The Ambassador of Slovenia to Iran is a sociologist and from that standpoint, believes that women have a deep impact on the Iranian social developments, whereas the gap between the rich and the poor is widening by day in this society and as in other countries, it too is worrisome. She also thinks that Iranians have never cut their relations with the World, esp. the West, even at the worst of times and historical crossroads, and the JCPOA created new motivations in that area. That is why the Slovenian Ambassador hopes that other parties to the JCPOA can continue their cooperation under this agreement and Slovenia, as an EU member, is committed to it. Here is a thorough interview with H. E. Kristina Radej, Ambassador of the Republic of Slovenia to Iran.
AVA Diplomatic’s Exclusive Interview with
Ambassador of the Republic of Slovenia, H.E. Kristina Radej
Interview by Mohammadreza Nazari
Considering that you were here in Iran before reopening of Slovenia’s Embassy in Iran, how do you find the trend of social developments in the country?
My first four-year stay posting to Iran was between 2009 and 2013, when I served as chargé d’affaires to the Embassy of the Republic of Slovenia in Tehran. Now, when I returned after having served three years in Brazil, I once more see – as a professional diplomat, as a woman and as a sociologist – that Iran is a highly dynamic country, impossible to categorise into narrow frameworks of thought.
Iranian society is increasingly being marked by the pronounced intellectual charge of the younger generation. In my opinion, young people, particularly women, will exert an influence on the social changes in the country as they more and more loudly demand greater participation and responsibility in decision making at all levels. It is worrying, however, that many young people are moving abroad, although they would like to live and work at home, but are not given proper opportunities. Judging by my conversations with Iranian expats I can say that most of them miss their homeland very much, are not happy abroad and would like to return.
Another concerning trend is the deepening divide between the rich and the poor, but this is a global trend, not characteristic solely of Iran. As in any other society, I would like to see a faster social and economic development in Iran in order to better meet the expectations of its youth. I would also want to see the alienation of the leading circles from the majority population reduced. It seems to me that two parallel worlds are emerging, which no longer recognise each other, and this seems quite worrying from the sociological point of view.
On the other hand, however, since my return I have noticed great progress in the society’s opening up. I can say with certainty that in a few short years Iranians have become more open, more self-assured and more enterprising. In my opinion, this could partly be attributed to the changes following the signing of the Joint Comprehensive Plan of Action (JCPOA), which established closer ties not only between the Iranian economy and the wider international community, but also between the people.
Even during the hardest moments in history, Iranians never severed their contact with the world, including the West, but I think that the warming of relations following the conclusion of the JCPOA provided them with a new impetus and boosted their self-esteem. This is why I sincerely hope that after the US’s withdrawal, other parties to the JCPOA will manage to continue the cooperation process under the deal, which will enable the Iranian society establish closer ties with the world and promote the economic development of the country possessing outstanding natural and human resources. Slovenia, too, is committed to the continued implementation of the JCPOA and, as an EU Member State, will strive to preserve the deal.
How effectively have Iranian women managed to gain more prominent decision-making positions in different fields?
The protection and promotion of human rights is an important element of Slovenia’s foreign policy. Slovenia was a member of the UN Human Rights Council (UNHRC) in the 2007–2010 period and is a member now, in the 2016–2018 period. In the framework of its membership, Slovenia devotes special attention to traditional human rights priorities: children’s rights, gender equality and women’s rights, protection of vulnerable groups, human rights education and links between the environment and human rights. In 2018, as UNHRC President, the Slovenian permanent representative will endeavour primarily to enhance the Council’s efficiency, increase its reputation and visibility, strengthen the cooperation with other UN entities, improve the constructive atmosphere, foster dialogue, and instil trust in the Council’s work.
The election of Slovenia’s representative to serve as President of the Council has further consolidated the country’s engagement and visibility in the international community on human rights issues.
