Posts Tagged ‘Iran’

ZTE revenues fall $2bn as US sanctions bite

May 23, 2018
Components ban hurts Chinese telecoms group as well as US suppliers
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ZTE has had to partially close its business following the imposition of sanctions by the US © AFP

Emily Feng and Louise Lucas in Beijing 


ZTE, the Chinese telecoms equipment maker, is estimated to have lost more than $2bn in revenue since the imposition of a ban on the supply of US components by Washington last month, according to calculations based on last year’s figures.

Although Beijing and Washington are said to be close to a deal to grant a reprieve from US sanctions that nearly destroyed ZTE, the damage to the Chinese telecoms group’s prospects could linger as suppliers and clients take long-term decisions on their supply lines.

ZTE reported full-year revenues of Rmb108.8bn ($17bn) in 2017, or an average of $1.4bn a month. The US ban on supplying parts to ZTE — after the group was found to have violated sanctions against North Korea and Iran — was imposed roughly six weeks ago, implying lost revenues of more than $2bn.

While customers are unlikely to opt to switch suppliers, American carriers buying ZTE handsets — the fourth most popular in the US — could start making back-up plans given the lead times involved, according to Edison Lee, a Hong Kong-based analyst at Jefferies, the investment bank. However, he added that if sanctions were lifted soon, the telecoms supplier should be able to regain its previous trading relationships.

The telecoms group, which has become a bargaining chip in a game of trade brinkmanship between the US and China, on Wednesday refused to comment on potential losses or on whether any production had restarted at its plant in Shenzhen.

The group’s prospects improved at the weekend following news that President Trump’s aides were negotiating a deal to lift US sanctions against ZTE in exchange for senior management changes and payment of a large fine. ZTE was previously fined $1.2bn by the US last year.

However, ZTE’s future is uncertain, with US Congressional Republicans, led by senator Marco Rubio, drawing up legislation that would block the White House’s attempt to rescue ZTE. The move highlights the mounting scepticism inside the GOP over the president’s conflicts with China over the US trade deficit and other issues.

Until it suspended trading in its shares on April 17 and partially shuttered its operations, ZTE was China’s biggest publicly listed telecoms equipment manufacturer, employing 75,000 people globally.

On a visit to ZTE’s headquarters in Shenzhen last week before news of the potential deal, the FT found workers milling around outside the plant. Local food providers said business had halved in the area. Managerial staff, software engineers and higher-level technical support personnel were still employed at that time, the ZTE employees said.

The potential reversal of the US ban on trading with ZTE would mark a victory for American hardware suppliers, which need access to the Chinese market in order to remain globally competitive and have been alarmed by how ZTE has become a political bargaining chip, according to analysts.

“There’s commercial interest [in ZTE’s survival] within the US industry, and that’s why Donald Trump was willing to reach a compromise . . . It affects not just US jobs but also US companies’ ability to fund research and development and stay at the leading edge of technology,” said Mr Lee.

The costs borne by US businesses would continue to accumulate for as long as it takes the US and China to reach an agreement on ZTE, analysts said.

“What most people do not realise is that in Silicon Valley right now there is a lot of opposition to the ZTE ban, because so many suppliers sell parts to ZTE,” said a venture capital investor who splits his time between the US and China.

“[The ban] obviously necessitates that Chinese players have back-up options, and when they develop those alternatives, it hurts the US companies right back. Samsung and MediaTek have expressed interest to offer their components to ZTE, including processors,” said Kiranjeet Kaur, smartphone analyst at market research group IDC.

Additional reporting from Xinning Liu and Lucy Hornby in Beijing

https://www.ft.com/content/abecbdec-5e4c-11e8-9334-2218e7146b04

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Syria and Russia say withdrawal of Iran, Hezbollah ‘not on agenda’

May 23, 2018

Syria’s deputy foreign minister said Wednesday Damascus did not envisage Iran and Hezbollah participating in the withdrawal of foreign forces from the war-torn country as announced last week by Russia.

Asked whether the removal of Iranian and Hezbollah forces could end Israel’s strikes on Syria, Faisal Mekdad told RIA Novosti state news agency that “this topic is not even on the agenda for discussion.”

“All these forces oppose terrorism. They are not making an attempt to violate the sovereignty and territory of Syria,” he said in comments translated into Russian.

