AS DOUBTS SURROUND EUROPEAN ACTION ON NUCLEAR DEAL, IRAN MAY BE PLANNING AN EXIT
By INU Staff
INU - In a report on Thursday, CNBC once again reiterated the doubts that are surrounding efforts to reconcile European and American views on the Iran nuclear deal, as the signatories inched closer to the deadline set by US President Donald Trump’s ultimatum to either strengthen the deal or allow its collapse. On May 12, the White House will once again be required to waive the nuclear-related suspended under the Joint Comprehensive Plan of Action, but Trump announced in January that he would not do so unless perceived flaws in the agreement were fixed.
Three specific issues have been highlighted by the White House: the JCPOA’s lack of restrictions on Iranian ballistic missile activities, its provisions allowing for constraints on the Iranian nuclear program to begin expiring after approximately 10 years, and the existing limitations on international inspectors’ access to suspicious sites in Iran. There have been signs of progress in some of these areas, where negotiations between the US and its European partners are concerned. This is particularly evident in the case of ballistic missiles, which Iran has been credibly accused of providing to Houthi rebels in Yemen, thus violating United Nations Security Council Resolutions.
However, CNBC concludes its report by quoting Cliff Kupchan of the Eurasia Group as saying that the Trump administration is obsessed with the so-called “sunset clauses” and will almost certainly be unsatisfied with any proposed solution that fails to make the JCPOA’s restrictions permanent. On this point, Kupchan declares, “Europe is not going to give Trump all he wants.”
Foundation for Defense of Democracies CEO Mark Dubowitz, who shares Trump’s extremely critical assessment of the nuclear deal, seems to generally agree with Kupchan on this point. However, he has expressed greater optimism about the possibility of US pressure overcoming European commitments to the deal as written. “The sunset clauses will be the toughest issue to address but must be resolved by May 12 or the president will walk away from the nuclear deal,” he said.
Foundation for Defense of Democracies CEO Mark Dubowitz, who shares Trump’s extremely critical assessment of the nuclear deal, seems to generally agree with Kupchan on this point. However, he has expressed greater optimism about the possibility of US pressure overcoming European commitments to the deal as written. “The sunset clauses will be the toughest issue to address but must be resolved by May 12 or the president will walk away from the nuclear deal,” he said.
Meanwhile, the Iranian propaganda network Press TV expressed a similar expectation that Europe would capitulate to American leadership. Consequently, it suggested that the Islamic Republic was “bracing for the aftermath” of Trump’s deadline, and that it was undertaking a shift in focus for its foreign policy and trade strategies. The report quoted Mohammad Shariatmadari, Iran’s Minister of Industry, Mining and Trade as saying the country still needed some 180 billion dollars’ worth of foreign investment in order to stabilize its economy, but that it now planned to obtain this mostly from countries that are outside of the European Union and less subject to American influence.
Press TV speculated that Europe was “unlikely to stand up to the US,” citing the various signs of willingness to incorporate at least some of Trump’s demands into future policies regarding diplomatic and trade relations with the Islamic Republic. Tehran, categorically rejects any such alternations to the JCPOA. If US-Europe negotiations are successful, they will likely result in one or more supplementary agreements that put Trump’s standards into force but do not directly alter the JCPOA. This would effectively prevent Iran, Russia, and China from obstructing the changes, although it would not prevent Iran from canceling the agreement in response to agreements that it sees as undermining the 2015 nuclear deal.
In fact, the continued progress in talks between Europe and the US have led to speculation that Iran might walk away from the JCPOA even before the US president has a chance to follow through on his own threat to do so. This was underscored by Al Jazeera on Thursday, in a report that recalled attention to an ultimatum issued by Tehran. Speaking at Chatham House in London, Iranian Deputy Foreign Minister Abbas Araqchi declared, “We cannot remain in a deal that has no benefits for us.” He went on to state that Iran would abandon the nuclear deal if negative statements from the White House continued to prevent Western businesses and especially international banks from doing business with Iranian entities.
Although such White House statements have been widely cited as reasons for the slow pace of Iran’s return to international markets, other factors have also been highlighted which have their roots in Iran’s own policies and activities. These include the government’s failure to demonstrate compliance with the standards set out by the Financial Action Task Force, which assesses the money laundering risk of national markets. Iran remains a high risk market in large part because of its status as the leading state sponsor of terrorism.
Rather than addressing this risk, it currently appears as if the Islamic Republic is putting considerable effort into mitigating the risk of financial penalties and lost business following the prospective renewal of US-led sanctions. As well as shifting their efforts away from markets with close links to the US, Iranian authorities are also reportedly taking steps to partially insulate its existing and potential foreign partners against American enforcement measures.
Last week it was reported that the Iranian Central Bank had announced its intention to create a national cryptocurrency, a move that many observers compared to similar efforts by Venezuela, which aided in the evasion of US sanctions. Then, on Thursday, it was reported in The Russophile that the same central bank was moving to bar foreign merchants from using the US dollar as a base currency when pursuing transactions with Iran.
The report noted that Iran had already signed agreements or pursued talks with several countries regarding the prospect of using national currencies in lieu of allowing the dollar to fill its traditional role as international reserve currency. Among these countries was Russia, a close ally of Iran in various conflicts with the West. Iranian Supreme Leader Ali Khamenei undertook a rare meeting with Russian President Vladimir Putin last November, wherein Khamenei expressed hope that the two countries could encourage others to dump the dollar and take other measures to “isolate the Americans.”
These trends further encourage the perception that Tehran is setting the stage for its own exit from the nuclear agreement, and also that it is doing so in hopes that the US will be left with less economic leverage over Iran’s nuclear and missile programs.
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