She characterized the measures as an attempt to "protect European companies."Tocci said the move was "necessary in order to signal, diplomatically, to the Iranians that Europeans are serious" about trying to salvage the Iran nuclear deal.Hours earlier, the U.S. announced it was reintroducing sanctions on the Islamic republic.

The Trump administration's decision to walk away from the landmark 2015 Iran pact signed by the five permanent members of the U.N. Security Council — the U.S., Russia, France, China and the U.K. — as well as Germany and the European Union, dismayed and angered longtime U.S. allies and vital trading partners.German Chancellor Angela Merkel, French leader Emmanuel Macron and British Foreign Secretary Boris Johnson traveled to the U.S. aiming to convince President Donald Trump not to ditch the deal, saying it was working and the only way to halt a regional arms race.Nevertheless, Trump went ahead and announced on May 8 the U.S. was withdrawing from what he called the "decaying and rotten" agreement.Mogherini told reporters Tuesday that the E.U. was doing its "best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran."

Tocci, the adviser, conceded potential E.U. sanctions as part of the the so-called blocking statute which came into effect on Tuesday were "politically and symbolically" an important step to take. However, it was unclear what, how and if they would be enforced.In 2016, the European Union exported more than 8.2 billion euros ($9.7 billion) worth of goods to Iran, while importing almost 5.5 billion euros ($6.5 billion) from there, according to the European Commission. This is dwarfed by the $1.1 trillion the EU-U.S. trade represented in the same year.Virtually all multinational firms do business or banking in the U.S., leaving European companies vulnerable to American sanctions punishing those operating in and with Iran.Trump doubled down on his stance on Iran early Tuesday.

At midnight Monday, the U.S. began targeting oil-rich Iran's automotive industry, civil aviation sector, as well as trade of gold and other metals are the first in a set of punitive measures had been eased under Trump's predecessor Barack Obama.Trump has called for a wholesale overhaul of Iranian regional policies, such as an end to its military support for the Syrian government and regional militant groups like Lebanon's Hezbollah. The 2015 pact did not curb these actions, one reason Trump has called the agreement "the worst deal ever."

International inspectors say Iran has been complying with the deal to curtail its nuclear program.The U.S. is preparing to reimpose the remainder of U.S. sanctions lifted as part of the agreement, and target Iran's oil sector and central bank in early November.America has also pressured allies to stop importing oil from Iran before the November deadline. Top buyers of Iranian oil include China, India, Turkey and South Korea.The effects on Iran of Washington's hardening stance have been stark, with Iran's rial currency losing two-thirds of its value in six months.Within hours of the White House announcement, international firms announced steps to avoid U.S. sanctions.On Tuesday, German car manufacturing giant Daimler said it had suspended its activities in Iran."We will continue to closely monitor the political developments, especially in connection with the future of the nuclear agreement," the company said in a statement.Daimler's announcement came after U.S. Ambassador to Germany Richard Grenell in May warned that firms that continued to do business in Iran would face consequences.World news

"U.S. sanctions will target critical sectors of Iran's economy. German companies doing business in Iran should wind down operations immediately," he tweeted.In June, auto manufacturer PSA — which makes Peugeot vehicles — began taking steps to suspend its joint-venture activities in Iran while rival Renault has said it will adhere to the U.S. sanctions.French oil giant Total has said it would quit a multibillion-dollar gas project if it cannot secure a waiver from the sanctions — a request the French government says had been rejected.F. Brinley Bruton reported from London, and Andy Eckardt and Carlo Angerer from Mainz, Germany.</s>Susannah George and Zeke Miller, The Associated Press 

 



WASHINGTON -- The first set of U.S. sanctions against Iran that had been eased under the landmark nuclear accord went back into effect early Tuesday under an executive order signed by U.S. President Donald Trump, targeting financial transactions that involve U.S. dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.

U.S sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.

The stiff economic sanctions ratchet up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after Trump pulled the U.S. out of the international accord limiting Iran's nuclear activities.

