Democrats Worry About U.S.-Europe Divide Over Iran Deal

Senate Democrats are keeping a watchful eye on Europe in the aftermath of President Donald Trump’s decision to leave the 2015 Iran nuclear deal, amid questions about how European countries will handle impending U.S. sanctions impacting foreign business in Iran.

Trump said last week that the U.S. would be reinstating the “highest level” of sanctions on Iran, which has seen a gradual increase in European business since the nuclear deal. France, Germany, and the U.K. have vowed to preserve the 2015 deal and keep economic benefits flowing to Iran. Now both hawks on the Hill and Democrats are weighing how capitals across Europe will deal with the impending U.S. sanctions.

“If I was a company in any of those countries, I’d probably be visiting with my government saying, ‘what are you going to do?’” said Bob Menendez, the top Democrat on the Senate Foreign Relations Committee. “What do their countries do as it relates to having blocking techniques? Are their countries going to push back against the United States?”

French energy giant Total said Wednesday that, considering the risk of U.S. sanctions, it will not be able to continue with a gas development project in Iran unless it can obtain a waiver. “Total has always been clear that it cannot afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by US banks for its worldwide operations,” the company said in a release. The administration has said the sanctions will affect relevant, existing contracts in three to six months.

Delaware senator Chris Coons said the “biggest threat” created by the president’s nuclear deal withdrawal is the divide forming between the U.S. and Europe.

“My hope is that some last-minute diplomacy will actually lead to a second agreement between the United States and its … European allies that will avoid the clash of our imposing secondary sanctions,” he said. “But it’s not guaranteed, and it’s unclear what path they’ll take if forced to choose between defending their own national interests and partnering with us.”

Maryland senator Ben Cardin suggested that the Europeans could prioritize saving the deal over their economic health.

“You’re going to find that it is likely that if they have to choose an economy, they will choose the U.S. economy over the Iranian economy,” said Cardin. “But if they have to choose the deal, because they made certain commitments to Iran to stay in the deal, then the economics of it may not dictate the final outcome.”

European officials, working to keep the nuclear deal and Iran’s economic benefits alive, are exploring options to protect foreign firms doing business there from U.S. sanctions. But they have acknowledged the challenges of finding effective solutions.

“We have to be realistic about the electrified rail, the live wire of American extra-territoriality, and how that can serve as a deterrent to businesses,” British Foreign Secretary Boris Johnson said Tuesday.

Connecticut senator Chris Murphy said that while the Europeans will try “desperately” to keep Iran in the deal, U.S. sanctions may prove to be “too much” in the end.

“The Europeans’ preference is to keep doing business with Iran to make sure Iran continues to comply with the agreement,” he said. “But the secondary sanctions in the end may force them to walk away from enough business that the Iranians back out of the agreement.”

“They’ll try to protect themselves from the impending sanctions,” Virginia senator Tim Kaine predicted. He added: “Sanctions against our European allies are going to continue to fray our alliances, and we shouldn’t be in a position now where we’re fraying alliances and causing our adversaries to band together.”

A senior State Department official said last week that the administration is seeking to replicate the effort to economically isolate Iran that took place in the run-up to the 2015 deal.

“The leverage that we gained from the secondary sanctions is what we used throughout the world with engagement to get countries to partner with us to build the economic isolation of Iran. That’s what we want to do again,” the official said. “It’s not about sanctioning foreign companies; it’s about using the leverage and engaging the way we did before.”

National Security Adviser John Bolton said Sunday that it’s “possible” that European companies that continue doing business in Iran will face U.S. sanctions. “It depends on the conduct of other governments,” he said. “Why would any business, why would the shareholders of any business, want to do business with the world’s central banker of international terrorism?”

Top European diplomats met with Iran’s foreign minister this week and committed to measures “to strengthen the deal,” including “deepening economic relations with Iran,” continuing Iranian energy sales, and “further investments in Iran,” among other measures.

“We are determined to ensure that the JCPOA stays in place,” said Federica Mogherini, the European Union’s foreign policy chief. “We know it is a difficult task, but we are determined to do that and we have started to work to put in place measures that help to ensure that this happens.”

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