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European Union ‘Special Purpose Vehicle’ Hits Iranian Terror Roadblock

Effort to devise mechanism to circumvent U.S. sanctions on Tehran appears stalled, as European nations slap their own financial penalties on Islamic Republic

German media reported this week that Berlin will ban Iran’s Mahan Air, as European Union countries mull additional sanctions on the Islamic Republic following terrorist plots on the continent. Mahan is Iran’s second-largest carrier and has four weekly flights between Tehran and Duesseldorf and Munich.

The European Union, meanwhile, earlier this month imposed financial penalties on Iran’s intelligence ministry, which was busted for planning summertime attacks on regime opponents in France and Denmark. This prompted the French government in October to seize the assets of two individuals connected to the foiled attack on a meeting of a dissident group near Paris. For its part, Copenhagen recently recalled its ambassador to Tehran after accusing the Islamic Republic of planning to target three members of an Iranian separatist group living in the Scandinavian nation.

Accordingly, even as Brussels ostensibly remains committed to upholding the 2015 nuclear accord from which United States President Donald Trump withdrew in May, its stance towards the mullahs appears to be shifting somewhat.

This is evidenced perhaps foremost by the failure to date to finalize a much-hyped “Special Purpose Vehicle” to circumvent renewed American sanctions and allow for continued non-dollar trade with Iran. EU foreign policy chief Federica Mogherini said in December that the mechanism would be completed within the month, although officials have conspicuously gone silent on the matter.

In addition to Iran bringing its terror war to European capitals, the delay has been partially attributed to fears that the SPV’s establishment within France or Germany could expose them to secondary U.S. sanctions. These countries have come under immense pressure from the Trump administration, which has taken a hardline on Iran and threatened the EU with a trade war.

“The U.S. ambassador to Germany has put a lot of effort into bringing about changes,” Benjamin Weinthal, Research Fellow at the Washington-based Foundation for Defense of Democracies, explained to The Media Line. “If you look closely at the statement released by the U.S. government it speaks about Mahan’s ban as a way to ensure the security of passengers. If Americans feel threatened due to Iranian activity in Europe, German commercial ties with the U.S. could, in turn, be endangered.”

Analysts also point to an emerging divide within the EU regarding Tehran, as some states have started advocating for a tougher approach to the Islamic Republic.

“This does not mean, though, that the Europeans have given up on protecting the [Joint Comprehensive Plan of Action, as the atomic agreement is formally known],” Cornelius Adebahr, Non-resident Associate at Carnegie Europe, stressed to The Media Line.”The bloc is, however, beginning to differentiate between issues having to do with Iran.

“At the same time, the SPV is still very much in progress but it has run into difficulties related to disagreements on where it should be hosted and what authority should control it. Nonetheless, talks between France and Germany are continuing, especially since they are now under political pressure to deliver on the promise to form it.”

As regards Berlin’s decision to blacklist Mahan Air, Adebahr believes “this is simply to emphasize the airline’s relationship to and management by the IRGC [Islamic Revolutionary Guard Corps],” whose elite Quds Force is responsible for conducting operations in war-torn places like Syria, Iraq and Yemen.

Many observers agree that Germany’s move exemplifies a nascent European effort to de-couple the nuclear issue from Iran’s territorial expansionism as well as its ballistic missile program. If so, this would constitute a marked policy shift and, ironically, bring Brussels closer in line with President Trump.

“So far these are just baby steps,” Weinthal qualified, adding that these actions nevertheless should be encouraged. “Europe still needs a comprehensive strategy against Iran and the best one is currently being promoted by the U.S.

“For there to be a large-scale European change likely would require increased incidences of Iranian ‘nefarious behavior.’ This is possible,” he concluded, “because Iran’s entire ideology is based on exporting terrorism.”

(Charles Bybelezer is managing editor of The Media Line.
Victor Cabrera is a student intern in The Media Line’s Press and Policy Student Program)