Despite nuclear deal, EU firms still cautious on Iran

Notably, addressing the AIPAC summit this year, Trump administration officials and senior leaders of the Republican Party did not bring up any steps against the nuclear deal. Vice President Mike Pence told the gathering, “America will no longer tolerate Iran’s efforts to destabilize the region and jeopardize Israel’s security,” and promised that Trump “will not allow Iran to develop a nuclear weapon.”

However, Pence made no reference to the nuclear deal. Meanwhile, House Speaker Paul Ryan described the JCPOA as “an unmitigated disaster” and discussed potential new sanctions against Iranian airlines and the Islamic Revolutionary Guard Corps. Yet with regard to the nuclear accord, Ryan merely vowed to “tighten the screws on Iranian compliance” and “rigorously enforce this deal.” These statements are in line with Trump’s earlier stated commitment to “rigorously enforcing” the JCPOA.

As such, for the time being, it does not appear that the United States intends to unilaterally cease to comply with the nuclear deal. Thus, it can be reasonably assumed that the United States is unlikely to apply secondary sanctions on European firms and other businesses that wish to engage in economic exchanges with Iran green-lighted by the JCPOA. These removed restrictions include several banking, insurance, energy and other sanctions, which were waived and/or terminated with the implementation of the JCPOA.

The first litmus test in this regard will be the extension of sanctions waivers by the Trump administration in May, a key US obligation under the JCPOA.

However, beyond the likely extension of these waivers, future US policy toward Iran remains unclear. From a strategic point of view, both a unilateral US abrogation of the JCPOA and a re-imposition of previous non-nuclear sanctions carry potentially significant political costs. Considering their commitment to the nuclear deal as well as their own commercial interests, major US allies — including JCPOA signatories such as France and Germany — would certainly not see such measures positively, as long as Iran abides by the nuclear deal.

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