Iran has put forth its own set of condition to Europe in order to save the nuclear agreement. The nation wants European nations to ensure their banks safeguard Iranian..
Iran has put forth its own set of conditions to Europe, in order to save the nuclear agreement. The nation wants European nations to ensure their banks safeguard Iranian assets and guarantee Iranian oil sales.
Background
The Iran nuclear deal, also known as the JCPOA (Joint Comprehensive Plan of Action), was signed by Iran and major powers UK, China, France, Germany, Russia, and the US (the P5+1) in 2015. The deal was a result of almost a decade of sanctions due to Iran’s non-compliance with the Nuclear Non-Proliferation Treaty. Between 2006 and 2015, Iran lost an estimated $100 billion in oil revenue alone. According to the JCPOA, Iran would limit its nuclear ambitions in return for relief from a number of sanctions. It was declared that Iran had complied with the terms of the provisional agreement and sanctions were lifted in 2016. Read more on the nuclear deal here.
On May 8th, 2018, President Trump announced that the US would be withdrawing from the “decaying and rotten” nuclear deal. This move was taken against the advice of allies such as France and Germany, whose leaders lobbied for the Trump administration to preserve the deal. Iran has warned that it would not “remain in a deal that has no benefit” and threatened to resume its uranium enrichment projects.
Washington’s decision to re-impose sanctions could have serious implications for European companies as well. Since 2015, trade between the EU and Iran has increased. In 2017, EU exports to Iran were worth $12.9 billion. European companies with interests in Iran include Airbus and ATR, who have signed deals to sell planes to Iran Air. Germany’s Siemens and Italy’s FS rail have entered partnerships for rail projects, France’s Renault has entered joint ventures in the country, and Volkswagen has resumed exports to Iran. BP is part of a joint venture to develop the Rhum gas field, and French company Total has signed a $5bn deal to develop the South Pars gas field.
Analysis
Iran has indicated that it is willing to stay in the deal as long the other signatories maintain the terms of the agreement. “We hope that with this visit to China and other countries we will be able to construct a clear future design for the comprehensive agreement,” Iranian Foreign Minister Zarif said during a recent diplomatic visit to Beijing. He has also met with European leaders, and his counterpart in Russia.
Meanwhile, EU leaders have said that they will continue to abide by the JCPOA. The European Union has also begun steps to evoke the “blocking statute” it previously used to lift sanctions on Cuba in 1996. The statute “blocks the application of foreign legislation and its effects in order to protect the economic interest of the Community.”
The Iranian Supreme Leader has now noted that in order for the nation to stay in the nuclear agreement, Europe must cooperate. The nation wants European banks to safeguard its assets as well as ensure Iranian oil sales. Ayatollah Khamenei said, “During the last two years, the US violated the JCPOA several times, and Europe remained silent. Europe must compensate for that silence.” He called on Europe to “explicitly stand up to the US sanctions.” While saying Iran doesn’t seek a “fight” with Europe, Khamenei noted, “these three countries have proved that, on the most sensitive issues, they follow the US.”
“Europe must guarantee that Iran’s oil will be completely sold. If the US can damage the sale of our oil, we must be able to sell as much oil as we want. Europeans must guarantee that they compensate for the loss, and that they buy Iran’s oil,” he added.
Khamenei’s demands to Europe come just days after US Secretary of State Mike Pompeo laid out “12 basic requirements” for Iran. US has demanded Iran to withdraw from Syria and cut ties with Houthi rebels in Yemen. The US is also threatening Iran with the “strongest sanctions in history.”
Assessment
Our assessment is that the EU will do everything within its power to ensure the nuclear agreement does not dissolve. The EU played an important role in brokering the Iran nuclear deal and has enthusiastically championed it even after Trump withdrew from the deal. Although European leaders have signalled their concerns regarding Iran’s activities in the Middle East, they are also worried that an untethered Iran would prove to be more dangerous for the region.
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