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Iran sets May 31 deadline in scramble to salvage nuclear deal

By FRANCOIS MURPHY and JOHN IRISH
Reuters

May 25. 2018 11:26AM




VIENNA (Reuters) - European powers have until May 31 to present Iran with a plan to offset the U.S. pullout from its nuclear deal and Washington's renewed sanctions, a senior Iranian official said, with Tehran "weeks" away from deciding whether to quit the pact.

The 2015 agreement between Iran and world powers lifted international sanctions on Tehran. In return, Iran agreed to restrictions on its nuclear activities, increasing the time it would need to produce an atom bomb if it chose to do so.

Since President Donald Trump withdrew the United States this month, calling the agreement deeply flawed, European states have been scrambling to ensure Iran gets enough economic benefits to persuade it to stay in the deal.

But this has proven difficult with many European firms alarmed at the specter of far-reaching U.S. financial penalties.

Nations that remain in the deal - Britain, China, France, Germany and Russia - held a formal meeting on Friday without the United States for the first time since Trump's announcement, but diplomats saw limited scope for salvaging the agreement.

"To be honest with you, we are not confident," a senior Iranian official told reporters shortly before the talks between senior officials aimed at fleshing out the package of measures to keep oil and investments flowing.

Those measures include banning EU-based firms from complying with the reimposed U.S. sanctions, and urging governments to make transfers to Iran's central bank to avoid fines.

"We expect the (economic) package to be given to us by the end of May," the Iranian official said. "I'm sorry to say that we haven't (seen) the Plan B yet. The Plan B has just started to be figured out."

He said European measures would need to ensure that oil exports did not halt, and that Iran would still have access to the SWIFT international bank payments messaging system.

After Friday's meeting, Iranian Deputy Foreign Minister Abbas Araqchi told reporters discussions would continue.

COLD SHOWER

Washington has not only reimposed sanctions but started to make them even tighter. U.S. Secretary of State Mike Pompeo threatened Iran on Monday with "the strongest sanctions in history" if it did not change its behavior in the Middle East.

"Pompeo was like taking a cold shower," said a European diplomat. "We'll try to cling to the deal, but...we're under no illusions."

Iranian Supreme Leader Ayatollah Ali Khamenei set out conditions on Wednesday for Iran to stay in the deal: unless Europe guarantees Iran's oil sales will not suffer, Tehran would resume enrichment activities that are currently prohibited. The deal lets Iran enrich but under tight restrictions.

Khamenei also rejected any new negotiations over Iran's missile program, which was not covered by the nuclear deal .

Iran has so far benefited less from the accord than it had initially hoped, partly because of remaining U.S. sanctions that have deterred major Western investors from doing business with Tehran. Some Western companies have already quit Iran or said they may have to leave because of the new U.S. sanctions.

Trump denounced the accord, completed under his predecessor Barack Obama, partly because it did not cover Iran's ballistic missile development program, its role in Middle East conflicts or what happens after the deal begins to expire in 2025.

French President Emmanuel Macron wants to complement the nuclear deal with negotiations involving all sides over other issues, an idea cautiously received by Russian President Vladimir Putin during talks in St. Petersburg on Thursday .

"Our position is very clear: make the JCPOA (Iran deal) a successful story, then come to us and ask for dialog or discussion or negotiation on other subjects," the Iranian official said.

European nations share some U.S. concerns but say that torpedoing the nuclear deal makes those far harder, not easier, to address. They have said that as long as Tehran meets its commitments, they will stick to the deal.

The International Atomic Energy Agency, which polices the pact, said on Thursday that Iran continued to comply with its terms, but could be faster in allowing snap inspections . The IAEA's director general, Yukiya Amano, briefed participants before Friday's meeting.

(Additional reporting by Parisa Hafezi in Ankara, editing by Mark Heinrich)


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