US warns France over its trade mission to sanctioned Iran

By Henry Samuel

John Kerry has warned France that sending a business delegation to Tehran could undermine sanctions, strengthening Iran's hand on nuclear issue

America warned France on Wednesday that allowing over 100 business leaders to visit Iran on a trade mission risked undermining sanctions by giving the impression that Tehran was “open for business”. The 116-strong French delegation - with representatives from companies including Peugeot, Renault, Total and Airbus - was the largest of its kind from Europe since Iran signed an interim agreement limiting its nuclear programme last November. In return, America eased sanctions in what the Obama administration insisted was a “limited and reversible” way. But Benjamin Netanyahu, the Israeli prime minister, predicted that any relaxation of sanctions would cause the entire embargo on Iran to crumble. By sending a trade delegation to Iran so quickly, the US fears that France might be vindicating Mr Netanyahu’s criticism. John Kerry, the US secretary of state, told Laurent Fabius, his French counterpart, that the timing of the business mission was “not helpful”. Wendy Sherman, the US under secretary for political affairs, told the Senate foreign relations committee on Tuesday that “Tehran is not open for business” because “our sanctions relief is quite temporary, quite limited and quite targeted”.

In response to Mr Kerry, the French foreign ministry insisted that Medef, France’s business organisation, had organised the visit to Iran on its own initiative “in an exploratory capacity and in compliance with France’s international engagements”.

Pierre Gattaz, the head of Medef, said the delegation had not violated the limited sanctions relief offered by the nuclear agreement signed in Geneva. “We faultlessly respected the Geneva Convention of last November - we’re familiar with this framework,” he said. “There are other European country delegations who were in Iran.” But French business leaders were “summoned” to the US embassy in Paris before leaving for Tehran to receive a warning about the partial nature of the relaxation of sanctions. According to Le Canard Enchainé, the investigative weekly, Peter Harrell, a US deputy assistant secretary, warned that Iranian banks were still embargoed. But one anonymous Medef leader was quoted as saying that America had its own commercial ambitions in Iran and Washington’s real aim was to disadvantage the competition. “The Americans only started rigorously applying sanctions against future competitors when they intended to come back to Iran,” he said.

The spectacle of European business delegations visiting Tehran barely two months after the Geneva agreement supports Israel’s view that any easing of sanctions will end up reducing the pressure on Iran’s economy by more than America wants. This could reduce America’s bargaining power over Iran, making a final settlement of the nuclear issue harder to achieve.

In theory, a final agreement should succeed the Geneva accord by July 20. In reality, experts believe that any such settlement would be exceptionally difficult to achieve, even if the pressure on Iran’s economy is sustained.

”I think it’s doubtful that the parties will be able to achieve a comprehensive deal given the deep differences between them,” said Mark Fitzpatrick, a non-proliferation specialist at the International Institute for Strategic Studies. In order to ensure that Iran would need at least six months to “breakout” and build a nuclear weapon, the number of functioning centrifuges inside its enrichment plants would need to be reduced to “about 4,000,” added Mr Fitzpatrick. At present, Iran’s scientists are operating over 10,000 centrifuges with another 9,500 standing idle. Ensuring that Iran dismantles most of these machines, which have been installed at huge cost, would be a stretching task for diplomacy at the best of times. If sanctions now crumble, critics fear that Iran would be even less likely to make this concession.