On February 4, 2019, the European Union’s (EU) statement on Iran expressed the extent of EU-Iran differences. On the onset of the new year, the disagreements become more heated due to some changes in the EU position such as: discussing Iran’s ballistic missiles program and imposing new sanctions on Iranian individuals and entities, calling to curb Iran’s interventionist activities the region, and linking the activation of the payment channel (INSTEX) to Iran’s commitment to the standards of the Financial Action Task Force (FATF).
on the same day, the Iranian Foreign Ministry’s statement expressed Iranian annoyance towards the EU for not fulfilling its commitment to safeguard the JCPOA, particularly, after 9 months since the US withdrawal from the deal, as the EU and Iran had agreed a plan to save the nuclear deal but this plan has not materialized, this is while Iran suffers –according to Rouhani himself- an unprecedented economic crisis since the1979 Iranian revolution.
Renewed EU position
The EU position has moved from talks on activating the safeguards to save the nuclear deal after the US withdrawal to linking these safeguards with Iranian requirements to commit to several major files.
In this regard, the EU statement pointed to several files with the most important being: Iran’s ballistic missiles program, Iran’s regional interventions, Iran’s commitment to its pledges in the framework of the JCPOA, Tehran’s hostile activities in some EU capitals and finally the passage and execution of Iran’s obligation under FATF. Despite this position, the EU asserted its support for the JCPOA and praised the Iranian commitment to the nuclear deal’s articles. The EU also criticized the US withdrawal from the JCPOA and the new US sanctions on Iran. The EU confirmed its support to allow Iran to benefit from the wide range of interests embedded in the framework of the JCPOA and it considered the objective of the French-German-British initiation of the Instrument in Support of Trade Exchanges (INSTEX) to positively stimulate mutual trade and economic transactions with Iran.
Accordingly, the European approach during the current phase has ended and has reached a new balancing point combining maintaining the deal in a legal and technical framework to deal with the nuclear issue on the one hand and exploiting the US pressure on Iran to reach an understanding to address a number of issues: the development of Iran’s ballistic missile program, its regional interventions, its support for terrorism in Europe and its commitment to FATF, in addition to its human rights record which is of less importance. Given the narrow Iranian gains so far, indeed the European approach offers limited facilities in return for significant gains. And, all European safeguards to maintain the nuclear deal have been condensed into the payment mechanism (INSTEX), which is still a limited new project, needs time and faces significant challenges, and it is conditioned on reaching a precise understanding and complying with specific conditions.
Iranian rejection and threats
The Iranian official response clarified its rejection of the EU position and expressed its mistrust towards the European position on saving the nuclear deal. The foreign ministry considered what came from the Europeans in the form of the INSTEX to fall short of Iran’s expectations. The announcement of the INSTEX was late and the steps for its execution were not sufficient, further linking the INSTEX with the implementation FATF regulations was rejected by Iran. Similarly, the Iranian foreign ministry rejected the EU accusations of Iran targeting European capitals with terrorist activities, and EU criticism of its ballistic missile program, which will not be a matter of negotiation. Iran also rejected the EU statement on it intervening in the affairs of neighboring countries and its politicization of Iran’s Human Rights file. On the side of this, the Iranian position reflects its anger towards the EU and there are indications that Iran is preparing to return to the uranium enrichment process. “In case there is no nuclear agreement, we will be free in our activities and we think about returning our focus to our projects,” Akbar Saleh said.
There is no doubt that the new developments preceding the EU statement made Iran doubt the integrity of the European position. The most prominent development was the opening of the ballistic missile file and threatening to impose sanctions on Iran if no progress is made in this file. Moreover, the EU imposed sanctions on Iran on January 9, 2019, claiming Iranian diplomats were involved in planning terrorist operations in the Netherlands, Denmark, and Belgium.Poland hosted the Warsaw conference held on 13-14 February, discussing ways to counter Iran’s regional role. Moreover, the German government cancelled the permit of Mahan Air from operating in Berlin on suspicion that the company was being used for military purposes.
Of course, these recent developments made parties within the ruling elite of Iran suspicious towards the sincerity of EU intentions. Also cast on the Iranian political scene is the conception of US-European coordination to impose pressure and to contain Iran, as well as that in actuality the nuclear agreement no longer exists and that other parties benefited from it while it was a burden on Iran. Moreover, Europe is bargaining on maintaining the nuclear deal in order to reach more successes particularly regarding Iran’s regional role and its ballistic missile program. From the Iranian point of view European efforts complement US efforts and do not contradict them.
New European approach and difficult Iranian options
According to the latest developments and mutual interactions, it has became clear that the European parties intend to adopt an approach that combines maintaining the nuclear deal with exerting more pressure on Iran in an attempt to balance the EU interests in maintaining the deal as an important mechanism to prevent Iran from crossing the nuclear threshold and to maintain the ground of understanding with Iran. At the same time, some European countries want to address files that they consider as a threat to their security, such as Iran planning terrorist operations in their territories, conducting ballistic missile tests or expanding its regional interventions that threaten stability in the region.
Despite the INSTEX mechanism, questions remain about the reality of differences in a united European approach to dealing with Iran, and the seriousness of this mechanism in providing real support to the Iranian political system, considering that the trade exchanges through it can not exceed what is permissible under the US sanctions, meaning that the first phase will be limited to humanitarian and medical items. Therefore, this mechanism does not live up to the ambition of the Iranians, who see its importance in including the proceeds of Iranian oil funds, so it can contribute to thwarting the US sanctions. It is not known whether this mechanism is available for non-EU parties and whether large companies will return to invest in Iran again after the launch of this mechanism or will only small companies resort to it that have no linkages to the US market.
Above all, how much time will the mechanism need to come into force, and what considerations or concessions will Iran offer to European parties that have put conditions in order for this mechanism to be activated, especially the announced and non disclosed European conditions and its plan to save the nuclear deal, such as the need for Iran to amend its laws related to FATF and financing terrorism, as well as the inclusion of Iran into the United Nations Convention against Transnational Organized Crime and it implementing FATF’s Combating the Financing of Terrorism (CFT) measures.Also, included in these conditions are non disclosed negotiations to put pressure on the Iranian files linked to its ballistic missile program, terrorism, human rights, and its regional role.
Overall, it can be said that the EU approach does not satisfy Iran, but the Iranian political system under the current developments, especially the Trump-administration led US strategy, means that it does not possess many options. The options are difficult, there is an option to maintain relations with the Europeans despite them not providing sufficient safeguards to save Iran from its current crisis and to help it to overcome the US sanctions, or not to violate the nuclear deals conditions or any of its provisions, and to suffice with political and diplomatic relations with Europe, which with its role can prevent the US from gathering the international community against Iran, and this option of course depends on the capacity of Iran to withstand US sanctions, to evade its affects and to maintain its stability and gains.
Another option is to implement its promise to withdraw from the deal, re-enrich uranium and relinquish its relationship with the EU. This option will undoubtedly prompt the Europeans to join the US position and to intensify pressure by building an international consensus against Iran.
There is no doubt the change in the European position is narrowing the scope of movement in front of Iran , and aids US strategic interests, as it has an extensive hand in affecting Iran’s economy and the stability of the system from within, and any radical option from Iran will complicate the crisis and intensify the pressure on its political system.