European Union External Action

European Commitment to the JCPOA - Keynote speech by EEAS Secretary General Helga Schmid

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The European Union warmly welcomes this initiative and the opportunity this forum provides today – to bring together those committed to developing economic relations between Iran and Europe.  This new opening in relations between Europe and Iran was made possible by the "nuclear deal" with Iran.

The Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear program, as we call it, was a major political achievement and an excellent example of successful multilateral diplomacy. It demonstrated what can be achieved through cooperation rather than confrontation.

The deal is of particular significance to the European Union. We were the facilitators of the nuclear talks. We continue to play a major role during the implementation phase by coordinating the work of the Joint Commission responsible for overseeing the implementation of the deal.

As somebody who has been part of the negotiations since the beginning, I can tell you that it was not an easy task to overcome mistrust and reach agreement. Over 2 years ago, I was practically living in the Coburg hotel in Vienna, negotiating until the early morning. If I look back, few predicted that we could reach a deal. And that it would hold.

We proved them wrong. The deal has been agreed, is being implemented and is delivering on its objectives. I will not hide from you the fact that the deal is put into question in harsh terms by some in recent months.

But the European Union, as well as many in the international community, has been very clear regarding its continuing unequivocal support for the JCPOA. This was reaffirmed just two weeks ago, in New York at the UN General Assembly, when the EU High Representative Federica Mogherini chaired a Ministerial meeting of the E3+3 and Iran.

Over there and now, for the last months and for the next, we have passed a very clear message: the nuclear deal is working and delivering and the world would be less stable without it. The EU fully supports the JCPOA and expects continued implementation by all parties. It is a multilateral agreement, endorsed by the United Nations Security Council. As Europeans we will do everything to make sure it stays.

Now, let me explain in more detail: why the nuclear deal is so valuable, why it is to the benefit of Europe and Iran, what the European Union is doing to support  EU-Iran economic relations

Let me start by recalling what has been achieved during the past 2 years, both in terms of nuclear security, but also in the area of sanctions-relief and economic developments.

The JCPOA is the result of 12 years of highly complex negotiations and hard-won international unity. It delivers on its primary objective: to prevent Iran from developing a nuclear weapon. There is no credible peaceful alternative to the JCPOA.

The JCPOA is based on strong monitoring, verification, and transparency mechanisms. The International Atomic Energy Agency (IAEA) confirmed 7 times that Iran is in compliance and undertook several hundreds of site visits including unannounced inspections in the first 12 months. 

So the JCPOA is delivering on its main goal: ensuring Iran’s nuclear program remains exclusively peaceful. The EU also launched civil nuclear cooperation activities with Iran under the so called annex III of the JCPOA to make the deal more durable (by bringing Iran into the international nuclear safety frameworks).

It is also important to recall that the JCPOA is a multilateral understanding; it was endorsed by the UN Security Council, through resolution 2231. This agreement does not belong to a single country. Therefore, it cannot be changed unilaterally.

Some critics say that the agreement did not address Iran's regional activities. It is very important to understand what this agreement is and isn't about. This is a non-proliferation agreement. It is NOT an agreement on regional matters or human rights.

We remain concerned about some of Iran's activities in the region as well as the ballistic missile programme. We believe that Iran needs to do more to find lasting, peaceful solutions for regional conflicts. However it is important not to mix these two things up. The JCPOA should not be blamed for something it is not supposed to address. At the same time, we will not be better placed to address any of these broader issues by ditching the JCPOA.

If the JCPOA did not survive, Iran could go back to enrichment and this would bring further regional instability, including a possible nuclear arms race, especially at a time of volatility in the Middle East and Gulf region. This is no coincidence that countries all over the world, including in the Gulf, are in favor of the JCPOA.

The nuclear question was only one part of the deal: the other side was the comprehensive lifting of UN, EU and US nuclear related sanctions.

Sanctions were never intended as a goal in themselves. They were always part of an approach to bring Iran to the negotiating table regarding its nuclear capabilities. As a result, Iran agreed to very significant restrictions on its nuclear development capabilities in exchange for the lifting of nuclear related sanctions.

We recognise that it is important that the benefits of the Iranian deal are felt directly by the Iranian people and Iranian businesses. This is necessary for the success of the deal, but it is also in the interest of the EU, its Member States and economic operators.

This is why I am here today and this is why we welcome initiatives such as the EU-Iran Forum.

As a result of the deal and its implementation a new chapter has opened in the EU's relations with Iran. As you know, on 16 January 2016, the International Atomic Energy Agency verified the implementation by Iran of the nuclear measures. On the same day, UN, EU and secondary US economic and financial nuclear-related sanctions were lifted.

