August 8, 2018 / 6:03 PM / a year ago

WRAPUP 2-China, Germany defend Iran business ties as US sanctions grip

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    * Partners dispute legality of extraterritorial U.S.
    * China objects to 'long-armed jurisdiction' of Washington
    * Iran has nothing to worry about - top leader Khamenei
    * Anger follows Trump tweet, reimposition of Iran sanctions

    By Ben Blanchard and Michelle Martin
    BEIJING/BERLIN, Aug 8 (Reuters) - China and Germany defended
their business ties with Iran on Wednesday in the face of
President Donald Trump's warning that any companies trading with
the Islamic Republic would be barred from the United States.
    The comments from Beijing and Berlin signalled growing anger
from partners of the United States, which reimposed strict
sanctions against Iran on Tuesday, over its threat to penalise
businesses from third countries that continue to operate there.
    "China has consistently opposed unilateral sanctions and
long-armed jurisdiction," the Chinese foreign ministry said.
    "China's commercial cooperation with Iran is open and
transparent, reasonable, fair and lawful, not violating any
United Nations Security Council resolutions," it added in a
faxed statement to Reuters. 
    "China's lawful rights should be protected."             
    The German government said U.S. sanctions against Iran that
have an extra-territorial effect violate international law, and
Germany expects Washington to consider European interests when
coming up with such sanctions.             
    The reimposition of U.S. sanctions followed Trump's decision
earlier this year to pull out of a 2015 deal to lift the
punitive measures in return for curbs on Iran's nuclear
programme designed to prevent it from building an atomic bomb.
    Iran's highest authority, Supreme Leader Ayatollah Ali
Khamenei, said meanwhile the country had nothing to be concerned
about, a report on his official website said in an apparent
reference to the imposition of the U.S. sanctions             
    "With regard to our situation do not be worried at all.
Nobody can do anything," Khamenei said recently, the website
reported. "There is no doubt about this."
    Iranian President Hassan Rouhani, speaking in a meeting with
North Korea's foreign minister, said that America could not be
trusted, according to the Islamic Republic News Agency.
    "Today, America is identified as an unreliable and
untrustworthy country in the world which does not adhere to any
of its obligations," Rouhani said.
    Tuesday's sanctions target Iran's purchases of U.S. dollars,
 metals trading, coal, industrial software and the auto sector.
    Trump tweeted on Tuesday: "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." 
    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
proved difficult: European companies have quit Iran, arguing
that they cannot risk their U.S. business.
    Among those that have suspended plans to invest in Iran are
France's oil major Total          , its big carmakers PSA
          and Renault          , and their German rival Daimler
    Danish engineering company Haldor Topsoe, one of the world's
leading industrial catalyst producers, said on Wednesday it
would cut around 200 jobs from its workforce of 2,700 due to the
new U.S sanctions on Iran, which made it very hard for its
customers there to finance new projects.             
    The chief executive of reinsurance group Munich Re
           said it may abandon its Iran business under pressure
from the United States, but described the operation as very
    Turkey, however, said it would continue to buy natural gas
from Iran.             
    In Tehran, Iranian Foreign Minister Mohammad Javad Zarif was
quoted by an Iranian newspaper as saying that a U.S. plan to
reduce Iran's oil exports to zero would not succeed.
    U.S. officials have said in recent weeks that they aim to
pressure countries to stop buying oil from Iran in a bid to
force Tehran to halt its nuclear and missile programmes and
involvement in regional conflicts in Syria and Iraq.
    "If the Americans want to keep this simplistic and
impossible idea in their minds they should also know its
consequences," Zarif told the Iran newspaper. "They can’t think
that Iran won’t export oil and others will export."
     Rouhani hinted last month that Iran could block the Strait
of Hormuz, a major oil shipping route, if the U.S. attempted to
stop the Islamic Republic’s oil exports.
    Trump responded by noting that Iran could face serious
consequences if it threatened the United States.
    "The Americans have assembled a war room against Iran,"
Zarif said. "We can't get drawn into a confrontation with
America by falling into this war room trap and playing on a
    Iran has dismissed a last-minute offer from the Trump
administration for talks, saying it could not negotiate while
Washington had reneged on the 2015 deal to lift sanctions.
    In a speech hours before the sanctions were due to take
effect on Tuesday, 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.

 (Writing by Mark Trevelyan,; Additional reporting by Babak
Dehghanpisheh in Beirut, Editing by William Maclean)
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