Posts Tagged ‘U.S. sanctions’

Venezuela: PDVSA makes payments on $233 million debt — debt restructuring agreement with Russia.

November 24, 2017


© AFP/File | PVDSA’s bonds represent 30 percent of Venezuela’s external debt, estimated to be around $150 billion

CARACAS (AFP) – Venezuela’s state-owned oil firm PDVSA said Friday it has started to repay $233 million in interest on two bonds nearing default, days before the end of the 30-day grace period.Writing on Twitter, the company announced “the transfer process was started to pay the interest on the PDVSA 8,5% 2020 Bonds and the PDVSA 6% 2022 Bonds.”

The company also called on creditors to “trust” its “logistical, productive and financial capacity” — adding it had “fulfilled all of its commitments, even with the offensive sabotage of imperialism and its national lackeys,” referencing American sanctions.

“We confirm the solvency and soundness of our oil industry, in a fight against illegal sanctions,” it added.

PVDSA’s bonds represent 30 percent of Venezuela’s external debt — estimated to be around $150 billion.

The company was dealt a blow on November 16 when the New York-based International Swaps and Derivatives Association committee declared it in default following three missed payments — a decision which could worsen Caracas’s situation, despite a debt restructuring agreement with Russia.

That came after two major financial ratings agencies — S&P Global Ratings and Fitch — also declared both Venezuela and PDVSA in partial default.

Meanwhile, the Venezuelan government has not yet addressed its failure to make a $237 million interest payment on bonds due in 2025 and 2026, which should have been made on Tuesday.



China denounces new U.S. sanctions on North Korea

November 22, 2017
By Elizabeth Shim  |  Nov. 22, 2017 at 10:56 AM

Chinese foreign ministry spokesman Lu Kang said Wednesday Beijing does not welcome unilateral U.S. sanctions against Chinese firms. File Photo by Stephen Shaver/UPI

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Nov. 22 (UPI) — China voiced its opposition to new U.S. sanctions on Wednesday, a day after the United States Treasury announced a blacklist of North Korean and Chinese firms.

Beijing’s foreign ministry spokesman Lu Kang said the Chinese government views “unilateral sanctions” as “misconduct.”

During the regular press briefing, Lu also defended Chinese efforts in curbing North Korea, South Korean news service EDaily reported.

“I would like to point out again China has consistently opposed the misconduct of other countries, or enforcing unilateral sanctions based on their own laws,” Lu said.

The U.S. Treasury includes an embargo against Chinese trading companies that the United States says have helped North Korea circumvent existing sanctions.

“These designations include companies that have engaged in trade with North Korea cumulatively worth hundreds of millions of dollars. We are also sanctioning the shipping and transportation companies, and their vessels, that facilitate North Korea’s trade and its deceptive maneuvers,” Treasury Secretary Steven Mnuchin has said.

China’s foreign ministry said it has no issues with implementing international sanctions, and that the sanctions are being actively enforced.

“If Chinese citizens or businesses violate laws in Chinese territory, we will investigate them strictly according to law,” Lu said, suggesting the United States may be overstepping its boundaries in seeking out punitive measures against Chinese companies. “If other countries have information on these issues, we can share information and cooperate on pertinent problems.”

One individual, 13 entities and 20 vessels were included on the Treasury’s blacklist.

One of the Chinese companies under sanctions, Dandong Dongyuan Industrial Co., is suspected of supplying North Korea with equipment and parts related to the development of nuclear bombs and ballistic missiles.

China may be struggling with North Korea and efforts at diplomacy.

Chinese President Xi Jinping‘s envoy to Pyongyang, Song Tao, met with top North Korean officials Choe Ryong Hae and Ri Su Yong.

But he may have not met with Kim Jong Un, the South China Morning Post reported.

Yoo Seung-min, a South Korean opposition party lawmaker, said Wednesday North Korea’s snub of China’s envoy is a sign Beijing should move in coordination with the United States, including on sanctions, South Korean news service Newsis reported.


U.S. sanctions 13 Chinese and North Korean organizations

November 22, 2017

WASHINGTON (Reuters) – The United States on Tuesday imposed sanctions against 13 Chinese and North Korean organizations Washington accused of helping evade nuclear restrictions against Pyongyang and supporting the country through trade.

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The U.S. Treasury announced the action, one day after President Donald Trump put North Korea back on a list of state sponsors of terrorism, on its website.

The new sanctions demonstrate the Trump administration’s focus on hurting trade between China and North Korea, which it has said is key to pressuring Pyongyang to back away from its ambition to develop a nuclear-tipped missile capable of hitting the United States.

“This designation will impose further sanctions and penalties on North Korea and related persons and supports our maximum pressure campaign to isolate the murderous regime,” said Treasury Secretary Steven T. Mnuchin.

The sanctions included blacklisting three Chinese companies, Dandong Kehua Economy & Trade Co., Dandong Xianghe Trading Co., and Dandong Hongda Trade Co., which the Treasury Department said have done more than $750 million in combined trade with North Korea.

