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Home » Security » Here we go again. America gives Europe an ultimatum – do business with us or Iran.

Here we go again. America gives Europe an ultimatum – do business with us or Iran.

PortandTerminal.com, June 30, 2019

The US special representative for Iran, Brian Hook, said yesterday that Europe has a choice: Do business with the United States, or do business with Iran.

LONDON, ENGLAND – The Trump administration has given Europe an ultimatum — do business with Iran or do business with the United States. Brian Hook, U.S. Special Representative for Iran, told reporters Friday in London that any country purchasing Iranian oil would itself be subject to sanctions as well.

These are strong threats coming from a country that is facing trade wars on several fronts. America is already embroiled in a punishing trade war with China and is kicking off a lesser one with India. Is America ready to take on Europe now on trade as well?

Any country purchasing Iranian oil would itself be subject to American sanctions as well.

Background

European countries made a last-ditch effort to prevent Iran from breaching the terms of a 2015 nuclear deal.

Iran agreed to limit its “sensitive” nuclear activities and let international inspectors visit and monitor their compliance with the deal. In return, Iran asked for the lifting of crippling economic sanctions.

President Trump pulled out of that deal and started reimposing strict economic sanctions on Iran.

Another new round of US sanctions, targeting Iran’s supreme leader, Ayatollah Ali Khamenei, and other senior Iranian officials, was announced by Washington on Monday after attacks on tankers in the Gulf of Oman and the shooting down of a US surveillance drone over the Strait of Hormuz.

Europe has been scrambling to come up with a way that will persuade Iran to stay within the limits of the old nuclear deal. Tehran complains that US sanctions mean that it no longer sees the economic benefit of the accord. They see it as all stick and no carrot. They’re probably right.

All stick, no carrot

Mr Hook said sanctions on Iran would continue until it decides to be a “normal” state, Reuters news agency reported. What that means is unclear. What is clear though is that America is ready to threaten long-standing trading partners as it ratchets up the “stick” with Iran.

Mr. Hook accused Iran of routinely engaging in “unsafe behavior” at sea, claiming they have used their military to attack commercial ships in recent weeks. Hook also suggested Iran continuously violates maritime law to hide its oil exports and evade sanctions. Few believe America on this accusation including close allies such as the U.A.E.

This June 13, 2019 file image, released by the U.S. military’s Central Command, shows damage and a suspected mine on the Kokuka Courageous in the Gulf of Oman near the coast of Iran. The United States has accused Iran of carrying out the attack (U.S. Central Command via AP, File)

Iran has indicated that if it does not receive some form of sanctions relief, it plans to exceed a limit of 300kg of low-enriched uranium that the country is allowed to possess under the nuclear agreement.

Breaching the limit would be a symbolic move but would not put Iran significantly closer to building a nuclear weapon. The 300-kilogram limit of uranium enriched to 3.67% is suitable for use in power plants but falls far short of the more than 90% enriched uranium needed for fissile material in a nuclear bomb.

The potential for a breach though did add urgency to a meeting yesterday of officials from Iran, Britain, France, Germany, Russia, China and the European Union, a meeting that takes place every quarter to discuss the implementation of the deal.

Three of the countries- Britain, France and Germany – have been trying to set up a barter system that would allow at least some trade to continue with Iran and keep it from breaching the nuclear deal.

Trump’s administration though has been critical of the programme, which it sees as an attempt to evade its sanctions.

If the European trade barter system, known as INSTEX fails to “meet Iran’s demands within the framework for the nuclear deal”, then Iran will “take the next steps more decisively,” Iranian Foreign Ministry spokesman Abbas Mousavi told state television yesterday.


Explainer: What is INSTEX?

EU Unveils New Trade Mechanism for Trade with Iran: INSTEX

Several European countries have set up a new way for Iran and Europe to do business that will allow companies to continue trading with Iran despite US sanctions. The announcement was made on Thursday.

The new channel, set up by Germany, France and the UK, is called  INSTEX — short for “Instrument in Support of Trade Exchanges.

We’re making clear that we didn’t just talk about keeping the nuclear deal with Iran alive, but now we’re creating a possibility to conduct business transactions

German Foreign Minister Heiko Maas

The payment channel allows for European countries to continue trade with Iran but has already clearly put them on a collision course with Washington.


Confusing messages from American diplomatic efforts

US officials have indicated that they would like to see Iran abide by the terms of the old nuclear deal, even though the United States withdrew from it. President Trump famously blamed Barrack Obama for negotiating it.

President Trump promised a better solution to the Iran deal while campaigning for reelection.

It is different, but is it better? “This deal if I win will be a totally different deal. This will be a totally different deal” Donald Trump

“This deal if I win will be a totally different deal. This will be a totally different deal.” Candidate Trump said often during the 2016 election.

“Our sanctions do not give Iran the right to accelerate its nuclear programme,” Mr Hook said before a meeting in Paris on Thursday.

How Mr Hook precisely sees that particular piece of logic working in the real world is unclear. America has removed itself from a joint treaty and is now punishing Iran for not subscribing to that same treaty?

To reinforce his point, Mr. Hook did say though that Iran “Can never get near a nuclear bomb.”

The US wants Iran to abide by the terms of the nuclear deal that America withdrew from.

An Iranian breach of the stockpile limit would not put it significantly closer to building a nuclear weapon, but it would strike another blow to the tattered deal.

Read more

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