Iranian Supreme Leader Ayatollah Khamenei has publicly announced his conditions for negotiating with European countries to save the nuclear deal, officially known as the Joint Comprehensive Plan of Action (the JCPOA).

Speaking on May 24, Khamenei adopted an aggressive tone, lashing out at the United States and taking a hard stance toward the European countries that the JCPOA hinges on — the United Kingdom, France and Germany. 

There is nothing unusual about Khamenei proclaiming his demands for negotiations, whether of a technical or political nature. He frequently did just that during talks that led to the signing of the JCPOA in 2015. In fact, Iran’s appointed negotiators regularly tried to use the Leader’s stringent and pessimistic conditions as bargaining chips to pressure the West. In other words, the Khamenei took on the role of “bad cop” throughout negotiations. These new conditions for negotiating with Europe fit well into the same model.

However, this time, the Supreme Leader did not specify a timeframe for negotiating with the Europeans. In the past, Iranian diplomats had repeatedly set a timeframe of a month or two for deciding the fate of the JCPOA, but it appears that Khamenei’s conditions will need more than a couple of months to work out.

Khamenei’s aggressive tone seems to be a reaction to what he has experienced in the past, or at least that is the way he is presenting it. “The more we gave in, the more they wanted,” he said, pointedly referring to nuclear negotiations with European countries in 2004 and 2005. “We saw that they were being too pushy. They were really impudent. So we said the game was over. We broke all the seals, we put UCF [uranium enrichment facilities] to work…and we got 20 percent [enriched uranium]…they came and insisted — in a sense, pleaded —that we give up 20 percent enrichment and limit our centrifuges to five or six thousand.”

Justifying Conditions

Khamenei explained the moral of the story. “In their own minds they were the ones who recognized Iran’s right to enrich uranium,” he said. “Yes, they did recognize it, [but] it did not originate with the negotiations. Make no mistake: It originated with our progress.” Here the Supreme Leader was taking a jab at Rouhani government officials who had insisted that the negotiations acknowledged Iran’s right to enrich uranium, while at the same time justifying his philosophy for setting conditions for the Europeans.

“The president [Rouhani] said that the Americans have lost moral, legal and political credibility in the world,” Khamenei said. But he reminded his audience that negotiations had always been about lifting sanctions. “That is why we started and continued the negotiations…If we don’t get this then any other achievements will not be worth much.” Negotiations had nothing to do with trying to discredit the US or driving a wedge between the US and Europe, he said.  

So what are the Supreme Leader’s conditions?

 

Conditions 1 and 2: Europe Must Prove it is Honest

European countries, said Khamenei, “went against their word some 13 or 14 years ago,” adding that they “didn’t keep their promise.” Now was the time, he announced, for them to “prove that they won’t repeat the same untruthfulness and prevarication.” He described how, since the deal was implemented, “the US violated the JCPOA several times, and Europe remained silent. Europe must compensate for that silence." These two demands are dependent on the other six conditions set out by the Leader. 

Condition 3: Introduce a Security Council Resolution against the US

“The US has rejected [UN] Resolution 2231,” said Khamenei. He called for the European countries with membership to the UN Security Council “to bring a resolution against the US' violation of it.” 

The Supreme Leader is well aware that the US has the power to veto any resolution at the Security Council. He also knows that such a resolution would be vetoed. So his use of the word “bring” is telling. What is important to him is that the resolution is actually put forward regardless of the fact that it would never go through.

On May 14, writing to UN Secretary General António Guterres, Iranian Foreign Minister Mohammad Javad Zarif wrote that the US decision to abandon the JCPOA “is in material breach” of the 2015 Security Council Resolution 2231 that endorsed the nuclear deal. Russian Foreign Minister Sergey Lavrov and Federica Mogherini, the High Representative of the European Union for Foreign Affairs, hold similar views. And, on May 11, German Chancellor Angela Merkel said: “I believe that it’s not right to unilaterally cancel an accord that was negotiated, that was confirmed in the UN Security Council unanimously.”

So it would appear that the Europeans agree with Iran, but the situation is more complicated than just arriving at an agreed viewpoint. “If a signatory to the agreement announces that one of the parties has not abided by its commitments, then the Security Council must put to vote the draft of a new resolution within 30 days,” ” said the UN Secretary General’s Deputy Spokesman Farhan Haq. “If such a resolution fails to win passage, the previous resolutions on sanctions against Iran would again become effective, unless the Security Council decides otherwise.”

So, whatever action Iran decides to take, the situation is bound to become more complex. Realistically, the most Khamenei expects is what Zarif expects, as set out in Zarif's letter to UN Secretary General António Guterres: “I urge the United Nations to keep the United States accountable for its unilateral and irresponsible conduct, which will detrimentally affect the rule of law, multilateralism, and the very foundations of diplomacy.” 

The UN Secretary General has yet to respond, and neither have European countries shown any sign that they plan to appeal to the Security Council.

Conditions 4 and 5: Missiles and Regional Policies are Off the Table

“Europe must promise that they will not raise the issues of missiles and the regional affairs of the Islamic Republic,” said Khamenei in his speech. On May 8, in a joint statement, Britain's Prime Minister Theresa May, French President Emmanuel Macron and German Chancellor Angela Merkel expressed their concern about Iran’s ballistic missile program and its regional policies. “Because our commitment to the security of our allies and partners in the region is unwavering,” said the statement, “we must also address in a meaningful way shared concerns about Iran’s ballistic missile program and its destabilizing regional activities, especially in Syria, Iraq and Yemen.”