The sanctions also blacklisted Sun Sidong and his company Dandong Dongyuan Industrial Co. In a June report, Washington think tank C4ADS said Sun Sidong’s firm was part of an interconnected network of Chinese companies that account for the vast proportion of trade with North Korea.

U.S. authorities have repeatedly targeted companies and individuals from the Chinese city of Dandong, which borders North Korea, for alleged business ties to North Korea.

Anthony Ruggiero, a North Korea expert at the Foundation for Defense of Democracies, said China doesn’t strictly enforce financial rules in the Dandong area. As a result, Dandong draws companies interested in making a profit by selling to North Korea, he said.

The new sanctions also hit several North Korean companies that send workers to countries such as Russia, Poland, Cambodia and China. United States authorities said they are seeking to cut off the money North Korea makes from the export of labor.

Along with targeting sources of weapons technology, the sanctions marked the first time the United States sought to directly attack North Korea’s everyday consumer trade, said Peter Harrell, a sanctions expert at the Center for a New American Security.

“We are sanctioning companies involved in ordinary trade,” Harrell said. “That’s the logical next step of the pressure campaign.”

State Department spokeswoman Heather Nauert said the sanctions were part of an effort to further isolate Pyongyang and said she did not think that the targeting of more Chinese firms would lessen Beijing’s cooperation in resolving the North Korean issue.

“I don’t think it jeopardizes anything. I think the world has come together on this issue,” she said. “We have a good relationship with China. That’s not going to change.”

Reporting by Joel Schectman; Editing by James Dalgleish

Venezuela: Is Maduro driving down bond prices to buy them back on the cheap?

November 8, 2017


By Daniel Cancel

  • Maduro may be driving down price of bonds to buy them back
  • ‘Our own suspicions tend more towards a more brutal endgame’

As Venezuelan bond prices sink toward a mere 20 cents on the dollar, a pair of sovereign debt specialists are publicly asking questions that many people are wondering in private: Is President Nicolas Maduro fooling the bond market? Was last week’s debt restructuring announcement simply a ruse to spark a panic, push down prices and then buy them back on the cheap?

 Image result for maduro, photos

“Maduro drove the secondary market prices of the bonds off a cliff,” Cleary Gottlieb Steen & Hamilton’s Lee Buchheit and Duke University’s Mitu Gulati wrote Wednesday in an opinion piece in the Financial Times.

There’s been radio silence from Caracas since the unveiling of the plan last week — including when Bloomberg News called the Finance Ministry seeking comment on this theory — but such a move isn’t without precedent. A decade ago, Rafael Correa, the president of Ecuador and a close ally of Maduro and his mentor Hugo Chavez, implemented a similar tactic, announcing he was defaulting on a series of foreign bonds and then scooped them up in the secondary market at depressed prices.


For Venezuela, the approach would be particularly attractive now. Mired in an unprecedented economic recession, the socialist country is in need of debt relief but is banned from cutting a deal with American investors by U.S. sanctions. A meeting that Vice President Tareck El Aissami — a man who the U.S. has labeled a drug kingpin — has called with creditors for Nov. 13 in Caracas is essentially a non-starter. Maduro “may be tempted to buy the bond back rather than slog through a debt restructuring exercise,” the academics concluded.

If that is indeed Maduro’s strategy, it’s working.

Ratings agencies are declaring state-oil company PDVSA non-compliant with a payment that was due Nov. 2, credit-default swaps are at record highs with prospects of payments being triggered in the coming days and Venezuelan bond prices have sank more than 40 percent in three trading sessions. The government’s bond due in 2027, its benchmark foreign security, is down to 22 cents on the dollar.

Buchheit and Gulati mentioned several other possible strategies that the government could be pursuing with the restructuring announcement, including drumming up nationalist support at home or nudging bondholders in the U.S. to push Congress for sanctions relief in order to re-negotiate the debt.

“Our own suspicions, however, tend more towards a more brutal endgame,” they said, in reference to the buy-them-back-on-the-cheap theory.

— With assistance by Fabiola Zerpa

EU rejects Donald Trump’s attempt to dump Iran nuclear deal

October 14, 2017

The EU’s top diplomat says the US can’t terminate the Iran nuclear agreement because it’s not a “bilateral deal.” European leaders acknowledge Iran poses many problems, but insist they should be handled separately.

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European diplomats on both sides of the Atlantic, along with the Iran nuclear deal’s other signatories and many of the US president’s own advisers, have failed to convince Donald Trump not to pick apart the agreement.

In Brussels, European Union officials are clearly exasperated with the US leader’s insistence on mixing a myriad of complaints about Iranian behavior with the Joint Comprehensive Plan of Action (JCPOA), the six-party accord signed in 2015 which limits Tehran’s ability to enrich uranium to a weapons-grade level.

EU Foreign Policy Chief Federica Mogherini did not mince words Friday when lambasting Trump’s decision not to certify Iran’s compliance, which she says has been full, and to ask the US Congress to examine ways to add sanctions on Tehran. Mogherini was officially the deal’s mediator when it was concluded in 2015.

