By Behnam Ben Taleblu
May 14, 2018

The EU believes the Joint Comprehensive Plan of Action (JCPOA) nuclear deal is worth preserving. It is no surprise, then, that President Trump’s decision to restore nuclear sanctions and terminate America’s adherence to the JCPOA risks putting Washington on a collision course with Europe. With sanctions kicking-in between the next 90 to 180 days, all attention will be on the efficacy of American tools of financial pressure. In the interim, Washington must not lose sight of managing Europe’s reaction and preventing Iran from taking advantage of fissures in the trans-Atlantic alliance.

Already, there are meetings scheduled between European officials and their Iranian counterparts. Iran’s Supreme Leader Ali Khamenei has tasked the government of President Hassan Rouhani with obtaining “a strong guarantee” from Europe to shield the Islamic Republic from American sanctions. Absent that, Khamenei said Iran “won’t stick to the nuclear agreement.” And there is reason to worry.

In the 2003-2005 iteration of nuclear talks, it was then chief nuclear negotiator Rouhani who met with foreign ministers from the E3 (France, Germany, and the U.K.) and obtained a promise to prevent the transfer of Iran’s nuclear file to the UN Security Council (UNSC). After Rouhani was relieved of his duties in 2005, Iran’s nuclear dossier was eventually transferred to the UNSC, and the first in a series of escalating UNSC Resolutions (UNSCRs) against Iran were passed. As such, with Rouhani back at the helm and looking for guarantees, Europe and Iran may be able to work out a strategy to keep the deal alive and offset American sanctions.

Now, as Washington looks to generate the same pressure on Iran that existed during the sanctions incubation period (2010-2013), it must not forget that those measures had EU political buy-in and followed the strongest UNSCR on Iran. This necessitates close diplomatic coordination with Europe before the 180-day period lapses.

Conversely, while Europe may strongly disagree with Washington’s unilateral exit, it too, can work to stem any trans-Atlantic fissure. Private European banks and businesses are more inclined to heed the Treasury Department’s warnings, since they will make the logical calculation that doing business in an economy the size of Iran’s pales in comparison to being able to do business with the U.S. But state-owned European companies are another matter since they might be willing to take the risk of doing business with Iran, especially if they continue to hear invective against Washington by EU leaders.

In the aftermath of President Trump’s decision, the E3 reiterated its commitment to keeping accord, as did EU High Representative Federica Mogherini. While both their statements cited the importance of UNSCR 2231—which unanimously passed in 2015, codifying the JCPOA—Mogherini’s statement signaled a European interest in deterring Washington from enforcing sanctions. “The European Union is determined to act in accordance with its security interests and to protect its economic investments,” she said. These interests might necessitate returning to 1990s-style blocking legislation that could shield European firms from having to comply with extra-territorial sanctions, an issue that EU officials have already met to discuss. Other options available to the EU include siding with Iran to stigmatize the U.S. as the “violator” of the accord in the JCPOA’s Joint Commission, as well as filing complaints at the World Trade Organization.

A recent Politico article helps explain the EU’s dogged attachment to the JCPOA as being motivated by “pride,” rather than commerce. While this may overstate the case in an attempt to understate the efficacy of American sanctions—particularly as European imports from Iran have risen in the last two years—it is worth considering. The EU has previously framed the JCPOA as “the culmination of 12 years of diplomacy facilitated by the EU.” Put differently, the EU sees the JCPOA as a multinational endeavor to use peaceful means of conflict resolution to [attempt] to solve a major global challenge.

Ultimately, even if the attempt to put up a fight is ineffective and American secondary sanctions compel Europe into begrudging compliance with the U.S.’s pressure strategy, the short-term beneficiary of this public tiff would be the Islamic Republic.

 

Tehran could easily exploit the distance between both sides of the Atlantic over Iran policy to continue its destabilizing activities—support for terror groups in the region—with little unified Western response. And in international fora, Iran could use European arguments against Washington to paint American concerns about Iran’s behavior as politically charged. To preclude that, Washington should create a channel with Europe to find a way to focus on areas of non-nuclear common interest in the post-May 8 world that involve Iran, like stopping ballistic missile flight tests.

Although it’s not worth crying over spilt milk, Washington had ample opportunity and authority to grow financial pressure on Iran in a manner that would not violate the JCPOA, and thus not cause a trans-Atlantic row. Neither President Obama, or interestingly enough, President Trump, took that chance. Instead, Washington today finds itself in a high-risk, high-reward game of sanctions enforcement—not against its chief Middle Eastern adversary, but rather, against its major global partner.

Behnam Ben Taleblu is a research fellow focusing on Iran at the Foundation for Defense of Democracies (FDD).

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