August 09, 2019
The Islamic Republic has given the EU an ultimatum, saying the Europeans have until September 5 to rescue Iran’s economy or Iran will withdraw from yet another part of the nuclear deal, which would be the fourth stepback from its commitments.
The EU announced last September that it would set up a special system for financing trade between Iran and Europe. That system, called Instrument in Support of Trade Exchanges (INSTEX), has been set up. But after 11 months, the EU has not announced that even a solitary transaction has been conducted via INSTEX.
In recent months, it said the first transaction would come “soon”—but “soon” has not yet arrived.
In announcing the ultimatum to Europe, President Rohani did not say what part of the Joint Comprehensive Plan of Action (JCPOA) Iran would withdraw from next month. So far, Iran has stopped complying with three parts of the agreement:
- The limit of 300 kilos of enriched uranium stockpiled in Iran;
- The cap of 130 tons of heavy water that can be stored within Iran; and
- The upper limit on enrichment of 3.67 percent.
None of those violations of the agreement are considered major or threatening because Iran has not exceeded the limits by much and remains far from being able to build a nuclear weapon.
The head of the Atomic Energy Organization of Iran, Ali-Akbar Salehi, said late in July that Iran might restart its activities at the Arak heavy water nuclear reactor, although he did not link that directly to Rohani’s ultimatum. It is unclear how work could be resumed next month given that Iran poured concrete into the core of the reactor to comply with the JCPOA and a new core for a new reactor is still being worked on by China and Britain.
One possible way that Europe might satisfy Iran and get the INSTEX trade mechanism moving has reportedly been drafted by France. Al-Monitor reported that France proposed to Iran that France provide Iran with a $15 billion credit line that would set the wheels of INSTEX in motion.
News reports said that as of August 7 Iran had not given any response to France.
INSTEX took another hit August 9 when the German named to take over its leadership said he wouldn’t take the job. Bernd Erbel, 72, is a former German ambassador to Tehran. It wasn’t clear why he bowed out a few weeks after being publicly named. There were some news reports saying he had been forced out for remarks deemed critical of Israel and supportive of Iran. But the transcript of the supposed offensive remarks didn’t indicate anything out of the ordinary. German news reports said he had defended Iran’s missile program; but all he actually said was that missile tests did not violate the nuclear deal, which is the German government position.
Still, a vacancy at the top of INSTEX can’t get things moving the way Iran demands.