Effective implementation of women’s rights is also reflected in the number of Slovenian female deputies in the National Assembly, ministers and ambassadors of the Republic of Slovenia – to Australia, Japan, Egypt, Switzerland, Israel, Ukraine, Austria, Greece, Spain, Croatia, Bosnia and Herzegovina, Permanent Representation of the Republic of Slovenia to the UN in New York, Iran and elsewhere.
I am happy to see that the situation of women in Iran has recently improved, too, and that engagement of women in political life is being encouraged. It is a very positive development that in the last parliamentary elections, 17 women were elected into the 270-member Majlis, where female representatives mostly sit on the committee for women and the committee for family issues. I applaud the endeavours of the Iranian government to achieve minimum 20% representation of women in administration and President Rouhani’s goal to have women assume 30% of high-level positions.
Unfortunately, very few women hold the highest positions in Iranian diplomacy, and there is only one female ambassador – H.E. Marziyeh Afkham, Ambassador to Malesia. Not only as a woman, but also in order to achieve greater diversity in points of view and work methods, I personally would like to see more female ambassadors in Iranian diplomacy.
Women are the pillar of Iranian society, and wife and mother is the anchor and connecting tissue of every Iranian family. What is also important is the changing demographics and growing percentage of educated women among the younger generation, which – I believe – will dictate the social development in the Iranian society of the future.
How has the reopening of the Slovenian Embassy in Tehran affected the economic and political ties between the two countries?
The Slovenian Embassy in Tehran was first opened on April 1993. New premises of the Embassy were inaugurated by President Borut Pahor during his visit to Iran in November 2016. In practice, the Embassy became fully functional after my arrival on 4 May 2017. I handed the copy of credentials to the Minister of Foreign Affairs, H.E. Dr Zarif in three weeks time, and to President Rouhani on 20 June 2017. The reopening of the Embassy strengthened the political and economic ties between Slovenia and Iran. In fact, the work itself continued when we temporarily closed the Embassy in March 2013, so we did not have to start from zero. My appointment as Ambassador was mainly dictated by the need for prompt and effective continuation of the work based on long-term excellent relations between the two countries.
Even before the reopening of the Embassy, in January 2016, the Minister of Economic Development and Technology, Mr Zdravko Počivalšek, visited Iran, accompanied by a large business delegation, and held talks with the highest representatives of nine Iranian ministries. On behalf of the Government of the Republic of Slovenia, Minister Počivalšek signed the Memorandum on Economic Cooperation and Memorandum on Cooperation in Energy.
In November 2016, the President of the Republic of Slovenia, Mr Borut Pahor, paid an official visit to Iran. He was accompanied by the Minister of Foreign Affairs, Mr Karl Erjavec, Minister of Economic Development and Technology, Mr Zdravko Počivalšek, and a business delegation composed of representatives of 41 Slovenian companies. During the visit, Slovenia and Iran signed the Agreement on Economic Cooperation, Memorandum on Cooperation in ICT and Memorandum on Cooperation in Science. In addition, the Gorenjska Banka bank established correspondence relations with partner banks in Iran.
The two countries also maintain regular diplomatic dialogue. The protocol on political cooperation between foreign ministries foresees political dialogue in the form of regular consultations at the level of deputy ministers; the latest political consultations at this level were held in Tehran in November 2016, and before that, in Ljubljana, in December 2015.
Progress is visible primarily in the economy. In 2017, the value of trade between Slovenia and Iran amounted to EUR 59 million; the Slovenian exports increased by 18-percent, while the growth rate of the total bilateral trade stood at 24 percent, an upward trend compared to 2016. The value of Slovenian export totalled EUR 54.2 million, exceeding the record value of 2011.
In May 2016, Slovenia hosted the 1st meeting of the Working Group on Energy established on the basis of the 2016 Memorandum on Cooperation in Energy.
In April 2017, a tourism workshop was held in Tehran organised by the Slovenian and Serbian tourism boards, attended by representatives of the agencies Happytours, Kompas and CMT.
