US Pressures Iran with New Sanctions

The United States on Thursday imposed sanctions on Chinese and Emirati companies and a network of Iranian firms that help export Iran's petrochemicals, a step that may aim to raise pressure on Tehran to revive the 2015 Iran nuclear deal.

The US Treasury department said it had imposed penalties on two companies based in Hong Kong, three in Iran, and four in the United Arab Emirates, as well as on Chinese citizen Jinfeng Gao and Indian national Mohammed Shaheed Ruknooddin Bhore.

"The United States is pursuing the path of meaningful diplomacy to achieve a mutual return to compliance with the Joint Comprehensive Plan of Action," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a statement, referring to the 2015 nuclear agreement.

Under the pact, Iran limited its nuclear program to make it harder for Tehran to obtain a nuclear weapon in exchange for relief from US, European Union and United Nations sanctions that had choked Iran's oil-dependent economy.

Then-US President Donald Trump pulled out of the deal in 2018 and restored US sanctions, prompting Iran to start violating the nuclear restrictions about a year later. Talks to revive the agreement have so far failed.

"Absent a deal, we will continue to use our sanctions authorities to limit exports of petroleum, petroleum products, and petrochemical products from Iran," Nelson said.

In Tehran, Iran's deputy foreign minister for economic diplomacy dismissed the new sanctions as ineffective.

"Our petrochemical industry and its products have long been under sanctions, but our sales have continued through various channels and shall continue to do so," Mehdi Safari told Iranian state TV.

Henry Rome, deputy head of research at the Eurasia Group, said the sanctions may aim both to raise pressure on Iran and to blunt US domestic critics who argue that US President Joe Biden has failed to rein in Iran's nuclear program.

"Washington is likely aiming to raise the costs for Iran of a continued no-deal scenario while also deflecting domestic and foreign criticism that it is allowing its Iran policy to drift," Rome said, saying that any single sanctions action was unlikely to change thinking in Iran or China absent a broader strategy.

"Indeed, Tehran may calculate that given the state of the oil market and global inflationary pressures, a concerted (US) campaign to collapse Iranian energy exports to Trump-era levels is not in the cards in the near term," Rome added.

The nuclear pact seemed near revival in March but talks unraveled partly over whether Washington might drop the Revolutionary Guard Corps, which controls armed and intelligence forces that Washington accuses of a global terrorist campaign, from the US Foreign Terrorist Organization list.

Reuters could not find contact information for Gao or Bhore to seek comment.

The Treasury Department named the Hong Kong-based companies as Keen Well International Ltd and Teamford Enterprises Ltd and the Iran-based firms as Fanavaran Petrochemical Company, Kharg Petrochemical Company Ltd and Marun Petrochemical Company.

Reuters could not obtain contact information for the Hong Kong-based firms. Kharg could not be reached for comment late on Thursday, the weekend in Iran, while Fanavaran and Marun did not immediately reply to emails seeking comment.

The Treasury listed the four UAE-based companies as Future Gate Fuel and Petrochemical Trading L.L.C., GX Shipping FZE, Sky Zone Trading FZE and Youchem General Trading FZE. Reuters could not obtain contact information for them to seek comment.

All property and interests in property of the firms falling under US jurisdiction are blocked and those who deal with them may also be sanctioned or penalized under some circumstances.

One of Israel's ultra-Orthodox parties, United Torah Judaism, said it was quitting Prime Minister Benjamin Netanyahu's ruling coalition due to a long-running dispute over failure to draft a bill to exempt yeshiva students from military service.

Six of the remaining seven members of UTJ, which is comprised of the Degel Hatorah and Agudat Yisrael factions, wrote letters of resignation. Yitzhak Goldknopf, chairman of UTJ, had resigned a month ago.

That would leave Netanyahu with a razor thin majority of 61 seats in the 120 seat Knesset, or parliament.

It was not clear whether Shas, another ultra-Orthodox party, would follow suit.

Degel Hatorah said in a statement that after conferring with its head rabbis, "and following repeated violations by the government to its commitments to ensure the status of holy yeshiva students who diligently engage in their studies ... (its MKs) have announced their resignation from the coalition and the government."

Ultra-Orthodox parties have argued that a bill to exempt yeshiva students was a key promise in their agreement to join the coalition in late 2022.

A spokesperson for Goldknopf confirmed that in all, seven UTJ Knesset members are leaving the government.

Ultra-Orthodox lawmakers have long threatened to leave the coalition over the conscription bill.

Some religious parties in Netanyahu's coalition are seeking exemptions for ultra-Orthodox Jewish seminary students from military service that is mandatory in Israel, while other lawmakers want to scrap any such exemptions altogether.

The ultra-Orthodox have long been exempt from military service, which applies to most other young Israelis, but last year the Supreme Court ordered the defense ministry to end that practice and start conscripting seminary students.

Netanyahu had been pushing hard to resolve a deadlock in his coalition over a new military conscription bill, which has led to the present crisis.

The exemption, in place for decades and which over the years has spared an increasingly large number of people, has become a heated topic in Israel with the military still embroiled in a war in Gaza.

US Pressures Iran with New Sanctions