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Russian Foreign Minister Sergei Lavrov

Syrian President Bashar al-Assad met Vladimir Putin in the Black Sea resort of Sochi on Thursday, with the Russian leader saying “foreign armed forces will withdraw from Syrian territory” although he gave few details.

But Russia’s chief Syria negotiator Alexander Lavrentyev later told journalists that the withdrawal of foreign troops should be done “as a whole” and include Iranians and Hezbollah, the powerful Lebanese group that is an ally of Iran and Assad.

“We are talking about all the foreign troop divisions which still have troops in Syrian territory. That includes the Americans and the Turks and Hezbollah, of course, and the Iranians,” Lavrentyev said on Friday, quoted by RIA Novosti.

Mekdad, however, suggested Russia had not meant to say this.

“I don’t think that our Russian friends meant the forces that entered Syria in agreement with the Syrian government,” he said.

“Russia demanded the withdrawal of forces that are here without agreement: that is the forces of the US, France, Turkey and other forces that are here illegitimately.”

Russia and Iran are both allied with Assad. Together with rebel-supporting Turkey, they have been brokering peace talks in Astana, the Kazakh capital, running in parallel to talks supervised by the United Nations.

Last year, Russian Foreign Minister Sergei Lavrov said Moscow was acting on the basis that both Hezbollah and the Iranians, “just like the Russian air forces, are in Syria at the invitation of the legitimate government.”

AFP

Iran slams U.S. sanctions push, Syria rejects idea of Iranian withdrawal

May 23, 2018

Iran on Wednesday kept up a drumbeat of opposition to U.S. demands for sweeping change in its foreign policy and nuclear program, and Tehran’s ally Damascus dismissed out of hand a U.S. call for a withdrawal of Iranian forces from Syria.

rance, one of several European powers dismayed by the U.S. withdrawal from a 2015 nuclear accord, said Washington’s method of adding more sanctions on Tehran would reinforce the country’s dominant hardliners.

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U.S. Secretary of State Mike Pompeo on Monday threatened Iran with “the strongest sanctions in history” if it did not curb its regional influence, accusing Tehran of supporting armed groups in countries such as Syria, Lebanon and Yemen.

Pompeo was speaking two weeks after President Donald Trump pulled out of an international nuclear deal with Iran that had lifted sanctions on Iran in exchange for curbs to its nuclear program. European powers see the accord as the best chance of stopping Tehran acquiring a nuclear weapon.

Iranian Foreign Minister Mohammad Javad Zarif (L) meets with European Union Foreign Policy Chief Federica Mogherini, to discuss Iran's nuclear deal, on May 15, 2018 at the EU headquarters in Brussels. (AFP PHOTO / POOL / Thierry Monasse)

Iranian Foreign Minister Mohammad Javad Zarif (L) meets with European Union Foreign Policy Chief Federica Mogherini, to discuss Iran’s nuclear deal, on May 15, 2018 at the EU headquarters in Brussels. (AFP PHOTO / POOL / Thierry Monasse)

Iran’s Foreign Minister Mohammad Javad Zarif said Pompeo had repeated old allegations against Tehran “only with a stronger and more indecent tone”.

“Mr Pompeo and other U.S. officials in the current administration are prisoners of their wrong illusions, prisoners of their past and have been taken hostage by corrupt pressure groups,” he told state television.

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Major General Mohammad Bagheri,

A senior Iranian military official, Major General Mohammad Bagheri, said Iran would not bow to Washington’s pressure to limit its military activities.

“This enemy (the United States) does not have the courage for military confrontation and face-to-face war with Iran, but it’s trying to put economic and mental pressures on the Iranian nation,” state news agency IRNA reported him as saying.

“ENDANGERING THE REGION”

In Damascus, Syria’s deputy foreign minister dismissed the notion of a withdrawal of Iranian forces.

In Syria’s seven-year-old conflict, Iran has provided vital support to President Bashar al-Assad’s military. Its forces and the militias it backs from the region, including Lebanon’s Hezbollah, helped Damascus claw back control of major cities from militants and rebels.

“Whether Iranian forces or Hezbollah withdraw or stay in Syria is not up for discussion because it’s the (business) of the Syrian government,” Lebanon’s al-Mayadeen TV cited Faisal Mekdad as saying.

In Paris, France’s foreign minister said the U.S. decision to scrap the Iran nuclear deal and implement a tough strategy on the country would strengthen Tehran’s hardliners and endanger the region.

