IranSource | Understanding and Analyzing a Multifaceted Iran

“I really, really think someone set him up,” Iran’s deputy foreign minister said in an initial reaction to Israeli Prime Minister Benjamin Netanyahu’s speech at the United Nations General Assembly on September 27.

In an interview with state media, Abbas Araghchi and Iranian Foreign Minister Mohammad Javad Zarif, who is seated next to Araghchi, are both unable to control their laughter at Netanyahu’s latest accusation that Iran is housing a secret warehouse for a nuclear weapons program that Iran, according to the CIA and the International Atomic Energy Agency (IAEA), ended more than a decade ago.

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NEW YORK — Iran’s mellifluous foreign minister, Mohammad Javad Zarif, was in characteristic form Saturday afternoon as he sparred with a small group of journalists and US-Iran hands and fulminated against the policies of the Trump administration.

Iran would survive the latest barrage of US sanctions, Zarif insisted, noting President Donald Trump’s relative isolation at last week’s UN General Assembly and efforts by the Europeans and others to devise ways for Iran to continue to sell oil and be paid for it despite US pressure.

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Prompted by the United States’ unilateral withdrawal from the nuclear deal with Iran (the Joint Comprehensive Plan of Action or JCPOA), the remaining signatories are urgently seeking ways to maintain the agreement—both for strategic reasons and to preserve its trade benefits. A British, French, and German proposal to launch an independent channel for maintaining trade with Tehran, however, is unlikely to succeed and risks undermining the effectiveness of European economic sanctions. 

The three European countries (also known as the E3) are reportedly pursuing the establishment of a special purpose vehicle (SPV) to evade US sanctions and ostensibly maintain legitimate trade with Iran. The proposed SPV would essentially act as an accounting firm, tracking credits against imports and exports without the involvement of European commercial or central banks. For example, Iran could ship crude oil to a French firm, accumulating credit that could then be used to pay an Italian manufacturer for goods shipped the other way —without any funds traversing through Iranian hands. By using credits instead of cash, the SPV would not require any funds to transfer outside of the European Union (EU). Supporters of the proposal contend the SPV would keep such funds safe from the reach of US sanctions. 

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A tale from more than a decade ago serves as a warning for both the US and Iran in the wake of the devastating September 22 terror attack on a military parade that killed at least twenty-five people in the provincial capital of Ahvaz.

It was around 2006 when reports started emerging of a man in his mid-fifties began making the rounds at embassies in Kuwait. He had quite a story. He was going around telling diplomats that he was a descendant of Sheikh Khazal Khan, who had led a failed 1922 Arab uprising against the rule of Iran over Khuzestan, a province in the country’s neglected but oil-rich southwest. He sought to enlist support for his own separatist group, which he promised would help fight the clerical regime in Iran at a time when the administration of George W. Bush was ramping up pressure on Tehran.

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“Now I’m Trump’s lovely man!” one Persian language tweet read with a picture of a smiling President Hassan Rouhani. The tweet was from hashtag #LovelyMan, an Iranian social media response to US President Donald Trump’s tweet.

On September 26, shortly before he addressed the United Nations General Assembly, Trump wrote on Twitter: “Despite requests, I have no plans to meet Iranian President Hassan Rouhani. Maybe someday in the future. I am sure he is an absolutely lovely man!”

Shortly after the tweet, CNN’s Christiane Amanpour interviewed the Iranian president. During the interview, Amanpour read Trump’s tweet to Rouhani, who with an amused smile dismissed the comment, claiming the US president is “playing with words and will not get us to any solutions.”

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For a country that has so often been isolated in multinational forums, Iran is wrapping itself in international legitimacy and approbation not only from much of the United Nations General Assembly but four of the five permanent members of the Security Council plus the European Union.

The night before US President Donald Trump excoriated the Islamic Republic as “brutal,” “corrupt” and “dictatorial” in a heavily nationalistic and bombastic speech at the General Assembly, the P4+1—Britain, France, Germany, China, Russia and Germany—affirmed their support for the 2015 nuclear accord with Iran and promised a special payment mechanism to allow foreign companies to circumvent sanctions re-instated by the Trump administration.

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Though August 6 marked the first set of re-imposed US sanctions against Iran, the economy had already started feeling the pain months earlier. Uncertainty about the future stirred up turbulence in the Iranian foreign exchange, and caused scarcity as well as a sharp price increase of essential goods, in addition to the gradual withdrawal of foreign companies investing in the country.

Meanwhile, there have been reports of some businesses misbehaving: such as in-store hoarding, non-oil exporters refusing to supply export proceeds to the market, and Iranians rushing to shops due to worries over further price hikes.

The national currency, the rial, was the first market that reacted to the threat of unilateral sanctions. Since November 2017, the rial started to plummet. The value of the rial against the US dollar has dropped by more than 250 percent since November, from 40,530 to 160,000 on September 24.

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Iran’s regional strategy is rapidly evolving as the Islamic Republic is trying to adapt itself to a new, and increasingly challenging, international environment.

A key determinant has been President Donald Trump’s decision to pull the United States out of the multilateral nuclear deal, clinched between Iran and world powers in July 2015, known as the Joint Comprehensive Plan of Action (JCPOA).

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When US President Donald Trump delivered his Iran strategy speech in October 2017, rather than focus on the important points that were being made, most Iranians zeroed in on him referring to the Persian Gulf as the “Arabian Gulf.” It was seen as a major insult by many Iranians who proudly view the body of water as part of thousands of years of their history and national identity.

Months later in July, Secretary of State Mike Pompeo delivered his “Supporting Iranian Voices” speech at the Ronald Reagan Presidential Foundation and Library in California. The speech didn’t offer much nuance or shift in US policy on Iran from its almost four-decade trajectory. If anything, as Ambassador John Limbert—a hostage during the 444-day Iran hostage crisis—noted, the speech “demonstrated that this administration has no knowledge of or interest in history.”

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US and Iranian officials traded accusations earlier this month over an attack on Iran’s consulate in the southern city of Basra, followed by mortar or rocket attacks that appeared to target US missions in the capital, Baghdad.

Tehran blames Washington for being behind the trashing of its consulate. The allegation was simply untrue. The protesters that did it were possibly loyal to the Shia cleric Muqtada al-Sadr—whose bloc recently won the majority of seats in parliament—and is no ally of America by any stretch of the imagination. More likely the young men were angry over persistent unemployment, power cuts, and lack of services, and were probably behind the sacking—a means of venting against Iran because it is perceived as dominating the political class. 

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