Trump declared the landmark 2015 agreement had been "horrible," leaving the Iranian government flush with cash to fuel conflict in the Middle East.

Iran accused the U.S. of reneging on the nuclear agreement, signed by the Obama administration, and of causing recent Iranian economic unrest. European allies said they "deeply regret" the U.S. action.

As the sanctions loomed Monday, Trump said in a statement, "We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behaviour and reintegrate with the global economy, or continue down a path of economic isolation."

Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."

The Europeans didn't like any of it.

Despite Trump's claims, the accord "is working and delivering on its goal" of limiting Iran's nuclear program, said a statement by European Union foreign policy chief Federica Mogherini and the foreign ministers of France, Germany and the United Kingdom.

The ministers said the Iran deal is "crucial for the security of Europe, the region and the entire world," and the European Union issued a "blocking statute" Monday to protect European businesses from the impact of the sanctions.

A senior administration official, briefing reporters under ground rules requiring anonymity, said the United States is "not particularly concerned" by EU efforts to protect European firms from the sanctions.

Iranian President Hassan Rouhani said that Iran still can rely on China and Russia to keep its oil and banking sectors afloat. Speaking in a television interview, he also demanded compensation for decades of American "intervention" in the Islamic Republic.

Months of uncertainty surrounding the sanctions have already further hurt Iran's economy. The country's rial currency has tanked, and the downturn has sparked protests across the nation.

The "Trump Administration wants the world to believe it's concerned about the Iranian people," Iranian Foreign Minister Mohammad Javad Zarif said in a statement posted to Twitter. But, he said, the reimposed sanctions would endanger "ordinary Iranians."

"US hypocrisy knows no bounds," he said.

U.S. officials insisted the American government stands with the people of Iran and supports many of their complaints against their own government.

National security adviser John Bolton said Iran's leadership is on "very shaky ground," but he insisted economic pressure from the Trump administration is not an attempt at "regime change."

Secretary of State Mike Pompeo said sanctions are an important pillar in U.S. policy toward Iran and will remain in place until the Iranian government radically changes course.

"They've got to behave like a normal country. That's the ask. It's pretty simple," said Pompeo, en route Sunday from a three-nation trip to Southeast Asia.

Israeli Prime Minister Benjamin Netanyahu, a firm foe of the Iranian government, said the sanctions symbolize "the determination to block Iran's regional aggression as well as its continuous plans to arm itself with nuclear weapons."

He called on the countries of Europe to join the U.S., saying, "The time has come to stop talking; the time has come to do."

The U.S has long designated Iran as the world's foremost state sponsor of terrorism, Pompeo noted Sunday, adding that the Islamic Republic cannot expect to be treated as an equal in the international community until it halts such activities.

He said that "there's no evidence today of a change in their behaviour," and in the meantime "we're going to enforce the sanctions."

Associated Press writers Nasser Karimi in Tehran and Ian Deitch in Jerusalem contributed</s>(Bloomberg) — U.S. President Donald Trump’s desire to isolate the Iranian economy seems to be working.

Within hours of Washington unveiling its first round of sanctions, German carmaker Daimler AG froze a plan to make Mercedes Benz trucks in Iran. That’s even after the European Union tried to salvage the Iran nuclear deal by pledging to protect firms from Trump’s assault.

“I wouldn’t be surprised if more companies were to follow Daimler out of Iran,” said Frank Biller, a automobile analyst based Stuttgart, Germany for Landesbank Baden-Wuerttemberg. “With the political situation right now, I’m sure a lot of companies are at least thinking about suspending their activities.”

Companies across Europe — from French energy giant Total SA and German carmaker Volkswagen AG — had initially announced plans to reestablish ties with Tehran following the 2015 deal that provided Iran with relief from economic sanctions in exchange for curbs on its nuclear program. Trade between the Islamic republic and Europe surged to more than $10 billion.

