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Europe Should Salvage N-Talks by Taking an Active Stance on Iran

Thursday, September 18, 2014

Iran Review's Exclusive Interview with Ellie Geranmayeh
By: Kourosh Ziabari

The Danish Foreign Minister Martin Lidegaard is just departing from Iran. He was the 13th European foreign minister to visit Iran following the election of Hassan Rouhani as the President of Iran in June last year. The rate of diplomatic exchanges between Iran and Europe has increased dramatically, and the continent that was literally detached from Iran for around one decade is once again seeking ways for reengagement with one of the world's most important emerging powers and energy hubs.

An Iran policy fellow at the European Council on Foreign Relations explains to Iran Review her viewpoints about the rapprochement between Iran and the European Union and the leading role the powerful 28-member bloc of nations can play in furthering the nuclear talks of Iran and the six world powers.

Ellie Geranmayeh, who joined the European Council on Foreign Relations as a visiting fellow for the Middle East and North Africa Programme in October 2013, and has been working with the influential think tank as a policy fellow since May 2014, believes that the nuclear standoff between Iran and the West has forced the EU member states to hold back on working with Iran on many important issues including "addressing the regional crisis now unfolding in the Middle East, fulfilling Europe’s energy demands and human security." However, she believes that Europe is well aware of Iran's significance as an important actor in the Middle East.

Geranmayeh accepts that there are many difficulties ahead of Iran and the P5+1/EU3+3 in clinching a final, comprehensive deal over Tehran's nuclear program by the extended November 24 deadline. However, if a final deal is agreed whose implementation is unreasonably blocked by the U.S. Congress, Geranmayeh recommends to Europe that as long as "Tehran shows commitment to diplomacy and to agreements reached, Europe should attempt to salvage the negotiations by taking a more independent line on Iran through altering the scope of its unilateral sanctions and ring-fencing its entities from the secondary impact of U.S. sanctions."

"This option avoids unwanted binary choices for Europe while buying time for the diplomatic process, especially if the U.S. President and Congress are at odds," she added.

To discuss the ups and downs of the nuclear talks between Iran and P5+1 comprised of the five permanent members of the UN Security Council plus Germany, the EU's approach to the nuclear talks and the anti-Iran sanctions, Iran Review spoke to Ellie Geranmayeh in an exclusive interview. Geranmayeh is a foreign policy scholar, who worked at Herbert Smith Freehills LLP law firm based in London and Tokyo from 2011-2013. She received a BA in Law and an MA from the University of Cambridge and later earned a Masters in Laws, focusing on public international law and international relations at the University of Virginia. The following is the text of Iran Review's interview with Ms. Geranmayeh.

Q: Following the conclusion of the Geneva interim accord or the Joint Plan of Action in November 23, 2013, a constructive and promising atmosphere was created, indicating that Iran and the six world powers would be able to forge a final, comprehensive deal and put an end to years of conflict and dispute over Iran's nuclear program. However, after the failure of the two sides to reach an agreement by the self-imposed July 20 deadline, uncertainty and apprehension began to emerge and dominate the atmosphere of the talks. What's your prediction for the next four months? What will happen if the talks fail and no comprehensive deal is secured?

A: Extending the negotiations should not be seen as a failure by the two sides to reach a final agreement on the nuclear issue. The EU3+3 and Iran have created unprecedented political space for reaching a comprehensive settlement. The need for time is no surprise after a decade of attempts to resolve the nuclear file. The talks are finally at a serious stage where meaningful debates are taking place. The negotiating countries are determined to settle the complicated areas of disagreement and have remained dedicated to this objective.

There is now less than three months left before the extension period runs out. Substantial differences remain between Iran and the EU3+3 on the critical issue of enrichment threshold and associated with this, the requisite numbers of centrifuges and duration of the deal. All sides prefer a political solution to this deadlock rather than the undesirable alternatives. It is therefore imperative that both sides remember the benefits that a final nuclear deal will bring them and allow for the tough compromises needed to make progress towards a comprehensive agreement. 

It remains open to both sides to walk away from the negotiations if the talks do not reach a final deal by 24 November. The worst-case scenario for both Iran and the EU3+3 would be for the negotiations to break down all together at the end of November. This would be truly an error on the parts of both sides after investing so much political capital to get to this stage of agreement.

Neither side will think it is wise to shut the door on diplomacy at this stage after months of effort to negotiate a final deal. In an ideal scenario, the parties can reach a final agreement by the extension deadline. If not, the next best thing is for the parties to extend the talks. But given the domestic environment in both the U.S. and Iran, it is unlikely that another extension will be possible.