“This deal is not a bilateral agreement, this is not an international treaty,” but part of a UN Security Council Resolution, she said tersely after the announcement, “so it is clearly not in the hands of any president of any country in the world to terminate an agreement of this sort.”

“The president of the United States has many powers, but not this one,” she added.

Iran's President Hassan Rouhani Iran’s President Hassan Rouhani

Iranian President Hassan Rouhani later echoed Mogherini in a live televised address. “No president can revoke an international deal. … Iran will continue to honor its commitments under the deal,” Rouhani said. He also warned that “if one day our interests are not served, we will not hesitate even one moment and will respond.”

Germany, France and UK statement

Chancellor Angela Merkel, President Emmanuel Macron and Prime Minister Theresa May said in a joint statement: “We encourage the US Administration and Congress to consider the implications to the security of the US and its allies before taking any steps that might undermine the JCPOA, such as re-imposing sanctions on Iran lifted under the agreement.”

“We stand ready to take further appropriate measures to address these issues in close cooperation with the US and all relevant partners,” they said. ”We look to Iran to engage in constructive dialogue to stop de-stabilising actions and work towards negotiated solutions.”

No deal-breaker

Mogherini and other European officials insist they will continue to observe the agreement, reminding Iran it must do the same.

A high-level EU official speaking on background ahead of the announcement said the bloc agrees with Trump about the dangers of ballistic missiles, terrorism, Iranian-backed militias and what they see as other bad behavior, and believes they should be dealt with, but separately from the nuclear deal.

Iran's Foreign minister Mohammad Javad Zarif (R) and European Union High Representative for Foreign Affairs, Federica Mogherini give a joint press conference (Getty Images/AFP/A. Kenare)Mogherini (left) says Iran is fulfilling its obligations under the nuclear deal she helped broker

At least with the current nuclear agreement, Tehran wouldn’t have the warheads for those missiles, the official pointed out.

Now lobbying attention turns to Congress, where European outreach efforts continue, according to the EU official.

“All the other issues of concern that may come up will not be better served if we undo the agreement,” the official explained, “because the agreement takes away a very dangerous risk, not only the risk of a nuclear arms race in the region, but also of uncontrolled nuclear proliferation, which is something we are now unfortunately seeing in North Korea.”

Lack of accord between US and EU 

European Council on Foreign Relations analyst Ellie Geranmayeh says this move “has really been seen in Europe as a terrible betrayal of European allies.” While Europeans are also very concerned about missile proliferation and regional meddling, they want to keep open the channel of diplomatic initiatives. “If this deal starts to unravel,” she told DW, “it’s more likely than not to provoke activities from Iran inside the region that add to the fragility of that region.”

Erik Brattberg, who heads the Carnegie Endowment’s Europe program, says that although the EU’s reaction is obviously one of disappointment, the situation doesn’t need to be seen as “catastrophic.”

“While uncertainty about US intentions and its commitment to the JCPOA seem unavoidable in the short term,” Brattberg said, “it is at least preferable to a [complete] unilateral US withdrawal from the agreement from a European perspective.”

Sanctions aimed at Tehran may also sting EU

But things will get worse for European companies that have resumed doing business with Iran if Trump’s impulses are fulfilled. “I think there is a very good chance that US sanctions will be reapplied against Tehran,” predicts Nile Gardiner, Director of the Margaret Thatcher Center for Freedom at The Heritage Foundation, a conservative think tank in Washington. Republicans will strongly support renewing the sanctions, he said, and some Democrats may join them.

“European companies should be nervous,” Gardiner told DW. “They are playing with fire by investing in Iran, and could be hit hard by US sanctions. If they wish to do business with the US they would have to comply with American sanctions if they are imposed.”

Geranmayeh warns Gardiner may be right. “My message to the Europeans is, now that Trump has decertified, you better start planning on that contingency much more vigorously than before,” she said, “whether it’s because of a review process by Congress or because, come January, the president decides that he’s not going to renew these waivers.”

 just decertified  -here is what Europe should do:start planning contingency to salvage 

Photo published for What if Trump decertifies the Iran deal?

What if Trump decertifies the Iran deal?

European countries must coordinate a vigorous response to prevent Trump from derailing the nuclear accord.

With EU foreign ministers meeting Monday to discuss their strategy, she says even if the EU is united behind a position of continuing the agreement, they’d better start coordinating on how far they are willing to go to salvage the deal and how to safeguard their companies from the White House if all else fails.

Shada Islam, director of policy at Friends of Europe, could only shake her head about the developments. “This was a hard-fought deal,” she told DW, adding that its abolishment would be dangerous for the world. “This will empower all those in Iran who don’t want the nuclear agreement – is that what we want?”

Includes videos:


Trump strikes blow at Iran nuclear deal in major U.S. policy shift

October 14, 2017

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WASHINGTON (Reuters) – U.S. President Donald Trump struck a blow against the 2015 Iran nuclear agreement on Friday in defiance of other world powers, choosing not to certify that Tehran is complying with the deal and warning he might ultimately terminate it.