Yet while Trump’s European allies condemned his move because they regard the nuclear deal as crucial for international security, the challenge for businesses is that they now have to weigh the potential loss of American clients against economic ties with Tehran that are minuscule by comparison.

Even when Trump was just threatening to reinstate sanctions in May, Total said it couldn’t risk investing in Iran following the return of U.S. sanctions because of its large U.S. operations.

“Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!,” Trump said in a Twitter post on Tuesday. “The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level.”

Following an executive order signed by Trump, the U.S. imposed new restrictions intended to stop the purchase of dollar banknotes by Iran, prevent the government from trading gold and other precious metals and block the nation from selling or acquiring various industrial metals. The measures, which took effect at midnight in Washington, also targeted the auto industry and banned imports of Persian carpets and pistachios to the U.S.

The European Union condemned the move and announced it would be rolling out an updated version of its so-called Blocking Statute which bans any EU company from complying with U.S. sanctions and does not recognize any court rulings that enforce American penalties.

“We are determined to protect European economic operators engaged in legitimate business with Iran,” the EU said in a statement late on Monday.

In a televised address on Monday night, Iranian President Hassan Rouhani called on the EU and other countries to take concrete action to save the Iran accord — although he too acknowledged the limits.

“In my visits to Europe and China and Russia and in the talks I’ve had, I’ve seen that they’ve all promised that they will not pay attention to the sanctions,” Rouhani said. “But the problem is their companies, which are under pressure from the U.S. and are affected by the U.S. sanctions.”

To minimize the effect of sanctions, Rouhani said the government had widened the list of essential goods that could be imported and said Iran had enough foreign-currency supplies to meet society’s needs. Iran’s central bank, acting on the eve of the U.S. move, scrapped most currency controls introduced this year in a bid to halt a plunge in the rial that has stirred protests against the government.

The U.S. goal is to get the Iranian regime to stop meddling in countries from Syria to Yemen, halt its ballistic missile program and commit to stricter limits on its nuclear program, not to overthrow the government, the administration officials said.

Rouhani said he’d be open to negotiations if the U.S. is “sincere,” but he added that such talks would be meaningless while his nation is being hit with sanctions. Trump and his top aides have raised the possibility of face-to-face discussions with Rouhani with “no preconditions.”

For European companies, Iran became an investment hot spot following the 2015 accord because it’s home to 82 million consumers who were starved of most Western products for years under international sanctions.

Before dropping business in Iran for a first time in 2010 under those penalties, for instance, Daimler had sold as many as 10,000 vehicles there annually. The company hadn’t yet resumed sale or production of cars or trucks before the pullout announced Tuesday.

The U.S. is preparing another set of sanctions, which take effect in 90 days and will target Iranian oil exports. It is weighing case-by-case exemptions for some countries from those penalties, according to Trump administration officials who briefed reporters on Monday.</s>Donald Trump has warned countries doing business with Iran that they will not be doing business with the US.

Donald Trump has warned countries doing business with Iran that they will not be doing business with the US.

Trump says US sanctions against Iran for world peace

Mr Trump also said in an early morning Twitter session that the sanctions placed back on Iran by the US were reintroduced in his pursuit for world peace.

The first set of US sanctions against Iran that had been eased under the landmark nuclear accord went back into effect early on Tuesday under an executive order signed by Mr Trump.

They targeted financial transactions that involve US dollars, Iran’s automotive sector, the purchase of commercial planes and metals including gold.

More US sanctions targeting Iran’s oil sector and central bank are to be reimposed in early November.

Mr Trump tweeted: “Anyone doing business with Iran will NOT be doing business with the United States.”

He added: “I am asking for WORLD PEACE, nothing less!”

The stiff economic sanctions ratchet up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after Mr Trump pulled the US out of the international accord limiting Iran’s nuclear activities.

Mr Trump declared the landmark 2015 agreement had been “horrible”, leaving the Iranian government flush with cash to fuel conflict in the Middle East.

