IRAN-ARMENIA PIPELINE DEMARCHE; MEDIA REPORT U.S.

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000815

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/19/2017
TAGS: ENRG ETTC PREL KMDR IR AM
SUBJECT: IRAN-ARMENIA PIPELINE DEMARCHE; MEDIA REPORT U.S.
GAVE ARMENIA A "YELLOW CARD" ON IRAN RELATIONS

REF: A. A) STATE 79300

B. B) BAKU 766

C. C) YEREVAN 331

D. D) YEREVAN 328

Classified By: CDA A.F. Godfrey, reasons 1.4 (b,d)


1. (C) CDA and Pol/Econ chief delivered Ref A demarche points
to FM Oskanian June 13. CDA also emphasized the continuing
diplomatic and public relations disaster that Armenia's Iran
engagement represents, given the context of UNSCRs and
international consensus on the need to isolate Iran. He
pointed out high concern in the Administration and Congress
alike about Iran, and reminded of the risk of Iran Sanctions
Act penalties and that Congress seems minded to tighten these
sanctions.


2. (C) FM Oskanian acknowledged our points, but said we had
hashed this all out a some length at the time of the pipeline
opening ceremony at the Armenian-Iranian border (refs C and
D). He reminded that this "second phase" is not a new
project at all, but simply completing the project precisely
along the lines that Armenia has always told us that it
would. He reaffirmed Armenia's committment to be fully
transparent with the USG on all aspects of Armenia's energy
relationship with Iran and that the GOAM would do its very
best to minimize any political or public opinion spillover
from the energy engagement, which must proceed to protect
Armenia's critical national interest in having an alternative
energy supply. Within the basic premise that Armenia cannot
and will not stop the pipeline project from being completed,
Armenia will do everything else it can to assuage U.S.
concerns. CDA took the point, thanked the minister for his
commitment to full transparency, and reaffirmed that -- given
the incredible sensitivity to Iran issues -- it would be
imperative for Armenia to consult continuously, both in
Yerevan and through the Armenian Embassy in Washington, to
ensure that Washington agencies are not surprised by any
announcement of new energy projects with Iran. Oskanian
agreed.


3. (SBU) Meanwhile, also on June 13, Prime Minister Serzh
Sargsian received the Iranian Ambassador Alirezza Haghighian
for an office call, after which the two men spoke of a July
"Inter-Governmental Commission" meeting between the two
governments, at which time they hoped energy relations would
gain new momentum. Haghighian announced a "large
international conference" on transportation will be held in
Iran in July to discuss the importance of the "North-South"
corridor. Armenian Transport and Communications Minister
Manukian will be invited to lead an Armenian delegation to
the conference.


4. (SBU) CDA took a question posed during a thematically
unrelated press opportunity June 15, in which he expressed
concern over Armenia's growing energy relationships with Iran
(transcript at para 7). The comment generated considerable
press discussion throughout the week of June 18-22, and
provoked public reactions from FM Oskanian, Deputy Parliament
Speaker Vahan Hovahnissian (ARF-Dashnaktsutyun party),and
ruling Republican Party spokesman Samvel Nikoyan, among
others. On June 18, Deputy Speaker Hovhanissian told a press
conference that in his view the CDA's remark was directed
mostly at Iran. Hovhanissian said that the U.S. and EU had
thus far treated "Armenian-Iranian mutual relations with
understanding," recognizing that "a country which is
blockaded has no choice." Hovhanissian said that Armenia's
energy cooperation with Iran was in its national interest,
and must therefore continue. He said the cooperation was
"normal, explicable, and justified in the sphere of energy."


5. (SBU) On June 19, FM Oskanian told reporters that
Armenia's cooperation for Iran should be no basis for
difficulties in the U.S.-Armenia relationship, and affirmed
that Armenia's relations with Iran, as with all Armenia's
neighbors, "remain transparent." Republican Party board
member and parliamentarian Samvel Nikoyan offered a nuanced
reaction. He noted that international community opinion on
Iran is hardening and suggested CDA's comment reflects that
international consensus, but he also said "up until now the
U.S. has been very understanding of Armenian and Iranian
cooperation, and will continue to hold that position. Nikoyan
said "I think the U.S. has one goal, which is to involve
Armenia into the international community's campaign demanding
that the Islamic Republic stop uranium enrichment." Nikoyan
said this is an important concern for Armenia as well, but
not one on which Armenia could sacrifice its "normal
relations" with Iran. "Simply, Armenia does not have another
alternative" to cooperative relations with Iran. However,
Nikoyan implied that Armenia might be convinced to be more

YEREVAN 00000815 002 OF 002


active in pressing the anti-nuclear agenda on Iran.


6. (SBU) As the week wore on, media editorial anlysis grew
more speculative and conspiratorial, as is its usual wont
here. The Noyan Tapan news agency's headline "Anthony
Godfrey's Statement is a 'Yellow Card' to Armenian
Government," was a great tag line for our public diplomacy
efforts, though the story bogged down in absurd tangents
linking our Iran policy to U.S.-Russian relations, and
perceived stalemate in the Nagorno-Karabakh peace process.




7. (U) TRANSCRIPT (AS RECORDED): "Does the United States
continue to demonstrate understanding on Armenian-Iranian
cooperation on energy?" The charge replied, "(O)n energy
cooperation with Iran, we are very concerned about the
increasing relations with Iran. We are working with the rest
of the international community to push Iran to comply with
its international obligations. And two new Security Council
Resolutions deal directly with investments in Iran, in
financial dealing with Iran. And we have expressed our
concerns to the Government of Armenia on all levels. We do
appreciate the transparent way in which the Government of
Armenia cunducts its energy relations with Iran and we
appreciate the straightforward way that they tell us where
they are going with their relations. We are in fact
encouraging the Government ofArmenia to be a more active
partner in international efforts to bring Iran into
compliance."


8. (C) COMMENT: It was clearly time to add a public
diplomacy element to our longstanding diplomatic dialogue
with the GOAM on energy issues, though it has made our
Armenian government interlocutors uncomfortable. We continue
to hammer the message that it is no time for "business as
usual" with Iran. That said, it is equally important for the
United States to hear what the Armenians consistantly tell
us, which is that energy security is a core national security
imperative for Armenia. With Armenia's Turkish and
Azerbaijani borders sealed, and with the ever-present threat
that volatile Russian-Georgian relations could at any time
shut down Armenia's natural gas supply from the north,
Armenians truly see no choice but to have access to Iranian
gas to prevent economic catastrophe. The message we have to
drive home is that anything that would allow Iran to export
gas through Armenia onward to anywhere else would be a sharp
red line for us, at which point our patience and
understanding would terminate.
GODFREY