EU REACHES COMPROMISE ON UNSCR 1737 IMPLEMENTATION

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 000189

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR EUR/ERA (CHASE) AND NEA/NGA

E.O. 12958: DECL: 01/19/2017
TAGS: PREL EFIN KDEM PHUM PARM PINR SNAR IR EUN
SUBJECT: EU REACHES COMPROMISE ON UNSCR 1737 IMPLEMENTATION

REF: A. SECSTATE 2659


B. BRUSSELS 119

Classified By: POLMINCOUNS LAURENCE WOHLERS FOR REASONS 1.5(B) AND (E)

SUMMARY AND COMMENT
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1. (C/NF) After protracted negotiations, the Political and
Security Committee (PSC) of the EU Council reached agreement
January 18 on a draft text on EU's implementation of UNSCR

1737. The draft must still be considered by the foreign
ministers' General Affairs Council (GAERC) on Jan 22, and
then be fleshed out with legal and implementation details.
However, the EU appears on track to having a comprehensive
implementation agreement over the next month. According to
various PSC sources, the agreement was a compromise which
allowed both sides of the debate to claim a victory of
principle. On the one hand, it satisfied UK/French
requirement that the EU be able to go beyond the UNSCR
resolution. It also reportedly includes provisions to include
the full Nuclear Suppliers Group list for dual use technology
and suggests at least implicitly that the EU will go beyond
the UNSCR in casting a wider net on travel and visa bans. On
the other, the Italy/Spain coalition successfully insisted
that the text remain firmly in the context of the UN
criteria. In addition, a paragraph expressing concern about
Iran's support for terrorism was stripped from the final
text. Sources emphasized that the UNSCR discussion was
defined narrowly in part because a broader, experts-level
discussion of EU policy towards Iran will be pursued by the
German presidency in February. END SUMMARY

THE COMPROMISE
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2. (C/NF) According to various PSC contacts, the Jan 18 PSC
discussion on UNSCR 1737 was much longer than expected. The
UK, supported (but quietly) by the French, the Danes and
unexpectedly strongly by the Belgians, pushed for a robust
implementation close to the original EU-3 position. Italy
and Spain, led the opposing camp, reportedly arguing for the
"principle" that the EU must respect the "multi-lateral" UN
resolution. As EU president, Germany maintained studied
neutrality (but one PSC source complained that the drafting
session was drawn out because the German rep was on a tight
leash and constantly conferring with Berlin).


3. (C/NF) The ultimate compromise was that EU sanctions
would be "based on the criteria" of 1737, but would
implicitly be able to go beyond it -- as one source put it,
"there will be a wide interpretation of 1737". Although
critical legal drafting remains to be done, the key decisions
included an agreement that the full Nuclear Suppliers Group
list will be used for preventing imports/exports of dual use
technology, and that the EU will go beyond the UN list of
names for the visa/travel bans. Not considered was any
action against banks, one source noting that banks were not
mentioned in the UNSCR and that the PSC agreement was
specifically focused on UNSCR implementation. Absent too was
any expression of concern about Iranian support for terrorism
or role in the region: the Spanish/Italians expressed
concern about the impact of a confrontational approach on
Iran and argued that Iran's actions should be part of a
planned experts discussion of Iranian policy scheduled for
February.

NEXT STEPS
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4. (C/NF) Sources agreed that considerable work remains to
be completed over the next month. First, foreign ministers
must formally ratify the PSC draft in Monday's GAERC. Then,
action will move to the External Relations (RELEX)
Commission, whose experts will need to flesh out legal
requirements. In parallel, the PSC is scheduled next week to
consider the addition of names to the UN's 1737 Annex (our
contacts were unsure whether new names would have to be
considered individually or in a block). This would set the
stage for the adoption of binding implementing regulations in
matters in which the Commission has competence (e.g., trade),
possibly as early as the February 4 GAERC, but might well
take a couple additional weeks.