“We disagree with the method because this collection of sanctions which will be set up against Iran will not enable dialogue and, on the contrary, it will reinforce the conservatives and weaken President Rouhani. This posture risks endangering the region more,” Jean-Yves Le Drian told France Inter radio.

He said Paris would continue to implement the agreement even if it did agree with the United States that Iran’s ballistic missile activity and regional hegemonic ambitions needed to be curbed.

He said Paris shared Washington’s concerns over Iran’s ballistic missile “frenzy” and regional ambitions, but the 2015 nuclear deal was the best chance of stopping Tehran developing a nuclear bomb.

Deputy foreign ministers of the remaining parties to the accord – Britain, China, France, Germany and Russia – will meet their Iranian counterpart on Friday in Vienna.

The meeting will assess what can be done to keep the deal and circumvent extraterritorial American sanctions that are impacting foreign business appetite for Iran.

For a graphic on Iran’s nuclear program: tmsnrt.rs/2rvkaq6

Additional reporting by John Irish in Paris and Parisa Hafezi in Ankara, Ellen Francis in Beirut, Editing by William Maclean and Janet Lawrence

Reuters

US sanctions 5 Iranians for aiding Yemen’s Houthi rebels with ballistic missiles

May 23, 2018

The U.S. has issued new sanctions against five Iranians linked to the Revolutionary Guard Corps over their role in the Yemen conflict, the treasury announced on its website Tuesday.

The U.S. Treasury listed the sanctioned individuals as Mahmud Bagheri Kazemabad, Mohammad Agha Ja’fari, Javad Bordbar Shir Amin, Mehdi Azarpisheh and Sayyed Mohammad Ali Haddadnezhad.

It said that they had provided ballistic missile-related technical expertise and weapons to Houthi rebels in Yemen, enabling Houthis to launch missiles at targets in Saudi Arabia.

Their actions also disrupted humanitarian aid and threatened free navigation in regional waterways, the statement said.

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Chief of Staff of the Iranian Armed Forces Major General Mohammad Baqeri

Impoverished Yemen has been wracked by conflict since 2014, when the Shia Houthi group overran much of the country, including the capital Sanaa.

In 2015, Saudi Arabia and its Sunni-Arab allies launched a wide-ranging military campaign against the Houthis in Yemen. Riyadh has repeatedly accused the Houthis of acting as a proxy military force for Shia Iran, Saudi Arabia’s arch-foe in the region.

The war has killed more than 10,000 people and displaced more than 3 million, and pushed Yemen’s 28 million people to the brink of famine.

https://www.dailysabah.com/economy/2018/05/22/us-sanctions-5-iranians-for-aiding-yemens-houthi-rebels

Pessimism mounts ahead of historic Trump-Kim nuclear summit

May 23, 2018

Washington (CNN)  President Donald Trump’s spur-of-the-moment decision to agree to a face-to-face meeting with North Korea leader Kim Jong Un represented an unprecedented opportunity, but also a huge risk, most recently highlighted by a case of cold feet on both sides.

Anticipation about the June 12 meeting in Singapore is turning to pessimism, as the complexity of the initiative, the stark divides between Washington and Pyongyang, and inconsistencies in the White House’s approach to the meeting all become clear.
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First, the Kim government threatened to pull out, blaming the “repugnance” of national security adviser John Bolton and his nuclear disarmament schemes.
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Now Trump has switched from dreaming of Nobel prizes to warning that there is a “very substantial chance” that the meeting will not happen next month.
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U.S. President Donald Trump and South Korean President Moon Jae-in at the White House on May 22, 2018

Trump is also speculating that China’s President Xi Jinping, who he called a “world class poker player” on Tuesday, may be behind Kim’s new hard line.
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The atmosphere has soured from the euphoric optimism with which Trump welcomed home three US prisoners from North Korea two weeks ago to doubt and uncertainty.
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There seems a good chance that the challenge coins minted by the White House Communications Agency to commemorate the summit may get left on the shelf.
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“If it doesn’t happen, maybe it’ll happen later. Maybe it’ll happen at a different time, but we will see,” Trump said, alongside South Korean President Moon Jae-in at the White House on Tuesday.
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So what is behind the sudden outburst of pessimism about what would be the most spectacular diplomatic summit in decades?
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One explanation is that both the United States and North Korea, as they get past the initial wave of enthusiasm after Trump agreed to meet Kim, are being reminded of just how intricate their differences are.
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The idea that Kim would give up a nuclear arsenal his country has spent decades acquiring and that he sees as the guarantor of his dynastic rule always struck many people who have dealt with the North Koreans as farfetched.
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The fact that goal seems so distant and could take years of painstaking negotiations to achieve after a Kim-Trump summit may be what is fueling rising skepticism among some White House officials that the summit will take place.
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It’s conceivable that Kim may be realizing, as North Korea invited journalists to watch the destruction of a nuclear test site Tuesday, exactly what the kind of aggressive verification measures the US is demanding would mean for his country.
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“There is a whole lot of sites that are going to have to be shut down (and) inspected. This is going to take months and years,” Michael Anton, Trump’s former National Security Council spokesman, said on CNN’s “Erin Burnett OutFront.”
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Trouble