Trump announced the major shift in U.S. policy in a speech in which he detailed a more aggressive approach to Iran over its nuclear and ballistic missile programs and its support for extremist groups in the Middle East.

He accused Iran of “not living up to the spirit” of the nuclear agreement and said his goal is to ensure Tehran never obtains a nuclear weapon, in effect throwing the fate of the deal to Congress.

He singled out Iran’s Islamic Revolutionary Guard Corps for sanctions and delivered a blistering critique of Tehran, which he accused of destabilizing actions in Syria, Yemen and Iraq.

“We will not continue down a path whose predictable conclusion is more violence, more terror and the very real threat of Iran’s nuclear breakout,” Trump said.

Trump’s hardline remarks drew praise from Israel, Iran’s arch-foe, but was criticized by European allies.

The move by Trump was part of his “America First” approach to international agreements which has led him to withdraw the United States from the Paris climate accord and the Trans-Pacific Partnership trade talks and renegotiate the North American Free Trade Agreement with Canada and Mexico.

His Iran strategy angered Tehran and put Washington at odds with other signatories of the accord – Britain, France, Germany, Russia, China and the European Union – some of which have benefited economically from renewed trade with Iran.

Responding to Trump, Iranian President Hassan Rouhani said on Friday on television that Tehran was committed to the deal and accused Trump of making baseless accusations.

“The Iranian nation has not and will never bow to any foreign pressure,” he said. “Iran and the deal are stronger than ever.”

European allies have warned of a split with the United States over the nuclear agreement and say that putting it in limbo as Trump has done undermines U.S. credibility abroad, especially as international inspectors say Iran is in compliance with the accord.

The chief of the U.N. atomic watchdog reiterated that Iran was under the world’s “most robust nuclear verification regime.”

“The nuclear-related commitments undertaken by Iran under the JCPOA are being implemented,” Yukiya Amano, director general of the International Atomic Energy Agency said, referring to the deal by its formal name.

U.S. Democrats expressed skepticism at Trump’s decision. Senator Ben Cardin said: “At a moment when the United States and its allies face a nuclear crisis with North Korea, the president has manufactured a new crisis that will isolate us from our allies and partners.”

U.S. President Donald Trump speaks about the Iran nuclear deal in the Diplomatic Room of the White House in Washington, U.S., October 13, 2017. REUTERS/Kevin Lamarque


While Trump did not pull the United States out of the agreement, he gave the U.S. Congress 60 days to decide whether to reimpose economic sanctions on Tehran that were lifted under the pact.

If Congress reimposes the sanctions, the United States would in effect be in violation of the terms of the nuclear deal and it would likely fall apart. If lawmakers do nothing, the deal remains in place.

Senate Foreign Relations Committee Chairman Bob Corker was working on amending the Iran Nuclear Agreement Review Act law to include “trigger points” that if crossed by Iran would automatically reimpose U.S. sanctions.

Slideshow (10 Images)

The trigger points would address strengthening nuclear inspections, Iran’s ballistic missile program and eliminate the deal’s “sunset clauses” under which some of the restrictions on Iran’s nuclear program expire over time.

Trump directed U.S. intelligence agencies to probe whether Iran might be working with North Korea on its weapons programs.

The president, who took office in January, had reluctantly certified the agreement twice before but has repeatedly blasted it as “the worst deal ever.” It was negotiated under his predecessor, former President Barack Obama.

Trump warned that if “we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated.”

“We’ll see what happens over the next short period of time and I can do that instantaneously,” he told reporters when asked why he did not choose to scrap the deal now.

The Trump administration designated the entire Islamic Revolutionary Guard Corps under an executive order targeting terrorists. The administration stopped short of labeling the group a Foreign Terrorist Organization, a list maintained by the State Department.

The Revolutionary Guard is the single most dominant player in Iran’s security, political, and economic systems and wields enormous influence in Iran’s domestic and foreign policies.

It had already previously been sanctioned by the United States under other authorities, and the immediate impact of Friday’s measure is likely to be symbolic.

The U.S. military said on Friday it was identifying new areas where it could work with allies to put pressure on Iran in support of Trump’s new strategy and was reviewing the positioning of U.S. forces.

But U.S. Defense Secretary Jim Mattis said no changes in force posture had been made yet, and Iran had not responded to Trump’s announcement with any provocative acts so far.

Reporting by Steve Holland in Washington; Additional reporting by James Oliphant, Phil Stewart, Makini Brice, Patricia Zengerle, Jonathan Landay, Justin Mitchell, Tim Ahmann and Arshad Mohammed in Washington, John Irish in Paris, Parisa Hafezi in Ankara, Dan Williams in Jerusalem and Shadia Nasrallah in Vienna; Editing by Yara Bayoumy, Alistair Bell and James Dalgleish



President Trump Refuses to Certify Iran Nuclear Deal; Asks Congress For Action — Revolutionary Guard named as a terror ​organization

October 14, 2017

President says he won’t certify that ‘rogue regime’ in Tehran is complying with nuclear agreement

Iranians walk past medium-range ballistic missiles displayed next to a portrait of Iranian Supreme Leader Ayatollah Ali Khamenei in September.
Iranians walk past medium-range ballistic missiles displayed next to a portrait of Iranian Supreme Leader Ayatollah Ali Khamenei in September. PHOTO: ATTA KENARE/AFP/GETTY IMAGES

WASHINGTON—President Donald Trump took aim Friday at the 2015 Iran nuclear agreement, vowing to end U.S. participation in the landmark deal unless Congress and U.S. allies are able to deliver on punitive measures targeting Tehran’s missile program, its support for regional militant groups, and any future nuclear activities.

