US slaps sanctions on Iran's biggest airline and shipping group

US slaps sanctions on Iran's biggest airline and shipping group
By: WNG CNBC Posted On: December 11, 2019 View: 40

US slaps sanctions on Iran's biggest airline and shipping group

Hassan Rouhani, Iran's president, pauses whilst speaking during a news conference in Tehran, Iran, on Monday, Oct. 14, 2019.

Bloomberg | Getty Images

WASHINGTON — The U.S. will impose a fresh round of sanctions on Iran's largest shipping company and biggest airline, the nation's top diplomat announced Wednesday.

Secretary of State Mike Pompeo targeted the Islamic Republic of Iran Shipping Lines, its China-based subsidiary, E-Sail Shipping and Mahan Air, for aiding the Iranian regime's proliferation of weapons of mass destruction.

"As long as its malign behaviors continue, so will our campaign of maximum pressure," Pompeo said Wednesday adding, that the transportation firms helped to "augment the regime's campaign of terror and intimidation at home and throughout the world."

The sanctions on IRISL and E-Sail will take effect in 180-days in order to give customers that ship humanitarian goods time to adjust their contracts. The sanctions on Mahan Air, however, will take immediate effect. Earlier this year, Germany and France announced a ban on Mahan Air, in part, for the firm's transportation of Iranian weapons and personnel to Syria.

"The Iranian regime uses its aviation and shipping industries to supply its regional terrorist and militant groups with weapons, directly contributing to the devastating humanitarian crises in Syria and Yemen," Treasury Secretary Steven Mnuchin said in a statement. "Aviation and shipping industries should be vigilant and not allow their industries to be exploited by terrorists."

Iranian President Hassan Rouhani said Wednesday that Tehran will overcome U.S. sanctions by either bypassing them or through negotiations.

"The government is determined to defeat (the enemy) by bypassing America's sanctions...or through various means including talks," the semi-official Iranian news agency ISNA quoted Rouhani as saying.

Former Defense Secretaries Leon Panetta and James Mattis weighed in on the Trump administration's tumultuous relationship with Rouhani at the annual Reagan National Defense Forum.

"Bottom line is, they are dangerous, we need to try and get them to the negotiating table, I don't think what we are doing now is working very effectively to get that done," Panetta said.

Mattis, a four-star Marine Corps general reiterated the importance of working with allies — an issue that prompted his shock resignation as Trump's secretary of Defense.

"We can't even deal with the nuclear threat alone and think we are going to somehow neuter this problem. It's going to take allies and partners as almost every problem we face in the world takes allies and partners," he began. "Unilateral don't work, we've got to do this in concert with others," Mattis said adding that the U.S. should take more creative approaches in dealing with Iran.

US President Donald Trump speaks as Defense Secretary James Mattis (L) looks on during a meeting with senior military leaders in the Cabinet Room of the White House on October 5, 2017.

Mandel Nganr | AFP | Getty Images

The latest action represents another brick in the crumbling edifice between Washington and Tehran after a string of attacks in the Persian Gulf this summer.

In June, U.S. officials said an Iranian surface-to-air missile shot down an American military surveillance drone over the Strait of Hormuz. Iran said the aircraft was over its territory.

That strike came a week after the U.S. blamed Iran for attacks on two oil tankers in the Persian Gulf region and after four tankers were attacked in May.

The U.S. in June slapped new sanctions on Iranian military leaders blamed for shooting down the drone. The measures also aimed to block financial resources for Iran's Supreme Leader Ayatollah Ali Khamenei.

Tensions soared again in September when the U.S. blamed Iran for the strikes in Saudi Arabia on the world's largest crude-processing plant and oil field. The predawn attack forced the Kingdom to shut down half of its production operations. What's more, the event triggered the largest spike in crude prices in decades and renewed concerns of a budding conflict in the Middle East. All the while, Iran maintains that it was not behind the attacks.

In September, Saudi Arabia's defense ministry said that drone and missile debris recovered by investigators shows Iranian culpability. Saudi coalition spokesman Col. Turki al-Maliki said during a press briefing in Riyadh that all military components retrieved from the oil facilities "point to Iran."

Read more: Attack on Saudi Arabian oil facilities was 'sophisticated' and had a 'dramatic impact on global markets,' Pentagon says

On the sidelines of the U.N. General Assembly, Rouhani gave a hypothetical response when asked if his nation was behind the Sept. 14 strikes in Saudi Arabia.

"Let's assume if it was from Iran, all of the monies received from the United States from these defensive systems, from these weapon systems, from these radar systems installed in Saudi Arabia and the Arabian peninsula, how come, they were not able to prevent that missile from hitting the target?" he asked, adding that the strikes were embarrassing for U.S.-made missile defense systems.

Rouhani and President Donald Trump did not meet in New York despite being in close proximity at the United Nations.

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