A way to keep diplomacy alive and avoid a breakdown in the talks is for the EU3+3 and Iran to negotiate a partial deal. This is something that is more comprehensive than the Joint Plan of Action agreed last November but falls short of the desired comprehensive deal. This would enable the parties to justify continued negotiations on outstanding issues by asserting [that] enough progress has been made and that there is hope to resolve the most complex issues.

Another alternative is that at the end of the extension period, the parties do not reach a final deal but reach a tacit agreement to voluntarily apply the interim deal for a few months. This would buy some more time for the negotiations to continue without a requirement for the parties to officially extend the interim deal.

Q: The Iranian Foreign Minister Javad Zarif has said that no final deal will be agreed until all the unilateral and multilateral sanctions against Iran, including four rounds of UNSC sanctions, are removed altogether. However, in the previous round of talks in Vienna which lasted 18 days, the Western side indicated that it's only ready to lift the sanctions on a step-by-step basis, which is not acceptable for Iran. What's the key to this deadlock over the sanctions?

A: A comprehensive nuclear deal will certainly involve confidence-building measures for both Iran and the EU3+3 to replace their misplaced trust. Sanctions relief will play a large role here. A final deal will mirror each of Iran’s implementation with a new layer of sanctions relief. The EU3+3 have made it clear that by the end phase of the final deal, if Iran has fulfilled its obligations, it will be in a situation where all nuclear related sanctions under unilateral and UNSC resolution measures will have been lifted.

There is extensive political pressure on the EU3+3 against any immediate lifting of sanctions. Besides this, the legal framework of sanctioning Iran’s nuclear program is extremely complicated and could take years rather than months to peel back altogether.

Even if the U.S. and Europeans wanted to lift all their unilateral sanctions within months, this would practically have little effect on the risk-averse mentality of companies that would potentially do business with Iran. As with the interim deal, the final deal is likely to reciprocate actions taken by Iran with sanctions relief. The Iranian government must prepare its population and business sector for this unfortunate, yet inevitable reality.

Q: Can the "Congressional hawks" and the advocates of Israel in the two houses of the U.S. Congress, who have conventionally undermined diplomacy with Iran and called for military action or increased sanctions, have a sway on the future of the nuclear talks and take the negotiations to a point of ultimate failure? In this light, is Israel going to use its leverage over the Congress to push for the collapse of the talks?

A: It is important to remember that in any system of democracy, there are opposition factions that do often disagree over what is in the national interest of the state. With respect to the nuclear negotiations, there are opposition voices in both Tehran and Washington DC. It is up to the administrations to manage these factions and ensure that their diplomatic route for resolving the nuclear issue is not undermined. The U.S. Congress is a very powerful body that has extensive legislative powers to impose further sanctions against Iran or obstruct the full implementation of a final deal. This would clearly run counter to the spirit of diplomacy entrenched under a comprehensive deal.

However, so far President Barack Obama’s administration has shown a stringent ability to contain Congressional opposition to diplomacy with Iran. For example, soon after the interim nuclear deal was signed, hawks in Congress began a campaign to impose new sanctions against Iran. This initiative managed to get the support of a surprising number of Democrat and Republican members of Congress – so much so that it could risk the veto powers of the president against bills introduced by Congress. In the end, the White House was able to deploy a sophisticated campaign against the hawks and accumulated enough support for the diplomatic track to prevent new sanctions legislations being introduced against Iran.

Although there is worry that U.S. Congressional members will attempt to limit Obama’s ability to negotiate with Iran, there is room for optimism that the White House can effectively counter such opposition. The President has a range of executive waivers open to him to ease sanctions against Iran as part of a final nuclear deal and therefore delay the need for the positive approval of Congress at the early stages of the deal. 

Q: How much difference do you find in the EU's approach towards Iran's nuclear program from that of the United States? It seems that Europe is more willing to accommodate a nuclear Iran and more prepared to work on the lifting of sanctions. What's your viewpoint on that?

A: The EU and U.S. have maintained a unified approach towards Iran as part of the EU3+3 framework. For Europeans, proliferation commitments run deep and they are concerned about the future course of Iran’s nuclear program. This concern has grown amidst diplomatic tensions between the West and Iran over the last decade. Strengthening the Non-Proliferation Treaty is a key objective for the Europeans. Under a final nuclear deal, Europeans are unlikely to accept terms perceived as being soft on Iran. Therefore the U.S. and EU will have similar minimal requirements for what a final nuclear deal entails.

