Date :Wednesday, December 5th, 2018 | Time : 01:18 |ID: 79662 | Print

EU must act soon if it wants to keep the nuclear agreement alive

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SHAFAQNA | by Leila Yazdani : The 2015 nuclear deal between Tehran and World powers will be in danger if European countries fail to fulfill their pledge to ease the US’ pressures.

The US pullout from the JCPOA on May 8, and its “illegal” move to increase pressure on Tehran upset the balance between the Islamic Republic’s commitments under the deal and the benefits it gained from it. Since then, Iranians have been looking to Europeans to rescue the pact with practical steps beyond political support. However the EU wants to maintain trade and economic relations with Iran which had already normalized . But, a payments channel to maintain trade with Tehran has not created yet and, Europeans are hopeful they would be able to develop the SPV soon.

Six months have passed since Trump administration unilaterally pulled out of the nuclear agreement, and nearly a month since the US re-imposed secondary sanctions on Iran’s oil and financial sectors. Iranian officials including President Hassan Rouhani have indicated several times Iran’s willingness to continue fulfilling its obligations as long as the other parties (the EU, Russia and China) provide the economic benefits that Iran expected to receive and guarantee Iran’s oil and gas exports.

The EU has frequently reiterated its commitment to the deal , and European Countries are now working to set up the so-called Special Purpose Vehicle (SPV) in a bid to circumvent the US sanctions against Iran and facilitate non-dollar trade with Tehran. But Araghchi said that Iran is not going to wait forever. “We believe we should give the Europeans more time,” he said in an interview with IRNA news agency. “You cannot swim without getting wet,” Iranian Foreign Minister Mohammad Javad Zarif told the annual International Mediterranean Dialogues Conference, signaling that Iran is losing patience with European leaders and expects the European Union (EU) to back up its political support for the Joint Comprehensive Plan of Action (JCPOA) with concrete action, atlanticcouncil reported.

In the latest sign of the growing divide between Washington and its allies, the European Union’s foreign policy chief announced that the bloc was creating a new payment mechanism to allow countries to transact with Iran while avoiding U.S. sanctions. On September 24, Iran and its five partners released a joint statement announcing the setting up of the SPV to facilitate continued trade with Iran, bypass the US financial system, and avoid any impact of America’s secondary sanctions. Called the “special purpose vehicle” (SPV), this mechanism would aim to “assist and reassure economic operators pursuing legitimate business with Iran,” according to a joint statement released by the remaining members of the Iran nuclear deal — France, Britain, Germany, Russia and China. The special purpose vehicle (SPV) is a way to evade US sanctions on Iranian oil trade and banking, Sputniknews noticed in September. At the time, analysts already doubt the viability of the plan — while the SPV would establish a clearer financial channel to trade with Tehran, it’s not likely to be able to protect participating companies from U.S. secondary sanctions, according to cnbc.

While largely viewed as positive, the plan left many with unanswered questions. Big questions loom over the European Union’s plan to create a money-transfer system to help Iran. Among them: Can this entity help sustain a meaningful amount of trade with Iran? Can it be safeguarded from the United States’ financial sleuths? Will it require significant use by two of America’s biggest adversaries, China and Russia, to really work, nytimes mentioned.

This “first step from word to action,” according to Ebtekar, sill faces hurdles that include guarantees to immunize European firms from US punishment. Hamid Reza Asefi, a senior former Iranian diplomat and ambassador, threw pessimism at the plan, noting that it’s simplistic to think that a financial mechanism with Europeans is workable. “Europe is determined to keep the JCPOA but without paying any price,” he said, al-monitor told.

EU claimed that security is more important than business opportunities

It is no secret that the United States is a much larger and more attractive market for European firms to do business than Iran. This is the reason that European multinational firms such as Total, Siemens, and Peugeot left Iran even before the re-imposition of US sanctions. However, the EU leadership has always insisted that its main interest in the nuclear agreement is regional security and stability, not business opportunities. For Europe, preserving the nuclear agreement with Iran is about preventing another conflict in an already troubled region—a conflict that could flood Europe with a new wave of refugees. The collapse of the nuclear agreement would put Iran, the US and their regional allies on a collision path, which would have significant ramifications beyond the Middle East, especially for Europe. Moreover, the failure to preserve the Iran deal would significantly undermine the sovereignty of the EU and its ability to enter international agreements independent of the United States.

