Prospects of Iran-EU collaboration on busting secondary sanctions rosier than ever

Iranian Diplomacy – Following the recent FATF meeting and the final statement released by the group, many called FATF’s 4-month opportunity to Iran to complete anti-money laundry reforms, in the final days before implementation of US secondary sanctions, a positive signal to Iran.

On the other hand, in the final statement of FATF’s Paris Summit, members reiterated their nine appeals towards Iran repeated in previous statement, which saw reaction from the spokesman for the Foreign Ministry of Iran.

All these developments, as well as the ongoing efforts of Washington inside the European Union to bring EU on board on the verge of November 4th, the date of reimposition of sanctions against Iran, have made the situation more critical than ever. Iranian Diplomacy discussed these developments with Abdolreza Faraji Rad, former Iranian Ambassador to Norway, and geopolitical and international affairs expert:

What is your overall assessment of the recent FATF meeting in Paris with Iran on its agenda, as well as the final statement of the group that contained positive and negative points for Tehran?

The meeting and the final statement of the FATF group were very positive in some aspects for Iran, especially with the four-month opportunity given to Iran until February 2019 to clarify the mandate of its anti-laundry bills.

During this meeting, the United States did not succeed in pushing Iran through this group. However, in the final statement, some claims centered around nine cases that Iran had failed to respond to, showing political bias against the country. But in general, it is possible to assess the current meeting of the FATF group and its final statement on the issue of Iran as positive.

Of course, it was likely that, given Washington’s presidency in this round of the FATF meeting, Washington would push Iran to foil Tehran’s chance to work via a EU-designed SPV (special purpose vehicle), which requires Iran’s removal from FATF blacklist. FATF, will resist sanctions.

Given the fact that the adoption of four FATF-related bills by the parliament has created controversy inside Iran, can it be hoped that the 4-month opportunity to Iran will settle the remaining issues?

It seems that the Islamic Republic’s attitude towards these bills are positive. Whenever the establishment is determined to do something, it has happened. Certainly, if Tehran did not want to do anything, even if these four months were extended for four years, nothing would have happened. In four months, it is easy to pass the bills in order to create a platform for cooperation with the EU through SPV.

How do you see the recent remarks by the EU foreign policy chief to implement the SPV even before reimposition of US’ secondary sanctions?

When Mogherini as EU foreign policy officer declares an official position, it means the necessary frameworks and measures have been done. These recent positions by Europe will send positive signals for Tehran, which could count on cooperation with the European Union. It seems that the EU tends to operationalize part of its intended mechanism before November 4th in order to find out what this model is basically capable of in the current global economy, and will continue to work on the shortcomings of this mechanism to fix it.

There are also some concerns about the establishment of an EU Office in Iran. Although, in this regard, the ambassadors of some of the European Union member states held a joint meeting with members of the National Security Committee of Majles and reached some agreements, but some institutions have not had positive reactions. Given the current situation, especially the European Union’s attempt to cooperate with Iran and support Tehran against sanctions, could Tehran’s behavior have an undesired impact on such cooperation?

This is an old request from the European Union. This issue has been repeatedly pursued by Mogherini and repeatedly appealed through all meetings. Iran should meet some of the EU’s requests when the European Union is willing to make concessions. The issue of establishing a European Union office in Tehran could encourage the European Union more in co-operation with Tehran. Especially at this time, when US ambassadors in the European Union are trying to foil the Union’s plans to help Tehran in opposition to secondary sanctions. In such a fragile situation, the side can play the game better will be the winner. So we will have to be more careful and follow a more flexible and logical diplomacy.

You emphasized EU’s earnest efforts in supporting Iran. Will Washington be able to persuade the European Union in any way about abandoning Iran in the remaining days to November 4th?

It seems that for some reason, America cannot stop the European Union from supporting Tehran. First, because of the approaching congressional elections in the United States, the White House and Trump are avoiding risks. Trump does not want to take any action or retaliatory measure against the European Union during elections. It is possible that the negative reactions of China, Russia and the European Union will also play a role. On the global scene and inside the United States, and it makes Trump’s situation more complicated.

Second, the situation emerging after the murder of Jamal Khoshoggi has led the US to focus more on its strategic alliy Saudi Arabia.

Third, US allies like Japan, India and South Korea are countries that really need to buy oil for their economy. Certainly one of their target markets is Iran. The facts show that neither Saudi Arabia nor any other country can respond to this level of shortage in the global oil market with the absence of Iran.

Fourth, if the United States, in the wake of the secondary sanctions to be imposed on Iran by November 4th, would decimate Iran’s oil export, it would create shockwaves for the global oil market, which will eventually lead to an increase in the price of petroleum products, such as gasoline, inside the United States itself.

If so, it will surely an Achilles heel for Trump in the mid-term elections of the US Congress. The fifth is that the SPV mechanism has finally been developed by the European Union to continue cooperation with Iran. Therefore, when 28 EU countries have decided to establish such a mechanism, Trump can no longer struggle with the entire European Union.