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Trump: Kim changed attitude after chat with Xi

The first sign of trouble came when Kim made an unexpected visit to China earlier this month to meet Xi and said he was aiming for a “phased and synchronous” process that would offer North Korea step-by-step rewards for renouncing its nuclear program.
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That is exactly the approach that Trump says failed for previous administrations. This White House is telling the North Koreans they will get a bonanza of US private-sector investment only once the nuclear program is completely dismantled.
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Then last week, Bolton went on television to tout his vision for a Libya-style export by North Korea of its nuclear weapons program — without upfront incentives.
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But when Kim hears Libya he thinks of the assassination of its longtime dictator, Moammar Gadhafi, after a NATO-led air operation in 2011 that may not have happened had he not previously given away a nuclear program that was far more rudimentary than North Korea’s.
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In a bid to keep the summit on track, Trump hurriedly said last week that he was not contemplating using a Libya model for North Korea.
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Secretary of State Mike Pompeo said on Tuesday that he was pressing ahead with plans for the summit — and was not looking at any date other than June 12.
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“We’re driving on. … I am optimistic, but again this could be something that comes right to the end and doesn’t happen,” Pompeo said.
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The run-in to the summit is also being clouded by uncertainty over the shape of the administration’s position. Bolton’s comments have, for instance, sparked a backlash in the media and among experts in South Korea.
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The confusion is bearing out warnings by former officials that the Trump administration should have gotten its ducks in a row before agreeing to a summit.
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“We are bumbling into this summit where there is no agreement even among the members of the US administration about where this is going and what are our goals,” Jamie Metzl, who served on President Bill Clinton’s National Security Council, told CNN’s Jake Tapper on “The Lead.”
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Tough talk

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Haley: Trump's unpredictability helped with NK

Tough talk from Trump and other members of the administration on what will happen to Kim if he doesn’t toe the US line may also risk alienating the North Koreans.
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“This will only end like the Libyan model ended if Kim Jong Un doesn’t make a deal,” Vice President Mike Pence told Fox News on Monday.
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Michael Green, who served as the top White House East Asia hand in the George W. Bush administration, said such rhetoric could play poorly in Pyongyang.
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“The rhetoric matters, and we know the North Koreans are very sensitive and very insecure about any narrative about assassination,” Green told CNN’s Brian Todd.
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Some analysts believe that the summit is so politically valuable to Trump that he will do almost anything to keep it on the schedule. Indeed, on Tuesday, he guaranteed Kim’s safety if he gives up nuclear arms. The President has described Kim as “open” and “very honorable” in recent weeks, an outburst of flattery apparently designed to bring him to the table.
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The President relishes dramatic made-for-television occasions that capture the world’s attention. The administration has also argued that his North Korea diplomacy is one reason why he should not be distracted by Robert Mueller’s special counsel probe. And Republicans hope to use the summit to shape a “peace and prosperity” campaign in tough midterm elections in November.
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By expressing public doubts about the summit actually taking place, Trump could also be following his customary habit of building suspense ahead of a big show.
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“Whether the deal gets made or not, who knows. It’s a deal. Who knows. You never know about deals. You go into deals that are 100% certain, it doesn’t happen. You go into deals that have no chance, and it happens, and sometimes happens easily,” Trump told reporters Tuesday.
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Alternatively, by playing down expectations that the summit will happen the President could be preparing a face-saving exit for himself — or indulging in a bit of pre-summit negotiating — on television where Kim can see exactly what he is saying.
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Whatever the motivations of the key players, though, the risks of the diplomatic process crashing to a halt are grave, given that a return to the “fire and fury” rhetoric of last year could take the US and North Korea back to the brink of what would be a disastrous war for everyone.
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US blacklists Iranians for allegedly providing missile tech to Yemen’s Huthis

May 22, 2018

The US Treasury blacklisted five Iranians who allegedly supplied ballistic missile technology to Yemen’s Huthi rebels Tuesday, a day after Washington warned Tehran it faced the “strongest sanctions in history.”

