11, 2011, which referred to an executive order that "blocked the property of certain persons with respect to serious human rights abuse by the government of Iran."

On May 8 2019, the U.S. government imposed sanctions on selling iron, steel, aluminum and copper to Iran as the metals could be used in Iran's ballistic missile development program.

A statement issued at the time by U.S. government maintained "It is also the policy of the United States to deny the Iranian government revenue, including revenue derived from the export of products from Iran's iron, steel, aluminum, and copper sectors, that may be used to provide funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion," the statement added.

Imposing the sanctions on May 8, U.S. President Donald Trump said the new sanctions targets Tehran's biggest source of income from its non-oil exports.

According to the Iranian Trade Development Organization, Iran exported $3.9 billion worth of Iron as well as $840 million Iron ore and $700 million Copper and Copper products during the past Iran year ending March 20, 2019.

Meanwhile, according to a Reuters report, Iran had exported 14 million tons of Steel last year and was expected to export up to 20 million tons in 2019, but U.S. sanctions might cut off Iran's steel export all together.

Iranian reports say last year Iran export of Steel was 18 percent more than the previous year. The country had announced extensive plans to further boost the export of its steel before the sanctions were announced.

In 2018, Iran's share of the global Steel market was around one percent.

Regardless of the sanctions on the metal sector, the price of metals in the world market dropped during the past months as a result of growing concerns about the tariff war between China and the United States which has affected global demands for metals.