First Rail Network Opens Between Iran and Afghanistan

An Iranian goods train carrying tonnes of agricultural products chugged into a western Afghan province Thursday as the two countries marked the opening of their first shared railway network.

The train route so far links the Iranian city of Khaf with the Afghan town of Rozanak about 150 kilometres (95 miles) away, but is scheduled to be expanded to reach Herat, Afghanistan's third largest city.

Crowds of Afghans gathered at Rozanak station for the arrival of the first blue painted train.

Afghan President Ashraf Ghani, addressing the ceremony via video link, welcomed the move as an "important step for economic revival and development in both the countries".

The project was a gateway to Europe for Afghanistan, said Iranian President Hassan Rouhani.

"I see the prosperity of Iran and Afghanistan in this railway," he said, also speaking via video link from Tehran.

"The development, security and stability of Afghanistan (contributes to) development, security and stability in Iran and the entire region."

Residents of Rozanak welcomed the new link.

"It is going to change our villages, towns and cities into business hubs," said Arbab Ghulam Reza, a farmer from Rozanak.

"It was also very difficult for our young boys to go to Iran for work. Now they can simply buy a train ticket and go."

Once completed, the 225 kilometre network would help transport six million tonnes of goods and a million passengers annually, officials said.

The Khaf-Herat network would later be connected to Central Asian and Chinese rail networks, officials said.

Decades of war and neglect have destroyed Afghanistan's infrastructure, making its roads and bridges nearly impassable.

But despite the worsening security situation, efforts to rebuild roads and railway networks have always been a top priority of the Afghan government and the donor community.

In 2016, the first railway link between northern neighbour Turkmenistan and Afghanistan opened. That link is planned to eventually extend to Tajikistan.

Coronavirus entered Afghanistan in February, as thousands of migrants returned from neighbouring Iran, which at the time was the region's worst-hit nation.

Afghanistan briefly suspended land and air routes with Iran, before reopening all of its borders with the country.

Photo: YJC

Not Cashing In: Virus Hits Iraq's Iran-US Money Trade

By Shwan Nawzad

In Iraq's Kurdistan region and at the country's Muslim Shiite holy sites, trading US dollars for rials from Iran was once big business.

But the money exchange trade has been hard hit by lockdown restrictions to stop the spread of COVID-19, and by deep economic woes in both countries.

Traders in Sulaimaniyah, the second city of Iraqi Kurdistan and close to the border with Iran, have seen dramatic changes.

In March, before restrictions to stem the pandemic which has killed more than 5,000 Iraqis and infected more than 130,000 others, one dollar traded for 150,000 Iranian rials.

Today, one dollar fetches 250,000 rials, money changer Amanaj Saleh told AFP.

Tehran and Washington may be at loggerheads—coming close to open war in Iraq at the beginning of the year -- but Iraqis have no problem keeping a mix of the rival banknotes in their wallets.

Betting on a rebound in the Iranian currency—and hoping the coronavirus crisis would pass quickly -- many Iraqis rushed to snap up rials on the cheap.

The dollar-rial trade seemed like a welcome alternative income during the financial turmoil, which has destroyed countless livelihoods.

A survey by the International Rescue Committee (IRC) aid organization has found 87 percent of people questioned said they could no longer work because of the disease.

Big Losses

Iraq is going through its worst economic crisis in its recent history, hit by a slump in oil prices that account for almost all public revenues.

Government austerity cuts are expected to be severe.

"Since the appearance of coronavirus and the economic crisis it has caused, people who can no longer work are investing in Iranian currency to make their capital work," said Saleh.

But the trader, a man with a small grey moustache sitting under a huge framed reproduction $100 bill, warned that not all had found profit in the gamble.

"Those who had bought Iranian rials at the exchange rate of 200,000 rials for one dollar, now resell them at the lower rate: 250,000 rials for a dollar," he said.

Many Iraqis use American dollars and their own dinars interchangeably, with the rates stable between the two currencies.

It is the big swings between dollars and Iran's rial that attract those hopeful of winning on the difference.

American sanctions have long stifled the Iranian economy, and the closure of official border crossings between Iran and Iraq has added to the woes.

Hazar Rahim, a laborer in Sulaimaniyah, found this out the hard way.

"A few days ago, I bought five billion Iranian rials," he told AFP. "I was betting on the market but I was taken by surprise. In a few hours, the rial dropped, and I'd lost 13,000 dollars."

Religious Tourism Frozen

Two of the most holy sites for Shiites, Karbala and Najaf, are both in southern Iraq. Millions of Shiite pilgrims, the majority from Iran, visit every year.

They bring Iranian rials to spend and trade. In past years, the visitors brought in up to five billion dollars -- crucial in a country where almost all tourism is to religious sites.

It also provided hundreds of thousands of jobs and accounted for around 2.5 percent of GDP, according to official figures.

But with travel restrictions in place because of the virus, the shops and restaurants once busy with visitors are closed.

Iranian arrivals had already slowed amid deep economic woes at home since the United States in 2018 withdrew from the Iranian nuclear agreement and reinstated punishing sanctions.

