Iranian President Hassan Rouhani speaks during a ceremony marking national Workers' Week in Tehran
By Humeyra Pamuk and Bozorgmehr Sharafedin
WASHINGTON/LONDON (Reuters) - U.S. President Donald Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals, the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic's nuclear program.
Iran had announced hours earlier that it was relaxing some restrictions on its nuclear program, steps that stopped short of violating the deal with world powers for now, but threatening more action if countries do not shield it from U.S. sanctions.
An executive order issued by Trump covers Iran's iron, steel, aluminium, and copper sectors, the government's largest non-petroleum-related sources of export revenue and 10 percent of its export economy, a White House statement said.
"Tehran can expect further actions unless it fundamentally alters its conduct," Trump said.
The administration says the nuclear deal, negotiated by Trump's predecessor Barack Obama, was flawed as it is not permanent, does not address Iran's ballistic missile program and does not punish it for waging proxy wars in the Middle East.
The executive order effectively bans entities from the purchase, acquisition, sale, transport, or marketing of those minerals and their products from Iran or face sanctions.
It also says any individuals and entities would be subject to U.S. sanctions if they knowingly engaged in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services used in connection with those industrial metal sectors.
The U.S. Treasury said it was allowing a 90-day winding down period for transactions related to Iran's metals sectors and warned against entering into any new business after May 8, saying that would not be considered a wind-down activity.
Trump unilaterally withdrew the United States from the nuclear deal a year ago. The accord signed by Iran, Russia, China, Britain, France, Germany and the United States, put limits on Tehran's disputed nuclear program in return for the lifting of some sanctions.
ENRICHED URANIUM SALES
Iranian President Hassan Rouhani announced changes on Wednesday that experts said seemed tailored to ensure Tehran avoids triggering the deal's mechanism to punish it for violations, at least for now. The main new measure that takes effect now would have limited practical impact: a halt to Iran's sales of enriched uranium and heavy water to other countries.
The deal allows such sales so Iran can keep reducing its stockpiles below maximum thresholds, but Washington already effectively barred the sales with a sanctions move last week. For now, Iran's stockpile of enriched uranium is still well below the deal's cap and heavy water is less sensitive.
"The Iranian people and the world should know that today is not the end of the JCPOA," Rouhani said in a televised address, using the acronym for the nuclear deal. "These are actions in line with the JCPOA."
Rouhani also threatened that in 60 days Iran would resume enrichment of uranium beyond the low fissile purity - suitable for civilian nuclear power generation - allowed under the deal, unless the five other powers signed up to it found a way to protect Iran's oil and banking industries from U.S. sanctions.
Tehran halting compliance with some elements of the nuclear deal was "nothing less than nuclear blackmail of Europe," Tim Morrison, special assistant to the U.S. president and senior director for weapons of mass destruction, told a conference.
"Now is the time for the community of nations to strongly condemn Iran’s nuclear misconduct and increase pressure on the regime to comply with U.S. demands," Morrison said.
Morrison said the United States would move quickly against any attempt by European countries to undermine Washington's sanctions pressure on Iran. He advised them against using the so-called Special Purpose Vehicle to facilitate non-dollar trade to circumvent U.S. sanctions.
From this month, Washington has effectively ordered countries worldwide to stop buying Iranian oil or face sanctions of their own. The Trump administration has revoked waivers that had allowed some countries to continue buying Iranian oil and it aims to reduce Iranian crude exports to zero.
Washington has also blacklisted Iran's Revolutionary Guards as a terrorist group. Iran responded with threats to close the Gulf's Strait of Hormuz - the conduit for about a third of the world's seaborne oil exports - if its ships were blocked there.
"We have made our focus diplomatic isolation and economic pressure and that policy is working," Brian Hook, Special Envoy for Iran, said in a briefing. Hook said that more nations now, compared with a year ago, were in agreement with the United States on Iran.
Washington's European allies opposed Trump's decision to pull out and have tried, so far in vain, to find ways to blunt the economic impact of new U.S. sanctions, which include an all-out effort to block Iran's oil exports to throttle its economy.
KEEPING ACCORD ALIVE
France and Germany both said they wanted to keep the nuclear deal alive, and warned Iran not to violate it.
"It is important to avoid any action that would impede the implementation of their obligations by the parties now engaged in the accord or that would fuel an escalation," deputy foreign ministry spokesman Olivier Gauvin said in a statement.
Russia and Iran both blamed the United States for what they portrayed as Tehran's forced decision to suspend some pledges under the nuclear deal, while putting the onus on European powers to guarantee sanctions relief for Iran.
China said the deal should continue to be implemented and called on all sides to exercise restraint and pursue dialogue.
The weeks leading up to the anniversary of Trump's withdrawal from the agreement have seen a sharp tightening of U.S. sanctions and an increase in tensions on other fronts.
Washington announced the deployment of an aircraft carrier and B-52 bombers to the Middle East to counter what it says are "clear indications" of Iranian threats to U.S. forces there.
The looming total ban on oil sales is likely to sharply increase the economic hardship for Iran's 80 million people. Finding a response is the biggest test yet for Rouhani, a pragmatist who has faced strong opposition from hardliners.
(Reporting by Humeyra Pamuk and Jonathan Landay in WASHINGTON and Bozorgmehr Sharafedin in LONDON; Additional reporting by Ben Blanchard in Beijing, Babak Dehghanpisheh in Geneva, Idrees Ali, and Makini Brice in Washington, Sophie Louet in Paris, Francois Murphy in Vienna and Michelle Martin in Berlin; Writing by Peter Graff and Grant McCool; Editing by Mark Heinrich and James Dalgleish)