As a first step, Mr. Trump refused to certify to Congress under a U.S. law that Iran was complying with its obligations under the nuclear agreement, charging that the country had violated the terms of the deal. Going further, Mr. Trump said if efforts to address his concerns fall short, he would terminate the accord.

“It is under continuous review, and our participation can be canceled by me, as president, at any time,” he said.

As U.S. president, Mr. Trump has wide, long-term latitude over the fate of the agreement, but lacks the ability under the accord’s complicated terms to immediately abolish it.

Mr. Trump, reiterating his fierce opposition to the terms of the deal, announced his decision after issuing a lengthy denunciation of what he called a “rogue regime” run by radicals.

“Iran is under the control of a fanatical regime,” Mr. Trump said in a speech at the White House, adding it has “spread death, destruction and chaos all around the globe.”

Trump Denounces Iran as a ‘Rogue Regime’
President Donald Trump announced plans on Friday to decertify the Iran Nuclear Deal, reinforcing his commitment to cancel the agreement if congress doesn’t act on whether to reimpose sanctions on Iran. Photo: Getty Images

Detailing grievances against Iran going back to 1979, the year of the country’s Islamic revolution, Mr. Trump broadly condemned the country’s rulers.

“Iranian aggression continues to this day,” he said. “The regime remains the world’s leading state sponsor of terrorism.”

In his threat, the president applied a well-practiced tactic of pressing for changes in pre-existing arrangements and abandoning them if he doesn’t succeed. He has taken a similar approach to the Paris climate accord and the North American Free Trade Agreement, as well as to domestic programs such as the Deferred Action for Childhood Arrivals, or DACA, program.

Mr. Trump’s move on Friday touches off high-pressure negotiations in Washington and European capitals over the future of the accord, and his action drew intensive world-wide attention. Iran’s president Hassan Rouhani denounced Mr. Trump’s comments in a televised speech, saying: “The Iranian people will not bend down before a dictator.”

Israeli Prime Minister Benjamin Netanyahu called Mr. Trump’s move to deny Iran’s compliance with the deal courageous, saying the U.S. leader had “boldly confronted Iran’s terrorist regime.” ​

Saudi Arabia, a leading Sunni Muslim power and Shiite-majority Iran’s main rival in the Middle East, also threw its support behind Mr. Trump’s stance.

European officials pushed back, however, on his threat to scuttle the deal if his terms can’t be satisfied.

“It is not a bilateral agreement. It does not belong to any single country and it is not up to any single country to terminate,” the European Union’s Foreign Policy Chief Federica Mogherini told reporters. German Chancellor Angela Merkel, French President Emmanuel Macron, and British Prime Minister Theresa May, whose countries are parties to the accord, said in a joint statement they remained committed to the agreement “and its full implementation by all sides.”

China, another party to the deal, has also signaled its desire to keep it intact, with foreign ministry spokeswoman Hua Chunying saying Tuesday it was in the interest of all sides to continue its implementation.

A law passed in 2015 to give Congress oversight of the nuclear deal requires the president to tell Congress every 90 days whether Iran is complying. If the president doesn’t do so, it triggers a 60-day process for lawmakers to weigh whether to reimpose sanctions under expedited consideration.

However, Mr. Trump didn’t call on Congress to reimpose sanctions immediately, and instead said he supported efforts of Republicans in Congress to craft legislation that would amend the 2015 U.S. oversight bill to reimpose sanctions on Iran if it violates enhanced and existing restrictions on its nuclear program.

Sen. Bob Corker (R., Tenn.), the chairman of the Senate Foreign Relations Committee, has been working with Secretary of State Rex Tillerson on amending the oversight law, the Iran Nuclear Agreement Review Act, known in Washington as INARA. Sens. Tom Cotton (R., Ark.) and Marco Rubio (R., Fla.) have also been involved in crafting the amended legislation.

Mr. Corker, despite a public feud with Mr. Trump that has spilled into Twitter posts, said on Friday that he expects to introduce the legislation in the next week or two.

What Is the 2015 Iran Nuclear Deal?
Iran reached a historic agreement with major world powers over its nuclear program in 2015. Under the deal, what did Iran give up and how is it benefiting? WSJ’s Niki Blasina explains.

Mr. Trump highlighted concerns with “sunset clauses” in the nuclear deal that allow nuclear restrictions to expire. Mr. Tillerson, briefing reporters, said the U.S. envisions a “successor deal” to address those concerns.