Coronavirus in Iran -- the worst in the region with more than 17,000 deaths and 310,000 infections -- has only worsened the situation of the country.

The crisis has reduced Iran's exports, causing devaluation and inflation.

According to the International Monetary Fund, Iran's GDP is expected to shrink six percent in 2020, after contracting 7.6 percent last year.

In Iraq, meanwhile, tougher times loom as well. The economy is expected to contract almost 10 percent this year.

But with few apparent alternatives, dozens of Iraqis keep coming to the money traders in the hope that times will change, the rial will rise, and they can cash in.

Photo: IRNA

Iran Says INSTEX 'Good Omen' But Insufficient

Iran on Monday welcomed the launch of a European trade mechanism to ease trade in the face of US sanctions as a "good omen" but said it was insufficient in light of the Europeans' commitments.

Britain, France and Germany said last week they had carried out the first transaction through the INSTEX mechanism to deliver medical supplies to Iran, which has been hit hard by the coronavirus pandemic.

In the first official reaction to the development, Iran's foreign ministry spokesman Abbas Mousavi said the transaction had involved "a few hundred thousand euros.”

“We see the launch of INSTEX as a good omen," Mousavi said in a televised news conference.

But "what the Islamic Republic of Iran expects (from now on) is for the Europeans to fulfil the rest of their commitments in various fields (such as) banking, energy, insurance," he added.

Iran has struggled to stop the spread of the novel coronavirus which officials say has claimed over 3,600 lives and infected more than 58,000 in the country since February 19.

Calls have mounted for the United States to ease its sanctions on Iran so that the Islamic republic can adequately respond to the COVID-19 crisis.

Washington reimposed crippling sanctions on Tehran in May 2018 after withdrawing from an international deal that put curbs on its arch enemy's nuclear program.

In response, the three European countries party to the nuclear deal—Britain, France and Germany—announced the creation of INSTEX in January 2019.

But the implementation of the mechanism has been slow, with Iran and the Europeans blaming each other for the delay.

INSTEX functions as a clearing house and allows European companies to trade with Iran without exposing themselves to the consequences of US sanctions.

It is designed to be open to other companies, particularly from China or Russia, which are also party to the 2015 nuclear agreement.

Photo: IRNA

Sanctions Push Iran Past Russia as Biggest Buyer of Indian Tea

By Pradipta Mukherjee

Iran overtook Russia to emerge as the top buyer of Indian tea last year, after sanctions against the Islamic Republic halted imports other than specially negotiated deals.

India and Iran have been trading through a rupee-based bank account to bypass restrictions imposed by the U.S. While this bilateral trade has boosted imports of the Indian leaf at higher-than-normal prices, the outlook for orthodox teas is uncertain with even Lipton owner Unilever Plc weighing a sale of one of its best-known brands.

“This boost really has come because of the rupee-rial trade arrangement that we have had with Iran,” said Azam Monem, a director at McLeod Russel India Ltd., which is among the nation’s largest tea exporters. “India’s diplomacy should allow us to remain a partner to Iran where we supply humanitarian aid, tea and rice.”

Iranian Imports:

• Iran imported 53.5 million kilograms of tea from India last year, a rise of 74% from 2018

• The price per kilogram for Iranian purchases rose to about 276 rupees ($4) from 255 rupees, data from India’s Tea Board show

• Russian shipments dipped 3% to 46 million kilograms

Overall, Indian exports dropped 3% to 248 million kilograms last year as bad weather hit production in the crucial months of June and July. Prices rose 8.5% to 226 rupees per kilogram.

India also saw a 30% increase in shipments to China, the world’s biggest producer of tea, due to rising demand in the green-tea-drinking nation for India’s black-tea brands. Indian leaves such as Darjeeling, Assam and Nilgiri are used in processing the ready-to-drink milk tea popular across Asian nations.

However, India’s tea industry faces headwinds in controlling costs, after an increase in wages last year. Prices are unlikely to rise in 2020 unless consumption surges, according to Vivek Goenka, chairman of the Indian Tea Association.

“Any material increase in wage rates in the new season, without a substantial increase in tea prices, would prolong the stress,” said Kaushik Das, an analyst at Icra Ltd.

Photo: IRNA

Six European Countries Join INSTEX Mechanism for Iran Trade

Paris, London and Berlin on Saturday welcomed six new European countries to the INSTEX mechanism, which is designed to mitigate the effects of US sanctions on European trade with Iran.

"As founding shareholders of the Instrument in Support of Trade Exchanges (INSTEX), France, Germany and the United Kingdom warmly welcome the decision taken by the governments of Belgium, Denmark, Finland, the Netherlands, Norway and Sweden, to join INSTEX as shareholders," the three said in a joint statement.

The Paris-based INSTEX offers a netting service enabling companies to avoid cross-border financial transactions between the European and Iranian financial systems.

The system has not yet enabled any transactions.

Washington in 2018 unilaterally withdrew from the international agreement governing Iran's nuclear programme and reinstated heavy sanctions against Tehran.

The accession of the six new members "further strengthens INSTEX and demonstrates European efforts to facilitate legitimate trade between Europe and Iran", France, Germany and Britain said.