Iran accused the US of reneging on the nuclear agreement, signed by the Obama administration, and of causing recent Iranian economic unrest. European allies said they “deeply regret” the US action.

As the sanctions loomed, Mr Trump said in a statement: “We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilising behaviour and reintegrate with the global economy, or continue down a path of economic isolation.”

Mr Trump warned that those who don’t wind down their economic ties to Iran “risk severe consequences”.

Despite Mr Trump’s claims, the accord “is working and delivering on its goal” of limiting Iran’s nuclear programme, said a statement by European Union foreign policy chief Federica Mogherini and the foreign ministers of France, Germany and the United Kingdom.

The ministers said the Iran deal is “crucial for the security of Europe, the region and the entire world”, and the European Union issued a “blocking statute” on Monday to protect European businesses from the impact of the sanctions.

A senior administration official, briefing reporters under ground rules requiring anonymity, said the United States is “not particularly concerned” by EU efforts to protect European firms from the sanctions.

Iranian President Hassan Rouhani said that Iran can still rely on China and Russia to keep its oil and banking sectors afloat. Speaking in a television interview, he also demanded compensation for decades of American “intervention” in the Islamic Republic.

Months of uncertainty surrounding the sanctions have already further hurt Iran’s economy. The country’s rial currency has tanked, and the downturn has sparked protests across the nation.

The “Trump Administration wants the world to believe it’s concerned about the Iranian people”, Iranian Foreign Minister Mohammad Javad Zarif said in a statement posted to Twitter. But, he said, the reimposed sanctions would endanger “ordinary Iranians”.

“US hypocrisy knows no bounds,” he said.

US officials insisted the American government stands with the people of Iran and supports many of their complaints against their own government.</s>WASHINGTON (AP) — As the Trump administration readies to re-impose sanctions on Iran that were lifted under the 2015 nuclear accord, America's European allies fear greater regional instability.

President Donald Trump's withdrawal from the landmark agreement, signed by the U.S. and five other world powers, remains one of the most consequential foreign policy decisions of his presidency.

Trump administration officials say the sanctions are being restored starting Monday in an effort to change the Iranian regime's behavior. "They're the world's largest state sponsor of terror," Secretary of State Mike Pompeo told Indonesian television in an interview Sunday. "That's what America is trying to get Iran to stop doing. That's the behavioral change that we're looking for from the Iranian regime."

But many U.S. allies believe that language is code for regime change, according to two European diplomats involved in negotiations with the Trump administration over how sanctions would be re-imposed.

The sanctions that go back into effect on Monday cover Iranian trade in automobiles and metals, including gold. The U.S. also has banned imports of Iranian products such as carpets and pistachios and revoked licenses that allowed Iran to purchase U.S. and European aircraft. Iran acquired five new European commercial planes on Sunday before the sales were cut off.

The last and most significant sanctions — those on Iran's oil sector and central bank — will be restored on Nov. 4. Iranian oil sales are a crucial source of hard currency.

The nuclear deal lifted international sanctions in exchange for Iran agreeing to restrictions on its nuclear program. U.N. inspectors said Iran was complying with the deal, but Trump argued that it didn't do enough to curb Iran's malign activity in the region. Trump administration officials also argued that because the U.S. lifted sanctions against Iran as part of the agreement, it in effect stripped Washington of one of its most powerful tools to penalize Tehran.

European countries say they remain committed to the agreement, seeing it as the surest way to safeguard their national security.

The problem is: What next?" one of the European diplomats said, referring to concerns that the U.S. is eyeing regime change as the sanctions' end goal. Both diplomats spoke on condition of anonymity, as they were not authorized to brief the media on ongoing negotiations.

If the re-imposed sanctions caused the government in Tehran to collapse, Iran would likely devolve into civil war like what unfolded in Syria or radicals would assume power, the diplomat said.

A deepening of Iran's economic crisis could also lead to an influx of refugees and migrants into Europe like that seen on the heels of the Syrian conflict.