Between 14 and 17 June 2017, the Slovenian town of Bled hosted the 3rd NANOAPP International Conference; on the invitation of the University of Ljubljana, it was attended by the highest representatives of the Iran Nanotechnology Initiative Council (INIC), who also held talks at certain Slovenian faculties and institutes in order to identify possible areas of cooperation.
In late November 2017, the multimodal transport connection between Europe and the Middle East became operational, which connects Ljubljana and the south of Iran, and involves rail, sea and road transport on the route Ljubljana-Trieste-Mersin-Razi-Sahlan-Bandar Abbas. The project was initiated in cooperation with the Slovenian company VIT Logistika and the Iranian company Rahanjam International.
The 2nd session of the Slovenian-Iranian joint economic commission is scheduled for the second half of 2018; it will be held on the basis of the recently ratified bilateral Agreement on Economic Cooperation.
The activities of the Embassy focus on various economic segments, primarily on logistics and transport, energy and renewables, IT, nanotechnology, automotive-, electro- and chemical industries, biotechnology, tourism, agriculture, wood processing industries and pharmaceuticals. Furthermore, the Slovenian economy can present in Iran its comparative advantages and implement its know-how in photovoltaics, green technologies, water management and wider environmental issues. The current developments make it possible to establish cooperation in banking and financial operations, which are very important in terms of supporting business in Iran.
As Ambassador, I do every effort to support companies in negotiating business deals and to co-create favourable conditions for their operations in Iran. The cooperation with the Iranian Embassy in Ljubljana is also excellent. However, Slovenian companies do not look for partners exclusively in Tehran, but are willing to cooperate in the territory of the entire country. To this aim, I visited the Khorasan Razavi Province in March, and met with the Mayor of Mashhad, Mr Ghasem Taghizadeh-Khamesi, and members of the Governor’s office and local economic associations. Slovenian companies are interested in obtaining business in the field of infrastructure in that part of the country, and I can proudly say that we encountered many professional and open-minded interlocutors.
Has Slovenia’s Chamber of Commerce started operating in Tehran?
The Slovenian Chamber of Commerce and Industry (GZS) based in Ljubljana has maintained long-lasting excellent cooperation with the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) as well as with other Iranian economic and trade associations, particularly through the interest groups such as the IT, wood-processing and automotive. Before the Embassy in Tehran was temporarily closed, the President of the GZS visited Iran, accompanied by a large delegation, and I hope that we will soon manage to establish a high level of cooperation between the two chambers and between interest groups.
How developed have the political relations between Iran and Slovenia become after the JCPOA?
As I have already mentioned, the relations between the two countries are good, and have recently intensified in target segments. Regular political dialogue is held, and economic cooperation is strengthening considerably. As other EU member states, Slovenia firmly believes that the JCPOA is the key element of the global architecture of nuclear weapons non-proliferation and a central factor of stability in the region. The interest to further deepen the relations is mutual. Following the reopening of the Embassy, we can expect further strengthening at the political level, new possibilities of cooperation in economy, culture, education, tourism, environment, and research and science as well new opportunities for closer people-to-people ties.
When will the joint economic commission be held between the two countries now that the Embassy in Tehran is reopened? What will its agenda be?
On the basis of the recently ratified bilateral Agreement on Economic Cooperation between the Government of Slovenia and the Government of Iran, the first meeting of the Slovenian-Iranian joint economic commission was scheduled in May this year, but was postponed until autumn due to the early elections in Slovenia. According to preliminary arrangements, the meeting will be headed by the foreign minister on the Slovenian side, and the minister for energy on the Iranian side. As both countries are interested in the further strengthening of economic cooperation, the first meeting is expected to review the current economic cooperation and determine guidelines for future work. We expect that working groups will be established in the areas which the joint economic commission identified as areas of common interest. The working group in charge of energy will continue its work, and new working groups will be formed for cooperation on agriculture and food, science and innovation, green technologies, education and sport.
The Slovenian Minister of Economy and Technology reminded in a statement that efforts are focalized on partly producing Slovenian products in Iran. Have there been any negotiations in this regard between the two countries’ officials?
