Baku, Azerbaijan, Feb. 2
By Azer Ahmadbayli – Trend:
On the eve of the 40th anniversary of the Islamic Revolution, the EU finally announced the creation of a financial settlement mechanism that allows European companies to trade with Iran without the threat of falling under the US sanctions. That, at least, has been declared by the E3.
However, haven’t the Europeans overestimated the effectiveness of this mechanism?
German Foreign Minister Heiko Maas stressed that “this step is intended to demonstrate that we are still ready to fulfill our part of the commitments undertaken, and, as a response, we expect that Iran will also fulfill its part.”
What he can get from Tehran is an equally stereotypic answer: “In itself, this step doesn’t have to mean much. We are ready to continue fulfilling our commitments, but only in case if this mechanism really works.”
Tehran’s fears are not unfounded.
European banks do not have an independent financial system for monetary transactions as they are all connected to SWIFT.
The weakness of the created mechanism is that it is transparent, not gray, as it would be, for example, in reciprocal payments with India or Oman. Therefore, it will be easy for the US to identify those who try to use the mechanism, even if the system masks the purchasers.
Big business has left Iran. The expectations rely on small and medium-sized businesses, focused mainly on the supply of essential goods and medicines, which are unlikely to have a significant impact on the sanctions regime.
As well, the US will certainly claim that Iran has not implemented all FATF recommendations yet: two bills – allowing Iran to join UN conventions against terrorism financing and organized crime – have been approved by parliament, but are still being delayed by higher authorities, including Iran’s Guardian Council. This, in turn, can impede small and medium European companies to invest in Iran.
Therefore, the same question is rising again: have the Europeans overestimated the importance of this move?
The answer one is going to say: possibly yes, they did. But no, they didn’t, because the matter is not in the new mechanism.
Just remember the words of the French President Emmanuel Macron about the presence of Total, Peugeot and Airbus in the Iranian market. He then said it was up to the companies to decide: “We're not going to impose on French businesses to stay in Iran. The President of the French Republic is not the CEO of Total.”
This means the EU will not be responsible for failure of SPV, if any.
European decision-makers are well aware that Iran simply has no alternative but to put a good face on things. Iran’s Foreign Minister Mohammad Javad Zarif had nothing but to welcome the move and say that European partners finally took a “long overdue first step.”
Despite recurrent threats of the Iranian hardliners to withdraw from the nuclear deal and to commence enrichment of uranium, Iran will never be the initiator of the exit from the JCPOA – which is so expected by the United States – as in this case Tehran will face a complete isolation, as it happened before 2015. European leaders are well-aware of this, just as Iranians are.
Recently, one of the close supporters of Iran’s Supreme Leader Ayatollah Khamenei, Ayatollah Ahmad Giannati has said: “Europe is no better, if not worse, than the United States. The EU is only wasting time. Dependence on Europe is sheer stupidity.”
A few days later, Mohammad Javad Jamali, a member of the National Security Committee of the Parliament, told Mehr News Agency that "despite the contradictions between the US and Europe on some issues, we should not assume that Europe is on our side, because the US has a huge impact on the political and economic spheres of the EU."
Europe has the most pleasant role in this business. In case of Iran's withdrawal from the nuclear deal, the EU will immediately join the US sanctions, but if not, then ... “sorry, but that's all we can do for you at the moment.” That is, almost nothing.
The EU has made a half-hearted, if not unprincipled, decision: to appease Iran and at the same time not to anger the US. National governments “are afraid that Washington can punish them politically, or even by the introduction of additional sanctions”, the Financial Times said citing one of the European officials.
The attempt to maintain the current status quo by the use of SPV may, oddly enough, in the foreseeable future do a great disservice to the participants of the process and become a catalyst for the final destruction of the JCPOA.
After some time, if it becomes clear that the new mechanism is stalling or not working at all, and the EU actually sold a castle in the air to Iran, it will clearly highlight the hopelessness of the Iranian position. What will the Iranians do?
We can only assume how a man can behave, cornered.