Daily Times

The European signatories to the Iran nuclear deal – the UK, France and Germany- and Iran are still working hard to salvage the deal jeopardized by the US President Donald Trump’s unilateral withdrawal.

The US re-imposed sanctions on Iran that were removed after 2015 nuclear deal, it also imposed additional crippling sanctions and declared the Islamic Revolutionary Guards Corps a terrorist organization.

Iran asked the UK, France and Germany to compensate for the US sanctions by making the European companies agree to invest more in Iran. But the European companies left Iran to avoid US retaliation.

France, Germany and the UK established the Instrument in Support of Trade Exchanges (INSTEX) -a special-purpose vehicle (SPV) to facilitate non-United States dollar trade with Iran by circumventing US sanctions. INSTEX was meant to allow European companies to do business with Iran.

Iran, in response to US unilateral actions and inadequate compensatory measures taken by the remaining members of the deal, backed off from a few clauses that allowed it partially defy the nuclear deal. Iran asked the European members of the deal to take concrete steps to compensate for the US sanctions. But the European countries could not provide economic benefits to Iran promised in the deal. The INSTEX took longer than the expected to get operational, the European companies were not ready to invest in Iran.

Iran stepped up the pressure and breached the uranium enrichment limit agreed by the parties to the deal. The International Atomic Energy Commission (IAEA) confirmed Iran violated the deal. The US and Israel asked the UN and the EU to take retaliatory measure against Iran. EU also condemned Iran.

Germany, France and the UK operationalized the payment channel (INSTEX) with Iran to help continue trade. But the INSTEX didn’t include the Iranian oil and gas – the backbone of Iranian economy crippled by the US sanctions.

The EU asked Iran to comply with the 2015 nuclear deal by reversing the breach of nuclear enrichment limit but Iran asked the EU nations to do more. Iran demand for more European investment and inclusion of Iranian oil to the INSTEX. Washington has warned EU nations against such actions.

The joint Comprehensive Plan of Action or the nuclear deal of 2015 is in jeopardy, it could only be saved If European signatories to the deal provide economic respite to Iranian economy badly crippled by the US sanctions. Otherwise, EU could lose Iran

Under the terms of the 2015 deal, if any party believes another is not upholding their commitments they can refer the issue to a Joint Commission, whose members are Iran, Russia, China, the three European powers, and the European Union.This begins a process that can eventually end with the restoration of global, United Nations sanctions on Iran.

EU foreign ministers met at Brussels on 16th July to discuss prevailing situation with Iran. The EU foreign policy chief Federica Mogherini said after the meeting that The remaining parties to the Iran nuclear deal do not see Tehran’s breaches as significant non-compliance and have not indicated any intent to trigger the accord’s dispute mechanism. Mogherini admitted the nuclear deal is not in great health, but she couldn’t say if it is in its last hours.

The EU foreign policy chief also said that inclusion of Iranian oil in INSTEX is also being considered. The European side intends to use the channel initially only to sell food, medicine and medical devices in Iran. However, it will be possible to expand it in the future.

The top EU diplomat also said the first transaction as part of the mechanism to facilitate trade with Iran was being processed, adding that eight member states have either joined the trade channel, officially called the Instrument in Support of Trade Exchanges (INSTEX), or have expressed interest to do so.

Mogherini stressed that Europe’s trade channel with Iran is open to third parties.

France, Britain, and Germany have called for the resumption of dialog and an end to the escalation over Iran’s nuclear deal, amid heightened tensions between Washington and Tehran.

Iran said it expects from the European parties to the JCPOA is to take practical decisions and steps, in an effective and responsible manner, to facilitate its implementation.

Washington has already made it clear to the European nations and companies that any attempt to circumvent US sanction against Iran would trigger a tough US response. Donald Trump has threatened to remove the entity from the US financial system.

Unless oil is not included to the barter trade system INSTEX and billions of Euros not pumped to the system, economic experts says, it is useless for Iran.

Some experts believe that expansion to the INSTEX and inclusion of oil would put EU nations on the collision course with Washington.

The EU is already having a trade war with Washington as the US President has increased the tariffs on EU imports. Economic relations with Iran by circumventing the US sanctions would further deteriorate the relationship between the US and the EU.

EU nations have to keep a critical balance between their relationship with Tehran and Washington. Iran has said to keep scaling back from its nuclear commitment unless France, Germany and the UK fulfill their obligations by taking practical decisions and concreted decisions.

The joint Comprehensive Plan of Action or the nuclear deal of 2015 is in jeopardy, it could only be saved If European signatories to the deal provide economic respite to Iranian economy badly crippled by the US sanctions. Otherwise, EU could lose Iran.

A full collapse of the nuclear deal could also be catastrophic for Iran as the UN sanctions removed after the deal could snap back into force further crippling the already ailing Iranian economy.

The writer is a journalist & analyst working at the International Desk of a news channel. He tweets at @kashifaliraza& can be reached at meetkashi514@gmail.com