Slovenian companies are already cooperating with their Iranian partners. However, it is left to the discretion of particular companies whether they are willing to relocate their production, in whole or in part, to another country.
I believe that Slovenian exports to Iran could be considerably increased if the companies were not faced by the rigid demands of the Iranian side for ensuring production locally, in Iran. Furthermore, the Slovenian economy would like to see the establishment of successful joint production capacities in Iran, but needs more time and more long-lasting presence in the market in order to determine what products would be most appropriate for the local environment. The Slovenian economy is export-oriented, and Slovenian SMEs are capable of quickly adapting to new circumstances: this is why they were successful in Iran also in the period when other European companies were leaving the Iranian market. I believe that this trend will continue, but we need to take into account the fact that we need pragmatic, flexible and professional partners at all levels of decision-making on the Iranian side.
How effective have banking reformations in Iran been in decreasing banking problems with Slovenian banks?
The Gorenjska Banka bank has established payment and documentary transactions with Iran. The Slovene export and development bank, SID Bank, approved a credit line to the Iranian Pasargad Bank to up to EUR 100 million. The main purpose of the credit line is to establish the necessary infrastructure for funding Iranian buyers, thereby providing support to Slovenian companies for successful realisation of their business endeavours in the Iranian market.
In a meeting between EU Ambassadors and Iran’s Minister of Economy and Treasury, which you also attended, fighting money laundering received increased accentuation. What should be done to make this happen?
In the context of striving for the integrity of the international financial system, Slovenia supports Iran’s endeavours for adopting comprehensive legislation and concrete measures against money laundering and funding of terrorism. We also applaud the fact that Iran has already adopted the majority of legislative acts and measures to this aim, but has not yet finalised the ratification of the United Nations Convention against Transnational Organized Crime as the final approval by the Guardians Council is needed for its implementation.
Your Honour met with Iran’s ICT Minister. Did you negotiate any IT and telecommunication cooperation with Mr. Jahromi?
With Minister Jahromi we resolved the problems which arouse during the implementation of the arrangements under a contact on cooperation between a Slovenian and an Iranian IT company. We agreed to hold regular direct dialogue and to timely inform each other if the problems recurred.
In addition, we reviewed the possibilities of cooperating on some other projects. Minister Jahromi is considered a friend of Slovenia’s; he has visited Slovenia, has learned first-hand of the potential of the Slovenian economy and has an open invitation to visit Slovenia again. I would also like to stress that the ministers in President Rouhani’s Government are outstanding experts and promote timely implementation of the projects which in the past were often subject to lengthy delays due to administrative obstacles.
What potentials are there to boost transportation and IT cooperation?
In conversation with Iranian partners, it was determined that the Slovenian Port of Koper could act as an ideal spring board and entry point to the EU for Iranian products. Additionally, it offers businesses the possibility for setting up logistic and distribution centres. The greatest potential for cooperation is car transport in which the Port of Koper has specialised becoming one of the frontrunners in technological advance. This year, the Embassy is planning to organise a detailed presentation of the Port to the interested business community in Tehran.
IT sector is also particularly important for further bilateral economic cooperation. The basis for enhanced cooperation in IT is the Memorandum of understanding on cooperation in ICT concluded between the Slovenian Ministry of Public Administration and the Iranian Ministry for Communication and Information Technologies. During Minister Počivalšek’s visit in early 2016, an agreement was signed to establish a joint Slovenian-Iranian venture to operate on the Iranian ICT market and offer innovative solutions for mobile payment transactions.
In this field, the Slovenian company Iskratel stands out, and other Slovenian businesses offer also IT training, especially for the banking sector. In fact, the fast paced development of the Iranian banking sector offers companies specialising in banking IT numerous opportunities for long-term cooperation. In the past, Slovenian SW companies already successfully cooperated with the Iranian central bank and the stock exchange, and I believe that they continue to use Slovenian solutions in their operations.
What consultations have been conducted between Iran and Slovenia to cooperate in the fields of biotechnology and nanotechnology?
