Europeans flock to Capitol Hill to save Iran deal
Ahead of Donald Trump’s big Iran speech this week, European companies and diplomats are swarming Capitol Hill to keep Congress from killing the nuclear agreement.
The Europeans are driven by concerns the American president will scupper a landmark diplomatic deal and hurt the Continent’s slowly growing business interests, particularly in energy, in Iran. The behind-the-scenes lobbying push marks an indirect challenge to a White House that the EU has found puzzling and difficult to work with.
In his address, Trump is expected to declare the 2015 Iran nuclear deal — when the U.S., France, Germany, Britain, Russia and China promised to lift sanctions in return for Iran ending its nuclear program — isn’t in America’s national security interest. If he does that, Congress would then have 60 days to decide whether to reimpose sanctions.
An American move on sanctions, even if not followed up by the EU, could ricochet against European investors in Iran. At worst, from the EU perspective, the U.S could freeze the American assets of European companies who do business with Tehran.
“The big players … are saying that even if the U.S. pulled out, they will keep their business operations as long as U.S. does not obstruct European investments” — EU official
The lobbying from Brussels is mainly led by the European External Action Service Secretary-General Helga Schmidt, who was closely involved in negotiating the 2015 accord, with input from commissioners including Miguel Arias Cañete, who oversees energy and climate action and led a business delegation to Tehran earlier this year. In Washington itself, European diplomats to the U.S., including EU Ambassador David O’Sullivan, met with top senators to discuss Iran last week.
EU leaders are weighing in as well. Iran was the main topic of a recent phone call between Trump and U.K. Prime Minister Theresa May.
Tackling the Hill
The EU, Germany, France and Britain have put in a “huge amount of effort” on Capitol Hill in recent weeks, said Ellie Geranmayeh, a senior policy fellow at the European Council on Foreign Relations. “The last few months they have focused their energy on the Trump administration, now they have to shift the focus on Congress, on moderate Republicans, to persuade them that it’s in the interest of U.S. security and global security for the deal to remain intact.”
The priority for European diplomats and businesses is to keep the deal alive. Brussels has received assurances from Tehran that it will continue to adhere to the agreement as long as European investments keep flowing.
European Commissioner for Climate Action and Energy Miguel Arias Canete | Fadel Senna/AFP via Getty Images
“The big players and those who know the market well are saying that even if the U.S. pulled out, they will keep their business operations as long as U.S. does not obstruct European investments,” said an EU official following Iran relations closely, asking not to be named.
“There is a high-level lobbying campaign, kind of like with the Russian sanctions and the Paris climate agreement, on all different levels, mainly led by France, Germany, the U.K. and the European Commission and of course all the companies that have interests there,” the official said.
European efforts failed to keep Trump from pulling out of the climate accord, and European officials only managed to blunt but not kill new American sanctions on Russia adopted in July.
Congress is a tough arena for European companies wanting to lobby against reimposing sanctions.
“I know of a few that are taking maybe indirect actions with Congress, but in reality it’s very difficult for a company, even an important North American one, to interfere on this issue,” one European energy industry official said, asking not to be named. “My perception is that the principle interaction will pass through classic channels in the executive branch, or indirectly across diplomacy between the United States and Europe.”
U.S. hostility to renewing commercial ties with Iran has already acted as a brake on European investment — with companies worried about falling afoul of U.S. rules that could ensnare banks and other financial institutions. European businesses ranging from oil and gas bigwigs to Italy’s fashion industry were expected to rush into Iran after the nonproliferation deal was reached, but their return has been slow and prudent.
“We are also protecting euro investment taking place in Iran” — EU official
The biggest commitments include French oil and gas major Total’s $4.8 billion, 20-year gas development contract announced in July and three aircraft sales deals: European manufacturer Airbus for 100 aircraft, Franco-Italian ATR for 20 and America’s Boeing for 110 aircraft. The manufacturers had to get U.S. licenses to deliver components, and would have to do so again to sell more. There have also been smaller investments such as the British green investor Quercus’ €500 million agreement last month to build a solar power plant.
Companies such as Anglo-Dutch Shell, Austria’s OMV, Russia’s Gazprom Neft and Italy’s Eni have so far only signed non-binding memorandums of understanding for oil and gas developments.
It’s not just the chilliness in Washington that’s slowing European investment. Iran’s unattractive conditions for doing business and high financial risk for foreign investors are also keeping companies away, although Tehran is gradually revamping terms such as restrictive contracts for foreign oil and gas producers. As long as the U.S. refrains from reimposing sanctions, those halting efforts to get back into a country largely closed to investors for more than a decade can continue.
“We are also protecting European investment taking place in Iran,” the EU official said. “As long as the Americans are not obstructing the world will go ahead and we’ll keep investing as long as [European companies] are protected by European governments and the EU.”
Kalina Oroschakoff contributed reporting.
This article was updated with new timing for Trump’s speech.