Doubt cast on EU plan to salvage Iran nuclear deal

The EU plan to help save the Iran nuclear deal may be at risk as the European Investment Bank (EIB) warns it can jeopardise its global operations.

Following US President Donald Trump’s decision to withdraw from the JCPOA (Joint Comprehensive Plan of Action) on 8 May and to revive Iran-related sanctions, the EU has tried to keep the deal alive. It has proposed a package of economic measures to try to compensate for the impact of US sanctions and guarantee Iranian oil revenue.

Speaking at a news conference at the European Commission, the President of the EIB Werner Hoyer has said the consequences of a plan to save the Iran JCPOA could be problematic to its operations. He claimed a deal would put in jeopardy the institution’s ability to raise money on US markets.

These include EIB lending (adding Iran to the list of countries with which the Luxembourg-based EIB does business, effective from August), a special measure to shield EU companies from US secondary sanctions, and a Commission proposal that EU governments make direct money transfers to Iran’s central bank to avoid US penalties.

Hoyer said: “There is no European bank which is presently able to do business in and with Iran. We have to take note of the fact that we would risk the business model of the bank if we were active in Iran.”

He went on to say that the bank will only do business in Iran if it receives approval from its board of governors, and on the basis that they find suitable projects to invest in.

Europe shares many of Washington’s concerns over Iran’s financing of “armed groups in the Middle East and its ballistic missiles arsenal,” but its position remains that “there is nothing to be gained” from pulling out of JCPOA.

Hoyer’s comments are likely to make a significant impact on EU plans in regards to Iran. Only recently, the US warned its allies they must halt all imports of Iranian oil from the 4 of November or face the consequences of  US financial measures.

Federica Mogherini, EU’s foreign minister, said at a press conference following the Foreign Affairs Council on Monday: “The set of measures we have been putting in place… allow us to guarantee that Iran continues to benefit from the economic benefits coming from the implementation of the agreement.”

However, in a letter to the EU nations’ finance and foreign ministers, US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin rejected an appeal to carve-outs exemptions for European companies, saying America wanted to exert “unprecedented financial pressure” .

Pompeo has stated that, US will not ease the sanctions until it sees a “tangible, demonstrable and sustained shift’’ in Iran’s policies.

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