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U.S. to issue new Iran sanctions, opening shot in get-tough strategy: sources

[February 03, 2017] By Arshad Mohammed, Matt Spetalnick and Jonathan Landay

WASHINGTON (Reuters) - U.S. President Donald Trump is poised to impose new sanctions on multiple Iranian entities, seeking to ratchet up pressure on Tehran while crafting a broader strategy to counter what he sees as its destabilizing behavior, people familiar with the matter said on Thursday.

In the first tangible action against Iran since Trump took office on Jan. 20, the administration, on the same day he insisted that "nothing is off the table," prepared to roll out new measures against more than two dozen Iranian targets, the sources said. The announcement is expected as early as Friday, they added.

The new sanctions, which are being taken under existing executive orders covering terrorism and weapons of mass destruction, may mark the opening shot in a more aggressive policy against Iran that Trump promised during the 2016 presidential campaign, the sources, who had knowledge of the administration's plans, said.

But the package, targeting both entities and individuals, was formulated in a way that would not violate the 2015 Iran nuclear deal negotiated between Iran and six world powers including Trump’s predecessor, Barack Obama, they added.

The sources said the new sanctions had been in the works for some time and that Iran's decision to test-fire a ballistic missile on Sunday helped trigger Trump's decision to impose them, although Washington has not accused Iran of violating the nuclear deal.

The White House declined comment.

A U.S. State Department official said: "As standard policy, we do not preview sanction decisions before they are announced."

The White House signaled a tougher stance toward Iran on Wednesday when Michael Flynn, Trump's national security adviser, said he was putting Iran "on notice" after the missile test and senior U.S. officials said the administration was reviewing how to respond.

A top adviser to Iranian Supreme Leader Ayatollah Ali Khamenei said his country would not yield to "useless" U.S. threats from "an inexperienced person" over its ballistic missile program. The adviser, Ali Akbar Velayati, did not identify a specific U.S. official in his comments.

STILL-EVOLVING PLAN

The impact of the new sanctions will be more symbolic than practical, especially as the move does not affect the lifting of broader U.S. and international sanctions that took place under the nuclear deal. Also, few of the Iranian entities being targeted are likely to have U.S. assets that can be frozen, and U.S. companies, with few exceptions, are barred from doing business with Iran.

But the administration is working with congressional staffers and outside experts on a still-evolving broader plan aimed at hitting Iran’s pressure points, including its already restricted nuclear program, missile development and support of militant groups in the region, several sources said.

Leading a chorus of Republican calls for new sanctions, Paul Ryan, the speaker of the House of Representatives, said the United States should stop "appeasing" Tehran. "I would be in favor of additional sanctions on Iran," he told reporters.

Options that may be among the first to be implemented include sanctioning Iranian industries that contribute to missile development and designating as a terrorist group the Islamic Revolutionary Guard Corps, which has been blamed by U.S. officials for fueling regional proxy wars. The designation could also dissuade foreign investment because it oversees a sprawling business empire.

Another approach would be “zero tolerance” for any Iranian violations of the nuclear deal, by taking a stricter interpretation of the terms than the Obama administration.

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A ballistic missile is launched and tested in an undisclosed location, Iran, March 9, 2016. REUTERS/Mahmood Hosseini/TIMA

That could include U.S. opposition to Iranian requests for waivers from restrictions requiring the approval of a committee comprising the United States and its negotiating partners, Russia, China, Britain, France and Germany, the sources said.

“Michael Flynn did not put Iran on notice as mere empty words,” said Mark Dubowitz, an Iran sanctions expert and head of the conservative Washington-based Foundation for Defense of Democracies who is advising the Trump administration. "Iran's continued missile and terrorism activities will lead to dozens of new U.S. designations and tough new congressional sanctions."

Some experts questioned how quickly the administration could develop the new strategy as many of the technical specialists on Iran have left the government.

'NOTHING IS OFF THE TABLE'

Trump’s declaration that nothing had been ruled out in response to Iran appears to leave open the possibility of military action, although experts said both sides would take care to avoid armed confrontation in the oil-rich Gulf. Still, the U.S. threats of reprisals, coupled with Iran’s defiant reaction, could dangerously ratchet up tensions.

Every recent U.S. president, including Obama, a Democrat, has said U.S. military options were not off the table to prevent Iran from getting a nuclear weapon. Trump has gone much further in his rhetoric, especially in criticizing the Iran deal as weak and ineffective.

Since taking office, Trump and his aides have not repeated campaign rhetoric about tearing up the deal. He may instead be trying to force Iran to either renegotiate the terms or pull out unilaterally, thereby shouldering the blame internationally.

Defenders of the deal said there was little chance Iran could be goaded back to the negotiating table and warned that too stringent an approach could escalate into a confrontation and embolden Iranian hardliners.

In the latest move, one source, who spoke on condition of anonymity, said about eight Iranian entities were to be sanctioned or designated, for terrorism-related activities and about 17 for ballistic missile-related activities under separate existing U.S. executive orders. The source declined to name the entities, which were targeted under executive orders signed by President George W. Bush in 2001 and 2005.

Sanctions designations can lead to asset freezes, travel bans and other penalties.

Republican lawmakers said they were working with the Trump administration to push back on Iran without risking the collapse of the deal, widely supported internationally.

Senator Bob Corker, chairman of the Senate Foreign Relations Committee, told Reuters that his panel was "in the early stages" of working on legislation on Iran.

(Additional reporting by Patrica Zengerle, Ayesha Rascoe, Roberta Rampton in Washington and Parisa Hafezi in Ankara; Writing by Matt Spetalnick and Patricia Zengerle; Editing by Yara Bayoumy and Peter Cooney)

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