Europe Can’t Effectively Stop the U.S. from Reimposing Sanctions on Iran

Feb. 23 2018

At a recent European economic conference, the head of the EU’s Iran task force stated that, if the U.S. were to renew sanctions against Iran that had been removed pursuant to the 2015 nuclear deal, Europe need not go along. He cited the precedent of the 1990s, when Brussels used “blocking regulations” that shielded European companies from the effects of American sanctions on Iran and Libya. But, writes Richard Goldberg, the sanctions now in question are much tougher, and would give Europeans little choice in the matter:

[I]n 2010 . . . Congress passed a new law leveraging America’s greatest strength against the fulcrum of global commerce with Iran: financial transactions. After years of blacklisting most financial institutions in Iran for their involvement in various illicit activities, Congress recognized that it also needed to punish third parties for doing business with these criminal enterprises. Thus, it declared that any foreign bank that maintained a correspondent banking relationship with a designated Iranian bank would forfeit its banking relationships in the United States. . . .

If President Trump decided to enforce these sanctions again, banks around the world would immediately be at risk of losing their correspondent accounts in the United States. Blocking regulations might shield a company from American-levied fines, but they cannot shield a British bank from losing its access to the U.S. financial system. This time around, the downside of U.S. sanctions would far outweigh the upside of Iranian trade. . . . And while diplomats in Brussels may want to stare Trump down and see if he flinches, banks will not want to take that risk.

The British, French, and German governments could help avoid this potential crisis by taking a more thoughtful approach on the Iran deal. Agreeing to repudiate its sunset clauses would avoid a transatlantic train wreck today without violating the agreement for years to come. Demanding verification of the agreement with visits to Iranian military sites would be a step toward enforcing the deal, not breaking it.

Furthermore, nothing in the Iran deal prohibits Europe or the United States from reimposing sanctions related to any Iranian entity—even the central bank—if it is connected to non-nuclear activities such as ballistic-missile development and terrorism. That’s a view shared by both Democrats and Republicans in the United States—and given Europe’s direct security interest in curbing Iran’s missile program and regional expansion, it’s a view that European diplomats should adopt as well.

Read more at Foreign Policy

More about: European Union, Iran sanctions, Politics & Current Affairs, U.S. Foreign policy


The Danger of Hollow Fixes to the Iran Deal

March 20 2018

In January, the Trump administration announced a 120-day deadline for the so-called “E3”—Britain, France, and Germany—to agree to solutions for certain specific flaws in the 2015 agreement to limit the Islamic Republic’s nuclear program. Omri Ceren explains why it’s necessary to get these fixes right:

[Already in October], the administration made clear that it considered the deal fatally flawed for at least three reasons: a weak inspections regime in which the UN’s nuclear watchdog can’t access Iranian military facilities, an unacceptable arrangement whereby the U.S. had to give up its most powerful sanctions against ballistic missiles even as Iran was allowed to develop ballistic missiles, and the fact that the deal’s eventual expiration dates mean Iran will legally be allowed to get within a hair’s breadth of a nuclear weapon. . . .

A team of American negotiators has been working on getting the E3 to agree to a range of fixes, and is testing whether there is overlap between the maximum that the Europeans can give and the minimum that President Trump will accept. The Europeans in turn are testing the Iranians to gauge their reactions and will likely not accept any fixes that would cause Iran to bolt.

The negotiations are problematic. The New York Times reported that, as far as the Europeans are concerned, the exercise requires convincing Trump they’ve “changed the deal without actually changing it.” Public reports about the inspection fix suggest that the Europeans are loath to go beyond urging the International Atomic Energy Commission to request inspections, which the agency may be too intimidated to do. The ballistic-missile fix is shaping up to be a political disaster, with the Europeans refusing to incorporate anything but long-range missiles in the deal. That would leave us with inadequate tools to counter Iran’s development of ballistic missiles that could be used to wipe Israel, the Saudis, and U.S. regional bases off the map. . . .

There is a [significant] risk the Trump administration may be pushed to accept the hollow fixes acceptable to the Europeans. Fixing the deal in this way would be the worst of all worlds. It would functionally enshrine the deal under a Republican administration. Iran would be open for business, and this time there would be certainty that a future president will not act to reverse the inevitable gold rush. Just as no deal would have been better than a bad deal, so no fix would be better than a bad fix.

Read more at Commentary

More about: Donald Trump, Europe, Iran, Politics & Current Affairs, U.S. Foreign policy