Paris Cannot Force its Companies to Keep Doing Business with Iran

Paris Cannot Force its Companies to Keep Doing Business with Iran

Wednesday, 4 July, 2018 - 07:00
The foreign ministers of the signatory countries of the Iran nuclear deal will meet in Vienna on Friday. (AP)
Paris - Michel Abou Najm
Vienna will host on Friday a meeting for foreign ministers of the signatory countries of the 2015 Iran nuclear deal. This first meeting of its kind will bring together the foreign ministers of France, Britain, Germany, Russia, China and Iran, as well as European Union Foreign Policy chief Federica Mogherini.

Diplomatic sources in Paris told Asharq Al-Awsat that the meeting will be a major turning point in the nuclear deal crisis. It will mark the first time that these ministers meet to follow up on the implementation of the deal and the disputes that may arise among the signatories. Friday’s meeting, however, will not strictly focus on the implementation of the agreement, but on the “guarantees” that Tehran demanded from the EU for it to continue with the pact despite Washington’s withdrawal from it in May.

The European sources following up on the file doubted, however, that Europe will have sufficient guarantee for Iran, especially in regards to oil exports that are its economy’s lifeline.

Washington vowed earlier this week to cut Iran’s oil exports to zero, announced US State Department director of policy and planning Brian Hook.

The sources told Asharq Al-Awsat that given this warning, major western oil companies would no longer be able to do business with Iran because they will suffer from sanctions the US intends to impose on its oil and banking sectors starting November 4.

French official sources told Asharq Al-Awsat that Paris or any other European capital cannot force their companies to continue to do business with Iran for two reasons. The first is that it has no authority over those firms and the second is that some of them have suffered a lot from previous US sanctions.

“No one wants a repeat of that experience,” they said.

Not too long ago, the three European signatories of the deal were hoping to obtain waivers from the American administration to continue dealing with Iran, but Hook’s announcement dashed these hopes. He also said: "We are not looking to grant licenses or waivers, because doing so would substantially reduce pressure on Iran.”

If Washington remains true to its vow, then French oil giant Total, which requested a waiver from the US, will likely be forced to put an end to its operations in Iran. What applies to Total will also apply to other French and European companies.

French-Iranian lawyer Ardavan Amir-Aslani said that major French and European companies that are also operating in the US will withdraw from Iran because their business with Washington is much more lucrative than business with Tehran.

Since the US withdrawal, the European countries that back remaining in the nuclear deal have been trying to devise a strategy that would counter the American sanctions. European-Iranian committees have held several meetings to reach this goal.

The European sources added that away from these countries’ strongly-worded statements on their economies, they have achieved very little progress in countering the US. The most they have agreed on is reactivating the 1996 “blocking statute” legislation that provides legal protection to companies that refuse to submit to extra-territorial American sanctions.

The Europeans have also sought to set up a fund that would finance trade operations for European firms that want to continue business with Iran despite the sanctions. Only medium and small companies that do not operate in the US market can benefit from such a fund.

Iran, however, wants much more than this.

It is demanding European governments to encourage their companies to invest in its country and defy US sanctions. Iranian authorities have gone so far as to threaten to withdraw from the nuclear deal and resume uranium enrichment. This warning has been repeatedly made by supreme leader Ali Khamenei, President Hassan Rouhani, Foreign Minister Mohammad Javad Zarif and other officials.

The French sources warned Tehran against going through with its threats because that would only stoke tensions with Washington and lead to various repercussions. The sources, therefore, urged Tehran to “respond” to calls to hold dialogue on its malign regional policy and ballistic missile program. They also urged it to be “realistic” and realize that “it is not in any position to make threats against Europe or impose conditions on it.”

The contacts that Paris has been holding with Washington reveal that the US administration is convinced that Iran will not be able to stand against the American measures. At the end of the day, it will yield to the American conditions that have been detailed by President Donald Trump and Secretary of State Mike Pompeo.

Given the above, Friday’s meeting will be very significant because it will provide hints over what direction the nuclear crisis will take in the months and years to come. It will also shed light on the impact this direction will have on other related files, such Tehran’s regional policy, role in regional crisis and missile ambitions.

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