The countries have mutual interest in nanotechnology: Iran is the leading Asian actor in this field and sees Slovenia as an entry point for cooperation and knowledge transfer to the EU. During President Pahor’s visit, a delegation of representatives from the Universities of Ljubljana and Maribor together with the Director of the Slovenian Research Agency (ARRS) visited the Iran Nanotechnology Initiative Council (INIC) and the Ministry responsible for science and research. ARRS Director signed a Memorandum on cooperation in science with INIC. In June 2017, 3rd Nanoapp international conference was held in Bled; on the invitation of the University of Ljubljana, it was attended by the highest representatives of INIC. They held meetings with representative of Slovenian universities and institutes with the aim of defining areas of cooperation. Especially promising is their cooperation with the Slovenian Innovation Hub, while unexploited potential exists also in the field of water protection. Slovenian-based Mediterranean Monitoring Institute already collaborates with Iranian partners in different fields, particularly in the area of sea monitoring and clean water.
What are the potentials between the two countries to have cooperation in the field of organic agriculture and medical herbs?
In this regards, allow me to mention my recent talks with Director General for International Affairs at the Iranian Ministry of Agriculture Mr Hooman Fathi who confirmed mutual interest in enhancing cooperation in agriculture, forestry and food, and including this area in the agenda of the Slovenian-Iranian joint economic commission. During the visit of Minister of the Economic Development and Technology Mr Počivalšek in 2016, the countries committed to cooperate in agriculture research and training, medical plants, agricultural machinery, food production and food security, and in regulation in agriculture, forestry and the veterinary area. Recently, the Iranian side submitted two proposals for cooperation agreements in the veterinary field and plants. Moreover, the Embassy closely cooperated with representatives from the Ministry of Agriculture during the promotion of the World Bee Day in Tehran on 20 May.
Upon Slovenia’s initiative, May 20 is named the World Bee Day at the UN General Assembly. Does Iran cooperate with Slovenia in commemorating this day?
Yes, on the initiative of Slovenia, the UN declared 20 May as World Bee Day in December 2017. We are grateful to Iran for the continued support to the initiative, as both countries are known for their well developed beekeeping traditions.
This 20 May, the first World Bee Day was observed in cooperation with our Iranian partners. Around 200 guests attended the reception and cultural programme event, hosted by the Embassy of Slovenia in Tehran, among them representatives of the diplomatic corps, the Iranian Ministry of Foreign Affairs and the Ministry of Agriculture, and representatives of Iranian beekeepers associations and organisations, businesses and 12 media outlets. This was a Slovenian diplomatic initiative which echoed and generated great interest all around the world.
An international beekeeping academy will be set up in Slovenia in order to protect bees and other pollinators, and our country will further strive to protect bees also in the framework of the EU.
With a view to enhancing cooperation in this area, we also advocate for establishing cooperation between the beekeepers associations of both countries. In addition to bee products, Slovenia pays special attention to apiculture, an area in which we could share our experience with Iranian partners and actively participate in the education of young people on the importance of bees in the global food chain.
Slovenians have always been a beekeeping nation, and currently among global leaders with five beekeepers per 1000 inhabitants. Slovenian beekeepers enjoy unrivalled reputation thanks to their expertise and advanced apiculture technologies as well as unique historic characteristics, such as the painted beehive panels, beehives, traditional hives and the renowned Carniolan honey bee (Apis mellifera carnica). As the Carniolan honey bee is part of the Slovenian national identity, the Embassy decided to set up a traditional beehome in the garden and grow this species of bees also in Tehran.
What Iranian products have the highest rate of export to Slovenia?
In 2017, polyethylene continued to account for a high share of Iranian exports to Slovenia – as much as 77%, followed by OEW for airplanes and other aircraft (8%), switches, relays and fuses (5%), electrodiagnostic instruments (3%), lamp parts and equipment (2%), carpets and floor coverings (1%).
What are Slovenia’s most important exported items to Iran?
