Europeans work to preserve accord – EU could impose blocking regulations to protect firms if US pulls out
PARIS, Feb 8, (RTRS): Britain said on Thursday it was working with its partners to tackle US concerns over a landmark 2015 nuclear deal between Iran and major powers, but said Tehran must avoid actions that threaten regional security. “We and our European partners are absolutely clear. We want the deal to succeed,” Britain’s Minister for the Middle East, Alistair Burt, told a Euromoney Iran conference in Paris.
“We don’t want to see the JCPOA (deal with Iran) go down and are working with our European partners to mitigate concerns the United States may have to ensure it continues.” The European Union could put in place regulations to protect its firms doing business in Iran if the United States withdraws from the 2015 nuclear deal and restores extraterritorial sanctions, a senior EU official said on Thursday.
European countries have been looking to increase trade with Iran since Paris, Washington and other world powers agreed to lift most economic sanctions in 2016 in exchange for limitations on Tehran’s nuclear programme. But US President Donald Trump on Jan. 12 vowed to restore US sanctions unless France, Britain and Germany change what he calls the “worst deal ever” to his liking, effectively putting it on life support until mid-May.
While European nations have been adamant that they would stick to the deal should Washington pull out, Europe would need to find ways to limit any impact from possible US sanctions to ensure their firms continue to do business with Tehran. Denis Chaibi, head of the Iranian taskforce at the EU’s external action service, said one of the options would be to restore “blocking regulations”, a system from 1996 that would protect its firms. “We are looking at a number of possibilities. It is not complicated to do it legally in that the legal instrument exists, but it doesn’t require a huge internal debate,” Chaibi told a Euromoney conference in Paris.
The regulations were agreed in 1996 as a countermeasure to the US extraterritorial economic sanctions against Cuba, which EU governments argued benefited US foreign policy interests at the expense of European sovereignty. “It could be revived or put back, but only if it is clear that the US is putting back sanctions with extraterritorial sanctions and that they are being applied. It can’t be done protectively,” he said.
The so-called extra-territoriality of US sanctions law, which apply to foreign firms carrying out transactions in US dollars even if the operations involve non-US branches, allowed US authorities to fine French lender BNP Paribas nearly $9 billion (5.34 billion pounds) in 2014.
Fears of such fines have been one reason preventing major international lenders and firms from returning. Iranian officials have repeatedly said reluctance of major European banks to return to Iran has slowed its economic improvement, calling on European leaders to encourage businesses to return to Iran. Iran’s Supreme Leader Ayatollah Ali Khamenei has praised European signatories of the deal for trying to keep it alive, but has demanded tangible reaction if the United States pulls out of the accord. The European External Action Service (EEAS), set up in 2009, runs a network of diplomats around the globe, drafts policy papers for EU foreign ministers and is led by the EU’s top diplomat Federica Mogherini.
Meanwhile, Iran said on Thursday there was no link between its influence in the Middle East region and its 2015 nuclear deal with major powers that has now come under fire from the US administration. With US President Donald Trump warning of a last chance for “the worst deal ever negotiated”, Britain, France and Germany are working on a plan to satisfy him by addressing Iran’s ballistic missile tests and its regional influence while preserving the 2015 accord.
Speaking to Reuters on the sidelines of a Euromoney conference in Paris, Iran’s Deputy Foreign Minister Abbas Araqchi gave no indication that Tehran would be willing to discuss those issues, and he accused the United States, Israel and Saudi Arabia of fomenting tensions in the Middle East. “We have always fought against terrorism. Iran has always played a key role in bringing stability and peace to the region … There is no link between the (nuclear) deal and our role in the region,” Araqchi, also a senior negotiator in the Iran nuclear talks, told Reuters.
Trump’s ultimatum has effectively put the deal on life support until mid-May. Speaking at the same conference, Britain’s Minister for the Middle East, Alistair Burt, said European powers were determined to save the deal and assuage the United States, but he warned that Iran also needed to mitigate Western concerns over its regional activities. “We and our European partners are absolutely clear. We want the deal to succeed,” Burt said. “We don’t want to see the JCPOA (deal with Iran) go down and are working with our European partners to mitigate concerns the United States may have to ensure it continues.” Negotiations between Europeans and the US officials to meet Trump’s conditions are ongoing.
The first challenge the Europeans face is dissecting divergent US statements about what Trump wants to keep issuing “waivers” to US sanctions. Without the waivers, which expire May 12, the US sanctions return, effectively killing the deal. “Iran also needs to avoid taking actions which threaten regional security,” Burt said specifically pointing to claims that Tehran has supplied ballistic missiles to Houthi rebels in Yemen