It represents "a clear expression of our continuing commitment to the Joint Comprehensive Plan of Action"—the 2015 Iranian nuclear deal—the trio added.

They insisted Iran must return to full compliance with its commitments under the deal "without delay.”

"We remain fully committed to pursuing our efforts towards a diplomatic resolution within the framework of the JCPOA."

The 2015 deal set out the terms under which Iran would restrict its nuclear program to civilian use in exchange for the lifting of Western sanctions.

Since the US pullout, Iran has taken four steps back from the accord.

The latest was on November 4 when its engineers began feeding uranium hexafluoride gas into mothballed enrichment centrifuges at the underground Fordow plant south of Tehran.

Photo: IRNA

Iran FM Says Europe Incapable of Bypassing US Sanctions

Iranian Foreign Minister Javad Zarif said on Wednesday European powers were incapable of bypassing sanctions imposed on Tehran by the US after it withdrew from the Iran nuclear deal.

Iran and six world powers agreed on a deal in 2015 that severely restricted Tehran's nuclear activities in return for sanctions relief and economic incentives.

However President Donald Trump withdrew Washington from the deal—technically called the Joint Comprehensive Plan of Action (JCPOA)—last May, reimposing punishing sanctions on the Islamic republic.

The other parties to the nuclear deal—Britain, China, France, Germany and Russia along with the European Union—however insist they remain committed to making the deal work.  

"The Europeans at first viewed the JCPOA (nuclear deal) as an achievement, but maybe they were not prepared to, and certainly they were not capable of standing up against U.S sanctions," Zarif said in an interview with Khamenei.ir, the official website of Iran's Supreme Leader Ayatollah Ali Khamenei.

“We will continue pressing the Europeans to implement their commitments. Europe must know that they cannot shy away from their responsibilities with a few statements and some unaccomplished plans," he added.

Zarif, who was his country's chief negotiator in the negotiations leading to the deal, said that Iran would continue to pressure the Europeans to act on their obligations within the deal but added that "we never had any hopes" in them.

Instead of the western powers the Islamic republic has turned to its traditional partners such as Russia and China, Zarif said, adding "the future of our foreign policy lies in that way."

Photo Credit: IRNA

Iran Looks to Remote Port to Beat US Sanctions

With the web of US sanctions tightening, Iran faces a host of challenges as it looks to an isolated port in the country's far southeast to maintain the flow of goods.

The port in Chabahar, only about 100 kilometers (62 miles) from the Pakistan border and located on the Indian Ocean, is Iran's largest outside the Gulf.

It is also the only Iranian port with exemptions from unilateral economic sanctions reimposed by the United States in 2018.

That is due mainly to the pivotal role of the port, and a planned railway line, in breaking landlocked Afghanistan's dependence on Pakistan for trade with the world, especially India.

Afghan trade as well as plans for a trading route by rail between central Asia and the Indian Ocean called the North-South Corridor are the main reasons the Islamic republic has invested one billion dollars in Chabahar's Shahid Beheshti port, official sources say.

"We will keep on developing this port... our rail network, road network and airport are all being developed, so that we can implement the North-South Corridor," Roads and Urban Development Minister Mohammad Eslami told AFP while visiting Chabahar for a development conference.

‘Traffic will Pick Up'

More than 200 hectares (almost 500 acres) of land have been reclaimed from the sea for the project and over 17.5 million cubic meters (618 million cubic feet) dredged, creating a 16.5-meter (54-foot) draught.

But more than a year since the new installations became operational in December 2017, business has yet to pick up.

The ships that officials say have docked in the past year have only loaded and unloaded 2.1 million tonnes of cargo, a far cry from the port's annual capacity of 8.5 million tonnes.

Only 20 ships have docked at the new section of the port and most of its three kilometers of waterfront remains unutilized, with new machinery and neatly lined-up cranes standing idle.

But authorities remain upbeat about the prospects for growth.

Hossein Shahdadi of the provincial ports and maritime authority said that in the first 11 months of the past Iranian year, which started on March 21, 2018, "there has been a 56 percent increase in cargo handled at the port compared with the previous year.”

"We've also had a 25 percent rise in the number of ships calling at the port" on the Gulf of Oman, he said.

Arun Kumar Gupta, managing director of India Ports Global Limited which has a 10-year concession at the new port, played down the startup issues.

"Any port will have a gestation period, there will be lulls but we are very sure that traffic will pick up," Gupta told AFP.

'Born with Sanctions'

The Indian company began work in December and has so far handled only an average of 60,000 tonnes of cargo per month.

But Gupta is counting on the port's proximity to India and Afghanistan to attract business.

Chabahar's location, however, carries its own risks as it lies in the volatile Sistan Baluchistan province where militant jihadists operate.

In December, a suicide attack on the local police headquarters killed two policemen.

During an investment conference in February, security was tight with many roads cut off and hundreds of armed security personnel deployed to protect delegates.

Apart from security concerns, US sanctions banning financial transactions with Iran make it ever harder to pay or receive payments.

Some like Afsaneh Rabiani, who runs a freight forwarding company, see Chabahar as an opportunity for "those willing to take the risk".