Pompeo laid out the strategy behind the sanctions in his first major address as secretary of state.

"Iran will be forced to make a choice: either fight to keep its economy off life support at home or keep squandering precious wealth on fights abroad. It will not have the resources to do both," he said in May.

Supporters of the Iran agreement have long argued that the U.S. departure would alienate European allies who partnered with the U.S. in the negotiations.

We "remain firmly committed to ensuring (the deal) is upheld and we continue to abide by our commitments," the second European diplomat said. "If we cannot fulfill these, this risks Iran deciding that it no longer has to abide by the restrictions."

Iran's economy was plunged into a downward spiral following Trump's announcement that the United States was scrapping the nuclear deal. The downturn has sparked waves of protests across Iran.</s>EU says encouraging trade with Iran is crucial to nuke deal

WELLINGTON, New Zealand (AP) — The European Union foreign policy chief Federica Mogherini says the EU is encouraging enterprises to increase their business with Iran, as that country has been compliant with their nuclear-related commitments.

Mogherini told reporters Tuesday during her trip to Wellington, New Zealand, that it's up to Europeans to decide who they want to trade with.

"We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe this is in the security interests of not only our region, but also of the world. If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained," Mogherini said.

The United States reimposed stiff economic sanctions on Iran on Monday, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after President Donald Trump pulled the U.S. out of the international accord limiting Iran's nuclear activities.

Trump declared the landmark 2015 agreement had been "horrible," leaving the Iranian government flush with cash to fuel conflict in the Middle East.

Iran accused the U.S. of reneging on the nuclear agreement, signed by the Obama administration, and of causing recent Iranian economic unrest.

European allies said they "deeply regret" the U.S. action.

Trump said in a statement, "We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation."

A first set of reimposed U.S. sanctions affect financial transactions that involve U.S. dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.

A second batch of U.S sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.

Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences."

European ministers said the Iran deal was crucial for Europe's and the world's security, and the European Union issued a "blocking statute" Monday to protect European businesses from the impact of the sanctions.

Mogherini, speaking at a news conference alongside New Zealand Foreign Minister Winston Peters, said the EU and New Zealand saw the need to maintain the nuclear deal with Iran, notwithstanding the U.S. withdrawal, and that she and Peters had discussed in detail how to keep open trade and financial channels with Iran.

"We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something (that) for us is a security priority," Mogherini said, explaining that trade is an integral part of the nuclear deal.

Trade between Iran and the EU "is a fundamental aspect of the Iranian right to have an economic advantage in exchange for what they have done so far, which is being compliant with all their nuclear-related commitments," Mogherini said.</s>The United States re-imposed a wave of tough, unilateral sanctions against Iran on Tuesday, bringing back into effect harsh penalties that had been lifted under a historic, multi-party nuclear agreement that President Donald Trump abandoned in May.

The first of two rounds of US sanctions kicked in at 12:01 am (0431 GMT), targeting Iran's access to US banknotes and key industries, including cars and carpets.

Iranians are already seeing the effects of the sanctions, with Iran's rial currency losing around half its value since Trump announced the US would withdraw from the 2015 nuclear accord.

Trump's contempt for the nuclear deal dates back to his time as presidential candidate and on May 8, he made good on a pledge to pull America out of the international agreement.

He blasted the agreement yet again Monday, calling it a "horrible, one-sided deal (that) failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb."

The unilateral withdrawal came despite other parties to the agreement -- Britain, China, France, Germany, Russia and the EU -- pleading with Trump not to abandon the pact aimed at blocking Iran from acquiring a nuclear weapon, and highlights the US leader's go-it-alone style and his distaste for multilateral agreements.

In an executive order Monday, Trump said the sanctions seek to pile financial pressure on Tehran to force a "comprehensive and lasting solution" to Iranian threats, including its development of missiles and regional "malign" activities.

The European Union's diplomatic chief Federica Mogherini said the bloc, as well as Britain, France and Germany, deeply regretted Washington's move.

