Iran braces itself for return of US sanctions

First phase comes as Teheran contends with angry protests and graft crackdown

TEHERAN • Iranians are bracing themselves for the return of US sanctions against the backdrop of angry protests and a graft crackdown that are roiling the embattled government of President Hassan Rouhani.

The country has seen days of sporadic protests and strikes in multiple towns and cities driven by concerns over water shortages, the economy and wider anger at the political system.

Journalists reported a heavy build-up of riot police on Sunday night, including at least one armoured personnel carrier, in the town of Karaj, west of Teheran, that has been a focal point of unrest.

Internet was cut off in the area, part of concerted efforts to block reporting on the unrest.

The US is set to reimpose sanctions today following President Donald Trump's decision to withdraw from the 2015 nuclear deal in May. US Secretary of State Mike Pompeo vowed on Sunday that the US would "enforce the sanctions" and that pressure on Teheran was meant to "push back against Iranian malign activity".

The tensions have already fuelled a run on Iran's currency, which has lost more than half its value since April, and exacerbated widespread concerns over high unemployment, inflation and lack of reform.

President Rouhani was due to give a televised address to the nation last night to outline plans for tackling the currency decline and impact of sanctions.

His government unveiled new foreign exchange policies late on Sunday, allowing unlimited, tax-free currency and gold imports, and reopening exchange bureaus after a disastrous attempt to fix the value of the rial in April led to widespread black market corruption.

With senior religious authorities calling for a crackdown on graft, the judiciary said it had arrested the central bank's vice-governor in charge of foreign exchange Ahmad Araghchi, along with a government clerk and four currency brokers.

Sanctions are due to return in two phases today and on Nov 5 - with the first targeting Iran's access to US banknotes and key industries including cars and carpets. The second phase to block Iran's oil sales is due to cause more damage, but several countries, including China, India and Turkey, have indicated they are not willing to entirely cut their Iranian energy purchases.

Key Trump administration figures, including National Security Adviser John Bolton, have called for regime change in the past, but the official line is that Washington only wants a change in its behaviour.

"If (pressure) leads to a wholesale capitulation, fine, if it leads to regime change, even better," said Ms Suzanne Maloney, deputy director of the foreign policy programme at the Brookings Institution.

Iran hawks believe the pressure is already showing results, pointing to a surprising lack of harassment by Iranian naval forces against US warships in the Gulf this year.

Mr Mark Dubowitz, chief executive of the think-tank Foundation for Defence of Democracies, said Iran has tested fewer missiles of late and that Mr Trump's rhetoric and position on Teheran actually lower the risk of escalation towards conflict.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 07, 2018, with the headline 'Iran braces itself for return of US sanctions'. Print Edition | Subscribe