“I've been researching Chabahar for the past year and a half, and the infrastructure is now in place to do serious work here," she said.

As for the sanctions, Iran's roads minister said the challenge was nothing new.

"We were born with sanctions. Ever since the (1979 Islamic) revolution, we have been under sanctions and we are working on how to counter them," Eslami said, as he oversaw the unloading of a first shipment of Afghan goods lined up to be re-exported from Chabahar.

Photo Credit: IRNA

Iran Welcomes New EU Trade Entity as First Step': Official

Tehran on Thursday cautiously welcomed as a "first step" the expected launch of an EU trade entity aimed at saving Iran's nuclear deal by bypassing US sanctions.

The special payment mechanism "is the first step within the set of commitments the Europeans have made to Iran which I hope will be fully implemented and not be incomplete", said deputy foreign minister Abbas Araghchi, according to state news agency IRNA.

The formal announcement of the new payment vehicle is expected to be made on Thursday afternoon by the German, French and British foreign ministers in Bucharest.

The entity, registered in France with German governance and finance from all three countries, will allow Iran to trade with EU companies despite Washington reimposing US sanctions after President Donald Trump pulled out of the 2015 accord.

The three countries are the European parties to the landmark deal that curbed Tehran's nuclear ambitions in return for sanctions relief.

The new European scheme called INSTEX —short for Instrument in Support of Trade Exchanges—was originally intended to allow Iran to sell oil to the EU on a barter basis.

But, with Europe currently buying very little Iranian crude, it is now aimed at small- and medium-sized companies. 

Iran is hoping that INSTEX will allow the Europeans to meet Tehran's trade demands and keep the nuclear deal afloat. 

"This entity has been in principle designed for sanctioned goods," Araghchi said.

He denied claims by some in Iran that sanctioned goods would not be traded by INSTEX.

"Some have said that this entity has been designed for non-sanctioned goods such as food, etc. It is possible that the beginning of activities might be with these goods until a mechanism for payments takes form," he said. 

"But in principle this entity would (only) be useful for sanctioned goods and the objective of the entity is for sanctioned goods," Araghchi added.

Photo Credit: IRNA

Europe Launches Iran Trade Mechanism

Britain, France and Germany will launch a special payment mechanism Thursday that the EU hopes will help save the Iran nuclear deal by bypassing US sanctions, European sources told AFP.

The entity, registered in France with German governance and finance from all three countries, will allow Iran to trade with EU companies despite Washington reimposing US sanctions after President Donald Trump pulled out of the 2015 accord.

The three countries—the European signatories to the landmark deal that curbed Tehran's nuclear ambitions in return for sanctions relief—are expected to launch the device, which has been in preparation for months.

While the new institution, called INSTEX—short for Instrument in Support of Trade Exchanges—is a project of the three governments, it will receive the formal endorsement of all 28 EU members.

The company was registered in Paris on Tuesday with 3,000 euros capital and a supervisory board with members from France and Germany, and chaired by a Briton.

The formal announcement is expected to be made on Thursday afternoon by the German, French and British foreign ministers in Bucharest.

EU diplomatic chief Federica Mogherini, who has led the bloc's efforts to save the Iran nuclear deal, said she welcomed the creation of INSTEX.

"This step... the establishment of the special purpose vehicle, is I believe the mechanism that will allow legitimate trade with Iran to continue as foreseen in the nuclear agreement. So full support from our side," she told reporters.

Transatlantic Discord

Washington has warned the EU against trying to sidestep its sanctions on Tehran, while the Europeans —along with the deal's other signatories Russia and China—say Iran has not broken its side of the nuclear accord and should be allowed to trade.

The UN atomic agency has certified Iran's compliance with its obligations 13 times and even the head of the CIA said this week that Tehran was abiding by the accord—drawing a furious response from Trump.

The EU has growing concerns about Tehran's ballistic missile program, as well as its human rights record, its interference in Middle East conflicts and recent attempted attacks against opposition groups in Europe.

Washington has warned it will vigorously pursue any company breaching its sanctions against the Islamic republic and a number of major international corporations have already pulled out.

Mogherini insisted transatlantic ties were not threatened by the discord over Iran, saying Brussels was in regular contact with the US to discuss concerns about Tehran's activities.

Belgian Foreign Minister Didier Reynders said that despite differences over the nuclear deal, Europe shared many of Washington's concerns about Iran.

“It's essential we show our American colleagues that we are going in the same direction as them on a series of issues such as ballistic missiles and Iran's regional activities," Reynders said as he arrived for the EU foreign ministers meeting.

On the INSTEX project, he said that "at the end of the day it will be companies that decide whether or not they want to work in Iran, bearing in mind the risk of American sanctions."

The new European scheme was originally intended to allow Iran to sell oil to the EU on a barter basis but, with Europe now buying very little Iranian crude, it is now aimed at small- and medium-sized companies. 

 "We'll have to wait and see who uses it," a European source said.

Photo Credit: IRNA

Iran Hails Oil-For-Goods Deal With South Korea

Iran said Saturday it had finalized a deal with South Korea to trade oil for goods, skirting renewed US sanctions.

