IRAN: EU DESIGNATIONS AFFECTED BY U.S. POLICY

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 000174 NOFORN SIPDIS STATE FOR P, ISN, EUR/ERA, EEB, AND NEA/IRAN E.O. 12958: DECL: 02/06/2019 TAGS: PREL KNNC ETTC ETRD EFIN IR EUN SUBJECT: IRAN: EU DESIGNATIONS AFFECTED BY U.S. POLICY REVIEW? Classified By: Chris Davis, USEU Polmincouns for reasons 1.5(d) and (e) ¶1. (C/NF) SUMMARY: In light of German and Italian interventions over the past twenty-four hours, the Czech EU Presidency has decided to postpone an EU-level experts meeting on new Iran proliferation-related designations that was scheduled for February 11. The Italian delegation requested that the Council consider additional Iranian entities and individuals (in addition to the pending French, German, and UK lists). The Czechs told USEU that Germany had requested the postponement of the meeting pending the Italian request. However, the German delegation has sought to portray itself as merely reflecting the "prevailing mood" of the Council in favor of postponement. The German Permrep in Brussels has expressed doubts that an EU consensus in support of new designations is possible during the U.S. policy review and in the absence of a "clear U.S. signal to all 27 member states" in support of new designations. In the meantime, the Czech Presidency confirmed its invitation to the USG to have a Treasury-State/ISN delegation brief the Council's Middle East experts group on February 11 on the impact of financial sanctions on Iran. END SUMMARY ¶2. (C/NF) According to Czech Presidency and Council Secretariat contacts (protect),on February 5, Germany demarched the Czech Presidency to request postponement of a Council working group on non-proliferation (CONOP) and regional experts (COMEM) February 11. This joint capital-based experts working group was to have considered new designations of Iranian individuals and entities under the EU,s Common Position and relevant UNSCRs on Iranian proliferation. On February 5, Italy also surprised the Czech Presidency by presenting it with a list of additional names for consideration in the designation exercise. According to EU work procedures, EU member states normally require 14 days to review names for designation before meeting at the EU level to discuss them. According to a Czech contact, Germany asserted it was necessary to postpone the meeting in order to give the new U.S. Administration time to complete its current policy review on Iran. Germany referred specifically to a "4-6 weeks" break for the U.S. to complete its policy reflection exercise. (Note: Department may recall that this appears to be the second effort by Berlin to delay EU action on new designations in two months. The French Presidency had held an inconclusive first CONOP-COMEM meeting on the German, French and UK list in December, 2008. The Czech Presidency had originally planned to hold a second round of expert talks on January 28, but Germany had asked for a postponement until mid-February. End Note.) ¶3. (C/NF) Separately on February 6, a German Permrep contact first confirmed with us, but later denied, that Germany was the "demandeur" for a postponement. In any case Germany felt that a postponement was necessary given the "mood" prevailing in some member states" that the EU should not move forward on designations pending a "clear U.S. signal to all 27 EU member states." Counselor Wolfgang Rudischhauser (strictly protect) highlighted both political and procedural reasons for Berlin's "support" for postponement. He argued that a designation meeting now might be counterproductive because it could "interfere with or contradict" the current U.S. policy reflection on Iran. Referring to a German MFA memcon of the February 4 P5 1 meeting in Wiesbaden, Rudischhauser said that in the meeting German Political Director had underscored "considerable problems" EU member states faced on designations, that a signal from the U.S. would be required, but that the US Delegation had indicated such a signal would not be possible at this time. Absent such a signal, Germany was concerned that the designation exercise wuld produce a "bad outcome," i.e., no consensus among member states. Rudischhauser expressed uncertainty about Berlin's timeline for (eventual) EU action, but noted that his recommendation to Berlin would be one month. As for the procedural reason for his delegation,s delaying tactics, our German contact noted that Italy had circulated additional names for designation on February 5. Under EU rules, the member states are permitted 14 days to review candidates for designations before convening to make recommendations on those names. The Italian names could, therefore, not be discussed by the experts group until February 19 at the earliest. ¶4. (C/NF) Poloff cautioned Rudischhauser that the U.S. policy review should not be used by EU partners as a pretext for EU inaction and noted that our understanding of the Wiesbaden discussion on designations was different. In internal EU sanctions deliberations, we expected EU-3 members to make clear U.S. support for additional EU designations. Furthermore, Poloff pointed out that U.S. public signals BRUSSELS 00000174 002 OF 002 tracked these view. For example, the State Department spokesperson had publicly reaffirmed the U.S. commitment to the dual-track approach and our concern that UN obligations under the relevant UNSCRs must be fulfilled by Iran (and all UN member states). ¶5. (C) Although the Czechs have decided to postpone the joint COMEM-CONOP meeting, the Middle East experts (COMEM) will meet in the morning of February 11. The Czech Presidency COMEM chair confirmed its invitation for the USG to have a Treasury-State/ISN delegation brief this regional experts group at a lunch the same day on the impact of financial sanctions on Iran. MURRAY .