“We are seeking to preserve the Iran nuclear deal and believe that the JCPOA must remain intact irrespective of the US’ pullout… as there is no alternative to the accord, and the JCPOA plays a key role in international peace and security,” Belgian Deputy Foreign Minister Bruno van der Pluijm noted, Press TV reported. Later, European Commission President Jean-Claude Juncker in an exclusive interview with Treffpunkt Europa reiterated the bloc’s strong support for the JCPOA, highlighting its contribution to global peace and security and The deal may not be perfect but it was an important step toward peace in the region and worldwide.

The failure of Europeans has increased concerns about the future

Luxembourg and Austria, under the US pressure, refused to host the SPV, with Luxembourg officials being warned that hosting the mechanism could damage the country’s place as a major financial center hosting many international investment funds, European diplomats said.

After disappointing news about several European countries refusing to host the SPV, Araqchi in a meeting with his Belgian counterpart in Brussels said that Under such circumstances, the failure of Europeans and other parties to ease the pressures, as they had promised to, has increased concerns about the future of the nuclear deal.

The EU needs to unite on this issue and implement it a way that displays its power and autonomy on the international stage.

The EU has the option to set up multiple SPV’s  and encourage non-European countries to join the SPV

First and foremost, the EU has the option to set up multiple SPV’s in several European countries instead of pressuring a single country to host the payment system. This would further complicate the scenario for the application of US sanctions. There are reports that France and Germany will co-host the mechanism. The Wall Street Journal reported Nov. 26 that Paris and Berlin are about to create a payments channel to maintain trade with Tehran in defiance of US sanctions. The news has been largely received in Iran as a signal that the Joint Comprehensive Plan of Action (JCPOA) will yet be salvaged. Iranian newspaper Aftab praised their two governments’ “step forward” in bypassing US sanctions on Iran. The French and Germans are rolling up their sleeves to implement the mechanism,” read another editorial in Iran, a paper echoing the official agenda of President Hassan Rouhani’s government Once implemented, the mechanism will prevent Iranian financial isolation,” the article stated. Araqchi also pointed to a report by the Wall Street Journal that Germany and France are going to host the SPV to keep trade with Iran in defiance of US sanctions, and said he cannot confirm it because of the “sensitivity of the issue”.

The report said if France plays host to the SPV, Germany will take the helm, and vice versa.

According to the diplomats, British officials are also mulling over joining France and Germany in order to rescue the European attempt to circumvent the US sanctions and salvage the Iran nuclear deal following the US’ withdrawal in May.

Secondly, Europe should encourage non-European countries to join the SPV, not only to facilitate trade with Iran but also to strengthen the role of the euro against the US dollar in international trade.

For his part, Belgian Deputy Foreign Minister Bruno van der Pluijm said the Europeans are hopeful they would be able to develop the SPV soon.

The EU must act soon

From Tehran’s view, the SPV could potentially become the savior of the nuclear deal. Yet, if not materialized soon, it is very likely that Iran will consider withdrawing from the JCPOA, putting a final end to an already hobbled agreement.

In a conversation with Iranian reporters on the sidelines of high-level talks in Brussel, Iranian Deputy Foreign Minister Abbas Araghchi once again warned about the possibility of the collapse of the nuclear agreement if Iran does not receive the economic gains it was promised. Therefore, the EU must act soon if it wants to keep the nuclear agreement alive.

 

Read more from Shafaqna:

Iran cannot ‘wait forever’ for EU’s promised SPV

Zarif: Iran don’t give in to coercion

US withdrawal from JCPOA is a blow to Europe security

Jeremy Hunt in Tehran: JCPOA is a vital component of stability in the Middle East

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