Germany Says Full Compensation for Firms Leaving Iran Not Possible

EghtesadOnline: Germany’s foreign minister said on Friday world powers would not be able to fully compensate for companies leaving Iran due to new US sanctions, but warned Tehran that abandoning its nuclear deal would cause more harm to its economy.

News ID: ۷۴۵۵۸۹

07 July 2018

“We will not be able to compensate for everything that arises from companies pulling out of Iran,” Heiko Maas told reporters before a round of talks among the remaining parties to the deal.

He said he did not think this round of talks would end negatively but it was likely more negotiations would be needed on the issue, Reuters reported.

Meanwhile, France said on the same day that it was unlikely European powers would be able to put together an economic package for Iran that would salvage its nuclear deal before November and warned Tehran to stop threatening to leave the accord, Financial Tribune reported.

“They must stop permanently threatening to break their commitments to the nuclear deal,” French Foreign Minister Jean-Yves Le Drian told RTL radio before travelling to Vienna for a ministerial meeting on the agreement.

“They must stop the threats so that we can find the solutions so that Iran can have the necessary economic compensations.”

He said the European powers but also Russia and China were working on coming up with a financial mechanism to mitigate planned tough US sanctions.

“We are trying to do it before sanctions are imposed at the start of August and then another set of sanctions in November. For the start August it seems a bit short, but we are trying to do it by November,” he said.

Europe Likely to Fall

Short of Iran Demands

Iran called on world powers to present measures guaranteeing oil revenue and investment into the country despite US sanctions when ministers met on Friday to save the 2015 nuclear deal, but European states will fall short of its demands, diplomats said.

President Donald Trump pulled the United States out of the multinational deal in May under which sanctions on Iran were lifted in return for curbs on its nuclear program, verified by the International Atomic Energy Agency. Washington has since told countries they must stop buying the OPEC producer’s oil from Nov. 4 or face financial consequences.

Foreign ministers from Britain, China, France, Germany and Russia met with their Iranian counterpart in Vienna for the first time since Trump left the pact, but diplomats see limited scope for salvaging it.

“The objective is to save the deal. We’ve made some progress, including on safeguarding some crude sales, but it’s unlikely to meet Iranian expectations. It’s also not just about what the Europeans can do, but also how the Chinese, Russians, Indians, others can contribute,” said a senior European diplomat.

Pillars of EU Strategy

The pillars of the European Union’s strategy are: European Investment Bank lending, a special measure to shield EU companies from US secondary sanctions and a Ccmmission proposal that EU governments make direct money transfers to Iran’s central bank to avoid US penalties.

“The Iranians expect the others to say what we are going to do to keep the deal alive. We will have to see if it is going to be good enough for them,” an EU source added.

Describing the Friday meeting as important, Iranian officials have said that key for them is to ensure measures that guarantee oil exports do not halt, and that Tehran still has access to the SWIFT international bank payments messaging system.

During a visit to Europe this week President Hassan Rouhani warned that Iran could reduce its cooperation with the UN nuclear watchdog having already threatened Trump of the “consequences” of fresh sanctions against Iranian oil sales.

Rouhani was quoted by state media and on his website after calls with French President Emmanuel Macron and German Chancellor Angela Merkel as having told them he was disappointed with their package which did not go far enough.

“SWIFT is the key but Iran has to stay in at least until the end of the year to maintain divisions between the EU and US, keep some credibility and try and survive amidst forthcoming sanctions,” said Sanam Vakil, associate fellow at Chatham House, a London-based international think tank.