The Treasury said the five placed on its sanctions list were linked to an operation by the Iranian Revolutionary Guard Corps to support Huthi attacks on cities in Saudi Arabia, which leads the Gulf coalition fighting the Yemeni rebels.

According to Riyadh, the Huthis have launched more than 130 ballistic missiles at Saudi Arabia since 2015, many of them intercepted by anti-missile defense systems.

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FILE Photo: Iranian made ballistic missile fired by Houthis into Saudi Arabia

In November last year they launched a missile which reached Riyadh, and the attacks have increased this year.

Iran has denied supplying missiles to the Huthis, while the group has insisted that they developed the missiles themselves.

But the United States says it has irrefutable evidence of Iran’s involvement.

Actions by the Revolutionary Guards “have enabled the Huthis to launch missiles at Saudi cities and oil infrastructure,” said Treasury Secretary Steve Mnuchin in a statement.

“The United States will not tolerate Iranian support for Huthi rebels who are attacking our close partner, Saudi Arabia. All countries in the region should be on guard to prevent Iran from sending its personnel, weapons, and funds in support of its proxies in Yemen,” he said.

Four of the five men hit with sanctions, which aim to lock them out of the global financial system, are senior officials in the Revolutionary Guard Aerospace Forces Al-Ghadir Missile Command.

The fifth was linked to a Revolutionary Guards unit responsible for researching and developing ballistic missiles.

Over the last two weeks, the US Treasury has stepped up sanctions targeting Iran, and especially the Revolutionary Guards, in the wake of President Donald Trump’s decision to withdraw from the Iran nuclear deal.

On Monday, US Secretary of State Mike Pompeo warned Tehran that it was facing a tougher sanctions regime than it ever experienced as Washington pressures Tehran to disengage from regional hot spots like Syria and Yemen and to stop exporting its ballistic missile technology.

“This sting of sanctions will be painful if the regime does not change its course from the unacceptable and unproductive path it has chosen to one that rejoins the league of nations,” said Pompeo.

AFP

Iran, Get Ready for the Battle Rial

May 22, 2018

The Trump administration has declared financial war on the regime. It’s a good bet America will win.

Iran, Get Ready for the Battle Rial
PHOTO: ISTOCK/GETTY IMAGES

Secretary of State Mike Pompeo on Monday presented the Islamic Republic of Iran with a stark choice: Either change or face “unprecedented financial pressure” in the form of “the strongest sanctions in history when we are complete.” The Trump administration has declared financial war on the Iranian regime. Given the seriousness of its currency emergency, it’s a good bet America will win.

Iran’s economy is in crisis. Inflation is skyrocketing, banks are in turmoil, and Iranians protest daily against the regime’s ineptitude, corruption and foreign adventurism. The currency is collapsing. In 1979, just before the Islamic revolution, Iran’s official exchange rate was 70 rial to the dollar. Today’s official rate, 42,000 to 1, is only available to those with regime connections. Most Iranians have to accept less favorable terms on the black market.

The rial experienced several waves of devaluation, including during the last ramp-up in U.S. sanctions. The black-market rate per dollar went from around 11,000 in early 2011 to close to 37,000 in 2013, immediately before the June election of President Hassan Rouhani. The latest deterioration signals a worse crisis. It was triggered by Mr. Trump’s decision in October to decertify the Joint Comprehensive Plan of Action, or JCPOA, indicating his intention to reimpose sanctions. The black-market rate has settled at 63,500, a nearly 40% loss of value since October. It dipped to 70,000 in the 24 hours after Mr. Trump announced on May 8 America’s official withdrawal from the nuclear deal. The regime is so desperate to avoid further collapse, it is taking extreme measures like criminalizing private currency trading and severely restricting the amount of currency Iranian travelers can take out of the country.

With the impending reimposition of sanctions, the pressure on Tehran is growing every day. Any bank that lets Iran draw on its foreign-held reserves will face total cutoff from the U.S. financial system. Trade and investment in major Iranian economic sectors will grind to a halt. Insurers will walk away from Iran-related projects. Importers of Iranian oil will reduce their purchases. Providing Iran with precious metals, which the regime might use in place of cash, will be off-limits, too. Already major European energy, insurance and shipping companies have signaled their intention to cut ties with the Islamic Republic unless their governments can negotiate sanctions waivers.

