High-Stakes Iran Talks Try to Avert Collapse of Nuclear Deal

(Bloomberg) -- Diplomacy intended to salvage the Iran nuclear deal goes into high gear this week after Tehran threatened to follow the U.S. in abandoning the accord.

German Foreign Minister Heiko Maas landed in Iran’s capital to meet Monday with his counterpart Mohammad Javad Zarif. Japanese Prime Minister Shinzo Abe arrives in Tehran on Wednesday for more consultations. In Vienna, the International Atomic Energy Agency will assess the state of the 2015 agreement that was supposed to rein in Iranian nuclear work in return for sanctions relief.

While European governments recognize Iran’s right to benefit from the nuclear accord and are striving to protect trade with it despite U.S. sanctions, they won’t accept the Islamic Republic’s “reneging” on its nuclear obligations because the U.S. has, Maas said.

The only way to reduce tensions is ending America’s “economic war” on Iran, and Germany and the European Union have a role to play in this, said Zarif, speaking alongside his German counterpart.

Iranian Ultimatum

The flurry of diplomacy kicked off after Iran’s president signaled May 8 that the country could soon violate terms of the agreement, known as the Joint Comprehensive Plan of Action. The declaration was made on the one-year anniversary of the U.S. decision to unilaterally exit the accord and reimpose sanctions, including on vital oil exports. With its economy plunging into recession, Iran gave European signatories 60 days to deliver the financial relief offered under the deal in return for moderating its nuclear output.

The European vehicle to sustain trade with Iran, Instex, will become operational this month, according to a senior European official with knowledge of the Maas-Zarif talks, who asked not to be identified to discuss the private consultations. A material Iranian violation of the nuclear agreement would force EU governments to end efforts to help Tehran mitigate U.S. sanctions.

Germany initially had hoped Maas would be accompanied to Tehran by officials from France and the U.K., the other EU signatories to the deal, according to another European official.

In Vienna, IAEA monitors convene to assess Iranian compliance. They reported last month in a 15th consecutive quarterly report that showed Iran has observed its obligations, amid growing concerns that the Trump administration’s campaign to counter Iranian influence in the Middle East could spill into war.

“I am worried about tensions over the Iran nuclear issue,” IAEA Director General Yukiya Amano said in a statement. “The nuclear-related commitments entered into by Iran under the Joint Comprehensive Plan of Action represent a significant gain. I therefore hope that ways can be found to reduce current tensions through dialogue.”

Iran has increased the rate at which it enriched uranium, although the amount stockpiled is still short of the 300 kilograms (661 pounds) allowed under the deal, Amano said at a press briefing. Any potential violation will be immediately reported and could trigger and emergency meeting in Vienna.

The country had about 180 kilograms of the material stockpiled last week -- well short of the amount needed for a weapon, were the material to be further enriched, and if Iran were to make the decision to pursue a bomb. Tehran has always said its program is solely for civilian energy and industrial use, but world powers pursued the deal because they doubted that claim.

Tensions spiked after the U.S. accelerated the deployment of a carrier strike group to the Gulf to counter unspecified Iranian threats, and suggested without providing proof that Iran and its proxies were to blame for attacks on ships in the crucial waterway as well as a Saudi oil pipeline, and sent more troops to the region.

The visit by Abe, the first by a sitting Japanese prime minister in 41 years, was endorsed by President Donald Trump and is an effort to open a channel for mediation. But with the U.S. continuing to pile on new sanctions that target Iran’s petrochemical industry, the initiative has failed to gain traction.

“We are witnessing a treacherous policy” from the U.S., said Abbas Mousavi, the spokesman for Iran’s Ministry of Foreign Affairs. “They bring up negotiations and at the same time administrate maximum pressure. To Iran, this isn’t acceptable.”

High-level diplomacy could continue over the next month depending on the outcome of talks this week in Tehran. The remaining parties to the accord -- China, France Germany, Russia and the U.K. -- could convene a meeting of foreign ministers if that lends to the accord’s survival, according to one of the European officials.

--With assistance from Ladane Nasseri and Mahmoud Habboush.

To contact the reporters on this story: Golnar Motevalli in Tehran at gmotevalli@bloomberg.net;Jonathan Tirone in Vienna at jtirone@bloomberg.net;Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Amy Teibel, Paul Abelsky

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