European Defiance of Sanctions

By Edward Carney

As of Wednesday, certain European entities were still maintaining a defiant tone on the topic of US sanctions, which were re-imposed on the Islamic Republic of Iran at the beginning of the week.

The first of the sanctions that had been suspended under the 2015 Iran nuclear deal went back into effect in August, after which the European Union began to explore means to incentivize Iran to remain a party to the Joint Comprehensive Plan of Action.

In recent weeks the EU announced its intention to create a “special purpose vehicle” for facilitating transfers between European businesses and the Islamic Republic.

The prospects for that plan are now being tested as Iran copes with renewed sanctions on 700 entities while the Europeans contemplate their future relations with both Iran and the United States.

Many analysts have questioned the SPV’s viability or the extent of its prospective effectiveness as helping Iran to evade US sanctions. Others have raised doubts about the long-term political will or European powers when it comes to standing against the US on this issue. Nevertheless, many representatives of the EU and its member states have continued to give the impression that they are both committed to helping Iran and actually capable of doing so. In some cases, remarks to this effect have come from what are arguably the unlikeliest sources.

On Wednesday, Newsweek quoted French Economy Minister Bruno Le Maire as saying, “Europe refuses to allow the U.S. to be the trade policeman of the world.” Le Maire went on to urge the Europeans as a whole to assert their independence, and he boasted of the ongoing development of plans to implement and utilize the SPV. He did not, however, going into detail about those plans, thus leaving them open to criticism or scrutiny by those who believe that Europe will waver or that the SPV will face insurmountable logistical obstacles.

The potential for such obstacles was underscored when the Belgium-based Society for Worldwide Interbank Financial Telecommunication announced that it would be barring Iranian banks from accessing the system. Reuters reported on Wednesday that the European Commission had issued a statement describing the decision as “regrettable.”

It is a sentiment that European authorities had previously expressed with regard to other European entities’ decisions to fully comply with US sanctions even ahead of their ultimate re-imposition at the start of this week.

However, such condemnation of the growing financial and logistical gulf between Europe and the Islamic Republic is at odds with European commentary on closely related issues, such as the Iranian threat to regional stability and Western security. The latter issue was brought into sharper focus in late October after Danish authorities announced the arrest of an Iranian operative who was accused of plotting at least one assassination on Danish soil.

This in turn highlighted the surprising nature of recent French statements in support of Iranian transactions, since a previously thwarted terror plot had sought to detonate explosives just outside Paris.

The earlier incident targeted the annual international rally of Iranian expatriates and their political supporters, organized by the National Council of Resistance of Iran, which maintains a headquarters in France. The NCRI itself gathered and publicized information about the plot in its immediate aftermath, underscoring the fact that it had been approved at the highest levels of the Iranian regime.

This information was subsequently corroborated by French intelligence, with government officials formally holding Tehran accountable only weeks before the revelation of the Danish plot amplified the apparent Iranian terror threat.

Although French officials have been vocal in their defense of the JCPOA, they have also been credited with some of the strongest European positions on holding Iran accountable for its overall malign activity. In keeping with this observation, Newsweek noted that in September, after the first round of US sanctions had been re-imposed, French President Emmanuel Macron declared that although he disagreed with the White House over the nuclear deal and the relevant sanctions, he agreed with Trump administration’s underlying goals.

Those goals have been clearly and repeatedly described as a complete reversal of Iran’s policies in a number of key areas, mostly relating to the regime’s strategy of regional force projection and the development of foreign militant proxies.

The return and prospective escalation of US sanctions is widely expected to limit the regime’s ability to finance and direct those proxies. But in the short term, the controversy surrounding the sanctions may drive many of Iran’s proxies and partners to cleave to the regime and express solidarity in the face of nascent pressure.

This possible trend was illuminated by statements from – and subsequent criticism of – the Palestinian terrorist group Hamas. On Monday, the organization accused the US of undermining “security and stability in the region” while strengthening “the Zionist project.” Hamas also expressed general “solidarity with Iran’s government,” according to The Tower. This led to Anwar Gargash, the United Arab Emirates’ Minister of Foreign Affairs, to criticism Hamas for ignoring the widespread anxiety among Arab powers regarding Iran’s pursuit of regional hegemony.

“Hamas’s solidarity with the Iranian government… pushes the Palestinian issue into a maze and confirms the opinion that the movement, in its orientation, is nothing more than an Iranian regional tool,” he said.

While this sort of commentary, coming from regional actors, may put significant pressure upon entities whose position between Iran and its Arab adversaries is in question, the same commentary may also help to keep pressure on European governments to recognize the dangerous and destabilizing role that Iran plays in the broader Middle East.

Certainly, some such pressure is already being exerted by the Trump administration via the public statements and diplomatic outreach that accompanies the renewed enforcement of sanctions. And as that pressure mounts, it may yet encourage Paris and other European governments to accept the strategies put forth by the White House, as well as its goals.

On the other hand, some of this pressure has come from entities whose recent actions have undermined their credibility as critics of Iran’s penchant for human rights violations and support for terrorism. In recent weeks, much attention has been focused on the apparent execution of journalist Jamal Khashoggi by agents of Iran’s leading regional adversary, Saudi Arabia. Somewhat surprisingly, though, this has actually prompted some commentators and media outlets to draw connections between that killing and the crimes and abuses of the Iranian regime. And this in turn has encouraged European powers to clarify their stance on issues of human rights and terrorism in general.

Late in October, IranWire published an article along these lines, arguing that the international community’s reaction to the Khashoggi killing should be informed by historical experiences with the Iranian regime’s “chain murders” on European soil in the 80s and 90s. The article noted that at least two instances of similar killings apparently occurred last year – a fact that it tentatively attributes to a recent lack of pressure and a trend toward international focus on issues other than Iran’s assault on opposition figures. This stands in contrast to the clear and multi-faceted pressure that apparently led to the earlier halt of the chain murders.

While this can be read as an indictment of European entities that are standing against the US sanctions, another IranWire article extended aspects of the criticism to the United States itself. That article, which discussed the renewed sanctions in the context of Iran’s recent and ongoing public protests, accused the White House of being too narrowly focused on Iran’s regional activities, to the exclusive of its domestic policies and violent repression of dissent.

This is not to say that the administration has never condemned that repression, but IranWire argues that the mullahs may have gotten the impression that “they will need to give concessions over their regional policies only” and that this could lead to “new potential risks for the Islamic Republic.”

But the article also pointed to the potential for reinvigorated public protests in the wake of re-imposed US sanctions. It argued that the outcome would depend in large part upon the positions taken by traditional US allies, and whether they try to mitigate the sanctions’ effects or direct them toward Iran’s domestic behavior as well as its threats to the region. If those dual aspects of the Islamic Republic appear to be worsening, the Europeans may be incentivized to add their own pressure, even if it takes different forms.

This is precisely what Emmanuel Macron seemed to advocate for in September when he said that a multilateral, long-term Iran strategy “can't just boil down to sanctions and containment.” Of course, this is not to say that sanctions cannot be part of an effective strategy, and it remains to be seen whether the governments of France, the UK, Germany, and the rest of Europe will come around to recognizing the potential effectiveness of sanctions as part of a broader effort to exert pressure on the mullahs’ regime.