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Does Europe have a chance to save a nuclear deal with Iran?

After the US withdrawal from a nuclear agreement with Iran, Europeans need a strategy that can save the treaty. Experts say that without the US it will not be easy.

Proponents of the nuclear deal with Iran hoped to persuade Donald Trump not to withdraw from the agreement until the last moment – the Joint Comprehensive Plan of Action (CFA). However, all hopes were in vain – on May 8, the US president announced that Washington was breaking the agreement with Tehran and resuming the sanctions that it was bound to take effect within the next 120 days. Thus, Trump fulfilled his pre-election promise.

The hopes that the US president will compromise, leaving the door open for a revision of the nuclear agreement along with European partners, also failed to materialize. Trump refrained from soothing gestures toward Europe and Asia. All countries that cooperate in any way with the Iranian regime will have to comply with American sanctions in the future. To complete the trading operations and stop the export of oil, they have four months left.

The Foreign Ministers of France and Germany are unified in the issue of nuclear deal with Iran.

The decision of Donald Trump caused a shock not only in Europe, but also in America itself. Many leading politicians, especially representatives of the Democratic Party, believe that in this way Trump did not isolate the Iran, but the United States.

Unlike the president of the United States, who repeatedly called the Iranian treaty with six countries (the United States, Russia, China, Britain, France and Germany) “the worst deal of all time”, the remaining parties to the agreements regard them as a major success. Therefore, the EU countries, China and Russia assured Tehran that the nuclear agreement will be maintained in the future, and Europeans are now trying to develop a common strategy that could save the deal.

The main issue is the export of oil.

Elli Geranmaye from the analytical center “European Council for International Relations” is convinced that a nuclear deal with Iran can be saved even after Donald Trump’s refusal to participate in it. Of course, she says in a conversation with DW, without the United States to comply with the agreement will be much more difficult – “this requires a lot of political will and creative thinking.”

The VHCP contract consists of 159 pages and includes many technical details. It is based, however, on a simple idea: Iran limits its nuclear activities and opens to the inspectors of the International Atomic Energy Agency (IAEA) access to all nuclear facilities for 20 years, and Western countries, in turn, step-by-step remove Iran from sanctions. In order for Tehran to continue to adhere to the main points of the agreement, it is necessary that the country still has an economic incentive, says Geranmaye. First of all, she believes, it is necessary to guarantee the continuation of supplies of Iranian oil and energy carriers to Europe. “If their exports are terminated as a result of US secondary sanctions, this will cause a shock to the Iranian economy,” the expert warns.

The US withdrawal from the nuclear agreement is the main theme of the Iranian media.

The so-called secondary sanctions are not directed at American or Iranian companies or individuals – they prohibit trade with Iran to companies from third countries, including the EU. The lifting of the sanctions or the resumption of sanctions, announced by President Trump, stipulated by the SVPA agreement affects the export of Iranian oil, petrochemical products, natural gas and many other products, as well as all related financial transactions, including payment for supplies of Iranian products and money transfer in Tehran with Iranian accounts abroad.

The Iranians sensed the brunt of economic sanctions in the period from 2012 to 2015. During this time, oil exports fell by more than half, over $ 120 billion in foreign accounts were frozen. To date, the volume of oil exports has almost returned to the pre-level level.

Is it possible to bypass secondary sanctions?

Expert of the non-governmental organization Crisis Group Neysan Rafati believes that there is a way to circumvent secondary sanctions. In an interview with DW, he recalled that even from 2012 to 2015 in some countries, in particular, in France and Italy, mechanisms were developed that allow state institutions to finance Iranian business.

Rafati believes that Europeans need to “systematize and combine individual initiatives of individual countries” so that the EU members can continue economic cooperation with Iran to the extent allowed by the nuclear deal, “through coordination between governments or at the level of the European Union.” Europeans, according to Rafati, should make it clear that as long as Iran complies with the terms of the treaty, the EU also intends to honor its obligations.

European banks will comply with US sanctions.

A researcher at Harvard University, Sascha Lohmann, who deals with the subject of sanctions, is skeptical about Nathan Rafati’s proposal.

“In the economic relations between the United States and European companies, the positions of the parties are not equal, therefore it will be extremely difficult for the European Union to make any significant proposal to Iran, for example, European large banks are unlikely to agree to participate in financial transactions with Iran,” the expert believes.

He believes that European financial institutions are likely to comply with US sanctions, since they are subject to US law when conducting dollar transactions. “Moreover, some European banks have already had to pay large fines in the past for violating the US sanctions regime, and they will hardly want to be in this situation again,” Loman explains.

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