"A mechanism has been devised for returning oil export revenues from South Korea, by which Iran's oil export revenue will be bartered with imported goods," Hossein Tanhayi, head of the Iran-South Korea chamber of commerce, told state news agency IRNA.

Washington unilaterally reimposed a crippling oil embargo on Iran last month following its withdrawal in May from a landmark 2015 nuclear deal.

South Korea—a close political ally of the United States—has cut Iranian oil purchases to zero from an estimated 285,000 barrels per day in the first six months of the year, according to Bloomberg figures.

The sanctions also target Iran's banking sector and its ability to bring dollars into the country, but leave open the possibility of trade in goods. 

Tanhayi did not give details of the mechanism, but said a "joint fund" could be opened between their respective central banks. 

South Korea is Iran's third largest trade partner after China and the United Arab Emirates. 

Bilateral trade has dropped from USD 12 billion in 2017 to USD 5.7 for the first 
10 months of 2018, according to the chamber of commerce.

Photo Credit: IRNA

Cuba Eyes EU's Planned Iran Sanctions-Busting System

Cuba hopes a special payment system the EU is creating to get round US sanctions on Iran will help it sidestep its own Washington-imposed trade embargo, a senior official told AFP on Monday.

Brussels is working on a "special purpose vehicle" (SPV)—a system for clearing payments to Iran—-as it seeks to keep trade flowing despite Washington reimposing sanctions after ditching the 2015 nuclear deal with Tehran.

The EU is desperate to keep the nuclear deal alive and hopes the SPV will persuade Tehran to stay on board by giving companies a way of trading with Iran without fear of US sanctions.

The SPV was announced in September but has made little headway, with several countries saying they will not host it, fearful of repercussions from the administration of US President Donald Trump.

Nevertheless, senior Cuban foreign ministry official Rodolfo Reyes told AFP after talks with EU officials that Havana was interested in the project.

"There was a mention of this instrument and we of course also raised the interest that we would have in any solution of this kind that would allow European companies to become increasingly involved in foreign investment and bilateral trade with Cuba," Reyes told AFP.

Despite a thawing of ties under Trump's predecessor Barack Obama, the US still has a sweeping economic embargo in force against Cuba that dates back to the 1960s.

The SPV would in theory allow Iran to keep selling oil and European companies to continue doing business in the country despite the US sanctions.

But it has proved difficult to get the project moving and some analysts doubt it would prove to be effective in any event.

Many major international companies have announced they are pulling out of Iran, and earlier this month the US announced a fresh set of sanctions aimed at cutting off Iran's banks from international finance and significantly cutting its oil exports

Photo Credit: Wikicommons

Iraq President Visits Iran

Iraq's new President Barham Saleh made his first official visit to neighbouring Iran on Saturday, calling for "a new order in the region.”

Saleh met his counterpart Hassan Rouhani to discuss trade, transport links and efforts to tackle dust pollution that plagues areas on both sides of the border. 

"It is now time for a new order in the region that would meet the interests of all countries in it," Saleh told a Tehran news conference, according to a translation provided by Iran's state broadcaster. 

"We believe Iran has an important role to play in this new order," he added.

Saleh, a 58-year-old moderate Kurd, was elected last month to the largely ceremonial role of president. 

Rouhani said the two countries aimed to boost trade from USD 12 billion to USD 20 billion. 

"Security and stability in the whole region is to everyone's benefit. We do not need any foreign interference in the region," Rouhani said. 

Iran has been highly influential in Iraq since the toppling of Saddam Hussein in 2003, and was a key partner in pushing back the Islamic State group in recent years. 

But Iran has also been blamed for factionalism and poor governance in Iraq and its consulate in the southern city of Basra was burnt to the ground during violent protests earlier this year.

Photo Credit: IRNA

Austria Says Won't Host Iran Sanctions-Busting Payments System

Austria has rejected hosting a special payment system designed to help EU countries trade with Iran despite US sanctions, the Austrian foreign ministry said Tuesday.

"We were asked if Austria would be prepared in principle to host this special purpose vehicle," foreign ministry spokesman Peter Guschelbauer said.

But after studying the idea "very closely", the Austrian government "came to the conclusion that at the moment we are not in a position to host this vehicle," Guschelbauer told the Austrian APA agency.

The Bloomberg agency reported that Austria had been approached to be the venue for the vehicle after Belgium and Luxembourg had already turned down the idea of hosting it.

"There are lots of unanswered technical questions" about the "effectiveness of this setup," Guschelbauer added.

Austria supported the principle of the vehicle, he said, "but of course it has to be set up in a way that fulfils its purpose".

Last week the US announced a fresh raft of sanctions, the latest tranche of such measures since May when US President Donald Trump dramatically withdrew from the 2015 nuclear deal between Iran and world powers, known as the Joint Comprehensive Plan of Action (JCPOA).

The US sanctions aim to cut off Iran's banks from international finance and significantly cut its oil exports.

Since May, the remaining five signatories to the JCPOA—Britain, China, France, Germany and Russia—have been exploring ways to keep the deal alive.

