The Trump administration moved to restore some US sanctions on Iran and reaffirmed plans to impose tougher penalties on the country's oil sales in November, as President Hassan Rouhani comes under increasing economic and political pressure from the crisis.
President Donald Trump signed an executive order on Monday restricting purchases of dollar banknotes by Iran, preventing the government from trading gold and other precious metals and blocking the nation from selling or acquiring various industrial metals.
The measures, which take effect on Tuesday, also target the car industry, and will ban imports of Persian carpets and pistachios to the US. In a televised address, Mr Rouhani said Iran was open to negotiations if the US was “sincere” but he added that such talks would be meaningless while his nation was being hit with sanctions.
Mr Trump has raised the possibility of face-to-face discussions with Mr Rouhani with “no preconditions”.
“Negotiations at the same time as imposing sanctions, what meaning does that have?” Mr Rouhani said. “Someone who is a rival an enemy, if he’s taking a knife and stabbing the other side with it and then we are to talk and negotiate with such a person, then firstly, of course we have to tell him to take out his knife.”
While the penalties were expected, they drew fresh condemnation from European allies who are standing by the 2015 nuclear accord – known as the JCPOA – that Mr Trump quit in May.
They presage tougher sanctions against imports of Iranian oil that come go into force in early November, although the administration signalled it would consider partial exemptions to that ban.
"We deeply regret the reimposition of sanctions by the US, due to the latter's withdrawal from the Joint Comprehensive Plan of Action," said a statement on Monday from the foreign ministers of the UK, Germany, France and the EU. "Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security."
‘Absurd pretexts’
Mr Rouhani said in his remarks that the EU must take practical action to save the Iran accord.
Iran's foreign secretary Javad Zarif tweeted that the "Trump administration wants the world to believe it's concerned about the Iranian people. Yet the very first sanctions it reimposed have cancelled licences for sales of 200+ passenger jets under absurd pretexts, endangering ordinary Iranians. US hypocrisy knows no bounds."
Iran’s central bank, acting on the eve of the US move, scrapped most currency controls introduced this year in a bid to halt a plunge in the rial that has stirred protests against the government.
Under the measures, the central bank will let the market determine the rate of foreign-exchange transactions except the imports of essential goods and drugs, Gov Abdolnaser Hemmati told state television on Sunday night. Licensed currency houses whose trading had been halted will be allowed to resume operations from Tuesday, he said.
Earlier this year, the central bank said it would unify the exchange rate at 42,000 rials to the dollar in an attempt to root out unregulated trading. It banned exchange houses from selling foreign currencies, and authorities arrested dozens of people for allegedly manipulating the rules for personal gain. Among those detained is a central bank deputy governor in charge of foreign-currency affairs.
Black market
But the policies backfired, with the rial weakening to more than 100,000 to the dollar on the black market this month.
The US is weighing case-by-case exemptions for some countries from the next set of sanctions – which take effect in 90 days – targeting Iranian oil exports, according to Trump administration officials who briefed reporters on Monday, despite its announced goal of allowing “zero” Iranian oil exports.
The administration had previously signalled that countries that don’t eliminate their imports of Iranian oil need to show “significant” reductions in those purchases to qualify for temporary waivers.
The US goal is to get the Iranian regime to stop meddling in countries from Syria to Yemen, halt its ballistic missile programme and commit to stricter limits on its nuclear programme, not to overthrow the government, the administration officials said. "We're very hopeful that we can find a way to move forward, but it's going to require enormous change on the part of the Iranian regime," secretary of state Michael Pompeo told reporters on Sunday en route to Washington from Asia. "They've got to – well, they've got to behave like a normal country. That's the ask. It's pretty simple."
Mr Trump is still willing to meet Mr Rouhani at any time, without preconditions, the officials told reporters on Monday. – Bloomberg