Mr. Pompeo made clear Monday that’s unlikely—and also that the administration will tighten the screws further, targeting every aspect of the regime’s finances.

What are the options? The Treasury Department has the authority to target companies owned or controlled by the Islamic Revolutionary Guard Corps and Iran’s defense industry. These represent around 20% of total market capitalization of the Tehran Stock Exchange. The Treasury could impose sanctions on Supreme Leader Ayatollah Ali Khamenei’s $200 billion corporate conglomerate, including the charitable trusts, or bonyads, where regime officials stash their money. Mr. Trump could use his executive powers to target companies of which the IRGC owns a minority share, vastly expanding Treasury’s list. He could broaden sanctions to cover Iran’s mining, construction and engineering industries, and any other sector of strategic importance.

Another top target will be Hezbollah, Iran’s largest terrorist proxy. The administration should cut off Hezbollah’s companies and bankers, especially in Lebanon, from the international financial system, while cracking down on the group’s fundraising, recruitment, narcotics trafficking and other transnational criminal activities.

America’s new strategy also presents European leaders with a choice: Either help curb all of Iran’s malign activities in exchange for major American economic and diplomatic concessions, or cast their lots with the repressive theocracy responsible for a 2012 terror attack in Bulgaria, and for the bloodshed in Syria that created a refugee crisis in Europe.

The Europeans have several important roles to play in a maximum-pressure strategy. The Swift financial-messaging service, based in Brussels, would disconnect the Central Bank of Iran, as well as other designated Iranian banks. The European Central Bank would stop clearing euro-based Iranian transactions through its Target2 settlement system, whose bylaws explicitly forbid activity with banks engaged in illicit financing schemes. Central banks in European countries would stop trying to evade U.S. oil sanctions by making direct payments to Iran’s central bank. Europe would designate the IRGC and Hezbollah in their entirety as terror groups.

The Europeans could refuse to do these things if they want to play hardball and undermine the U.S. strategy. But Mr. Trump would have options to respond. American law authorizes him to impose sanctions on Swift and its directors if they refuse to disconnect Iranian banks. The president could use his executive powers to put on the sanctions list board members and senior officials at the ECB, European Investment Bank and national central banks.

That sort of showdown may seem appealing to some Europeans. But the democratic ties that bind America with Europe are far stronger than any commercial relationship between Europe and the Islamic Republic.

Just last week, German Chancellor Angela Merkel and French President Emmanuel Macron ruled out any trade war with the U.S. over Iran. Other European leaders should follow their lead. Mr. Pompeo has opened the door for renewed trans-Atlantic dialogue. Brussels may be slow to warm up to America’s new, no-holds-barred financial war on the Iranian regime. But European banks and businesses ought to keep one thing in mind: In a Battle rial, anything goes.

Mr. Dubowitz is chief executive and Mr. Goldberg a senior adviser at the Foundation for Defense of Democracies.

https://www.wsj.com/articles/iran-get-ready-for-the-battle-rial-1526941983

Fuel price hike in India: Amit Shah says govt taking matter seriously

May 22, 2018

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BJP president Amit Shah on Tuesday said the government is working out a formula to bring down the prices and ease the burden on consumers.

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BJP president Amit Shah

By: PTI | New Delhi | Updated: May 22, 2018 6:07:24 pm

Steps to deal with rising petrol, diesel prices likely this week The petrol prices in Delhi are the cheapest among all metros and most state capitals. (File)

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With the prices of petrol and diesel touching a record high, BJP president Amit Shah on Tuesday said the government is working out a formula to bring down the prices and ease the burden on consumers. Briefing the press on the BJP’s four years in power at the party headquarters in New Delhi, Amit Shah said the matter of rising oil prices is being pursued “seriously” by the government. “The government is taking the matter of oil prices seriously. Petroleum minister will have a meeting with the officials of the oil companies tomorrow. We are working out a formula to reduce the prices,” he said.

Meanwhile, news agency PTI, citing a senior government official, reported that the administration is likely to come out with “some steps” this week to deal with rising fuel prices. The government may not rely only on cutting excise duty, which makes up for a fourth of the retail selling price, the official said without elaborating further.

