PORTUGAL'S POLICY TOWARD IRAN SANCTIONS

C O N F I D E N T I A L SECTION 01 OF 02 LISBON 000052

SIPDIS

E.O. 12958: DECL: 02/02/2020
TAGS: PINR ETRD EUN PGOV PREL IR PO
SUBJECT: PORTUGAL'S POLICY TOWARD IRAN SANCTIONS
(C-RE9-02696)

REF: A. STATE 8682

B. 09 LISBON 598

C. 09 LISBON 531

D. 09 LISBON 518

E. 09 LISBON 495

F. 09 LISBON 146

G. 08 LISBON 685

Classified By: Poleconoff Mario Fernandez, reasons 1.4(b) and (d)


1. (U) This message responds to questions in ref A request.


2. (C/REL TO USA, FVEY) Question A: Are decisions on this
topic made solely by prime minister Jose Socrates or Foreign
Minister Amado, or is there a team of government officials
making decisions? If multiple officials are involved in
decisionmaking on this topic, which officials and what level
of influence does each have? What are the interpersonal
dynamics among the decisionmakers?

Answer: Decisions on Iran sanctions are made by the
Portuguese Ministry of Foreign Affairs (MFA). The senior
official responsible is Ambassador Nuno Brito, the Political
Director of the MFA. Brito is close to Foreign Minister Luis
Amado. There are three action offices within the MFA
responsible for Iran issues: a) Middle East and Maghreb
Affairs; b) Common Foreign and Security Policy; and c)
International Political Organizations. Our contacts report
that decisions on Iran very "rarely" make it to PM Socrates
and "never" to President Cavaco Silva.

The Directorate of Middle East and Maghreb Affairs has
overall policy coordination for Iran issues. The office
director is Joao Neves da Costa, a bushy-haired, bearded,
bespectacled, comic book-loving 45-year old who looks
somewhat out of place at the stolidly formal MFA. Though
Costa has never been to the U.S., he nonetheless has a
surprisingly extensive knowledge of U.S. domestic politics,
culture, and films, and exudes enthusiasm for President
Obama. "We're running parallel with the U.S. on Iran
sanctions," he asserted February 2. It was Costa who
accompanied Political Director Brito on his trip to Tehran in
March 2009 (ref F).

The Directorate of Common Foreign and Security Policy handles
sanctions in general. The Office is headed by Joao Ribeiro
de Almeida, a million-words-a-minute interlocutor who knows
Iran issues cold but is usually too busy to meet and often
refers us to various underlings, none of whom has his command
of issues. A lawyer by training, Almeida is 47 years old.
He told us September 27 that Portugal was "on the same line"
as the U.S. on the Iran nuclear program (ref D).

The Directorate of International Political Organizations
handles U.N. affairs, under which Iran issues often fall.
The Director of the office is Carlos Costa Neves, but the
lead on Iran is Sara Martins, a 30-something lawyer who
previously worked at Portugal's mission to the UN and is an
expert on, and somewhat passionate about, human rights issues.

Although we have not seen the three offices interact, they
seem to coordinate well and often refer questions to each
other. Post has not noticed differences in policy
pronouncements by the different offices and it is often clear
that there is a high level of coordination.


3. (C/REL TO USA, FVEY) Question B: Has Lisbon determined its
policy on additional unilateral sanctions against Iran, or is
it still formulating the policy?

Answer: The GOP has been very clear on a number of occasions
(ref C,D, and E) that it will follow the EU consensus on Iran
sanctions. Post notes that Portugal has shown occasional
flashes of independence when the EU has been unable to forge
a consensus.


4. (C/REL TO USA, FVEY) Question C: Are there any
disagreements among Portugal's ministries on Lisbon's Iran
sanctions policy?

Answer: According to Neves da Costa, the MFA is currently in
consultations with the Ministries of Finance and Economy to
ensure that Iran sanctions policy does not adversely affect
the Portuguese economy. Because Portugal has little trade
with Iran, however, these ministries' role is minimal. See
para 5.


5. (C/REL TO USA, FVEY) Question D: To what extent are other
factors, such as Portugal's economic interests, the view of

LISBON 00000052 002 OF 002


the majority of EU members, or regional stability in the
Middle East playing a role in decisionmaking regarding
Portugal's Iran sanctions policy?

Answer: Portugal has very little trade with Iran, primarily
because Portugal's economy opened up in the last 20 years,
after sanctions against Iran were already in place. As Neves
da Costa put it, "We arrived too late to have much trade with
Iran." Portugal's trade with Iran totals less than 40M Euros
a year, while Iranian oil represents about 9 percent of
Portugal's oil imports. Neves da Costa asserted that
Portugal has an unspoken policy not to import more than 10
percent from any one country to minimize dependency; thus,
Portugal could "easily" replace its Iranian oil imports with
oil from another country if the need arose.

Despite these representations, Portugal is increasingly more
adept at practicing economic diplomacy -- the Portuguese
relationship with Venezuela comes to mind -- and Post
believes that the GOP will likely keep its options open in
the hope that GALP Energia, Portugal's largest energy
corporation, may be able to do business with Iran in the
future.

In early 2008, GALP was engaged in discussions with Iran's
National Oil Company, but GALP's largest shareholder told the
U.S. Ambassador in March 2008 that GALP had no intention of
signing an agreement in the current political environment and
would not move beyond the exploratory phase without his full
knowledge and approval (ref G). In January 2010, in several
meetings on the margins of the annual U.S.-Portugal Bilateral
Commission Meeting in Washington, D.C., MFA Political
Director Brito struck a similar note, telling Under Secretary
of State Burns, as well as several assistant secretaries,
that Portugal had no intention of furthering its economic
relationship with Iran at this time.


6. (C/REL TO USA, FVEY) Question E: Lisbon has sought to
maintain ties with Iran while also maintaining EU sanctions.
Are Portuguese leaders concerned about inconsistent policy or
reaction from EU partners and domestic political rivals?

Answer: One of the pillars of Portuguese foreign policy is
its relationship with other EU members. Thus, so long as an
EU position exists, Portugal will follow it. At the same
time, Portugal has enjoyed a long diplomatic relationship
with Iran that dates back to the 16th Century. For that
reason, and to keep its economic options open as discussed in
para 5, it is unlikely that when there is no EU consensus,
Portugal will adopt an independent stance critical of Iran.


7. (C/REL TO USA, FVEY) Question F: What signs, if any,
indicate that Portugal is becoming more or less supportive of
EU sanctions? Why does Post judge Lisbon does not take a
more outspoken stance on sanctions?

Answer: Portugal, namesake of the Lisbon Treaty, which aims
to integrate EU foreign policy among other things, will be
increasingly more likely to follow EU consensus on Iran and
other global issues. In addition, as one of the poorer
nations in the EU, Portugal does not see itself as a heavy
hitter, with the wherewithal to adopt policies independent of
the EU consensus. "It's just not warranted by our size,"
Neves da Costa explained.


8. (C/REL TO USA, FVEY) Question G: Are Portuguese business
groups lobbying for Lisbon to take a more defensive position
on sanctions? More specifically, who are these groups
targeting within government?

Answer: According to Neves da Costa, the GOP has faced no
pressure from business groups regarding Iran sanctions. As
noted, Post believes that the GOP and GALP Energy, of which
it is a minority shareholder, are actively keeping their
options open regarding future investments in Iran.


For more reporting from Embassy Lisbon and information about Portugal,
please see our Intelink site:

http://www.intelink.sgov.gov/wiki/portal:port ugal
BALLARD