A current draft of the bill also would change the frequency of presidential certification required from every quarter to twice a year.

The legislative process is likely to require time and painstaking negotiations. Mr. Tillerson said he hoped Congress would amend the legislation before Mr. Trump next faces another certification deadline in January, but admitted the process won’t be a “slam dunk.”

Mr. Rubio said he backed Mr. Trump’s move to withhold support for the deal and said he thought the U.S. should leave the accord and reimpose sanctions. “I have serious doubts about whether it is even possible to fix such a dangerously flawed agreement,” he said.

However, Sen. Ben Cardin (D., Md.), the top Democrat on the Senate Foreign Relations Committee, said he disagreed with Mr. Trump’s “reckless political decision and his subsequent threat to Congress.” Mr. Cardin voted against the deal in 2015 but said Friday he backed staying in it and rigorously enforcing it.

Mr. Corker’s measure would contain what Mr. Tillerson called “trigger points” that would reimpose sanctions, for example, if Iran violates restrictions spelled out in the legislation. The legislation would set stricter limits than those contained in the nuclear accord. Mr. Corker’s office said the bill would be “effectively ridding the JCPOA of its sunset provisions as they apply to U.S. sanctions.” It will also bolster the verification powers of the U.N.’s nuclear watchdog and limiting Iran’s centrifuge program.

As it works to toughen the U.S. law, the administration also will seek talks with European partners to address key concerns, Mr. Tillerson said.

Asked if the EU would be interested in negotiating a “successor” agreement, Ms. Mogherini, the EU foreign policy chief, said “the agreement is working, has been implemented, continues to be implemented…I would expect all sides to stick to it.”

European officials and former U.S. officials involved in negotiating the deal are concerned that by reimposing sanctions for reasons not covered by the original nuclear deal, the U.S. stands to be in breach of the international agreement, setting in motion a sequence of events that could lead to the deal’s collapse.

Mr. Trump has the power to unilaterally end U.S. participation in the deal by halting the U.S. sanctions relief that Iran was promised under the accord. Doing so, however, wouldn’t necessarily abolish the agreement, as other countries and Iran could choose to continue to follow it.

Reinstating U.S. sanctions also could lead Iran to halt its commitments under the deal if Tehran doesn’t receive the economic relief it expected. Iran’s withdrawal and return to now-banned nuclear activities would effectively nullify the agreement.

Mr. Trump has other options under the complex deal. He could say that Iran has committed a material breach of the terms and initiate a dispute resolution process ​that could lead to a vote in the U.N. Security Council. In such a vote, the U.S.’s veto could result in the resumption of broad, punitive international sanctions. However, the appearances of a U.S. move to force a vote that way would be challenging, former officials involved in the negotiations said.

Among other steps outlined by Mr. Trump, the U.S. will target the Islamic Revolutionary Guard Corps, Iran’s elite military branch, which Mr. Trump said has hijacked large portions of Iran’s economy.

The IRGC won’t be classified formally as a foreign terrorist organization under U.S. laws that would expose it to more punitive action, officials said. Instead, the Treasury Department announced on Friday that it is designating the group under as a terror ​organization under an executive order that was created after Sept. 11, 2001 to target terrorist financing.

Behnam Ben Taleblu, a senior Iran analyst at the Washington-based Foundation for the Defense of Democracies, said that even though large parts of the IRGC has already been sanctioned under past executive orders, the latest designation could inflict economic damage.

“This is a major course correction” by Washington, Mr. Ben Taleblu said. Besides expanding the sanctions to the entire IRGC, the administration is also issuing the order under a terrorism designation, which ratchets up the stigma for firms and individuals thinking about doing business with the group or any of its affiliates.

Write to Felicia Schwartz at

Appeared in the October 14, 2017, print edition as ‘Trump Threatens to End Iran Deal.’

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Venezuelan Bonds Fall as U.S. Trading Sanctions Loom

August 24, 2017

Some moves under consideration by Trump administration could have unpredictable consequences

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Aug. 23, 2017 7:03 p.m. ET

Venezuelan bond prices tumbled Wednesday as traders grappled with the prospect that U.S. sanctions could restrict trading in the troubled South American nation’s securities.

The Trump administration is considering banning trading by U.S. banks of new debt issued by Venezuela or its state-owned entities, and possibly some existing debt, The Wall Street Journal reported on Wednesday. The move is aimed at weakening a government that Washington says has moved toward dictatorship, according to a senior administration official.

The U.S. Treasury has targeted foreign financial markets before. In 2014, it barred U.S. financial institutions from participating in new bond sales by Russia meant to raise money for the government, a move that had the effect of reducing the availability of dollar funding for the country.

But some moves under consideration are seen as extremely rare and could have unpredictable consequences. Investors couldn’t recall a time when the Treasury prevented financial firms from trading debt among themselves in the so-called secondary market, a move the Journal reported the administration is considering.

That move would aim to hurt the government of President Nicolás Maduro and his associates who hold these bonds, but could also harm U.S. and other private investors who own Venezuelan debt, analysts said — a factor officials have considered in the past when deciding which sanctions to implement.