Having said this, Europeans have more political space to acknowledge that a final nuclear deal with Iran will have to accept a degree of enrichment capabilities. Given the political restrictions placed on the U.S. administration by right-wing Congress members and allies, it is difficult for the U.S. to openly accept Iran’s enrichment capacity.

The process for removing European unilateral sanctions against Iran is comparatively easier than that of the U.S. The EU’s mechanism for sanctions removal will be a smoother transition given that Europeans do not have to deal with opposition from a legislative organ as is the case for the White House vis-à-vis Congress. This procedural difference does not however mean that Europeans will be more willing to lift sanctions against Iran. A final deal will involve a high level of coordination between the U.S. and EU as to the order and timing of peeling back sanctions.

Q: In one of your recent papers, you analyzed the role the EU3 countries can play in maximizing the chances of a comprehensive nuclear deal with Iran. How can the European nations contribute to the emergence of a sustainable and lasting deal that puts an end to the decade-long hostility between Iran and the West over Tehran's nuclear activities?

A: Now that the interim nuclear deal has been extended, there are a few options available to Europe for boosting the chance of reaching a comprehensive settlement. For the duration of the rollover period, through Catherine Asthon’s leadership, Europe has a role in ensuring all sides continue to adhere to the requirements and the spirit of the interim deal.

During the extension period and as part of any final deal, extensive confidence building will be essential. Europe can continue its diplomatic outreach to Iran in ways that the U.S. cannot. Many European Foreign Ministers have visited Tehran since Rouhani’s election, including from Italy, Austria, Belgium, Latvia, Poland, Spain, Greece, Slovakia and Sweden. This list is growing and helping enormously to build a degree of trust and better understanding between the West and Iran. This has also demonstrated that other options do exist for Iran’s future, and strengthening the hand of Iran’s administration.

If a deal is reached, Europe can play a key role in implementing it, front-loading agreed sanctions removal where U.S. actions on this front will take longer and be more difficult. Europe could be key in delivering a quid pro quo to Iran at the early phases of a final deal in ways the U.S. administration will find cumbersome. But to do so it will have to better overcome some of the obstacles preventing even limited and reversible European commercial dealings with Iran.

There is also a warning that Europe should not blindly follow an obstructionist U.S. Congress and in doing so risk undermining its own interests if Congress blocks implementation of a final nuclear deal. While Tehran shows commitment to diplomacy and to agreements reached, Europe should attempt to salvage the negotiations by taking a more independent line on Iran through altering the scope of its unilateral sanctions and ring-fencing its entities from the secondary impact of U.S. sanctions. This option avoids unwanted binary choices for Europe while buying time for the diplomatic process, especially if the U.S. President and Congress are at odds.

Q: Does the European Union have interests which might be endangered as a result of the continuation of disputes with Iran? Have the anti-Iran sanctions, including the oil embargo, had a negative impact on the bloc's economy? Do you see any willingness on the part of European firms and companies to return to Iran's lucrative market and invest in big projects in the country?

A: The nuclear standoff between Iran and Europe has forced EU member states to hold back on engaging with Iran on other important issues until this matter is resolved. These include addressing the regional crisis now unfolding in the Middle East, fulfilling Europe’s energy demands and human security. Europe is well aware that Iran is an important actor in the Middle East and yet there has been very little discourse with Iran on regional issues out of fear that this could spoil the nuclear talks or give Iran leverage in the negotiation.

While sanctions targeting Iran’s financial and oil sector do not have a substantial impact on the bloc’s economy, there is a noticeable impact on Europe’s long-term energy security strategy. The rising tensions between Europe and Russia have further highlighted Europe’s need to diversify its energy resources – Iran could become a part of this solution if sanctions are lifted as part of a final nuclear deal.

There is a clear and substantial desire on the part of European entities to do business with Iran as they did in the pre-sanctions days. Due to the degree of trade with Iran, European companies paid a much higher price in comparison [with] the U.S. firms when it came to enforcing nuclear-related sanction. These companies have had to create complicated frameworks to abide by the sanctions regulations in recent years. Despite the lucrative market available to them, it is highly unlikely that these entities will be willing to return to Iran until there is strong evidence that the financial and oil sector related sanctions targeting Iran will be lifted as part of a nuclear deal.

Key Words: Europe, Nuclear Talks, Iran, European Council on Foreign Relations, Joint Plan of Action, Iran's Nuclear Program, EU3+3, Sanctions, Congressional Hawks, United States, European Union, Oil Embargo, Geranmayeh

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