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U.S. says no sanctions penalty on humanitarian aid for Iran

FRANKFURT (Reuters) - Banks that process payments for humanitarian aid to Iran will not be penalised under U.S. sanctions, the U.S. Treasury has said, following a European appeal for leniency.

FILE PHOTO: A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives of the U.S., Iran, China, Russia, Britain, Germany, France and the European Union during the Iran nuclear talks at the Vienna International Center in Vienna, Austria July 14, 2015. REUTERS/Carlos Barria/File Photo

In a statement explaining the workings of its sanctions, U.S. authorities said foreign banks would not be punished for financing the supply of health and medical items such as hand sanitizer, ventilators or personal protective equipment.

“The United States maintains broad exceptions ... that allow for the commercial sale and export of humanitarian goods,” officials wrote.

It also made clear that there were other exceptions to processing payments with the country, such as covering staff costs at international organisations with missions in Iran.

In late October, Germany, France and Britain urged the Trump administration to reconsider broad, new sanctions against Iran’s banks, arguing they would deter legitimate humanitarian trade, diplomatic correspondence shows.

That letter came after the United States imposed sanctions against 18 Iranian banks as part of a campaign to exert “maximum pressure” on Tehran over its nuclear programme.

The order barred Americans further from dealing with the Iranian banks and extended secondary sanctions on foreign companies that did business with those lenders.

For foreign banks, violations could mean losing access to the U.S. market and raise the spectre of hefty penalties.

The Iran nuclear accord of 2015 was a key achievement for President Barack Obama’s international diplomacy until President Donald Trump withdrew from the deal in May 2018 and started imposing a new round of unilateral sanctions on Tehran.

Financial support for trade, one of the central tenets of the agreement, has since shrivelled, hitting Iran’s economy hard. Tehran, meanwhile, has cited the general absence of such support from European powers as a reason for ignoring parts of the nuclear deal.

In the letter from Germany, France and Britain, officials had highlighted the “acute ... humanitarian needs of the Iranian population”, arguing for leniency.

Reporting By John O’Donnell; Editing by Alex Richardson

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