Iran Says `Hostile' U.S. Sanctions Vote Harms Nuclear Deal

(Bloomberg) -- Iran vowed to respond if the U.S. House of Representatives’ “blatantly hostile” vote to impose new sanctions becomes law.

The U.S. action goes against commitments to carry out the nuclear accord “in good faith and in a constructive climate” and may ultimately “erode benefits Iran was to derive” from the deal, state-run Iranian Students’ News Agency cited Deputy Foreign Minister Abbas Araghchi as saying on Wednesday.

Iran will “certainly respond” to this “blatantly hostile undertaking” against it, said Araghchi, who was a member of the Iranian team that negotiated the 2015 deal with world powers. He didn’t elaborate.

President Hassan Rouhani told his cabinet the government would “take any other action needed to preserve and strengthen the interest of the nation,” the official Islamic Republic News Agency reported. The measure passed on Tuesday now goes to the Senate, though the White House has sent mixed signals over whether President Donald Trump would sign it.

The House action escalated tensions between Iran and the U.S., which this month recertified the Islamic Republic’s compliance even as Trump continued to call it the “worst deal” he has ever seen. Although he hasn’t taken direct action to scuttle it -- one of his promises during his campaign -- some analysts suspect he is trying to deal it a slow but mortal blow by denying Iran the economic fruits of the accord by slapping on new sanctions.

Seeking Pretext?

“The U.S. is looking to increase tensions with Iran, and searching for ground for friction aside from the nuclear deal, which it has -- for now -- put on ice,” said Vincent Eiffling, an Iran researcher at the Belgium-based Centre d’Etudes des Crises et des Conflits Internationaux.

So far the Trump administration has applied additional penalties, tied to Iran’s ballistic missile program which is outside the accord. And while onerous sanctions on Iran were lifted in exchange for its curtailment of its nuclear program, many American restrictions exist, scaring away investors.

The House bill would strengthen sanctions on Russia and impose new penalties on Iran and North Korea. It would target entities deemed to support terrorism, sell weapons to Iran or help its ballistic missile program.

Trump supports sanctions against the three countries but wants to make sure the U.S. gets “good deals,” White House spokeswoman Sarah Huckabee Sanders told reporters aboard Air Force One on Monday.

Guards Funding

Iran’s parliament -- pushing back against U.S. antagonism -- has said it will start discussing a bill that would increase funding for the country’s missile program and the Revolutionary Guards, which has been a target of earlier sanctions.

In the event of new sanctions, Iran could push forward with such measures or opt for “symbolic” moves such as sanctioning some American companies, Eiffling said -- as it did in March after the U.S. imposed new sanctions against several Iranian entities and individuals.

What concerns the Iranian government is the ambiguity of the Trump administration’s policy vis-a-vis Iran, he added.

“What investors -- whether Russian, Chinese or Europeans or others -- hate the most is uncertainty, and what worries Iran is that because of the uncertainty brought on by the U.S., Iran may not see the return of foreign investors” it hoped the deal would yield, Eiffling said.

--With assistance from Golnar Motevalli

To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel, Mark Williams