"We are determined to protect European economic operators engaged in legitimate business with Iran," she said in a statement.

Many large European firms are leaving Iran for fear of US penalties, and Trump warned of "severe consequences" against firms and individuals that continued to do business with Iran.

The impact of the return of sanctions has ramped up tensions inside Iran, which has seen days of protests and strikes in multiple towns and cities over water shortages, high prices and wider anger at the political system.

Severe reporting restrictions have made it impossible to verify the swirl of claims coming through social media.

Trump said he was open to reaching a more comprehensive deal with Iran "that addresses the full range of the regime's malign activities, including its ballistic missile program and its support for terrorism."

But Iranian President Hassan Rouhani was unimpressed by the offer.

"If you're an enemy and you stab the other person with a knife, and then you say you want negotiations, then the first thing you have to do is remove the knife," the Iranian leader said in an interview on state television.

"They want to launch psychological warfare against the Iranian nation," Rouhani said. "Negotiations with sanctions doesn't make sense."

John Glaser, director of foreign policy studies at the Cato Institute, noted that the US sees the sanctions "as a tool to pressure Iran to come back to the negotiating table to rehash the nuclear deal on terms more to Trump's liking. That is not going to happen."

The second phase of US sanctions, which takes effect November 5 and will block Iran's oil sales, is due to cause more damage, though several countries including China, India and Turkey have indicated they are not willing to entirely cut their Iranian energy purchases.

Iran's Foreign Minister Mohammad Javad Zarif told reporters the global reaction to Trump's move showed that the US was diplomatically "isolated," but acknowledged the sanctions "may cause some disruption."

Rouhani's government has taken emergency measures to stem the collapse of the rial ahead of the return of sanctions.</s>The Latest: Trump reinstates many sanctions on Iran

WASHINGTON (AP) — The Latest on U.S. sanctions on Iran (all times local):

President Donald Trump is signing an executive order reimposing many sanctions on Iran, three months after pulling out of the Iran nuclear deal. He says the U.S. policy is to levy "maximum economic pressure" on the country.

In a statement Monday, Trump restated his opinion that the 2015 international accord to freeze Iran's nuclear program in return for lifting sanctions was a "horrible, one-sided deal." He says it left the Iranian government flush with cash to use to fuel conflict in the Middle East.

Trump says the U.S. is urging all nations "to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation."

Trump warned that those that don't wind down their ties to the Iranian economy "risk severe consequences" under the reimposed sanctions.

A senior administration official says the United States is "not particularly concerned" by EU efforts to protect European firms from the re-imposition of sanctions on Iran.

The official was not authorized to discuss the matter by name and spoke Monday on condition of anonymity.

The European Union issued a "blocking statute" Monday to protect European businesses from the impact of sanctions set to return Monday at midnight.

The official says the U.S. will use the sanctions aggressively and cited Iran's severe economic downturn this year as evidence the sanctions would prove to be effective despite opposition from the EU, China and Russia.

European foreign ministers say they "deeply regret" the re-imposition of U.S. sanctions on Iran.

A statement Monday by European Union foreign policy chief Federica Mogherini and foreign ministers of France, Germany and the United Kingdom insisted that the 2015 Iran nuclear deal "is working and delivering on its goal" of limiting Iran's nuclear program.

President Donald Trump withdrew the U.S. from the deal, which had lifted international sanctions in exchange for Iran agreeing to restrictions on its nuclear program. U.N. inspectors said Iran was complying with the deal, but Trump argued that it didn't do enough.

But the European ministers said the Iran deal is "crucial for the security of Europe, the region and the entire world."

The first set of reinstated U.S. sanctions goes into effect Monday. Those target Iran's automotive sector as well as gold and other metals.

Secretary of State Mike Pompeo says the renewed sanctions against Iran are an important pillar in U.S. policy toward the Tehran government.

Pompeo says the sanctions will be rigorously enforced and remain in place until the Iranian government radically changes course.

