Iran Sanctions at Risk If Congress Stops a Deal, EU Envoys Say

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Sanctions against Iran’s economy are likely to erode if talks to curb Iran’s nuclear program fail or U.S. lawmakers try to block an international agreement, according to the U.K. and German envoys to Washington.

“You’re already seeing a number of countries which of course don’t respect the embargo on oil,” U.K. Ambassador Peter Westmacott said Tuesday, referring to half a dozen economies with an exemption from U.S. sanctions that lets them import Iranian crude, as well as companies that have sought to evade bans on trade.

Westmacott spoke alongside his French and German counterparts at the Atlantic Council, a Washington policy institute, about the prospects for reaching a deal on Iran’s nuclear program before a self-imposed deadline of June 30.

Sanctions on Iran have probably reached “the high water mark,” the British envoy said. “You would probably see more sanctions erosion” if the talks collapse, unless the failure were “clearly, incontrovertibly” Iran’s fault.

“If diplomacy fails, then the sanctions regime might unravel,” German Ambassador Peter Wittig said. “It depends on who’s to blame if there’s no deal.”

Some would view a move by the U.S. Congress “blocking this deal” as a “trigger” to stop observing sanctions, he warned. President Barack Obama, under pressure from lawmakers, signed a measure giving Congress the opportunity to review a deal before any U.S. sanctions could be eased.

France, Germany and the U.K. -- along with China, Russia and the U.S. -- are seeking a long-term accord to curb and inspect Iran’s nuclear activities, in exchange for removing an array of European Union, United Nations and U.S. sanctions imposed on Iranian energy, banking, ports, shipping and more over the past five years.

Last-Minute Drama

French Ambassador Gerard Araud, who spent several years as his nation’s envoy to nuclear talks with Iran, said he thinks “it’s very unlikely we’ll have a deal before the end of June,” because the two sides haven’t resolved key issues over inspections and sanctions.

No deal will be reached if Iran refuses to resolve concerns about the possible military dimensions of its program, said Araud, who predicted last-minute drama at the talks in late June, complete with walkouts and ultimatums.

Unlike the U.S., which banned Americans from most commerce with Iran in the aftermath of the 1979 Islamic Revolution, France, Germany and the U.K. had significant commercial ties with the Persian Gulf state before sanctions. A majority of EU nations imported oil from Iran before an EU embargo was approved in 2012.

‘Not More Greedy’

“Something that really bothers me is this view in Washington that European business is more eager to go back in than U.S. business,” Araud said. “European businessmen are not more greedy than American ones.”

“We -- not you -- made the sacrifice of the sanctions. We lost a lot of money,” Araud said. “We have done a very tough job, we have done it in a very loyal way.”

Westmacott called Iran “a country with immense potential” and “great natural resources,” adding that “at the right moment,” companies will want to take advantage of that.

Wittig said big companies in Germany took a hit from losing their Iran trade, and a nuclear deal “would benefit our economies.” At the same time, they won’t “rush back to Iran. We will be very cautious.”

If an accord is reached, sanctions will be eased gradually, and Iran and its business partners won’t see major benefits before the end of this year, Wittig said. Iran will need time to adopt nuclear restrictions, and United Nations nuclear inspectors will need time to verify Iran’s compliance, Wittig said.

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