By M.A. Saki

Austria has strong stake in preserving JCPOA: ambassador

February 28, 2018

TEHRAN - Stefan Scholz,Vienna’s ambassador to Tehran, believes that the 2015 nuclear deal will continue to stand even in the most unwanted event that the United States withdraws from it, provided that Iran continues to fulfill its obligations, thus enabling European countries to follow suit.

Ambassador Scholz, whose country hosted the nuclear talks between Iran and other parties including the European Union, tells the Tehran Times that “Austria has a strong sense of stakeholdership for maintaining and preserving” the nuclear agreement, officially called the Joint Comprehensive Plan of Action (JCPOA).

Following is the text of the first part of the exclusive interview:

Q: Mr. Ambassador, Donald Trump has threatened to withdraw from the international nuclear deal. Don’t you think in that case the world would be pushed toward “anarchy” and “insecurity”, especially as the agreement is being endorsed by the UN Security Council and the IAEA just last week once again has confirmed that Iran is abiding by the agreement?

A: Austria is fully committed not only to the letter but also to the spirit of the agreement and is doing its very best to make sure that the lifting of nuclear related sanctions has a positive impact on trade and economic relations with Iran, including benefits for the Iranian people through inclusive growth.

Moreover, Austria has been the leading figure in the International Campaign to Abolish Nuclear Weapons and partnering with Iran was instrumental in the creation of the landmark Treaty on the Prohibition of Nuclear Weapons, adopted in July 2017.

Not only for this reason but also because my country is the seat of the IAEA and has had the honor to host the nuclear talks leading to the JCPOA. Therefore, Austria has a strong sense of stakeholdership for maintaining and preserving the JCPOA.

We are painfully aware that the JCPOA has reached a critical juncture. So far the JCPOA has fulfilled its non-proliferation objective and this exclusive non-proliferation focus of the agreement should not be diluted.

At present we all still hope that all sides will abide by the agreement. If the U.S. decided to leave the JCPOA much would depend on the reaction by the Iranian side and whether or not Iran is willing to continue to uphold its part of the deal in case that Russia, China and the EU already have signaled that they are willing to stick to it as well. We would encourage our Iranian partner to exercise strategic optimism and to adopt a “YES WE CAN” approach.

It will be decisive that Iran doesn’t let itself get provoked into a course of actions which then can be qualified by the IAEA as a breach of the nuclear deal.

If Iran keeps up with the spirit and the letter of the agreement it could happen that eventual non-compliance of other parties becomes an issue.

It is also clear to us that any Iranian reaction would be related mainly to the extraterritorial application of U.S. primary sanctions, punishing European companies active in Iran. Here some work already has been done with countries like Austria at the fore.

A U.S. pullout of the JCPOA does not automatically mean the end of this important agreement.

Austria, followed by Denmark and Italy recently concluded sovereign investment guarantee schemes which serve as examples how to shield companies from the negative effects of possible unilateral extraterritorial sanctions. Another idea that has been floated is that European financial institutions provide credit line extensions to this effect. Europe and Iran have agreed to ensure that investments can flow into the country and that the economic relations get strengthened.

For the time being we do hope that our joint efforts to convince the U.S. Congress and the U.S. administration about the benefits of the JCPOA will bear fruit. So let’s cross the bridge when we come to the water.

Whether or not the JCPOA would survive a U.S. abrogation is not clear to any of us at this stage.

Q: Don’t you think that a U.S. abrogation of the nuclear deal would humiliate the European Union as a key party to the multilateral agreement?

A: I do not think that this question should be put to the European Union given all the efforts that we have launched.

Therefore, and allow me to reiterate this once again, Europe has been willing and continues to be willing to stick to the JCPOA as long as Iran abides by it.

As an important bloc in the world we are obviously rising to the challenge. The JCPOA is one of the two biggest achievements of the European Action Service that they have achieved so far. This is part of the track record for the success of doing things jointly together on the foreign diplomacy side.

Why should the European Union be humiliated because of honoring its international obligations? Therefore, at this stage we should be forward looking and positive and not engage into hypothetical discussions.

Q: Don’t you think that we will face another serious dispute and security problem if the nuclear deal is killed?

A: Definitely not. A U.S. pullout of the JCPOA does not automatically mean the end of this important agreement.

The nuclear deal will continue to stand even in the most unwanted event that the United States withdraws from it, provided that Iran continues to fulfill its obligations, thus enabling European countries to follow suit.

Austria, followed by Denmark and Italy recently concluded sovereign investment guarantee schemes which serve as examples how to shield companies from the negative effects of possible unilateral extraterritorial sanctions.

We still hope to convince our U.S.-friends of the benefits of the agreement. If they leave the JCPOA it can still be upheld by Iran and the other signatories to it, signaling to the whole world that Iran, the region and the international community at large has chosen to stick to the peaceful path outlined in the JCPOA. We therefore urge all parties most urgently to continue to fully implement this agreement.

Since you put the question twice to me, my answer with the common saying is that let’s cross the bridge when we come to the water.

Q: How can Iran, the EU along with Russia and China protect the nuclear deal without the U.S.?

A: The question is not “how” we can do it but “whether we are willing to do it”.

The European Union is certainly willing to hold up its part of the deal, ideally together with the U.S.

Austria is doing its fair share for the implementation of the JCPOA by promoting deep and comprehensive economic ties aimed at fostering a high-employment economy delivering social cohesion.