“Rising fuel price is a crisis situation for government and it has to be handled with combination of steps. Finance ministry is consulting the petroleum ministry on rising crude prices,” he said.

More than a week after the state-owned oil firms ended a 19-day pre-Karnataka poll hiatus on revising fuel prices, petrol and diesel rates have touched record highs. Petrol costs Rs 76.87 per litre in Delhi and diesel costs Rs 68.08 a litre. In last nine days, petrol price has risen by Rs 2.24 a litre and diesel by Rs 2.15. Rates vary from state to state depending on the incidence of local sales tax or VAT. The prices in Delhi are the cheapest among all metros and most state capitals. Refusing to discuss steps under consideration, the official said the government has to be mindful of its fiscal maths while dealing with the option of cutting excise duty.

“We cannot rely on excise duty cut alone, although I am not ruling out a possibility of cutting excise duty. We have to be mindful of any fiscal impact of any excise cut on fuel,” the official said.

Both the Centre and states, whose VAT makes up for 20-35 per cent of the retail cost and have gained from the rising oil prices, need to take measures, he said.

“Some steps to deal with rising oil prices are likely to come this week,” he added.

The rupee, which has fallen to 16-month low of 67.97 against the US dollar, is also playing a role in high oil bill, he said.The central government levies Rs 19.48 a litre of excise duty on petrol and Rs 15.33 per litre on diesel. State sales tax or VAT varies from state to state. Unlike excise duty, VAT is ad valorem and results in higher revenues for the state when rates move up.

In Delhi, VAT on petrol was Rs 15.84 a litre, and Rs 9.68 on diesel in April. Today it is Rs 16.34 on petrol and Rs 10.02 a litre on diesel. Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of Rs 13,000 crore. The government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT. Just four of them — Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh — reduced rates while others including BJP-ruled ones ignored the call. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

with PTI inputs

Source:http://indianexpress.com/article/business/commodities/steps-to-deal-with-rising-petrol-diesel-prices-likely-this-week-5186799/

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Iran tells Europe to step up and save nuclear deal

May 22, 2018

Iran poured scorn on threatened U.S. sanctions on Tuesday and told European powers to step up and salvage its international nuclear deal – though Germany signaled there was only so much it could do to fend off Washington’s economic clout.

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Iranian Foreign Minister Mohammad Javad Zarif

Senior Iranian military and political figures queued up to issue defiant statements a day after Washington threatened “the strongest sanctions in history” if Iran failed to make a series of sweeping changes.

Two weeks on from U.S. President Donald Trump’s decision to pull out of the nuclear pact, his administration told Iran to drop its nuclear program and pull out of the Syrian civil war among other demands, setting Washington and Tehran further on a course of confrontation.

“The people of Iran should stand united in the face of this and they will deliver a strong punch to the mouth of the American Secretary of State and anyone who backs them,” Ismail Kowsari, a senior commander with Iran’s Revolutionary Guards said, according to the Iranian Labour News Agency.

The 2015 nuclear agreement, worked out by the United States, France, Germany, Britain, Russia, China and Iran, lifted sanctions on Iran in exchange for Tehran limiting its atomic program.

Trump called it the worst deal ever negotiated but European powers see it as the best chance of stopping Iran developing a nuclear bomb.

After Trump pulled out, the other signatories said they would try to salvage the deal and keep Iran’s oil trade and investment flowing. But European companies say they are worried about getting caught up in the new U.S. sanctions, given the extent of Washington’s global reach, and some have already started pulling out.

The head of Iran’s National Security and Foreign Policy committee in parliament said that the only way to salvage the nuclear deal would be for the European signatories to stand up to the United States.

“Today they must show their strength in the face of American pressure,” Alaeddin Borujerdi said, according to the Iranian Students’ News Agency.

CONSEQUENCES

German Foreign Minister Heiko Maas on Monday told reporters in Argentina he would travel on from there to Washington to discuss the nuclear deal with U.S. Secretary of State Mike Pompeo. He gave no date for his meeting.

Germany’s economy minister earlier told a newspaper the Berlin government would help German firms with business in Iran where it could, but could not entirely shield them from the U.S. decision to quit the Iran nuclear deal and reimpose sanctions.

Asked how the German government could assist German firms feeling nervous in the wake of the U.S. decision, Peter Altmaier told the Passauer Neue Presse newspaper that Berlin would help them assess the situation and developments while also urging the U.S. to grant exemptions and deadline extensions.