Those sanctions go back in place on Monday.

Pompeo told reporters on his way home from a three-nation trip to South East Asia that the Trump administration is open to looking beyond sanctions but adds that would "require enormous change" from Tehran.

He said President Donald Trump is intent on getting Iran to "behave like a normal country."

U.S. sanctions had been eased by the Obama administration under the terms of the landmark 2015 Iran nuclear deal. Trump decided in May to withdraw from the accord.</s>As the Trump administration readies to re-impose sanctions on Iran that were lifted under the 2015 nuclear accord, America's European allies fear greater regional instability.

President Donald Trump's withdrawal from the landmark agreement, signed by the U.S. and five other world powers, remains one of the most consequential foreign policy decisions of his presidency.

Trump administration officials say the sanctions are being restored starting Monday in an effort to change the Iranian regime's behavior. "They're the world's largest state sponsor of terror," Secretary of State Mike Pompeo told Indonesian television in an interview Sunday. "That's what America is trying to get Iran to stop doing. That's the behavioral change that we're looking for from the Iranian regime."

But many U.S. allies believe that language is code for regime change, according to two European diplomats involved in negotiations with the Trump administration over how sanctions would be re-imposed.

The sanctions that go back into effect on Monday cover Iranian trade in automobiles and metals, including gold. The U.S. also has banned imports of Iranian products such as carpets and pistachios and revoked licenses that allowed Iran to purchase U.S. and European aircraft. Iran acquired five new European commercial planes on Sunday before the sales were cut off.

The last and most significant sanctions — those on Iran's oil sector and central bank — will be restored on Nov. 4. Iranian oil sales are a crucial source of hard currency.

The nuclear deal lifted international sanctions in exchange for Iran agreeing to restrictions on its nuclear program. U.N. inspectors said Iran was complying with the deal, but Trump argued that it didn't do enough to curb Iran's malign activity in the region. Trump administration officials also argued that because the U.S. lifted sanctions against Iran as part of the agreement, it in effect stripped Washington of one of its most powerful tools to penalize Tehran.

European countries say they remain committed to the agreement, seeing it as the surest way to safeguard their national security.

The problem is: What next?" one of the European diplomats said, referring to concerns that the U.S. is eyeing regime change as the sanctions' end goal. Both diplomats spoke on condition of anonymity, as they were not authorized to brief the media on ongoing negotiations.

If the re-imposed sanctions caused the government in Tehran to collapse, Iran would likely devolve into civil war like what unfolded in Syria or radicals would assume power, the diplomat said.

A deepening of Iran's economic crisis could also lead to an influx of refugees and migrants into Europe like that seen on the heels of the Syrian conflict.

Pompeo laid out the strategy behind the sanctions in his first major address as secretary of state.

"Iran will be forced to make a choice: either fight to keep its economy off life support at home or keep squandering precious wealth on fights abroad. It will not have the resources to do both," he said in May.

Supporters of the Iran agreement have long argued that the U.S. departure would alienate European allies who partnered with the U.S. in the negotiations.

We "remain firmly committed to ensuring (the deal) is upheld and we continue to abide by our commitments," the second European diplomat said. "If we cannot fulfill these, this risks Iran deciding that it no longer has to abide by the restrictions."

Iran's economy was plunged into a downward spiral following Trump's announcement that the United States was scrapping the nuclear deal. The downturn has sparked waves of protests across Iran.

© Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>The U.S. campaign to rein in Iran has scored a victory in the German financial sector, after the Deutsche Bundesbank− the country’s central bank− imposed a rule stopping a $400 million cash delivery to Tehran.

Iran's cash-starved economy desperately needs hard currency ahead of crippling U.S. bank sanctions that will be introduced in November.

Germany allows the Iranian-owned European-Iranian trade bank (EIH) to operate in Hamburg. The EIH holds more than $400 million that Tehran wants to receive in cash ahead of a second wave of U.S. sanctions due in November that impact banks and Iran’s energy sector.

