August 7, 2018 / 2:06 PM / a year ago

WRAPUP 5-Trump says firms doing business in Iran to be barred from US as sanctions hit

 (Adds Iran foreign minister response, Iraq comment)
    * Trump says firms dealing with Iran will not do business
    * Tehran rejects talks as long as Washington rejects deal
    * European allies seek ways to mitigate impact
    * Oil prices rise on prospect of cuts to world supply

    By Babak Dehghanpisheh and Peter Graff
    BEIRUT/LONDON, Aug 7 (Reuters) - Companies doing business
with Iran will be barred from the United States, President
Donald Trump said on Tuesday, as new U.S. sanctions took effect
despite pleas from Washington's allies.
    Iran dismissed a last-minute offer from the Trump
administration for talks, saying it could not negotiate while
Washington had reneged on a 2015 deal to lift sanctions in
return for curbs on Iran's nuclear programme.
    Trump decided this year to pull out of the agreement,
ignoring pleas from the other world powers that had co-sponsored
the deal, including Washington's main European allies Britain,
France and Germany, as well as Russia and China.
    European countries, hoping to persuade Tehran to continue to
respect the deal, have promised to try to lessen the blow of 
sanctions and to urge their firms not to pull out. But that has
proven difficult: European companies have quit Iran, arguing
that they cannot risk their U.S. business.
    "These are the most biting sanctions ever imposed, and in
November they ratchet up to yet another level. Anyone doing
business with Iran will NOT be doing business with the United
States. I am asking for WORLD PEACE, nothing less!" Trump
tweeted on Tuesday.
    Iranian Foreign Minister Mohammad Javad Zarif criticized
Trump's tweet as a tired cliche and denounced "US
    "And it is not the first time that a warmonger claims he is
waging war for 'world peace'," Zarif tweeted. 
    White House national security adviser John Bolton said on
Monday Iran's only chance of escaping sanctions would be to take
up an offer to negotiate with Trump for a tougher deal.
    "If the ayatollahs want to get out from under the squeeze, 
they should come and sit down. The pressure will not relent
while the negotiations go on," Bolton, one of the
administration's main hawks on Iran, told Fox News.
    On Tuesday, Bolton said the sanctions were already working,
deterring European companies: “The European governments are
still holding to the nuclear deal, but honestly their businesses
are running from it as fast as they can so that the effect of
the American sanctions really is proceeding regardless.”
    Few American companies do much business in Iran so the
impact of sanctions mainly stems from Washington's ability to
block European and Asian firms from trading there.
    Among large European companies that have suspended plans to
invest in Iran are France's oil major Total           and its
big carmakers PSA           and Renault          .
    "We have ceased our already restricted activities in Iran in
accordance with the applicable sanctions", said German car and
truck manufacturer Daimler           .             
    Washington accepts that Iran has complied with the terms of
the 2015 deal reached under Trump's predecessor Barack Obama,
but says the agreement is flawed because it is not strict
enough. Iran says it will continue to abide by the deal for now,
if other countries can help protect it from the economic impact
of Washington's decision to pull out.
    Tuesday's sanctions target Iran's purchases of U.S. dollars,
 metals trading, coal, industrial software and its auto sector.
Global oil prices rose on Tuesday on concern sanctions could cut
world supply, although the toughest measures targetting Iran's
oil exports do not take effect for four more months.
    Global benchmark Brent crude oil futures         were up $1
or 1.36 percent to $74.75 per barrel at 1823 GMT.
    "It is a reality check that this is happening and that
Iran's oil exports will be hurt when the oil sanctions hit it in
November," chief commodities analyst at Commerzbank Bjarne
Schieldrop said.
    In a speech hours before the sanctions were due to take
effect, Iran's President Hassan Rouhani rejected negotiations as
long as Washington was no longer complying with the deal.
    "If you stab someone with a knife and then you say you want
talks, then the first thing you have to do is remove the knife,"
Rouhani said in a speech broadcast live on state television.
    "We are always in favor of diplomacy and talks ... But talks
need honesty," Rouhani said.
    Iranian Intelligence Minister Mahmoud Alavi said Trump's
withdrawal from the deal meant there was no point negotiating,
since Washington had shown it did not abide by its commitments.
    "And Iran, based on past experience, has no trust in
negotiating with the American government."
    The nuclear deal is closely associated in Iran with Rouhani,
a relative moderate who won two landslide elections on promises
to open up the economy to the outside world. European countries
fear that by abandoning it, Washington could undermine Rouhani
and strengthen the hand of his hardline opponents.
    Britain, France, Germany and the EU as a bloc said in a
joint statement on Monday: "We deeply regret the reimposition of
sanctions by the U.S."
    Since the sanctions were initially lifted two years ago,
Iranian oil exports have risen. But many Iranians have yet to
see major economic improvement, and the prospect that Washington
would reimpose sanctions has helped drive a collapse in the
value of Iran's currency this year, raising the cost of imports.
    Iran's security forces have responded firmly to protests
against rising prices. Iran this week made it easier to access
foreign currency and said it was prosecuting an ex-central bank
official for economic crimes.
    "(Sanctions) will definitely make daily life harder for
Iranians," said Saeed Leylaz, a Tehran-based economist and
political analyst. "But if the government has a serious plan
they can control the situation."
    Iraq said it did not agree with the U.S. sanctions on its
neighbor, but will abide by them to protect its own interests.
    "As a matter of principle we are against sanctions in the
region. Blockade and sanctions destroy societies and do not
weaken regimes," Prime Minister Haider al-Abadi said on Tuesday.

 (Writing by Peter Graff and Mary Milliken; Additional reporting
by Susan Heavey in Washington; Editing by Angus MacSwan and
James Dalgleish)
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