We do hope that Iran too sees the continued merits of this agreement, again ideally with the U.S. on board as well.

On the very personal note, I also think completely separated from the nuclear agreement. I would like to say a few words on regional issues. I personally would see a number of opportunities to seek out whether there are possibilities for cooperating on selected areas of common interest in the region.

We first need to identify low profile civilian tasks such as humanitarian assistance or improving resilience for the protection of cultural property in armed conflict or for Heavy Urban Search and Rescue missions. This would help build trust, predictability and confidence, creating a new culture of doing things jointly – this would be extremely important for our political narrative.

We appeal to Iran – independently from the nuclear issue – to act constructively and responsibly by joining – as a first step – existing informal, working level networks of government, multilateral, and international partners aimed at sharing experiences and deepening practical field oriented international cooperation in developing civilian capabilities for stabilization and peacebuilding. Austria has just started such an engagement with Iran in partnering on a whole-of-government approach to Heavy Urban Search and Rescue.

Iranian banks in terms of compliance, which is the key parameter, have to upgrade their internal technical rules to international compliance requirements.

The dynamics of the conflicts are difficult and complex but I have seen most recently instances where Iran has played a mediating role which went largely unnoticed. This happened for example in the crisis following the Kurdish independence referendum, where Iran helped to prevent an escalation through diplomatic means. Any of these positive stories can create an entry point which should be widened. And we should aim at doing things in ever more focus areas jointly.

I personally would start with migration management as Europe needs a strong partner in the region. This would include building perspectives for Afghan youth to return or to stay in their home country in the first place. This kind of cooperation could be expanded also to the coordination on the civilian stabilization and reconstruction of the ISIS-liberated areas in Iraq and Afghanistan.

The longer-term goal should be to adapt our respective policies and practice to new priorities and to the evolving context and to balance hardline stances that we see on all sides with more pragmatic forms of cooperation.

Q: Iran has been complaining that major European banks are reluctant to enter transactions with Iran. What steps are needed to remove this problem?

A: I have a few things to say on this matter. One is to congratulate Iran on two most recent moves on it has taken.

I’d like to warmly congratulate all the Iranians and particularly the economic team headed by President Rouhani on the upgraded credit rating, which is well deserved and has been supported by Austria in the respective OECD [the Organization for Economic Cooperation and Development] committee meeting of Export Credit Agency Group.

This happened in January. Iran was upgraded from level 6 to level 5 which also means that credits will be made less expensive for Iran and it’s a sign of hope that things are improving.

Also I congratulate the Iranian parliament, Majlis, on passing legislation for Iran becoming member of the Convention against Transnational Crime. It’s a very significant move. Austria stands ready to partnering with Iran on the joint implementation.

“Definitely” there will be no security problem if U.S. quits nuclear deal.

These two measures create security for evaluation of Iran’s performance regarding anti-money laundering and anti-terrorism financing by the FATF (Financial Action Task Force). The FATF just last week recognized the progress Iran has made on its reform path and decided to continue the suspension of counter-measures while urging the Iranian partner at the same time to address the remaining items by completing and implementing necessary reforms.

But one key remaining problem is that Iran’s regulatory framework for banking and financing -- because of decades-long financial sanctions - urgently needs upgrading and adaptation to  current standards in the international banking system, and this includes, inter alia, the urgent adoption of the banking bill that has been sitting in Majlis for some time. In addition, Iranian banks in terms of compliance, which is the key parameter, have to upgrade their internal technical rules to international compliance requirements. In the EU, for example, the so-called MIFIR III regulation just went into effect, which will introduce drastic changes to the rules of the game for financial institutions and the level of protection for consumers of financial products – especially in terms of informational materials and the sale of investment products.

Austria as all so often in Iran has had a trail-blazer function that has served as a model for other countries to follow.

On September 21, 2017, Oberbank AG concluded a Framework Agreement with 14 Iranian banks. The agreement is intended for the financing of goods and services to be delivered by Austrian exporters to Iranian companies with a repayment period of two years or more.

One of the conditions precedent for financing is to get cover through the official Austrian Export Credit Agency, acting as agent of the Republic of Austria, requires a sovereign guarantee of the Iranian Ministry of Finance and Economic Affairs. Terms and conditions of the loans will be in compliance with OECD rules.

The projects shall be nominated by Iranian authorities and must also fulfil the criteria of OeKB and Oberbank. Considering that, the loans will most likely be used for infrastructure and upgrading the industrial infrastructure, healthcare and other projects being important for the Iranian population.
 
Six fifth generation hospitals are currently under considerations two of which are already under construction with Austrian chief planners responsible for overseeing the program.

And also other talked about projects in the transportation and steel sector are closer to implementation phase.

We have been a close friend and partner of Iran during good times, but also during times of hardship for Iran. The first documented diplomatic contacts go back exactly 700 years (1318) and the first real government-to-government contact and dispatch of envoys was established 500 years ago on the initiative of Ismail I.

This year we are celebrating 160 years of full diplomatic relations. The friendship treaty of 1858 is significant as it was signed by the Austrian side on behalf of territories that today make up 12 member states of the EU. This first pan-European treaty consequently was issued in French, Italian, German, and of course in Farsi language.

Our special partnership ever since have been marked by a high level of predictability, trust and mutual friendship.

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