Europe drags feet on guaranteeing trade with Iran

Europe drags feet on guaranteeing trade with Iran
The European Union's top policy chief has said that she cannot talk about giving Iran guarantees for the economic benefits of the 2015 agreement, but that she can give assurances that the EU will deepen the dialog with Iran and will immediately start work to arrive at practical solutions. Still a number of European firms have already started winding down business in Iran in an attempt to protect themselves from secondary US sanctions.

Iran’s Foreign Minister Mohammad Javad Zarif warned ahead of a meeting with his British, French and German counterparts in Brussels on Tuesday that there was not much time for them to deliver those assurances.

“Guarantees of benefits of the JCPOA should be given to Iran. We will have to see whether those remaining in the JCPOA can deliver those benefits to Iran,” he was quoted as saying upon arrival in the Belgian capital.

However, the Europeans only pledged to keep the Joint Comprehensive Plan of Action (JCPOA) alive without the United States by trying to keep Iran’s oil and investment flowing.

“We all agreed that we have a relative in intensive care and we all want to get him or her out of intensive care as quickly as possible,” EU foreign policy chief Federica Mogherini told reporters after the 90-minute meeting.

Mogherini emphasized that the lifting of nuclear-related sanctions and the normalization of trade and economic relations with Iran constitute an essential part of the nuclear deal.

She said Iran and the Europeans will be working over the coming weeks to find practical solutions which will include continuing to sell Iran’s oil and gas products, maintaining effective banking transactions and protecting European investments in Iran.

As for the assurances, Mogherini said, “I cannot talk about legal or economic guarantees but I can talk about serious, determined, immediate work from the European side.”

The US has given companies a 180-day wind-down period before the sanctions are reimposed on Iran. That has prompted some European companies to start planning their exit from Iran's market in the absence of guarantees from their governments.

Danish shipping companies Maersk Tankers and Torm were reported on Tuesday to have stopped taking new orders in Iran.
Even before Trump's withdrawal, Iran had repeatedly complained to the Europeans about their failure to persuade companies into dealing with Tehran because banks in Europe are generally unwilling to handle transactions with the Islamic Republic.

On Tuesday, German insurer Allianz said it was preparing to wind down Iran-related business due to possible US sanctions.

“We are analyzing our portfolio to identify Iran-related business,” Reuters quoted an Allianz spokesman as saying.

“This analysis is ongoing and we are developing wind-down plans for relevant business to ensure appropriate termination within the defined periods,” he said.
Date: 26 May 2018