In 2017, the highest share in Slovenia’s export to Iran was medication (35%) followed by millstones and grindstones (15%). Smaller shares were attributed to hydraulic turbines (3%), electric motors and generators (3%), paper and cardboard (3%), pigments and other applications containing titanium dioxide (2%), UV or infrared medical appliances (1%), integrated ovens (1%), measuring instruments, devices and machines (1%), aluminium products (1%), glass products (0.7%).
What measures has the Slovenian Embassy come up with to expand cultural relations with Iran in 2018?
The agreement between the Governments of Slovenia and Iran on cooperation in education, culture and science was signed in April 1994. In July 2011, during the visit of the Iran foreign minister Dr Salehi an Exchange programme in culture, science and education for 2011–2014 was signed based on the agreement, encouraging direct cooperation in all spheres of culture, especially through translations and publications of literary and artistic works by authors of both nations. The Programme is in force until a new one is signed.
Among special cultural events hosted by the Embassy I must highlight the exhibition “Plečnik’s Ljubljana”, on the work of the renowned Slovenian architect Jože Plečnik, who left an imprint on the modern architectural identity of Ljubljana, but also Prague and Vienna.
We also wish to present the intangible cultural heritage of Slovenia. Within EUNIC, we will participate in the 2018 European Film Festival by hosting a renowned Slovenian director of documentaries. The Embassy will also host different Slovenian musicians and support their cooperation with Iranian musicians.
At the recent 36th FAJR International Film Festival in Tehran, the Slovenian feature film ‘Rudar’/’The Miner’ received three awards. During the final ceremony on 26 April, in the presence of the film’s director and screenwriter Ms Hanna Slak, Slovenian artists were awarded the following prizes: Leon Lučev for the best actor, the critics’ acclamation and the honorary diploma within the Peace Prize category.
In Slovenia, the Iranian film is highly appreciated, which is why we will strive to strengthen cultural cooperation particularly in this area. I hope for closer cooperation with the Iranian Youth Cinema Society (IYCS) and the Tehran International Short Film Festival (TISFF). At a recent meeting with IYCS Director Mr Seyyed Sadegh Mousavi, we agreed to explore the possibilities of study exchanges for their members in Slovenia. We also intend to organise a special week of Slovenian Short Film in Iran and a similar event in Slovenia, probably sometimes next year.
What agreements have been ironed out by the two countries to serve the purpose of academic collaborations?
A number of scientific institutes and universities of Slovenia expressed their interest in deepening their cooperation with Iran. The opportunities for deepening scientific cooperation have already been identified (in environmental issues, forestry; inter-university cooperation). Cooperation in Karstology has been established since 2001 and we wish to deepen and widen this cooperation to include sustainable water management and preservation of wetland, which is an important topic and a national priority in Iran due to the dry climate.
During President Pahor’s visit, the delegation of representatives from the Universities of Ljubljana and Maribor together with the Director of the Slovenian Research Agency (ARRS) visited the Iran Nanotechnology Initiative Council (INIC). ARRS Director and INIC Secretary General signed a Memorandum of cooperation in science which acts as a framework for future cooperation between the two countries also in nanotechnology.
I have been in close contact with INIC Secretary General Prof. Saeed Sarkar, since I firmly believe that nanotechnology will become one of the most promising sectors in future, in which partners and businesses from both countries could jointly access global markets.
How helpful was the implementation of the JCPOA to the economic relations between Iran and Slovenia?
As already mentioned, the conclusion of the JCPOA and withdrawal of a majority of sanctions against Iran significantly contributed to the enhancement of bilateral economic ties between our two countries. With its 80 million inhabitants, Iran is for Slovenia the third most important business partner among the Gulf countries.
In 2017, trade between the two countries amounted to EUR 59 million.
The volume of trade peaked in 2011 with nearly EUR 100 million, while between 2013 and 2015 it decreased due to sanctions imposed. In 2016, trade increased by 68%, mainly as a result of Slovenian exports which rose by 70% compared to 2015. Strong growth in trade continued also in 2017.
