Europe has sent a message to the
United States, loud and clear: By unilaterally withdrawing from the UN,
six-party Iran nuclear containment accord (the Joint Comprehensive Plan of
Action), you have undone the protections we negotiated with Iran,
provoked them, and they are resuming building their nuclear weapons
capabilities. The Iran accord had seriously effective inspection requirements.
Even your own military said the accord was working.
You have swatted the wasps’ nest of
Tehran’s hatred of all things American, sent your ships of war into threatening
waters, launched drones, imposed additional killer economic sanctions and moved
to the brink of out-and-out war. They have responded with mines and unsubtle
assaults on passing tankers. You have easy oil; we do not. Iran is in our
backyard, not yours. Europe thus has to live with the egotistical consequences
of your autocratic “America First” president, which is oceans and continents
away. Europe suffers from your inept folly. There are no benefits. Iran has
doubled down. And Europe simply will not take it anymore.
Remember, the leaked email from UK’s
Ambassador to the US, Kim Darrosh? Well he wrote some other stuff that is a hot
topic in both Europe and Washington: “In one 2018 cable published by the Mail on Sunday [7/14/19], U.K.
ambassador Kim Darroch says President Donald Trump pulled out of an
international nuclear deal with Iran as an act of ‘diplomatic vandalism’ to
spite his predecessor, Barack Obama…The memo was written after then-Foreign
Secretary Boris Johnson visited Washington in a failed attempt to persuade the
U.S. not to abandon the Iran nuclear agreement.” Associated Press, July 14th.
Even Trump’s favorite Brexit dude, Boris?
Donald Trump is wildly unpopular in most
of Western Europe, our supposed allies. They disagree with most of his foreign
policy forays. They seem him as a bumbling, egotistical incompetent, catering
to a base of billionaires and unsophisticated constituents who do not
understand how much the world has changed from what they have assumed it to be.
If Trump wants to take America back into the 1950s, Europe doesn’t care as long
as this does not impact them. But it does.
Europeans are so furious at Trump’s
rejection of the treaty to contain Iran’s nuclear weapons program, instead
escalating sanctions that ultimately punish Europe as well, that they are
actively finding a way to redesign global financial structures to circumvent
American dominance and control. And if the structures work, you can bet that
much of what they are doing will become permanent, reducing America’s global
power and influence accordingly. This a is a work-around to circumvent American
control of international banking. Clearly, Iran’s reaction to Trump has been to
do precisely what Donald Trump said he will never permit them to do. They see
America’s withdrawal plus new sanctions as relieving them from further
compliance.
Here is analysis of that European
work-around plan from Nabih Bulos, writing for the July 13th Los
Angeles Times: “As Iran presses on with its gradual dismantling of terms set by
the 2015 nuclear deal, and while tensions with the U.S. increase ever higher,
European signatories say a new financial mechanism can salvage the accord.
“That mechanism, INSTEX, aims to
provide Iran with an incentive to stay in the Joint Comprehensive Plan of
Action (JCPOA), as the nuclear agreement is formally known, despite the U.S.
withdrawal last year… In May, on the anniversary of that withdrawal, Iran began
a careful but escalating campaign of enriching and stockpiling uranium beyond the
deal’s limits.
“If INSTEX doesn’t compensate Iran
for staying in the deal even as the U.S. levies additional sanctions, among
other measures, Tehran has threatened to walk away from the accord altogether… At
its heart, INSTEX — the Instrument in Support of Trade Exchanges — is a
clearinghouse for trade deals between Iran and Europe that allows companies to
avoid payment across borders.
“Established in January by Britain,
France and Germany, it’s headquartered in Paris and became operational last
month. The mechanism avoids use of U.S. dollars… Iran established a mirror
entity in April called the Special Trade and Finance Institute…
“Say you have a European company
sending machinery to an Iranian importer, and an Iranian company sending
pistachios to Europe. Normally, the Iranian importer in the first deal would
have to send money to Europe and the European importer would send money to
Iran. Instead, INSTEX would match those two transactions: The European importer
pays for the pistachios by giving money to the European exporter. The two
Iranian companies pay each other in rials.
“This way there is no direct
financial flow between Iran and Europe, but commodities can still travel to and
from Iran… In two words, ‘secondary sanctions.’… The U.S. has long used primary
sanctions, such as asset freezes or trade embargoes that prevent U.S. companies
from doing business in Iran.
“Secondary sanctions target non-U.S.
entities for engaging in commercial activities or providing material support to
Iran… Punishments can include denial of visas and import/export certificates,
denying these foreign entities the use of American dollars or even cutting them
out of the U.S. financial system and forbidding any U.S. party from doing
business with them… Banks, especially, have been skittish.
“Because a number of the large
international banks have been hit substantially by sanctions over the years,
they’re reluctant to engage in any business that could jeopardize their access
to U.S. markets, said Doug Davison, a sanctions expert at the London-based law
firm Linklaters and former SEC official. ‘They [the banks] have in effect
become the best enforcers.’
“Even though the Office of Foreign
Assets Control, the U.S. governmental agency enforcing the sanctions, is small,
the sanctions are open to interpretation in a way that gives it an outsize
chilling effect, Davison said… ‘We’ve had clients who had transactions that
weren’t problematic,’ he said. ‘But once the transactions are flagged as
potentially problematic, the banks are very reluctant to process them, even if
there is a good explanation, given the substantial risk in making the wrong
call.’
“And the complex legal demands, which
require the attention of an army of compliance officers, along with the
comparatively minor reward for doing business with Iran, mean that a deal is
usually not worth the effort… At this point, banks are so intimidated they’ll
refuse dealing with a company with any exposure to Iran, even if the business
it brings is completely unrelated.
“So INSTEX helps Iran circumvent
sanctions?... No. INSTEX, at least to start, deals with humanitarian aid, which
in theory is still allowed… ‘It’s designed to process transactions that are
permissible under U.S. sanctions but aren’t happening because of
over-compliance on the part of non-U.S. banks.,’ said Jarrett Blanc, the State
Department’s coordinator for Iran nuclear implementation under President Obama.”
Wink wink. It really is a European attempt to erode the impact of U.S.
sanctions on Iran and get Iran back to its targeted nuclear containment pledge.
Simply, Iran asked Europe for a way
to relieve the impact of these new US sanctions if they are expected Iran to
comply with the JCPOA in any way. Europe found a way, perhaps to Make Europe
Great Again.
I’m
Peter Dekom, and I wonder when Trump supporters will wake up to our President’s
proclivity to create problems that he says only he can solve (insert photo op)…
and then not only make things vastly worse… but be completely unable to
implement a solution.
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