Europe not backing down on Iran

- Mei 17, 2018

Europe is refusing to walk away from the Iran nuclear deal even if Donald Trump wants to kill it.

The continent’s leading officials are spending the week huddling, negotiating and debating ways to essentially ignore President Donald Trump’s decision last week to withdraw the U.S. from the 2015 deal, under which Iran pledged to limit its nuclear program in exchange for sanctions relief.

“We are working on finding a practical solution,” Federica Mogherini, the European Union’s top diplomat, said earlier this week. “We are talking about solutions to keep the deal alive.”

The Trump administration’s move to pull out of what the president calls a “terrible deal” also came with a threat to slap sanctions on European companies doing business with Iran and a warning to organizations to wind down any operations they may have in Iran.

“The wealth that was created in Iran as a result of the JCPOA drove Iranian malign activity,” said Secretary of State Mike Pompeo during an interview Sunday on Fox News, referring to the official name of the Iran deal, the Joint Comprehensive Plan of Action. “It provided resources for their work in Syria and Iraq.”

“President Trump's withdrawal is denying them that wealth, denying them the resources to continue their bad behavior, to take the money away from them,” he added. “The withdrawal wasn’t aimed at the Europeans.”


But some European leaders did take it personally. They have long argued that Iran is complying with the deal’s requirements, and insist the agreement is the only realistic alternative to military force as a means of halting Tehran’s nuclear program. They spent months imploring Trump to stay in the pact, arguing that throwing it into disarray would have few, if any, positive effects.

“Looking at latest decisions of Trump, someone could even think: with friends like that who needs enemies?” Donald Tusk, president of the European Council, said on Wednesday. “But frankly, EU should be grateful. Thanks to him we got rid of all illusions. We realize that if you need a helping hand, you will find one at the end of your arm.”

Indeed, European leaders are now plotting to find ways to help themselves.

On Tuesday night, Mogherini met with the foreign ministers from France, Germany, the United Kingdom and Iran — all countries that helped negotiate the agreement — to chart a path forward. And on Wednesday, EU leaders held a dinner before a European Council meeting in Bulgaria. Officials there agreed to work to shield European companies from any punitive action by Washington.

The first step, Mogherini explained this week, could be strengthening Europe’s financial ties with Iran — the antithesis of what the White House had hoped would happen after pulling out of the deal.

“The lifting of nuclear-related sanctions and the normalization of trade and economic relations with Iran constitute essential parts of the agreement,” she said, noting that the EU had committed in its Tuesday meeting to “maintaining and deepening economic relations with Iran,” including the continued sale of Iranian energy, “effective banking transactions” and ongoing transport links.

Mogherini added that there would also be “protection of European Union economic operators and … last but not least, the further development of a transparent, rules-based business environment in Iran.”

Concern about the effects of the U.S. decision is particularly strong in France, as many of its companies were among the first to invest in Iran after the signing of the nuclear accord.

On Tuesday, French Economy Minister Bruno Le Maire held a closed-door meeting with more than 6o French businesses that are “present in Iran or have trade relations with the country,” according to a statement issued by the economy ministry.


“A lot of companies in the aeronautical, pharmaceutical, energy and car sectors have invested in a significant way in Iran and some have concluded contracts in good faith which must be respected,” Le Maire told reporters following the meeting.

France, he said, is “totally determined” to “make our economic interests respected and to respect one principle, which is the refusal of extra-territorial sanctions.” The minister said he wanted France, Germany and Britain to reach out to the U.S. administration and ask for “exemptions, additional deadlines, or to respect the contracts that have been agreed in good faith by our businesses in Iran.”

Europe, he added, must have an “independent financial tool” that would “allow our companies to trade freely in places Europe decided it was necessary or useful to do trade.”

Another possibility raised by Le Maire is a European version of the Treasury Department’s Office of Foreign Assets Control, which administers and enforces economic and trade sanctions.

The penalties for breaking U.S. sanctions can be steep, as some of France’s biggest firms can attest. In 2015, French lender BNP Paribas was slapped with a $9 billion fine after U.S. prosecutors accused it of violating sanctions against Iran as well as Sudan and Cuba. The bank’s CEO and deputy CEO were forced out in the wake of what was then the highest fine ever imposed on a foreign lender by American authorities.

Another French firm that has a lot to lose in Iran is Total.

It is the only major Western energy company that plunged into a business deal with Iran once sanctions were lifted in 2016, signing a $1 billion investment in the offshore South Pars gas field. It’s meant to be a 20-year project and Total’s investments are believed to be $5 billion.

The company said on Wednesday that it will have to ax the gas development project unless it gets a waiver protecting it from U.S. sanctions.


Criticism of the U.S. sanctions also came from the U.K., which resumed its trade with Iran after the deal was struck. In a statement Tuesday, British Foreign Secretary Boris Johnson said the U.K. remains “fully committed to upholding” the deal, and is working with France and Germany to “explore the best way forward.”

A French government official told reporters earlier this week that the U.S. practice of punishing foreign companies operating in foreign countries like Iran “is a real problem.” He said Europe “is not capable of reacting to those extraterritorial measures.”

However, he added, “We are not going to get into confrontation,” with the U.S.

David Herszenhorn contributed to this report.


 

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