The main drivers of this growth were undoubtedly the conclusion of the JCPOA and the ensuing strengthening of economic ties between the two countries. This also corresponds to the trends at the EU level, where in the first 10 months of 2017, trade between Iran and the EU totalled EUR 20.2 billion, accounting for a 52.8% increase compared to the same period in 2016. In the same period, Iran exported more than EUR 10.1 billion worth of goods to EU member states, which is an 83.9% increase compared to the same period in 2016. In this period, imports to Iran from EU member states amounted to over EUR 10.8 billion (31.5% more than in 2016).
How would Trump’s decision to return sanctions against Iran affect the economic tie between Iran and Slovenia? Can the imposition of such embargos and blockades challenge these relations?
US President Trump’s decision of 8 May to withdraw the US from JCPOA and reimpose American sanctions had been anticipated for a long time and came as no surprise to Slovenia or the EU. We regret the President’s decision. We believe that it should be in the interest of the international community to preserve the agreement which strengthened the global system of nuclear non-proliferation. We hoped for a certain compromise, presented by E3, but it seems that President Trump had made his decision long before that.
The withdrawal of the US from the JCPOA and the reintroduction of unilateral sanctions will no doubt have an impact on economic cooperation with Iran. Especially problematic will be the functioning of EU banks which are highly exposed and dependant on the USD market and the American financial institutions. The impact on Slovenian and European businesses will highly depend on the implementation of EU measures to counter American sanctions.
Despite EU anti-measures, we can expect more reservations from international banks due to US exposure, while smaller banks usually dispose of only limited resources to fund bigger projects. In my opinion, this will make Iran interesting mainly for European SMEs.
In the current structure of Slovenian economy, these companies are at the core of exports, so I believe that the economic ties between Slovenia and Iran will suffer less compared to some other EU member states. Certain Slovenian SMEs which are not affected by secondary US sanctions have already expressed interest in continued business with Iran. The only remaining pressing question is that of financial transfers and bank routes that will have to remain open.
How successful will European countries be in thwarting the effects of US sanctions against Iran? Is there such strong will in the EU?
It is still too early to talk about effectiveness of European protection measures. Based on our past experience from the 90s, when the EU used similar protection mechanisms, we can assume that they will probably prove successful to a certain point, although the current context is completely different.
After the unanimous backing of all 28 EU governments at the leaders’ meeting in Sofia on 16 May, the European Commission has taken steps in four directions:
1 – Launched the formal process to activate the Blocking Statute by updating the list of US sanctions on Iran falling within its scope. The Blocking Statute forbids EU companies from complying with the extraterritorial effects of US sanctions, allows companies to recover damages arising from such sanctions from the person causing them, and nullifies the effect in the EU of any foreign court judgements based on them.
2 – Launched the formal process to remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the
European Union, in Iran. This will allow the EIB to support EU investment in Iran and could be useful in particular for small and medium-sized companies.
3 – The Commission will continue and strengthen the ongoing sectoral cooperation with, and assistance to, Iran, including in the energy sector and with regard to small and medium-sized companies. Financial assistance through the Development Cooperation or Partnership Instruments will also be mobilised.
4 – The Commission is encouraging Member States to explore the possibility of one-off bank transfers to the Central Bank of Iran. This approach could help the Iranian authorities to receive their oil-related revenues among others.
Here, I would like to stress that the future of the JCPOA and the opening of economic flows with European countries does not rest solely with the EU. During the negotiation process, Iran will have to demonstrate greater flexibility and approach further discussions with more pragmatism. At the moment, Iran is only focusing on requirements towards the EU and other signatories of the JCPOA. But let us not forget, that the US withdrawal from the agreement was criticised by all other parties and a number of other countries that have been doing business with Iran, because the US decision will also affect their economies. If Iran fails to take into account the current situation and pragmatically adopt further measures to preserve the JCPOA, and as a consequence the pace of its economic development, the international support for further cooperation will soon falter. In this regard, faster implementation of structural reforms in the country is of paramount importance, as well as the adaptation of standards in different economic sectors.