THE ISRAEL PROJECT
1. The E.U. is working with Iran to pressure the U.S. into giving Iran dollar access – The E.U. has been pressuring the U.S. so that the Europeans can accelerate normalization with Iran:Ms. Mogherini [said]… “The main message that I have delivered here is the fact that we Europeans have as much as an interest as the Iranians that this issue is solved… We have an economic interest also in coming back here as the first trading partner… In order to do that we need our banks to be present here”… Under terrorism and human right sanctions, the Treasury still bars Iran from using the U.S. financial system or the American dollar… Zarif acknowledged that while U.S. officials may not be doing anything that breaches the letter of last year’s nuclear accord, they were undermining its spirit… Ms. Mogherini said she has been pressing the Obama administration to do what it can to end the impasse. She discussed the issue with U.S. Secretary of State John Kerry at the Group of Seven meeting in Hiroshima recently and also raised it in Washington with senior U.S. official on the sidelines of a nuclear security summit.
2. The E.U. will cooperate with Iran on a range of projects, including nuclear development
The two sides announced a string of joint projects—from the energy sector to migration and joint research work—in a bid to broaden a bilateral relationship that was long restricted by the dispute over Iran’s nuclear program… Among the new projects announced on Saturday, the EU and Iran will start work on some joint civil nuclear projects and start discussions on broadening oil and gas links.
When the nuclear deal was sold to Congress, the Obama administration declared that the multilateral approach would make the Europeans into partners who would cooperate with Washington in pushing back against Iranian misbehavior. The tone and substance of Mogherini’s visit suggests that the opposite may be happening, and that the Europeans are cooperating with the Iranians against Washington.
Omri.
By Lawrence Norman, WALL STREET JOURNAL
Iran’s foreign minister says he hopes to start to see ‘tangible benefits’ from nuclear deal
TEHRAN, Iran—The European Union’s top foreign policy official pledged Saturday the bloc would do what it can to get large regional banks working with Iran in a bid to ease tensions between Tehran and Washington over the benefits of last year’s nuclear agreement.
Federica Mogherini was in Tehran on Saturday at the head of the largest delegation of EU officials to visit Iran in years. The two sides announced a string of joint projects—from the energy sector to migration and joint research work—in a bid to broaden a bilateral relationship that was long restricted by the dispute over Iran’s nuclear program.
Ms. Mogherini, who chaired the negotiations which produced last July’s nuclear agreement, said in a press conference with Iranian Foreign Minister Javad Zarif the bloc was trying to “reassure” major European banks that they should start engaging again in Iran.
“The main message that I have delivered here is the fact that we Europeans have as much as an interest as the Iranians that this issue is solved,” she said in a sit-down with a small group of reporters later. “We have an economic interest also in coming back here as the first trading partner…In order to do that we need our banks to be present here.”
The implementation of last year’s nuclear agreement took effect in mid-January. However, despite widespread business interest in Europe and beyond, the absence of large western banks to underwrite deals and set up broad financial links is stymying the delivery of concrete projects.
European officials fear this could spark a downward spiral of mistrust over the nuclear accord. With Iranian officials coming under fire because the agreement isn’t yet generating large-scale investments and jobs, Iran could start to stray from implementing the nuclear deal, they fear. That would then deepen the unwillingness of western banks and businesses to come to Iran.
In recent days, there have been some signs of these risks. In remarks in Washington on Friday, Iran’s central bank chief, Valiollah Seif, warned that the failure of the nuclear deal to deliver economic benefits in Iran could eventually endanger the agreement.
European and Iranian officials say there are growing contacts between small and medium-size European and Iranian banks but that many larger institutions remain cautious, in part because of continued U.S. sanctions and the hefty U.S. fines handed down in recent years to European banks.
Under terrorism and human right sanctions, the Treasury still bars Iran from using the U.S. financial system or the American dollar. For a large European bank, the risk of doing business with the wrong person or firm in Iran and ending up being frozen out of the U.S. dollar market therefore remains real.
In a separate sit-down Saturday, Iranian Foreign Minister Javad Zarif acknowledged that while U.S. officials may not be doing anything that breaches the letter of last year’s nuclear accord, they were undermining its spirit.
“All we’re asking the United States isn’t to interfere and to assure…international banks that they will not be fined again illegally for doing business with Iran,” he said.
Mr. Zarif said the U.S. and Europeans should have worked to ensure European banks were ready for business again in the six month period between last July’s deal and its January 2016 implementation.
“The point is the impediments should have been removed,” he said. However, he brushed off suggestions that the tensions over the slow restoration of financial links are imperiling the nuclear deal, known as the Joint Comprehensive Plan of Action.
“I do not see JCPOA in jeopardy,” he said.
Ms. Mogherini said she has been pressing the Obama administration to do what it can to end the impasse. She discussed the issue with U.S. Secretary of State John Kerry at the Group of Seven meeting in Hiroshima recently and also raised it in Washington with senior U.S. official on the sidelines of a nuclear security summit.
In recent weeks, the Obama administration has been having internal deliberations about facilitating Iran trade, according to U.S. officials. This has included finding ways to allow Iran to conduct dollarized trade without directly accessing the U.S. financial system. Tehran’s ability to repatriate its oil revenues is seen as limited without any ability to access dollars.
However, Ms. Mogherini said Iran also needs to make changes at home to entice more western banks. That includes reforms to improve the business and financial environment—and more contentiously, to improve the political framework for investors so that they don’t risk creating links with outlawed firms or groups. .
“There are ways in which we can help each other,” she said.
Among the new projects announced on Saturday, the EU and Iran will start work on some joint civil nuclear projects and start discussions on broadening oil and gas links. The EU offered additional assistance to Iran to help host millions of Afghan refugees and pledged to step up student and other exchanges.
The two sides are looking to establish a political framework which will allow them to discuss regional tensions and human rights. Mr. Zarif said Iran was willing to engage on that and would, on its side, raise the problems faced by Muslim communities in Europe.
Ms. Mogherini also brought with her to Tehran an official who will work on setting up an EU delegation in Tehran.
“We are turning a new page,” she said.
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