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Weapons of Mass Destruction (WMD)

Pompeo Slams EU Plan to Help Companies Skirt US Sanctions on Iran

By Michael Lipin, Afshar Sigarchi September 25, 2018

U.S. Secretary of State Mike Pompeo on Tuesday criticized a European Union plan to help European companies do business with Iran as they face the prospect of U.S. sanctions that could punish them for such trade.

In a speech in New York to the U.S. advocacy group United Against a Nuclear Iran, Pompeo called the EU plan "one of the most counterproductive measures imaginable for regional global peace and security."

The plan, announced late Monday at the United Nations on the sidelines of the General Assembly, calls for the creation of a "Special Purpose Vehicle" (SPV) to enable companies in the EU to make payments for Iranian exports such as oil.

Partners to Iran nuclear deal

The announcement came in a statement by Iran and the five remaining parties to the 2015 Iran nuclear deal – EU members Britain, France and Germany, plus Russia and China.

In May, U.S. President Donald Trump withdrew from the Iran nuclear deal that his predecessor signed and started a monthslong process of reimposing U.S. sanctions that had been suspended under that agreement. Trump said he wanted to pressure Iran into giving up what he said were its nuclear weapons ambitions and other malign activities. Iran denies seeking nuclear weapons.

Speaking to reporters after the SPV announcement, EU foreign policy chief Federica Mogherini said it would give EU member states "a legal entity to facilitate legitimate financial transactions with Iran ... and allow European companies to continue to trade with Iran in accordance to European Union law, and could be open to other partners in the world."

Mogherini said the move was aimed at preserving the 2015 deal, under which Iran agreed to suspend certain nuclear activities in return for international sanctions relief.

In his Tuesday remarks, Pompeo said he was "disturbed and … deeply disappointed" by the EU plan. The Trump administration has urged the EU to abide by U.S. sanctions being reimposed on Iran and has warned that entities who trade with Iran in violation of those restrictions will face secondary U.S. sanctions.

Pompeo said he imagined that Iran's "corrupt ayatollahs and the IRGC [Islamic Revolutionary Guard Corps] were laughing this morning" when they heard about the SPV.

"By sustaining revenues to the regime, you are solidifying Iran's ranking as the No. 1 state sponsor of terror, enabling Iran's violent export of revolution and making the regime even richer, while the Iranian people scrape by," Pompeo said.

Iran has said it is a victim of terrorism rather than a perpetrator.

UNGA speech

Earlier Tuesday in a speech to the U.N. General Assembly, Trump highlighted his policy of reimposing U.S. sanctions against Iran and said he was working with countries that import Iranian oil to cut their purchases "substantially."

"We ask all nations to isolate Iran's regime as long as its aggression continues. And we ask all nations to support Iran's people as they struggle to reclaim their religious and righteous destiny," Trump said.

In a live appearance on the Tuesday edition of VOA Persian's News at Nine show, Hudson Institute analyst Michael Pregent said the key element of Trump's Iran comments was his pledge to intensify the sanctions.

"The United States is encouraging the West and urging the international community to support [anti-government] protesters in Iran and continue to put pressure on Iran through sanctions," Pregent said.

Shortly after Trump's speech, Iran's rial weakened to a record low against the dollar for a second straight day.

The Bonbast.com website, which tracks Iran's unofficial exchange rates, showed a new low of 17,000 tomans, or 170,000 rials, to the dollar Tuesday. The rial has lost much of its value in recent months as Iranians have sold the currency because of concerns about the impact of U.S. sanctions on an Iranian economy already struggling with high inflation and unemployment.

In another interview on VOA Persian's News at Nine, Foundation for Defense of Democracies analyst Emanuele Ottolenghi expressed doubt that Iran's domestic problems would force its ruling Islamic clerics to change their foreign policy.

"Iran's involvement [in Middle East conflicts] is a core interest of the Iranian regime, and it has been so at the height of the [previous international] sanctions regime [against Iran]," Ottolenghi said, noting Iran's material support for Syrian President Bashar al-Assad, a regional ally, at the start of the Syrian civil war in 2011. "That was a time of extreme economic difficulties [in Iran], and the regime prioritized that [policy], so I doubt that the economic circumstances in Iran now are going to dictate a different path."

This article originated in VOA's Persian service.

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