But Khamenei rejected the idea that Iran would discontinue its role in the region. Iran’s presence in the region and the support Iran attracts from Middle Eastern countries was not something the Islamic Republic could “give up,” he said. 

So it can safely be assumed that the Supreme Leader will reject any call for changes to Iran’s missile program or to its regional policies. Nevertheless, Khamenei’s tone on regional issues was somewhat more moderate than his tone about the missile program. It is likely that Iranian negotiators will have more room to maneuver when it comes to the role played by Iran in Syria, Iraq and elsewhere in the region — and that when it comes to the missile program, they will have far less (if any) flexibility.

 

Condition 6: Stand Up to American Sanctions

“Europe must encounter any sanction against the Islamic Republic and explicitly stand up to American sanctions,” said Khamenei. This condition is similar to a clause the Supreme Leader included in a letter he sent to President Rouhani on October 21, 2015, just after the JCPOA was adopted and before it went into effect on January 16, 2016. “During the whole eight-year duration of [the nuclear agreement], imposition of any sanction with any excuse…by any of the countries that were parties to the negotiations would mean that the JCPOA has been violated,” he wrote. This condition was not achievable, and neither did it work in practice. European countries cannot fight American sanctions against Iran. And they are unwilling to engage in arguments with the US over the matter. In fact, it is not farfetched to believe that European countries could impose their own sanctions on Iran in connection with violations of human rights.

Condition 7: Guarantee Oil Sales

“Europe must guarantee that Iran’s oil will be sold,” demanded Khamenei. “If the US damages the sale of our oil, we must be able to sell as much oil as we want. Europeans must guarantee that they will compensate for the loss, and that they will buy Iran’s oil.”

In April, Iran exported 2.62 barrels of crude oil per day. Out of this total, Europeans purchased 815,000 barrels, or less than 30 percent. It is expected that, with the US exit from the JCPOA, these exports will drop, especially if the US enforces “secondary sanctions,” i.e. sanctions on third parties. The United States has given customers of Iranian oil 180 days before secondary sanctions kick in.

Banks play a key role in oil exports. If the banks deny their services to the European importers of Iranian oil, then these importers must stop buying from Iran. The best that Europeans can hope for is to preserve their 30 percent share through schemes set up by the European Commission. Europeans are also planning to arrange it so that Iranian oil proceeds from its European sales will be paid to the Iranian Central Bank in one lump. This could be relatively reassuring to the Iranian side.

Besides Europe, there are other customers for Iran’s oil, including India, South Korea and Japan, all of which have been buying more than 30 percent of Iranian oil exports, but which are likely to decrease their imports from Iran.

But the bigger challenge for Iran is investment in the petroleum sector, investment that only big oil companies can afford and have the technical means to do. These companies are precisely the customers that are likely to abandon Iran first.

 

Condition 8: Guarantee Monetary Transactions

“European banks must guarantee transactions with the Islamic Republic, both government transactions and private ones,” declared Khamenei. Since May 18, the European Commission has been exploring the possibility of taking action related to banking transactions with Iran. First, Europe will try to remove certain obstacles so that European banks will be in a position to assume responsibility for financing projects in Iran. Second, Europe wants to restore rules that would help shield European companies from American secondary sanctions in case they want to trade with Iran. There are also various proposals from European officials and experts to boost this trade, including conducting transactions through the European Central Bank, the creation of a special bank for financial transactions with Iran, and for the European Bank for Reconstruction and Development to get involved. According to experts, such actions, taken together, can keep average-size European banks on safe ground so financial transactions with Iran can continue.

No “Tom and Jerry”

But all such actions and guarantees will be part of a “new deal” to save the JCPOA. To receive these guarantees, Iran will have to make concessions because in this new environment, Iran — more than any other country — needs to preserve the nuclear deal and to sell its oil. Reading between the lines of Khamenei’s speech, it is easy to detect anxiety about this reality. 

"All their plots have failed,” Khamenei told his audience, referring to the United States. “You can compare the Islamic Republic now to 40 years ago, and see that it is moving forward with various capabilities. So, all their plots have failed... just like Tom from the well-known Tom and Jerry cartoon. And they will fail again in the future.”

Unsurprisingly, the Supreme Leader did not talk about possible concessions to which Iran might agree. But he is well aware that now that “Tom” has left the nuclear deal, the story of bargaining with Europe will not be a light, humorous one. It will be far removed from an amusing episode of Tom and Jerry.

 

More on the aftermath of Trump’s withdrawal from the nuclear treaty with Iran:

Revolutionary Guards Respond to Pompeo’s “Empty Bluff”, May 23, 2018

The 12 Demands of Pompeo's New Iran Strategy, May 21, 2018

When Will US Sanctions Hit Iranian Oil Sales?, May 18, 2018

The JCPOA: A Missed Opportunity, May 17, 2018

The Future of Iran’s Economy as the US Bows Out of the Deal, May 10, 2018

What are Iran’s Choices as US Abandons the Nuclear Deal?, May 9, 2018

Khamenei’s “Heroic Flexibility 2.0”, May 9, 2018

What you Need to Know About Trump and the Nuclear Deal, May 8, 2018

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