The Europeans are falling over themselves to keep the 2015 Iran nuclear deal. That will be difficult with the reimposition of sanctions that took effect November 5—a number of major firms have pulled out of Iran—but they’re trying anyway.
Their idea is to set up an “alternative payment system” by which companies can avoid the U.S. financial system and still trade or barter with Iran. For weeks, various European nations played a game of “not it” over who would end up actually hosting the work-around system. Austria, once floated as a contender, gracefully rejected the honor. Nominated next: Luxembourg, which also had reservations. Now, France and Germany, after initially ruling themselves out as hosts, have agreed to team up to revive the payment channel effort despite the threat of U.S. penalties.
Their new payment channel is a risky move. It could serve—indeed, given Iran’s past behavior, it would almost certainly serve—as yet another mechanism the regime uses to fund its terrorist and militaristic adventurism. Businesses and other entities using it could also be vulnerable to U.S. secondary sanctions, as Trump administration officials have warned time and again. It’s unclear if the Europeans have paused to consider the national security implications of their effort. Iran is fortified with sanctions relief from the 2015 deal, which only asked Tehran for some limits on its nuclear activity and in exchange provided the regime with stacks of cash. Tehran is free to channel its profits to fund malign activity in just about every other arena.
The Europeans appear fully aware of these risks—but don’t care.
Just this past June, European authorities stopped an Iranian plot to bomb a dissident gathering near Paris. Months later, Danish authorities intercepted an Iranian assassination plot. Targeted asset freezes from France and a temporary diplomatic recall from Denmark followed, but Tehran continued to reap its nuclear deal profits. Rarely have we seen countries try so hard to preserve economic benefits for a state that carries out terrorist plots on their soil.
Europe is also already being forced to confront the strength of the U.S. sanctions regime as multinational corporations exit Iran’s tainted marketplace. Swift, the Belgium-based cooperative that provides financial messaging services, has also given in to the administration’s pressure campaign. Treasury Secretary Steven Mnuchin said this month that the cooperative would disconnect the Central Bank of Iran and certain designated banks.
Why European policymakers are so determined prop up the government in Tehran, even as Iranians risk their lives to express their outrage at the regime, is a mystery. No doubt some can’t let go of the Obama-era fantasy that if we allow the government to profit from international trade, it will stop menacing the Middle East. Others may feel the pressure of Iran’s threats: On Monday the head of the country’s atomic agency warned of “ominous” consequences if Iran doesn’t see its promised economic benefits. “Ominous” in this context would seem to mean: Give us sanctions relief or we will build a nuclear bomb and use it. As for the regime’s proliferation of terrorism, the Iranians can’t threaten to restart it—since they never stopped it to begin with.
The wiser course for Europe is to stop indulging Iran’s terror-sponsoring leaders and, instead, sign on to Americans efforts to forge a better deal—one that doesn’t ignore Iran’s malign non-nuclear activity. At some point, Iran must be forced to choose between exporting terror and nuclear blackmail, on the one hand, and channeling the resources it has to its people, on the other.
