Trump to reimpose Iran sanctions, give companies 6 months grace

U.S. President Donald Trump speaks about Iran and the Iran nuclear deal in the Diplomatic Room of the White House in Washington, U.S., October 13, 2017. REUTERS/Kevin Lamarque - HP1EDAD1BKC9Z

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WASHINGTON, United States of America

US President Donald Trump is most likely to pull out and reimpose sanctions on Tehran, while giving companies that are currently doing business with the Islamic Republic a six-month grace period to gradually scale it down officials say.

Trump is preparing to tell the world whether he plans to follow through on his threat to pull out of the landmark nuclear accord with Iran and almost certainly ensure its collapse. There are no signs that European allies enlisted to “fix” the deal have persuaded him to preserve it.

According to officials, European members have gave in to many of Trump’s demands, yet they are still left convinced he is likely to reimpose sanctions and walk away from the deal he has lambasted since his days as a presidential candidate.

Hanging in the balance was the fate of the 2015 nuclear deal struck by the United States, Iran, and world powers that lifted most US and international sanctions against the country. In return, Iran agreed to restrictions on its nuclear program making it impossible to produce a bomb, along with rigorous inspections.

An immense web of sanctions, written agreements, and staggered deadlines make up the accord. So Trump effectively has several pathways to pull the United States out of the deal by reneging on its commitments.

Under the most likely scenario, Trump will allow sanctions on Iran’s central bank intended to target its oil exports to kick back in, rather than waiving them once again on Saturday, the next deadline for renewal, said the individuals briefed on Trump’s deliberations.

Then the Trump administration would give those who are doing business with Iran a six-month grace period to wind down business and avoid breaching of those sanctions.

Depending on how Trump sells it either as an irreversible US pullout, or one final chance to save it the deal could ostensibly be strengthened during those six months in a last-ditch effort to persuade Trump to change his mind.

The first 15 months of Trump’s presidency have been filled with many such “last chances” for the Iran deal in which he’s punted the decision for another few months, and then another.

Other US sanctions don’t require a decision until later, including those on specific Iranian businesses, sectors, and individuals that will snap back into place in July unless Trump signs another waiver. A move on Tuesday to restore those penalties ahead of the deadline would be the most aggressive move Trump could take to close the door to staying in the deal.

If the deal collapses, Iran would be free to resume prohibited enrichment activities, while businesses and banks doing business with Iran would have to scramble to extricate themselves or run afoul of the US.

As they braced for an expected withdrawal, US officials were dusting off plans for how to sell a pullout to the public and explain its complex financial ramifications, said the officials and others, who weren’t authorized to speak ahead of an announcement and requested anonymity.

The three EU members of the deal Britain, France, and Germany were insistent from the start that the deal could not be reopened. After all, it was the US that brokered the agreement in 2015 and rallied the world behind it. But all that was under president Barack Obama, whose global legacy Trump has worked to chip away at since taking office.

So the Europeans reluctantly backed down, only slightly at first, agreeing to discuss an “add-on” agreement that wouldn’t change the underlying nuclear deal, but would add new restrictions on Iran to address what Trump had identified as its shortcomings.

Trump wanted to deter Iran’s ballistic missile program and other destabilizing actions in the region. He also wanted more rigorous nuclear inspections and to extend the deal’s restrictions on Iranian enrichment and reprocessing, rather than let them phase out after about a decade.