“We will help where we can, but there is no way of completely averting the consequences of this unilateral withdrawal,” he said.

His statement was echoed by Luxembourg’s foreign minister Jean Asselborn who said there were limits to the European Union’s powers to persuade its larger firms to stay in Iran in the face of threatened U.S. sanctions.

“We know there are hardly any larger companies in Europe that do not also trade with the United States. The pressure on European companies from the U.S. is quite large,” he told reporters in Brussels. “We are in the situation that we’re in.”

“I believe we should not give up, we should try until the end, to show, with our heads held high, that we are right and Mr. Trump is wrong,” he added.

French President Emmanuel Macron last week acknowledged the dilemma faced by firms choosing between trading with the biggest economy in the world, the United States, and risking sanctions and massive fines by trading with Iran.

Reporting by Babak Dehghanpisheh in Beirut; Michelle Martin and Andrea Shalal in Berlin and Gabriela Baczynska in Brussels; Writing by Andrew Heavens

Reuters

China’s foreign minister to visit Washington — After Trump urged China on Monday to “be strong & tight” along its border with North Korea

May 22, 2018

China said its Foreign Minister Wang Yi would visit Washington on Wednesday, as trade tensions ease but new strains arise over North Korea and Beijing’s military moves in the South China Sea.

“China and the US will exchange views on bilateral relations and issues of common interest,” said foreign ministry spokesman Lu Kang, announcing the visit Tuesday.

Wang is stopping over in the US capital on his way home from Argentina, where he is attending a G20 foreign ministers’ meeting and has reportedly discussed contentious South China Sea issues with some of his counterparts.

Image result for wang Yi photos

Tensions have risen since China flew nuclear-capable bombers to a disputed island in the South China Sea last week.

The Pentagon condemned Beijing’s “continued militarisation of disputed features” in the waterway.

Meanwhile, US President Donald Trump has urged China to maintain tight control over its border with North Korea until he signs a denuclearisation deal with Kim Jong Un. A summit is set for June 12.

“The word is that recently the Border has become much more porous and more has been filtering in,” Trump tweeted Monday.

The two nations may also lock horns over China’s business ties with Iran after Trump pulled the US out of the Iran nuclear deal and said he would reimpose sanctions.

China voiced regret at the decision and vowed to “safeguard” the agreement.

AFP

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Donald Trump is pictured. | Getty Images

 

“China must continue to be strong & tight on the Border of North Korea until a deal is made,” President Donald Trump wrote on Twitter. | Alex Wong/Getty Images

Trump pushes China to be ‘strong & tight’ on North Korea border

President Donald Trump urged China on Monday to “be strong & tight” along its border with North Korea as preparation continues for his planned meeting with North Korean leader Kim Jong Un next month in Singapore.

“China must continue to be strong & tight on the Border of North Korea until a deal is made,” Trump wrote on Twitter. “The word is that recently the Border has become much more porous and more has been filtering in. I want this to happen, and North Korea to be VERY successful, but only after signing!”

It was not immediately clear what the president was referring to in writing “I want this to happen” and White House spokespeople did not return emails seeking clarification.

The White House is currently in the midst of planning for Trump’s announced summit with Kim Jong Un, a meeting that, if it happens, would represent the first ever face-to-face meeting between a sitting U.S. president and North Korean leader. China, as North Korea’s largest trade partner and patron on the world stage, holds outsized influence with the Kim regime. Defectors fleeing from North Korea often do so across the border with China, while consumer goods and foreign media, including South Korean music, movies and TV shows, flow the opposite direction.

Until recently, plans for Trump’s meeting with Kim had progressed surprisingly smoothly, including the two trips by Secretary of State Mike Pompeo to North Korea and the release of three Americans who had been held as prisoners by the repressive communist nation. Kim also met last month with South Korean leader Moon Jae-in, who will visit the White House later this week.

Planning for the Trump-Kim summit appeared to hit a snag last week when the North Korean government demanded that joint U.S.-South Korean military exercises be canceled, threatening to pull out of the summit if they were not. Kim’s government also released a statement lashing out at White House national security adviser John Bolton and declaring it is uninterested in a meeting with Trump if that meeting is to be one-sided.

At least outwardly, the Trump administration was undeterred by the shift in tone from North Korea, with the president himself and multiple spokespeople continuing to express hope that the meeting will go off as planned while leaving open the possibility that it might not.