As part of those efforts the EU has floated the idea of the special purpose vehicle, which would in theory allow Iran to keep selling oil and European companies to continue doing business in the country despite the US sanctions.

However, details of the scheme have remained vague.

The Austrian capital Vienna is the headquarters of several international organizations, including several arms of the UN and OPEC, and hosted the negotiations which resulted in the JCPOA.

On Monday the UN atomic watchdog the International Atomic Energy Agency (IAEA) said in its latest report that Iran was still abiding by the terms of the deal.

Photo Credit: IRNA

US Exempts Indian-Backed Port in Iran from Sanctions

The United States said Tuesday it would exempt Iran's Indian-backed port of Chabahar from new sanctions on Tehran, recognizing the value of the project to Afghanistan.

Iran late last year inaugurated the port on the Indian Ocean which provides a key supply route to landlocked Afghanistan and allows India to bypass its historic enemy Pakistan.

The United States will exempt from sanctions the development of Chabahar along with an attached railway project and Iranian petroleum shipments into Afghanistan, the State Department said.

President Donald Trump's "South Asia strategy underscores our ongoing support of Afghanistan's economic growth and development as well as our close partnership with India," a State Department spokesperson said.

"This exception relates to reconstruction assistance and economic development for Afghanistan. These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief," the spokesperson said.

The United States, which has been building closer relations with New Delhi since the late 1990s, earlier exempted India from sanctions that took effect on Monday.

The Trump administration has vowed to exert maximum pressure on Iran to end its support for regional proxies, exiting a denuclearization agreement that brought sanctions relief.

Trump's decision has been opposed by European powers as well as other nations including India, which has largely warm relations with Iran and accuses Pakistan of fomenting attacks on its soil.

India has poured USD 2 billion into Afghanistan since the 2001 US-led overthrow of the extremist Taliban regime, which was also opposed by Iran.

India has seen Chabahar as a key way both to send supplies to Afghanistan and to step up trade with Central Asia as well as Africa.

Iran has plans to link the port by railway to Zahedan on the Pakistani border up to Mashhad in the northeast.

Photo Credit: IRNA

Foreign Drugs Rare Commodity in Sanctions-Hit Iran

"Talk of sanctions on Iran reemerged, and my essential medicine was no longer available," said Masoud Mir who suffers from thalassaemia, a genetic blood disease common in Iran.

Mir, 36, is one of many patients in the Islamic Republic who not only have to deal with their disability, but also the consequences of trade sanctions reimposed in August by the US, as well as a battered economy with a free-falling currency, a foreign drug shortage and price hikes.

His essential medicine, a Swiss-made anti-iron overload drug, is now rationed by the government and can only be freely purchased at exorbitant prices on the black market.

The same is true for other crucial drugs for treating multiple sclerosis, cancer and cardiac problems and even simple anaesthetics required for surgery.

On Wednesday, the UN's top court stepped in, and ruled in favor of Iran which had called for the US sanctions to be suspended. 

Judges at the International Court of Justice in The Hague unanimously ruled Washington should remove barriers to "the free exportation to Iran of medicines and medical devices, food and agricultural commodities" as well as airplane parts.

Official Iranian statements acknowledge the shortage of medicines and say imports of certain drugs are no longer subsidized.

"We are currently short of 80 pharmaceutical items," Mohammad-Naeem Aminifard, a member of parliament's health commission, told semi-official news agency ISNA.

"The government and insurers have removed the support for foreign drugs that have a domestic equivalent which intensifies the pressure on patients."

Iran produces 96 percent of the drugs it uses, according to the Syndicate of Iranian Pharmaceutical Industries, but imports more than half the raw materials to make them.

The double-whammy of banking sanctions and a collapse in the value of its currency make total self-sufficiency difficult if not outright impossible.

Battered Economy Hits Patients

For others with family health concerns, sanctions are adding to their burden.

Ali, an electrical technician in his mid-30s, was fired from one job for spending too much time on hospital visits for his son.

His next company went bankrupt, and his current employer, a Dutch-Iranian firm, is stalled because they cannot import equipment and has stopped paying staff.

He spoke to AFP outside the busy 13 Aban pharmacy in central Tehran, where he had been hoping to buy a medicine for fungal infections caused by his son's cancer treatment.

"They're not giving me any because of insurance problems," he said. 

"They said even if they could it's less than I need due to rationing. My son could die if his medicine is delayed for even a day."

Managers at the pharmacy, a state-owned outlet focusing on rarer diseases, declined to comment.

But others in central Tehran said there was "a notable shortage" in some anticoagulants, beta-blockers or drugs to treat blood pressure problems.

"The local versions are cheaper, but not as effective," one pharmacist told AFP. "Things will get worse if sanctions continue."

Many patients cannot afford black market prices and risk side effects from locally-made equivalents, the head of Iran's thalassaemia society, Meysam Ramezani, told the conservative Tasnim news agency recently.

Seven thalassaemia patients died in March alone, he said, blaming "either a lack of injections or low-quality drugs."

Who's to Blame?

Iranians on social media are blaming many people: the US for its crippling sanctions, government economic mismanagement, and pharma firms for skyrocketing prices.

