Progress on Nuclear Deal Talks 'Positive', But 'Insufficient'

EghtesadOnline: Progress was made in nuclear talks on Friday to salvage the 2015 nuclear deal, but it is not sufficient to stop Tehran from scaling back compliance with the accord, a senior Iranian official said, as Europe announced that a new mechanism to allow trade with Tehran had become operational.

News ID: ۷۴۷۷۰۵

30 June 2019

Iran said it is ramping up its nuclear program and has announced dates when it would surpass certain limits set out in the deal officially known as the Joint Comprehensive Plan of Action, which Washington unilaterally quit last year.

Countries that are still party to the agreement—European powers Britain, Germany and France plus Russia and China—held urgent talks with Iranian officials on Friday in Vienna, Austria, in the hope of persuading Tehran to hold off.

The Europeans say Iran’s breach of the agreement would escalate confrontation at a time when Tehran and Washington are at risk of a miscalculation that could trigger a war, Financial Tribune reported.

Iran's envoy, Deputy Foreign Minister Abbas Araqchi, said the talks were "a step forward, but it is still not enough and not meeting Iran's expectations", Reuters reported.

He said it was ultimately up to higher authorities in Tehran to decide whether to call off plans to exceed limits in the nuclear deal, but he did not believe the talks' outcome was likely to change their minds.

"The decision to reduce our commitments has already been made and we will continue unless our expectations are met," he said.

"I don't think the progress made today will be enough to stop our process, but the decision will be made in Tehran."

Despite abandoning the deal, Washington has demanded European countries ensure Iran remains compliant. Tehran says it cannot do so unless the Europeans ensure it receives the deal's promised economic benefits.

In particular, it wants its oil exports restored to the level before US President Donald Trump abandoned the deal and reimposed sanctions.

French President Emmanuel Macron said this week that he would ask the US leader to ease sanctions to allow negotiations to begin. But the plea seemed to have fallen on deaf ears, with Trump's Iran envoy saying on Friday sanctions would remain in place to end Iranian oil exports altogether.

China, long a big importer of Iranian oil, said it rejected US sanctions, but Fu Cong, director general of the Department of Arms Control of the Chinese Foreign Ministry, would not be drawn on whether Beijing planned to keep buying.

So far, European proposals to protect Iran from the impact of US sanctions have failed, with Iran largely shunned in international oil markets and all major companies cancelling plans to invest there for fear of falling afoul of US rules.

Launch of INSTEX

On Friday, the European Union announced in a statement that the Instrument in Support of Trade Exchanges or INSTEX, the financial mechanism set up by France, Britain and Germany to facilitate non-dollar trade with Iran, is now operational and the first transactions are being processed.

Iran has established a reciprocal entity to trade with Europe while some more EU countries are joining INSTEX as shareholders, the statement said, according to the website of the EU's External Action.

In a joint statement earlier on Friday, Austria, Belgium, Finland, the Netherlands, Slovenia, Spain and Sweden said they were working with the E3 to develop trade mechanisms, Reuters reported.

Araqchi said the new trade vehicle would help, only if it enables Iran to sell its oil.

The Europeans say it is likely to be able to handle only small transactions for items such as medicine, already permitted under sanctions.

"For INSTEX to be useful for Iran, Europeans need to buy oil or consider credit lines for this mechanism," the senior diplomat said, adding that all the parties in Vienna had agreed to hold a ministerial meeting "very soon".

On the same day, Foreign Ministry Spokesman Abbas Mousavi told Anadolu Agency that it is likely for Tehran to remain in the pact if EU countries abide by their commitments.

"But if we cannot be assured in this regard, it will be among the options to step out of the nuclear deal and take the other steps foreseen," he added.

Heshmatollah Falahatpisheh, chairman of Majlis National Security and Foreign Policy Commission, says INSTEX should be given time to work.

It is a "mechanism whose political impact to avoid the trap of extremists is more important than the economic openings it offers. So it should be given a chance," he wrote on Twitter, ISNA reported on Saturday.

No Talk of Sanctions

A senior Russian diplomat said on Friday that the remaining parties to the Iran nuclear deal are not looking to impose anti-Iran sanctions in response to its reduction of commitments under the deal.

"As for the sanctions, we spoke about absolutely different things, with an opposite sign," Russian Deputy Foreign Minister Sergey Ryabkov was quoted as saying by TASS news agency.

"The question was not imposing some additional sanctions. It was about how to secure maximum efficiency from the European Union's decision to drop the sanctions that was passed [after the nuclear deal was struck] in conformity with its internal procedure," he added.

The sanctions were lifted long ago but "the Iranians have all the grounds to lament that the pecuniary effect from the lifting of the European Union's sanctions is not felt to a significant extent," Ryabkov said.

"When the conversation proceeds in this mode, it is at least untimely, unethical and wrong to speak about the reimposition of sanctions," he added, noting that all the remaining signatories are committed to keeping the agreement in place.

British Prime Minister Theresa May urged Iran on Saturday to uphold its obligations under the nuclear agreement.

"The UK will continue to work with our JCPOA partners to do all we can to keep the Iran nuclear deal in place," she said in comments at the G20 meeting in Osaka, Japan, the British Foreign Office reported.