“This would be a new step for Treasury and there would undoubtedly be collateral damage for U.S. institutional investors,” said Tim Ash, senior sovereign bond analyst at BlueBay Asset Management, a U.K. investment firm.

Prices for Venezuela’s government bonds due 2027 dropped as much as 4% to 39 cents on the dollar on Wednesday, while bonds from the state-owned oil company Petróleos de Venezuela SA due this November fell as much as 2.1% to 88.5 cents. Both bonds recovered slightly by the end of trading.

Venezuelan bond prices have been under pressure in recent weeks as investors began to worry that the cash-starved government was edging closer to default. Some worried that tough U.S. sanctions could push it over the edge.

When the Trump administration announced on July 31 sanctions on Mr. Maduro but not, as many feared, on Venezuela’s oil industry, many investors piled back into debt that offers double-digit yields.

News of another round of sanctions has raised the anxiety level around Venezuelan bonds again.

“I would not touch them with a 10-foot pole,” said Diego Ferro, co-chief investment officer at Greylock Capital Management, referring to any new bonds issued by the Maduro government and certain other existing debt.

Image result for Goldman Sachs, sign, photos

Goldman Sachs Group Inc. ran into criticism after its asset-management unit this year purchased $2.8 billion of debt held by the country’s central bank at a deep discount. Venezuelans accused Goldman of raising fresh cash for Mr. Maduro.

Goldman has said it purchased them through an intermediary and didn’t interact with the Venezuelan government directly.

The backlash from the trade has led some emerging-market bond analysts and traders to refer to such deals as “hunger bonds,” for their support of a regime that has restricted the flow of food and medicine so drastically to pay its debts that its people are starving.

U.S. investors are barred from holding debt of countries like Syria and North Korea, which are subject to comprehensive sanctions from the U.S. that bar all trade, said Judith Lee, head of the international trade practice of law firm Gibson, Dunn & Crutcher.

Such blanket sanctions could be problematic in Venezuela because the country sells much of its oil to the U.S. and owns Citgo Holding Inc., which has refineries and pipelines in the U.S. The U.S. has never applied a more tailored sanction on trading bonds of a country not already under a comprehensive ban, Ms. Lee said.

Treasury considered implementing a similar blockade on trading of Russian government bonds after Moscow intervened militarily in Ukraine but dropped the idea to avoid hurting U.S. bondholders, according to a person familiar with the matter.

Instead, Treasury barred U.S. banks from underwriting any new bond sales for Russia. Moscow circumvented the measure by issuing new debt through Russian banks that ultimately sold the debt to international investors in secondary trades.

Freezing trade of Venezuelan bonds would hit many emerging-market investors, since the country comprises 1.55% of the benchmark emerging market bond index operated by J.P. Morgan Chase & Co. The index includes securities that meet minimum liquidity criteria. A spokeswoman for J.P. Morgan declined to comment on how a ban might affect Venezuela’s role in the index.

Write to Matt Wirz at and Julie Wernau at

Washington Will Impose Greater Sanctions On Venezuela

August 22, 2017


I cover business and investing in emerging markets.  Opinions expressed by Forbes Contributors are their own.

Pro-government activists hold Long Live Chavez signs in Caracas on August 14, 2017. The ruling Socialists United Party will have no problem convincing loyal Chavistas (adherence to the political philosophy of Venezuelan God, er um, former president, Hugo Chavez) that the U.S. is out to overthrow their government again. (Photo by RONALDO SCHEMIDT/AFP/Getty Images)

Wait for it: Washington will impose greater sanctions on the embattled government of Venezuela.  President Trump has already announced more names to Treasury’s individual sanctions list, including Venezuelan president Nicolas Maduro. But more sanctions are right around the corner, especially if October elections look rigged.

In the war of words battle, Washington has been much more explosive of late.

On Aug. 14, vice president Mike Pence called Venezuela a “failed state” and that its downfall “threatened the security of the hemisphere and the people of the United States of America.” Pence was doing what all VEEPs do in this case, reiterate what the Commander-in-Chief said just days prior. On Aug. 12, Trump played his usual strongman hand and said, “by the way, I’m not going to rule out a military option.” While this is highly unlikely unless Maduro’s military begins overtly cracking heads in the streets of Caracas, or the government breaks down completely and needed some for of foreign military support to maintain order, the foreign policy press were quick to point out the poison in the president’s words. U.S. military intervention into Latin America is toxic history. If Latin Americans had statues of American statesmen dotting their landscape, they’d probably call for them to be removed. Memories of CIA-backed coup d’etats are not conspiracy theories, and so threats of sending the Marines into Venezuela would drive a wedge between Washington and its allies in South America, as everyone has now pointed out.

But on the other hand, Trump’s belligerence, coupled with some rank and file military members in Venezuela growing tired of civil strife, may have calmed Maduro down.