Surgeon Hamidreza Vafayi said the refusal of international banks to work with Iran was the biggest challenge.

The United States pulled out of the 2015 nuclear deal and reimposed sanctions targeting key parts of Iran's economy including international banking ties and transactions in US dollars.

"As far as I know, there is no official statement on sanctioning medicine trade with Iran," Vafayi told AFP.

"Yet when we cannot have banking ties (with the world) we are in fact under an undeclared medicine sanction regime. The truth is that no company would sell us drugs now."

Thalassaemia patient Masoud Mir also angrily recalled that when sanctions were imposed between 2010 and 2016, pharmaceutical firms exploited the situation by hoarding goods and manipulating prices. The same thing is happening today, he claimed.

Medicine importers get subsidised currency rates from the government, but their names are not publicly available, making it difficult to hold them to account if drugs do not appear in state-owned pharmacies.  

"In 2011, they kept saying that there was none (of his drug) in the market because of sanctions. But I could just walk out of the pharmacy and buy some from a street dealer at crazy prices," he said.

"Not everyone can pay that, so they may face a slow death."

Photo Credit: IRNA

Merkel, Chinese Premier Defend Iran Deal, Free Trade

German Chancellor Angela Merkel and Chinese Premier Li Keqiang defended the Iran nuclear deal on Thursday, with Li hinting that terminating the pact would complicate negotiations with North Korea.

Merkel and Li showed a united front on Iran and free trade—two issues that have seen high-profile interventions by US President Donald Trump—during their meeting at the opulent Great Hall of the People in Beijing.

Li warned that ending the agreement with Tehran "will not just impact Iran, but also have a negative impact on (the ability) to solve other hot international issues through peaceful negotiations."

He did not mention North Korea by name, but analysts have warned that Trump's withdrawal from the Iran deal dented Washington's negotiating credibility ahead of his scheduled meeting with North Korean leader Kim Jong Un next month.

The German leader also sounded the alarm about the economic impact on Europe of Trump's move to quit the Iran agreement. 

Trump's decision to reimpose sanctions on Tehran, despite pleas from allies to maintain the deal, could hit European firms that have done business with Iran since the 2015 accord was signed.

If European companies pull out or shrink operations in Iran fearing US sanctions, it would "create an opportunity for businesses in other countries to step in and play a greater role", Merkel said. 

Meanwhile, Li dismissed the idea that the Iran crisis paved the way for the internationalization of the Chinese currency, amid speculation that demand for yuan-denominated oil futures would increase.

"The internationalization of the yuan is a long-term process that is closely linked to the development of the Chinese economy," Li said.

On trade, Merkel welcomed China's moves to reduce automobile import tariffs and allow foreign carmakers to own a majority stake in joint ventures with
Chinese partners.

The Chancellor drove home Berlin's demand for Beijing to ease barriers on foreign investment, saying the two countries would sign a memorandum of understanding to offer mutual access to each others' markets for autonomous vehicles.

"China and Germany are on the path of promoting multilateralism and bolstering free trade," said Merkel, who was accompanied by an industry delegation of 18 German executives.

Li hinted that a China-EU investment agreement, which has been in the works for years, might be signed during a bilateral meeting in July in Beijing.

"China's doors (for investment) will be opened even more," Li said.

Merkel was expected to take up the case of Liu Xia, widow of Nobel peace laureate Liu Xiaobo, who remains under house arrest without charges nearly a year after her husband died of cancer in custody.

"We have found a dialogue mechanism where difficult questions can be raised," she said. Merkel will meet with President Xi Jinping later Thursday.

Photo Credit: Wikicommons

EU Leaders Agree 'United Approach' on Iran Deal, Trade

European Union leaders agreed on a "united EU approach" to keeping the Iran nuclear deal alive after US President Donald Trump withdrew from the pact, a European source said after talks in Bulgaria.

The 28 EU leaders also backed a plan for dealing with trade tariffs that Trump is imposing on European metals, saying that the "EU will not negotiate with a gun at its head", the source told AFP.

"The EU will continue fighting for a rules-based international system despite recent decisions on climate change, tariffs and Iran," the source said after the leaders met over dinner in Sofia.

Their show of unity comes after EU president Donald Tusk lashed out at Trump, saying that "looking at the latest decisions of President Trump, someone could even think with friends like that who needs enemies."

On Iran, the leaders expressed backing for a plan including "EU support for
JCPOA, as long as Iran respects the deal," the source said, referring to the deal's formal name, the Joint Comprehensive Plan of Action.

They also agreed to "initiate work to protect European companies negatively affected by the US decision," which involves Washington reimposing sanctions on Iran.

But with the US saying it had pulled out of the deal because of broader worries about Tehran's actions, the leaders said they would also "address concerns about Iran's role in the region, Iran's ballistic missile program and what happens after 2025."

On trade, the EU leaders agreed to "strengthen" the European Commission as it seeks to negotiate a permanent exemption from US tariffs on metal and aluminum that are due to take effect on June 1, the source said.

If it gets the exemption, the source said the EU was ready to take steps including "voluntary regulatory cooperation" with the US, and working on reform of the World Trade Organization, after Trump claimed the US was unfairly treated.

