IRAN: MFA SAYS GERMANY SHIFTS POSITION, SUPPORTS

S E C R E T BERLIN 001660 SIPDIS, P, EUR/CE, NEA/IR, EUR/ERA FOR GIAUQUE, ISN, EEB FOR COULTER E.O. 12958: DECL: 12/12/2018 TAGS: PREL KNNP MNUC EFIN PGOV GM IR EU SUBJECT: IRAN: MFA SAYS GERMANY SHIFTS POSITION, SUPPORTS TOUGH NEW EU DESIGNATIONS REF: A) USEU TODAY DECEMBER 10 B) GAYLE (LONDON) - NEA/IR E-MAIL DECEMBER 10-11 Classified By: CDA John Koenig for reasons 1.4(b)/(d) ¶1. (S) SUMMARY: In a significant change of position on Iran sanctions, a senior German MFA official told CDA December 11 that senior MFA officials had decided that Germany would support a much stronger application of new sanctions (including on banks) against Iran at a December 17 experts-level EU meeting (ref A). According to MFA Chief of Staff Stephan Steinlein, Germany is ready to agree to an expansive list of Iranian entities to be designated for their support of IRIG proliferation activities, but to defer entry into force until early next year. This would allow for planned EU meetings with Iranian officials to take place and to maximize the psychological impact of new sanctions on the Iranian government, he said. According to working-level contacts, Germany is actively lobbying EU member countries prior to the December 17 meeting but is unsure how willing member states outside the E4 are to sign off on the proposed list at the meeting. END SUMMARY. ¶2. (S) MFA Chief of Staff Steffen Steinlein told CDA December 12 that, in a meeting earlier that day, senior MFA officials, including State Secretary Reinhard Silberberg, had decided that Germany would support much stronger application of sanctions (including on the financial sector) against Iran. Steinlein added that Germany is willing to agree "to a great deal" at the December 17 EU expert-level meeting next week, during which Member Countries will review a list of proposed Iranian entities for designation. However, Germany does not want to see immediate implementation (COMMENT: Given that expert-level agreement is only the first step in the EU approval process, implementation within the short-term seems unlikely. END COMMENT). Steinlein explained that Germany wants to wait for the results of the planned meeting between EU Director General Robert Cooper and Iranian Supreme National Security Council Deputy Ali Bagheri, as well as the results of other potential contacts with Iran. Germany wants to maximize the psychological effect on the Iranian regime that the introduction of such far-reaching sanctions could achieve, added Steinlein. ¶3. (C) Steinlein's comments reflected a clear change in German thinking, as working-level MFA contacts only a day earlier were evaluating the designation proposals much more conservatively. EmbOffs and visiting Germany Desk Officer Peter Schroeder met December 10 with MFA Iran Unit Chief Andreas Krueger and Iran Desk Officer Adrian Pollmann. According to Krueger, the E-4 (UK, France, Italy, and Germany) has proposed new entities/individuals for additional annexes to be discussed at the December 17 EU experts meeting. Krueger noted that the E-4 members are themselves not unified on the names submitted and are "still coordinating." When asked what standards Germany is applying to the proposed entities, Krueger said they are evaluating the proposed names based on two criteria: that a clear proliferation connection exists (a criterion proposed by the French, he said); and that evidence of the entity's activity would stand up in court. Krueger added that the European legal system's philosophy on designations writ large has shifted the burden of evidentiary proof further to the governments (NOTE: Krueger was referring to the European Court of First Instance's decision to strike down the EU Council designation of the People's Mujaheddin (PMOI). END NOTE.) ¶4. (C) Krueger noted that France is aiming for, and Germany supports, quick passage through the EU decision-making process, but Krueger was unsure that the other 23 member countries would be willing to sign off immediately at the experts-level meeting. Germany is actively lobbying EU member countries prior to December 17, particularly the skeptics, to give the proposals due diligence and consideration, he said, adding that he is also talking "daily" with other E-4 members. Koenig