5. (C/NF) Although there was apparently little overt
discussion in the PSC of the impact of the UNSCR on European
business, a French permrep contact conceded that there were
concerns, noting that the question is complicated for Europe,
unlike the US which has not been in business with Iran for
last 25 years. The same contact hastened to add, however,
that it is time for Europe to share some of the burden that

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US companies have shouldered for so long vis a vis Iran. The
French indicated that EU members could be receptive to the
(U.S.) argument that measures beyond 1737 could be explicitly
designed to prevent proliferation financing rather than
punish the Iranian people or European business. Comment:
Prevention could be an effective angle from which Treasury
Deputy Secretary Kimmit could discuss U.S. measures and
encourage parallel European measures, including, inter alia,
designations, end of export credits. End Comment

POLITICAL DIALOGUES
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6. (C/NF) Sources noted that the UNSCR decision should be
seen in the context of the more comprehensive discussion of
Iran in February, first by member state experts and then
presumably by foreign ministers at the February GAERC. That
discussion will reportedly include the resumption of three
now-moribund dialogues with Iran on: political issues
(including the regional situation, human rights and
counter-narcotics). It will also look at ways to increase the
impact of the European civil society programming in Iran,
both at the bilateral and EU level.


7. (C/NF) According to contacts in the Council Secretariat
and the UK Permrep, the EU-3 will try to use the human rights
dialogue to lure Mediterranean (esp. Italy, Greece, Spain)
and Nordic members into a broader policy debate on Iran that
would address Iran's support for terror and destabilizing
actions in the region. While the EU is expected to reaffirm
its commitment to the human rights dialogue with Tehran,
member states are ambivalent about simultaneously raising the
counter-narcotics dialogue. Some have expressed concerns
that Iran could try to link the two dialogues. Conducting
"business as usual" on counter-narcotics or political issues
could also dilute pressure on Tehran over its non-compliance
on the nuclear file. As a complement to resurrecting EU-Iran
dialogues, the EU-3 and the Council Secretariat were also
encouraging the EU to launch a more comprehensive discussion
of Iran in its schedule of regular bilateral dialogues with
the Gulf Cooperation Council, Egypt, Russia, Euromed and
other concerned parties.

Broadcasting
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8. (C) European Commission officials and German and UK
Permrep contact stated that the EU is supportive of
increasing international Farsi-language broadcasting into
Iran. They want to know more about U.S. programming and
plans in this regard (Ref A). At the same time, the EU
machinery itself has little know-how and may look to member
states to take the lead. Indeed, the Commission has no
standing functional expertise in third country broadcasting.
Any EU-funded country-specific broadcasting initiatives are
normally vetted by an ad hoc panel comprised of outside
experts, EU regional assistance specialists and policymakers.
According to a UK contact (strictly protect),the
Netherlands, and Czech Republic have expressed particular
interest in broadcasting. The British Broadcasting
Corporation (BBC) is planning to send a delegation to
Brussels in late February or early March to drum up support
for EU-sponsored broadcasting from senior policy officials in
DG Relex and the Council Secretariat, as well as likeminded
Members of European Parliament. (COMMENT: In advance of
this UK initiative, Washington may wish to explore with HMG
the possibility of low-key bilateral consultations between
technical and policy experts that could be expanded to
include potential EU (or other regional) providers of
funding, content, and transmission facilities. END COMMENT)

Civil Society Programming
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9. (SBU) The EU currently has no formal coordination
mechanism related to exchange information on civil society
and other assistance programming. EU member states with
representation in Tehran coordinate their bilateral efforts
informally. The need to increase the impact of the European
civil society programming in Iran, both at the bilateral and
EU level is widely recognized. According to Commission
sources, the EU may consider the creation of a new internal
consultative mechanism.

Internal EU Intelligence Sharing Difficulties
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10. (C/NF) A likeminded EU member state contact noted that
the EU Situation Center had difficulty disseminating evidence
to the 27 member states of Iran's support for terror and
destabilizing regional behavior because of EU national
governments' justifiable concerns about safeguarding

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intelligence information. As an unintended consequence,
likeminded member states could not deploy intelligence to
full effect in persuading skeptical EU member states
representatives of the need for tough sanctions against Iran.
Comment: We may wish to consider a USG briefing of EU
member states' Political and Security Committee Ambassadors.
We conducted a similar exercise with the EU regarding the
China Arms embargo in which U.S. briefers traveled to
Brussels to present specific and detailed information. That
sharing of information proved to be pivotal in bringing about
a policy reversal within the EU. In the case of the arms
embargo, the information was shared with a small number of
named individuals because of releasability constraints. In
order to influence a decision by consensus on a matter of
Common Foreign and Security policy, we will need to engage
all member states. Such an information exchange should
become easier once the US-EU Security of Information
Agreement is signed early this year (ref b).

GRAY
.