Renewed sanctions need not mean U.S. exit from Iran deal: Mnuchin

[April 12, 2018]  By Lesley Wroughton and Arshad Mohammed

WASHINGTON (Reuters) - A decision by U.S. President Donald Trump not to renew sanctions relief for Iran on May 12 would not necessarily mean the United States had withdrawn from the 2015 Iran nuclear deal, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.

It was not immediately clear what Mnuchin meant by his comment but it appeared to signal the Trump administration believes the agreement will not necessarily collapse if Trump chooses not to extend U.S. sanctions relief to Iran.

The crux of the 2015 agreement between Iran and six major powers - Britain, China, France, Germany, Russia and the United States - was that Iran would restrict its nuclear program in return for relief from sanctions that have crippled its economy.

On Jan. 12, Trump delivered an ultimatum to Britain, France and Germany, saying they must agree to "fix the terrible flaws of the Iran nuclear deal" or he would refuse to extend the U.S. sanctions relief on Iran that it calls for.

U.S. sanctions will resume unless Trump issues new "waivers" to suspend them on May 12, although it is not clear how

quickly they would go into effect.

European officials saw Trump's Jan. 12 comments as a threat to kill the deal. They have since been in negotiations with the Trump administration to see if there is a way to salvage it.

Speaking at a congressional hearing, Mnuchin said the Trump administration was in talks with allies and would "not do anything abruptly."

"If the president decides not to sign that (waiver), it doesn't mean we're necessarily pulling out of the deal. What it means is that the primary and secondary sanctions will go back in place," he told the U.S. House of Representatives Appropriations Committee.

The political directors of Britain, France and Germany met Brian Hook, the State Department's director of policy planning, in Washington on Wednesday to discuss the future of the pact, formally known as the Joint Comprehensive Plan of Action, or JCPOA, two sources familiar with the matter said.

It is not immediately clear how Iran might respond to a Trump decision not to renew the sanctions waivers, but Tehran would be within its rights to argue the United States violated its commitments to ease sanctions even as Iran, as verified by international inspectors, had kept its nuclear commitments.

U.S. Treasury Secretary Steven Mnuchin speaks during a news conference at the G20 Meeting of Finance Ministers in Buenos Aires, Argentina, March 20, 2018. REUTERS/Marcos Brindicci

U.S. nuclear experts say if Trump does not waive the sanctions in May, it effectively kills the nuclear deal.

European diplomats have said that even if U.S. allies decide to remain in the agreement, Western companies would withdraw from Iran because of the threat of U.S. sanctions.

'ALL ABOUT LIFTING THE SANCTIONS'

Democratic Representative David Price pressed Mnuchin on the issue, saying: "Are you saying that failing to waive the sanctions would not constitute pulling out of the deal? The deal is all about lifting the sanctions."

Mnuchin did not answer the question directly.

The secretary declined to speculate on what Trump might do, repeatedly emphasizing he could not discuss the issue publicly.

Trump has voiced frustration at having to waive the sanctions again, believing his predecessor, Democratic President Barack Obama, negotiated a bad deal for the United States in agreeing to the accord.

Iran says its nuclear program is only for peaceful purposes. It has said it will stick to the accord as long as the other signatories respect it but will "shred" the deal if Washington pulls out.

(Reporting by Lesley Wroughton and Arshad Mohammed; Editing by Peter Cooney)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.