The Deutsche Bundesbank has cooperated with the EIH in the past to circumvent U.S. sanctions on Iran. The U.S. and the European Union previously sanctioned the EIH for its role in advancing Iran’s nuclear and missile programs. The sanctions on the EIH were lifted after the world powers reached an agreement to curb Iran's nuclear program in 2015.

IRAN CROWDS REPORTEDLY CHANT 'DEATH TO THE DICTATOR!' AS US SANCTIONS INCREASE ECONOMIC UNREST

But President Trump effectively tore up the “decaying and rotten” deal in May and vowed to impose greater sanctions on the regime.

The disclosure in July that German Chancellor Angela Merkel's government was seeking to circumvent the pending sanctions triggered the U.S. ambassador to Germany to urge her government to stop the massive payment transfer.

“We are grateful to our German partners for recognizing the need to act.

Iran’s malign activities throughout Europe are a growing concern,” Richard Grenell, the U.S. ambassador to Berlin, told FoxNews.com. Grenell, a former Fox News contributor, led the campaign to persuade German authorities to prevent the cash transfer.

The U.S. embassy to Berlin tweeted: "Close partnership = results. Thank you to our German counterparts for acting to stop Iran’s activities."

The German central bank's new anti-Iran rule is slated to go into effect on August, 25.

Chancellor Merkel's efforts to send more than $400 million to the mullah regime echoes the Obama administration’s 2016 delivery of $1.7 billion in cash to Tehran, as part of a ransom to secure the release of American hostages held by the Islamic Republic.

President Trump has repeatedly slammed his predecessor for sending the cash.

The United States government has classified the Islamic Republic of Iran as a top state-sponsor of terrorism. The Merkel administration is going to great lengths to promote trade with Tehran. The German Economy Ministry said on Monday “export guarantees and investment guarantees from the Federal Ministry of Economic Affairs are still available to companies” that want to operate in Iran.

Germany's government provides 57 companies with more than $1 billion in export and investment guarantees for their business with Iran.

TRUMP RENEWS 'BITING SANCTIONS' AGAINST IRAN, WARNS COUNTRIES DOING BUSINESS WITH TEHRAN

Major German multinational companies, however, are voting with their feet.

Automobile manufacturer Mercedes-Benz announced on Tuesday that it had frozen all business with Iran due “to applicable sanctions.” The first wave of U.S. sanctions kicked in on Tuesday and will impact Iran’s automobile sector, as well as trade in precious metals.

Sportswear giant Adidas meanwhile followed the lead of its U.S. competitor Nike and pulled the plug on its business with Iran.

Adidas said in a statement last week that it will not extend commercial agreements with Iran's soccer association. Iran's state- controlled media reported that Adidas withdrew from Iran's market because it fears damage to its business in the U.S.

Peter Kohanloo, the president of the U.S.-based Iranian American Majority organization, told FoxNews.com: “Germany, France and the UK always talk about human rights and democracy, but by resisting more sanctions, they’re actively opposing a growing revolution inside Iran to replace one of the most egregious human rights violating dictatorships in the world.

“Germany is making a huge mistake by injecting much-needed cash into the mullahs’ resistance economy as they murder Iranian protesters.”

In a joint statement on Monday, Federica Mogherini, the EU’s foreign policy chief, and the foreign ministers of Britain, France and Germany said: “We are determined to protect European economic operators engaged in legitimate business with Iran.”

The EU implemented a “blocking statute” to insulate EU companies active in the Islamic Republic from American sanctions.

The Association of German Chambers of Commerce and Industry said on its website that in the first five months of this year, exports to Iran dropped by four percent.

Over the last few years, 120 German companies have opened offices in Iran, according to the German industry group, but that trend is sinking.

German exports to Iran climbed to $3.96 billion in 2017, up from $2.89 billion in 2016.
The United States reimposes sanctions on Iran after the US pulled out of the international agreement three months prior.