That said, what’s the latest stress in Venezuela and what is the likelihood of Maduro and his Socialists United Party (PSUV) rearranging the deck chairs to allow for majority rule, and get the country moving forward again

For starters, local elections won’t tip the power scales in Caracas. And PSUV is about as likely to give the majority opposition in the National Assembly a voice as Trump is likely to stop tweeting.

There is some good news worth noting: daily protests have become less violent. Venezuela has not retaliated against U.S. sanctions, and Maduro has signaled a willingness to talk with Trump (even though this Latin American crisis is not the fault of Washington). He also remains open to the normal presidential election cycle in 2018. All positives.

The president of Venezuela’s Constituent Assembly, Delcy Rodriguez, offers a press conference after holding a meeting with the new Truth Commission at the Foreign Ministry in Caracas on August 19, 2017.Venezuela’s president Nicolas Maduro accuses the United States of wanting to overthrow him. The Truth Commission will get to the bottom of this…  AFP PHOTO / Federico PARRA

There is still no clarity on the agenda from the new PSUV-centric Constituent Assembly (which replaces the legislative powers of the National Assembly, or congress) and there are mixed signals now as to whether this new political body represents an outright power grab by PSUV or was just a distraction designed to give them a breather from the opposition in congress. The opposition parties have all boycotted the Constituent Assembly, and they agreed to participate in the local elections in October 2017. They mostly stood down and did not vote for the Constituent Assembly because they felt their vote would not matter. As a result, pro PSUV voters, which represent a little under a third of the population, voted to give Maduro the rights to avoid congress completely.

The upcoming mayoral races won’t tip the scales of power and some see it as another rigged deal.

“We assume it’s a rigged process again,” says Siobhan Morden, a managing director at Nomura in New York, with regards to the upcoming local elections. “The opposition needs to defend whatever is possible in terms of representation across the institutions,” she says. “It’s also curious that President Maduro didn’t rule out the prospect for presidential elections in 2018. There has been a more conciliatory tone perhaps to discourage retaliation from the U.S. or breakaway dissidents from the military ranks.”

The market is watching Venezuela as closely as Latin America political junkies. Goldman Sachs recently forked over a billion dollars to buy the bonds of Venezuelan oil company PDVSA. Numerous hedge funds who love distressed assets have taken a buy and hold strategy on PDVSA’s long dated bonds, maturing beyond 2018, in hopes that Venezuela’s long democratic tradition trumps Maduro’s ideological push towards Havana-style politics. In such a free and open election, Maduro is expected to lose hands-down, sending bond prices soaring. PSUV ‘s base would continue to shrink, or barely hold water, following years of economic misery. The party is dependent on three types of voters: government employees (namely PDVSA workers), the poor (increasingly dependent on government hand-outs for survival and easily convinced an ant-PSUV party will take it all away) and communist ideologues fighting the good fight against Yankee imperialists from the bygone Cold War era.

A Citgo oil refinery stands in Corpus Christi, Texas. The company is owned by the Venezuelan government, with major equity stakes owned by Russian oil firm Rosneft. (Photo by Eddie Seal/Bloomberg)

Nomura Securities has been watching these developments closely. Morden thinks that the sanctions program will intensify next year.

“The Maduro administration has already crossed the line with an illegitimate Constituent Assembly that further consolidates power and undermines the opposition-controlled legislature,” she says. So much for majority rule in Venezuela. “The rigged local elections and consistent persecution of the opposition politicians should further motivate retaliation from the U.S. on their sanctions policy with the latent threat of sector sanctions next year the main constraint against a sustainable recovery in PDVSA bond prices.”

Iran’s Parliament increases funding for missiles after U.S. sanctions — Lawmakers shouted: “Death to America.”

August 13, 2017


© Atta Kenare, AFP | Members of Iran’s Armed Forces attend President Hassan Rouhani’s swearing-in ceremony in Tehran on August 5, 2017. Rouhani warned the US against tearing up the nuclear deal as he was inaugurated for a second term.


Latest update : 2017-08-13

Iran’s parliament voted Sunday to allocate $520 million to develop its missile programme to fight Washington’s “adventurism” and sanctions, and to boost the foreign operations of the country’s Revolutionary Guards.

“The Americans should know that this was our first action,” said speaker Ali Larijani, after announcing an overwhelming majority vote for a package “to confront terrorist and adventurist actions by the United States in the region”.

A total of 240 lawmakers voted for the bill, out of the 244 parliamentarians present.

The vote came after fresh US sanctions in July against Iran, targeting Tehran’s missile programme.

“The bill is backed by the foreign ministry and the government and is part of measures by the JCPOA supervision committee to confront the recent US Congress law,” deputy foreign minister Abbas Araghchi.

He was referring to a 2015 nuclear deal with world powers, known officially as the JCPOA, under which Iran agreed to strict limits on its nuclear programme in exchange for an easing of sanctions.

The bill mandates the government to allocate an additional $260 million for the “development of the missile programme” and the same amount to the Revolutionary Guards’s foreign operations wing, the Quds Force, state news agency IRNA said.

After Larijani announced the vote results, lawmakers shouted: “Death to America.”