It was also ready to "improve reciprocal market access, for industrial products, including amongst others cars, and liberalization of public procurement."

Photo Credit: EU AV Service

Russian Companies to Benefit from US Iran Withdrawal

While Russia has condemned Washington for its withdrawal from the Iran nuclear deal, Moscow remains less exposed to the economic consequences of US sanctions than Europe and its companies could even benefit from the move.   

"The deal and the lifting of sanctions in 2015 marked the return of European business to Iran. But it's unlikely they can keep doing business today, giving room to Russia," said independent political scientist Vladimir Sotnikov.    

"Russia can now go ahead at full speed," he added. Russia and Iran once had difficult relations, but have seen ties improve since the end of the Cold War.  

While Tehran was shunned by the international community in the 1990s, Moscow agreed to resume the construction of the Bushehr Iranian nuclear plant that Germany had abandoned. 

Russia and Iran sought to strengthen their business ties long before the 2015 agreement, despite international sanctions in place. 

"European companies are more exposed to the US market, they must comply not to get into trouble. The Russians are less (exposed) and have less to lose," said Igor Delanoe, an analyst at the Franco-Russian Observatory group. 

He added that Russian companies continued to work in Iran "without any fuss" even when the sanctions were in place. "They are used to working within legal and economic constraints. The US has systematically forced Iran to turn more towards Russia and China."

The situation could revitalize Russian-Iranian economic ties that have been losing ground in recent years despite the involvement of Russian nuclear and oil giants in the Middle Eastern country. 

According to Delanoe, bilateral trade amounted to $1.7 billion in 2017, down 20 percent from the previous year and well below the more than $3 billion in the late 2000s. 

Moscow 'Is Not Scared'

On a visit to Tehran on Thursday, Russian deputy foreign minister Sergei Ryabkov said the two countries intended to continue "all round economic cooperation." 

"We are not scared of sanctions," Ryabkov said.  

This echoes statements from China, which has also said it wanted to continue normal business ties with Iran and is currently financing multi billion dollar infrastructure and electricity projects in the country.

"Russia wants to sell steel, transport infrastructure and other manufactured goods to Iran. The less competition from the US and the EU, the better," said Charlie Robertson, an analyst at Renaissance Capital. 

Igor Delanoe said that Russia had a "real role to play" in Iran's energy and electricity sectors.   

Another positive sign for the Russian economy is the rise in oil prices, which rose to their highest level since 2014 after the US withdrawal from the Iran deal. 

Analysts at Russia's Alfa Bank said the current tensions should maintain oil prices at a high level, which they called a "great relief for the Russian market." 

For the Russian state, whose finances remain highly dependent on natural resources, this is a significant source of income at a time when President

Vladimir Putin is beginning his fourth Kremlin term with promises of developing Russia's economy and reducing poverty. 

Russian Prime Minister Dmitry Medvedev assessed the cost of Putin's long term goals at more than 100 billion euros.  

Photo Credit: Kremlin

Turkey Says US Iran Deal Pullout 'Opportunity' for Ankara

The Turkish economy minister on Friday said the United States withdrawal from the Iran nuclear deal was an "opportunity" for Turkey, insisting there would be no-let up in trade with Tehran.

Despite strong protests and last-minute lobbying by his European partners, US President Donald Trump announced that Washington would withdraw from the historic nuclear accord.

Trump then vowed that there would be fresh sanctions issued against Iran.

"I see it like this, this is an opportunity for Turkey," Nihat Zeybekci told state news agency Anadolu, adding: "I will continue to trade with Iran."

But he said that if there are United Nations decisions related to Iran's nuclear activities and other issues, "of course" trade would continue "complying with them."

Turkish President Recep Tayyip Erdogan spoke on the phone with his Russian counterpart Vladimir Putin during which both men agreed the US move was a mistake.

Zeybekci criticized the unilateral decision by Washington but added: "I don't see anything big to worry about at this stage," noting that other countries including EU members were not of the same opinion as the US.

Relations between Turkey and the US have been strained over several issues including the conviction in January of a Turkish banker who helped Iran evade US sanctions. 

Mehmet Haka Atilla was convicted after well-connected Turkish-Iranian businessman Reza Zarrab, arrested in the US in 2016, became a government witness and admitted involvement in a multi-billion-dollar gold-for-oil scheme to subvert US economic sanctions against Iran.

During Zarrab's testimony late last year, the businessman, who was once close to the ruling party elite, implicated Erdogan and other officials in the scheme. 

In a deal negotiated between Iran and the five permanent members of the UN
Security Council—the UK, China, France, Russia and the US—plus Germany, Iran agreed in 2015 to freeze its nuclear program in exchange for the lifting of international sanctions.

Turkey and Iran together with Russia have been working closely on the Syrian peace process despite being on opposing sides of the seven-year conflict.

Erdogan on Thursday held a telephone call with Iranian President Hassan Rouhani during which the Turkish leader reiterated Turkey's commitment to JCPOA (the formal abbreviation for the accord).

The men also touched upon developing bilateral economic relations, a Turkish presidential source said.

Photo Credit: Twitter