Those same three nations have jointly established a payment mechanism that would supposedly evade US sanctions on Iranian firms. But this Instrument in Support of Trade Exchanges, or INSTEX, has yet to actually become operational, and there are widespread doubts about its viability as a pathway for any transactions that are not already permitted under US sanction law. As numerous reports have pointed out, even among major European companies that previously expressed interest in continuing to do business with Iran, virtually all of them have pulled out over fear of sanctions enforcement.
In absence of substantial economic benefits from the Joint Comprehensive Plan of Action over the past year, the Iranian regime has presented its would-be European partners with an ultimatum. Mass’ visit to Tehran coincided with the halfway point of the regime’s two-month timeframe for the European Union to take serious measures to counteract the sanctions. The German Foreign Minister evidently sought to moderate Tehran’s expectations during his visit, using a press conference to say that European leaders “cannot work miracles.” Nevertheless, he continued to affirm the EU’s efforts to negotiate and work with Iran to preserve the deal and oppose the US strategy of “maximum pressure” as best they can.
Yet, at the same time, Europe faces coordinated pressure by US officials and other opponents of the Iranian regime, over the prospect of broader cooperation in that very strategy. The prospect for such cooperation appears favorable when focusing on matters other than nuclear enrichment and the specific provisions of the JCPOA. The US exit from that deal stemmed largely from President Donald Trump’s objection to its narrow focus. While visiting London last week, he expressed confidence that his administration’s strategy could convince Iran to give up all nuclear weapons-related work, including not just uranium enrichment but also ballistic missile development and testing.
Trump has also taken issue with Iran’s intrusive regional role, while Secretary of State Mike Pompeo has characterized that role as characteristic of a terrorist-supporting regime that fails to behave “like a normal country.” The European signatories to the JCPOA have variously expressed agreement with these concerns and have even sought to exert pressure on the regime over them, even though they have been far more willing that the Trump administration to separate such issues from the nuclear agreement.
During Trump’s visit, British Prime Minister Theresa May once again affirmed her government’s commitment to the deal but also called attention to the “special relationship” between the United States and the United Kingdom, noting that this could prove instrumental to addressing the broader issues and threats stemming from the Islamic Republic. Meanwhile, escalating tensions in the region underscored the perceived seriousness of those threats.
Last month, White House National Security Advisor John Bolton announced that an aircraft carrier would be deployed to the waters near the Persian Gulf earlier than expected, in response to recent intelligence regarding possible attacks from Iran-backed groups. The flotilla was accompanied by four B-52 bombers that are now stationed in Qatar. Additionally, 900 more US military personnel are being deployed to the region.
In recent days, the General Frank McKenzie, the head of the US military’s Central Command, has spoken to the media about his assessment of the underlying threats and the effects of the deployments. Praising the “enormous capabilities” of the carrier and accompanying military resources, McKenzie said that the Islamic Republic had been compelled to “step back and recalculate.” Its military naval presence has reportedly diminished, although proxy forces on the ground in nearby countries apparently remain as active as ever.
Perhaps in part because of this latter fact, McKenzie also said that he did not believe the threat had truly diminished. In a message that may have been intended in part for European policymakers who are on the fence about the maximum pressure strategy, the general also reiterated that he had personally reviewed the intelligence that prompted the requests for additional deployments, and had determined it to be as “clear and compelling” as any other.
The intelligence reportedly took multiple forms and referred to multiple avenues for the proliferation of Iran-backed threats. Satellite images showed missiles being transported on the decks of small Iranian vessels, while statements from foreign-stationed officials in the Islamic Revolutionary Guard Corps suggested that militant allies had been prompted to prepare for open conflict with US assets and allies.
Furthermore, it was reported on Monday that the roots of this threat may extend back to a time when the JCPOA was still being negotiated. The Washington Examiner reported on Monday that operatives for the Iran-backed Lebanese militia Hezbollah were discovered to be stockpiling the raw materials for explosive devices in London in late 2015. The report went on to allege that this information has only just emerged because “the public and lawmakers were kept in the dark about the matter for years as the UK continued to support the nuclear deal.”
This raises the question of what affect the newfound revelation will have on the decisions of policy decisions of those lawmakers, now that they are already facing other arguments in favor of taking a harder line with the Islamic Republic. The Washington Times emphasized that the London operation “was not an aberration but was part of an international plot by Iran-backed Hezbollah to lay the groundwork for future attacks.”
Indeed, over the course of 2018, Iran reportedly attempted to carry out a number of attacks that may have originated with this overarching plan. These include the thwarted bombing of a gathering of international expatriates organized outside Paris last June by the National Council of Resistance of Iran. Crucially, that rally was also attended by a number of political dignitaries from across Europe and North America, meaning that if the plot had not been uncovered, Iran might already be responsible for recent attacks on Western nationals.
The political implications of this and other plots may still be amplified by the tone of Iran’s communications with Western governments in the midst of escalating tensions with the US in particular. The AP described Foreign Minister Javad Zarif as giving voice to “ramped-up rhetoric” at the time of his German counterpart’s visit. He was quoted, for instance, as saying that the US “cannot expect to stay safe” if it continues to pursue its current strategy. Reiterating a defiant stance taken by many other Iranian officials including Supreme Leader Ali Khamenei last week, Zarif also insisted that the regime will not compromise on its ballistic missile program under any circumstances.
Meanwhile, the Foreign Ministry’s spokesman Abbas Mousavi asserted that President Trump’s statements offering to hold unconditional talks with Iranian officials were belied just days later by his decision to impose still more economic sanctions on Iran, this time targeting its petrochemical industry. Mousavi used this as justification for categorically rejecting the notion of direct talks between Iran and the US. And last week, Rouhani took much the same stance, saying that such talks would only be considered if the US showed “respect,” and resumed compliance with the JCPOA.
Of course, all evidence points to the White House disregarding such ultimatums. In reporting on Mousavi’s statements, Reuters also noted the President Trump had expressed confidence in the ability of his maximum pressure strategy to compel Iran to come back to the negotiating table. He stated that the sanctions had contributed to a situation in which Iran was “failing as a nation.”
It remains to be seen just how the latest sanctions will contribute to that situation once they effectively isolate the Persian Gulf Petrochemical Industries Company. What is already known is that that company, which is accused of supporting the Revolutionary Guards, is responsible for an estimated 40 percent of Iran’s total petrochemical production, and 50 percent of petrochemical exports.
What is also known is the dramatic impact that the preexisting sanctions have already had. Business Insider examined this phenomenon with a focus on “eight unbelievable facts about Iran’s economy.” It pointed out, for instance, that skyrocketing inflation has led to products that cost one dollar in 2018 costing 130 dollars in 2019. Overall unemployment is projected to reach 16 percent last year, while youth unemployment stands around 28 percent. This has no-doubt helped to fuel anti-government protests that began in earnest at the end of 2017 and highlighted the economic problems that had been created by the clerical regime even before US sanctions came back into effect.
The Trump administration presumably hopes to exploit this anti-government sentiment to help facilitate internal change and avoid the danger of military conflict, notwithstanding the recent military buildup on both sides. It is, however, unclear whether that prospect has been communicated to European counterparts during recent visits by White House officials.
The somewhat equivocal statements issued by the British Prime Minister and the German Foreign Minister in recent days invite continued uncertainty about whether or not their respective governments will contribute to any such plan. But as Iranian rhetoric intensifies and the intelligence pointing to Iranian threats continues to be disseminated, those governments may find it more difficult to maintain the JCPOA and the broader status quo.