Updated April 24th, 2024 at 17:48 IST

As Pakistan, Iran Sign New Deals, US Warns of Sanctions for Anyone Dealing with Tehran

During Iranian President Raisi's recent visit to Pakistan, the two nations signed eight MoUs while vowing to increase trade to $10 billion in the coming years.

Reported by: Digital Desk
The US warning came a day after Iran and Pakistan inked several new deals during Iranian President Raisi's visit to Islamabad. | Image:AP
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Washington: A day after Iran and Pakistan inked new agreements during President Seyyed Ebrahim Raisi's visit to Islamabad, the US made a pointed statement warning of the “potential risk of sanctions” for anyone considering business deals with Tehran. 

During Raisi’s three-day visit that concluded on Wednesday, Iran and Pakistan signed eight MoUs while vowing to increase trade to USD 10 billion in the coming years.

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Vedant Patel, Deputy Spokesperson for the US State Department gave the warning on being asked about the agreements signed by Tehran and Islamabad during Raisi's visit.

He was responding to a question on a Pakistan government spokesperson's assertion that Islamabad does not need a waiver from US sanctions to build a portion of the Pakistan-Iran pipeline. 

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“Just let me say broadly ... We advise anyone considering business deals with Iran to be aware of the potential risk of sanctions. But ultimately, the Government of Pakistan can speak to their own foreign policy pursuits,” said Patel. 

According to Iranwire.com, Mumtaz Zahra Baloch, the Pakistani Foreign Ministry spokesperson, had told a press conference on March 21: “It is a segment of the pipeline which is being built inside Pakistani territory. So, we do not believe that at this point there is room for any discussion or waiver from a third party.”

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However, on March 25, Pakistan’s Minister for Petroleum Dr Musadik Malik said the government would seek exemption from US sanctions for the multi-billion-dollar Iran-Pakistan (IP) gas pipeline project and decided to plead “vigorously".

“We will seek exemption from US sanctions. Pakistan cannot afford sanctions in the gas pipeline project,” he had said days after US Assistant Secretary of State for South and Central Asia Donald Lu said at a congressional hearing that Pakistan had so far not sought exemption for the 1,150-kilometre gas pipeline.

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The proposed 2,775-km pipeline plans to link Pakistan’s energy supply directly to Iran’s abundant gas reserves.

However, the project has faced significant delays due to geopolitical pressures, sanctions on Iran and financial hurdles within Pakistan.

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In February this year, the caretaker government in Pakistan decided to dust off the 2009 agreement, approving the construction of the first phase or 80-km stretch (of the total 780-km pipeline) from the Iranian border to Gwadar in Balochistan, the Dawn newspaper reported last week.

Meanwhile, Tehran has issued a deadline: finish the pipeline segment by March 2024 or incur financial repercussions amounting to nearly USD 18 billion — a sum that could prompt international arbitration, the report said.

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According to SHANA, a Tehran-based information network, Iranian Oil Minister Javad Owji said that Pakistan is keen to fulfil its obligations in completing a part of the Iran-Pakistan Gas Pipeline Project.

Speaking on the sidelines of Raisi’s visit, Owji stated that the Pakistani side is willing to see the injection of gas into the pipeline and for this reason, Islamabad is drawing up contracts with various companies for the acceleration of this process.

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Sanctions on entities linked with Pak missile programme 

Earlier last week, the US had also slapped sanctions on three Chinese companies and one from Belarus for supplying missile-applicable items for Pakistan's ballistic missile programmes, including its long-range missile programme.

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China, an all-weather ally of Pakistan, has been the main supplier of arms and defence equipment to Islamabad's ambitious military modernisation programme.

Asked about the real reasons for these US sanctions, Patel said, “The sanctions were made because these were entities that were proliferators of weapons of mass destruction and the means of their delivery. These were entities based in the PRC, in Belarus, and that we have witnessed to have supplied equipment and other applicable items to Pakistan’s ballistic missile programme.”

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“They are following our October 23 designation of other – three PRC entities who’ve worked to supply Pakistan’s missile programme. We’re going to continue to disrupt and take actions against proliferation networks and concerning weapons of mass destruction procurement activities wherever they may occur,” Patel added.

Meanwhile, at a separate news conference, when Pentagon Press Secretary Patt Ryder was asked about how the US sanctions against four companies will affect the US-Pakistan military-to-military relationship, first he said, he did not have any information to provide on that.

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But quickly added: “Clearly, as you know, we maintain a good relationship with Pakistan. They're an important security partner in the region. And so, you know, we'll, again, continue to have those conversations and make sure that we can.”

In Pakistan, The News International said, “The State Department's statement comes at a crucial standpoint in Pakistan's history as it works to advance its ‘brotherly ties’ with Iran by welcoming their president, months after their cross-border skirmishes in January.”

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“The statement also holds significance following Iran's standing at the global level, owing to its regional activities and recent clashes with Israel after it attacked its embassy in Damascus, killing two senior members of the Islamic Revolutionary Guard Corps,” it added. 

With inputs from PTI. 

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Published April 24th, 2024 at 16:58 IST