More than 330 persons and entities have been removed from the EU sanctions list.

As a result, new business opportunities with Iran have opened up. Implementation Day meant the re-opening of Iran to world markets.

Trade between Iran and Europe increased 94 percent in the first half of 2017 from the same time in 2016.

IMF reported that Iran's GDP grew by 7.4% in the first half of 2016/17 and the World Bank projects it will grow at an annual rate of 5.2 % by 2020.

Oil production and export have reached pre-sanctions level – and new foreign investments are coming into the energy sector.

Billion of outstanding oil debts have been paid back.

Foreign Direct Investment is increasing, the Iranian government reported a growth of 55% compared to the previous Iranian year.

Trade in goods has also increased. To just take the transport sector, some European car makers have doubled their sales, joint ventures have been agreed for production in Iran and delivery of Airbus planes has started as well.

At the European Union we support economic cooperation between Iran and Europe - at the political level and at the policy level.

We had a successful visit by the EU HR Federica Mogherini together with 7 European Commissioners to Iran in mid-April 2016. This clearly expressed the political will at the highest level from the EU side to develop a gradual, comprehensive and constructive engagement with Iran across a number of different areas. On this occasion a joint statement was agreed between High Representative and Vice-President Mogherini and Foreign Minister Zarif covering future areas of cooperation. This joint statement lays the ground for the renewed bilateral relations between the EU and Iran and to turn the page from a previous period. A political dialogue is taking place twice a year, where I am leading the EU side. We also hope to open soon an EU diplomatic Representation in Tehran (a "Delegation").

We are now working together in a variety of areas: from macro-economic dialogue, trade and investment talks to economy and science, from education to transport, from migration to environment and energy, from humanitarian issues to human rights.

Beyond the political level, technical meetings take place on a regular basis between the EU and Iranian Ministries. We discuss renewable energy, climate change, EU internal market procedures for food safety, railway and maritime transport, customs…these are just some examples.

Of course the establishment of well-functioning banking services is key to the integration of Iran into the international economy. 

As EU, we have been doing all we can to provide clarity on the regulatory framework in place to the EU’s financial and banking system. We have provided a fifty pages guidelines on the new situation after we lifted the nuclear-related sanctions and, together with the Member States, we have been engaging the private sector and our partners in the world.

Obviously the European Union - or any EU government - is not able to force banks and other businesses to take certain decisions in commercial matters. But we continue to reach out to the financial sector and our banking system to promote engagement with Iran.

It is also worth recalling that we have already witnessed a significant improvement in our banking relationships:

  • A number of European banks have started to facilitate transactions and are establishing correspondent banking relationships with Iranian banks. More and more European banks are providing payments channels to their customers and conducting transactions.
  • More than 30 Iranian banks are reconnected to SWIFT and more than 200 international banks have started correspondent relations with Iranian banks.
  • Large credit lines have recently opened, mainly from Asian countries, let's hope larger European banks will follow soon!
  • Of course, there have been challenges in what is a gradual process of reconnection to the world economy.
  • There are also things, Iran has to do: we welcome Iran’s efforts to address the issue of anti-money laundering/combating the financing of terrorism. It is critical to adjust to current international banking standards and comply with the international regulatory standards in the field of financial services. We encourage Iran to continue these efforts and stand ready to provide support where we can (as we have done already in the framework of the Financial Action Task Force/ FATF).
  • After such a long time when Iran was cut off from international trading and banking, it was clear that it would take time for the international business community to adjust to the new reality post-Implementation Day.
  • As a sign of confidence in our future financial and economic relations, the European Commission has proposed to allow the European Investment Bank operating in Iran in the future.
  • All 28 European Union Member States Governments, grouped in the EU Council, have welcomed the expansion of the EU's economic relationship with Iran. They also support Iran's WTO accession and reintegration into the global economy.

 

Work on full and strict implementation of the JCPOA by all sides needs to continue. At a time when we are trying to tackle the threat arising from North Korea's unchecked nuclear capacities, I want to recall the critical value of the JCPOA in preventing nuclear proliferation. The world does not need a second nuclear proliferation crisis. One is already too many.

Let me reassure you once more, the EU has invested a great deal in this agreement – and we will honour it as long as Iran does. We are not naïve; we are principled and believe in the principle of pacta sunt servanda.

The Persian poet Rumi once said: “Raise your words, not voice. It is rain that grows flowers, not thunder.”

I should like to thank the Europe-Iran Forum for this initiative, for having developed a fascinating programme and most of all for having brought Iranian and EU economic operators together once more. I am impressed by the range and depth of knowledge and experience of all the participants in this event. I wish you a fruitful second day!