February 5, 2020 | Policy Brief

The EU Foreign Policy Chief’s Mission Impossible in Tehran

February 5, 2020 | Policy Brief

The EU Foreign Policy Chief’s Mission Impossible in Tehran

The new EU foreign policy chief, Josep Borrell, traveled to Tehran this week to salvage the almost-dead Iran nuclear deal. Borell’s mission had little hope of success, however, since the European Union lacks the means to match its political gestures with the kind of economic support that would stabilize a regime now reeling from Washington’s maximum pressure campaign.

Borrell’s visit comes three weeks after Germany, France, and the United Kingdom, collectively known as the E3, triggered the dispute resolution mechanism created by the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). The E3 took action in response to Tehran’s escalating nuclear activities, including a declaration last month that it will no longer abide by JCPOA limits on uranium enrichment.

While strict application of the dispute resolution mechanism could lead to the reinstatement of UN sanctions and restrictions in little more than 30 days, the process can also be extended indefinitely by consensus among the remaining JCPOA participants. The Trump administration has called on the E3 to move quickly, yet Borrell, like Iran, would rather play for time until the U.S. presidential election in November.

Iran, for its part, says it will happily return to compliance with the JCPOA if all U.S. sanctions on the regime are lifted and tens of billions in economic relief fills its coffers. Tehran could then take patient pathways to nuclear weapons, intercontinental ballistic missiles, and an advanced military as key restrictions sunset under the nuclear deal and the related UN Security Council resolution. Of course, during a previous period of alleged compliance, Iran maintained a hidden nuclear archive and reportedly concealed nuclear material or activities at an undeclared site. Now, in exchange for a new pledge of compliance, Tehran wants the European Union to buy oil from Iran or give it billions of dollars in loans and lines of credit to escape the impact of President Donald Trump’s maximum pressure campaign.

Borrell, however, arrived in Tehran with empty pockets since he cannot deliver what the mullahs ask. Trump appears unwilling to provide any sanctions relief prior to a final agreement that addresses the administration’s 12 key demands. At present, European banks, energy companies, and insurers are unwilling to risk violating U.S. sanctions and losing their access to the U.S. market and financial system.

For that reason, past attempts by European leaders to encourage their companies to trade with Iran have failed. In the first 11 months of 2019, EU imports from Tehran decreased 93 percent in comparison with the same period a year earlier, falling from €9.3 billion to just €648 million. A similar pattern is visible for EU exports to Iran, which fell 52 percent from €8.5 billion in 2018 to €4.1 billion in 2019. Clearly, the INSTEX special purpose vehicle established by European politicians to evade U.S. sanctions has failed to deliver.

With each passing day, as Iranian centrifuges produce more and more enriched uranium and the UN conventional arms embargo on Iran approaches its October 2020 expiration date, or “sunset,” Borrell’s ability to salvage the JCPOA grows ever weaker. Moreover, British Prime Minister Boris Johnson’s overwhelming electoral victory and mandate for Brexit may soon free British foreign policy from Brussels’ fear of offending Tehran. Without Johnson’s support, the French and Germans cannot drag out the JCPOA’s dispute resolution process. Instead, the issue would come before the UN Security Council, where a U.S. or UK veto could kill the JCPOA and its sunset provisions, thereby preventing Russian and Chinese arms from flowing into Iran, increasing restrictions on Iran’s ballistic missile program, and restoring the international standard of “no enrichment” for the regime.

Washington’s priority should be to end the JCPOA before the first sunset takes effect. President Trump should continue and intensify his maximum pressure strategy while working closely with Johnson to bring the dispute resolution process to its proper conclusion.

Saeed Ghasseminejad is a senior Iran and financial economics advisor at the Foundation for Defense of Democracies (FDD), where Richard Goldberg is also a senior advisor. They both contribute to FDD’s Center on Military and Political Power (CMPP). For more analysis from Saeed, Richard, and CMPP, please subscribe HERE. Follow Saeed and Richard on Twitter @SGhasseminejad and @rich_goldberg. Follow FDD on Twitter @FDD and @FDD_CMPP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

Iran Iran Global Threat Network Iran Nuclear Iran Sanctions Sanctions and Illicit Finance United Nations