U.S. loses UN-court ruling, will terminate decades-old treaty with Iran

U.S. Secretary of State Mike Pompeo blames Iran for threats to American missions in Iraq and said the United States was terminating a historic treaty with Tehran on consular and economic rights.

The 1955 Treaty of Amity was signed when Iran's last shah ruled

Secretary of State Mike Pompeo briefs reporters at the State Department in Washington on Wednesday. Pompeo said the U.S. is ensuring humanitarian transactions in Iran aren't affected by its sanctions, although a UN-backed court expressed concern that wasn't the case. (Cliff Owen/Associated Press)

U.S. Secretary of State Mike Pompeo blamed Iran on Wednesday for threats to American missions in Iraq and said the United States was terminating a historic treaty with Tehran on consular and economic rights.

"Iran is the origin of the current threat to Americans in Iraq," Pompeo told reporters at the State Department. "Our intelligence in this regard is solid. We can see the hand of the ayatollah and his henchmen supporting these attacks on the United States."

The U.S. announced on Friday it will effectively close its consulate in the Iraqi city of Basra and relocate diplomatic personnel assigned there following increasing threats from Iran and Iran-backed militia, including rocket fire.

The decision added to mounting tension between the U.S. and Iran, which is the target of increasing U.S. economic sanctions.

Pompeo's announcement came just a few hours after the International Court of Justice (ICJ) ordered the U.S. to ensure that sanctions against Iran, due to be tightened next month, do not affect humanitarian aid or civil aviation safety.

Tehran had argued that the sanctions imposed since May by the administration of President Donald Trump violate the terms of that 1955 Treaty of Amity between the two countries, signed when Iran's last shah held power.

The ruling is likely to have at most limited practical impact on the implementation of sanctions, which Washington is reimposing and tightening after pulling out of the 2015 nuclear deal that Iran signed with world powers.

The court order issued on Wednesday is temporary pending a resolution of Iran's full lawsuit against Washington by the ICJ, something that could take years.

Iran's foreign ministry said in a statement "the decision proved once again that the Islamic Republic is right and the U.S. sanctions against people and citizens of our country are illegal and cruel.

"The United States must comply with its international commitments and lift obstacles to Iranian trade," it added.

But Pompeo rejected the decision, saying the court has no jurisdiction.

Pompeo said Iran was misusing the court for political purposes and that the U.S. was actively ensuring that humanitarian aid reaches the country, without regard to the court ruling.

At the White House, national security adviser John Bolton said Iran had "made a mockery" of the 1955 treaty with its "support of malign behaviour in the Middle East."

"Our dispute has never been with the people of Iran," he added.

Iranian business being hindered

The ICJ is the United Nations' highest court for resolving disputes between nations. Its rulings are binding, but it has no power to enforce them, and both the U.S. and Iran have ignored them in the past.

The court said assurances offered by Washington to ensure sanctions do not affect humanitarian conditions were "not adequate."

"The court considers that the United States must … remove by means of its choosing any impediment arising from the measures announced on 8 May 2018," said Presiding Judge Abdulqawi Yusuf, reading a summary of a ruling by the 15-member panel of justices.

The sanctions may not hurt "exportation to the territory of Iran of goods required for humanitarian needs such as medicines, medical devices and foodstuffs and agricultural commodities as well as goods and services required for the safety of civil aviation," he said.

While U.S. sanctions "in principle" exempt food and medical supplies, the court said "it has become difficult if not impossible for Iran, Iranian nationals and companies to engage in international financial transactions" to purchase such goods.

Mohammed Zahedin Labbaf, centre, representative from Iran, waits for judges to enter at the World Court in The Hague. Judges from the court ruled Wednesday on an Iranian request to order Washington to suspend sanctions against Tehran. (Peter Dejong/Associated Press)

The treaty was signed long before Shah Muhammad Reza Pahlavi was exiled and Iran's 1979 Islamic Revolution, which turned the two countries into archenemies.

Europe getting to 'acceptance': Bolton

Jennifer Newstead, a legal adviser with the State Department, had said Iran's real quarrel was its frustration over the U.S. pullout from the nuclear pact, under which Tehran restricted its disputed uranium enrichment program under UN monitoring in exchange for a lifting of most international sanctions.

Trump's unilateral move has put it at odds with the other signatories to the deal, including Washington's close European allies Britain, France and Germany as well as Russia and China.

Iranian President Hassan Rouhani praised Europe on Wednesday for maintaining business with Iran after the U.S. withdrawal.

"To maintain financial and monetary relations in Iran, Europe has formed a special body.… Europe has taken a big step," Rouhani was quoted as saying by Tasnim news agency.

John Bolton, national security adviser, predicted that the European signatories to the Iran nuclear agreement are coming to accept the U.S. decision to withdraw from the deal. (Susan Walsh/Associated Press)

Foreign Minister Mohammad Javad Zarif also told the BBC on Wednesday that support from Europe to preserve economic ties with the Islamic Republic in the face of U.S. pressure was "better than expected."

At the White House, Bolton referenced the so-called stages of grief when discussing the European countries who are still signatories to the deal.

"Eventually you get to acceptance," he said. "European countries in droves are foreswearing business opportunities in Iran."

Washington nonetheless plans to pursue a new series of sanctions due to go into effect Nov. 4 aimed at curtailing Iranian oil exports, the lifeblood of its economy.