TEHRAN – Richard Nephew, who served as the lead sanctions expert for the U.S. team negotiating with Iran, is of the opinion that “I do think that there will be something called the SPV eventually created that facilitates trade between Europe and Iran, but I do not think it will be the same sort of SPV that was announced in September, covering wide areas of trade.”

The fellow at the Center on Global Energy Policy at Columbia University, says, “Iran will find it very difficult, if not impossible, to continue implementing its provisions of the JCPOA while not receiving any economic relief.”
He adds that “I think that the sanctions pressure that will build on Iran in 2019 -- likely combined with the failure of the SPV to do much beyond humanitarian trade -- will make Iran's leaders consider seriously withdrawing from or at least reducing their compliance with the JCPOA.”

Following is the text of the interview:

Q: Due to U.S. is opposed to the financial mechanism between Europe and Iran and pushes European countries to prevent the implementation of the financial channel as called SPV, do you think this financial mechanism(SPV) will be implemented between Iran and Europe?

A: I do think that there will be something called the SPV eventually created that facilitates trade between Europe and Iran, but I do not think it will be the same sort of SPV that was announced in September, covering wide areas of trade. I think that the sanctions implications of this are too severe for most banks and companies and, consequently, Europe will look to scope it to something more manageable, such as humanitarian trade.

Q:  Iranian Foreign Ministry Spokesman, Bahram Ghasemi recently said that European countries were not able to implement the SPV because of U.S. pressure. On the other hand, the failure to implement the SPV and the failure of the financial mechanism between Iran and the EU may lead to inappropriate results in relations between Iran and EU. In your opinion, if the financial mechanism of Iran and the EU fails, what will be the fate of the nuclear deal (Joint Comprehensive Plan of Action)?

A: I continue to believe that Iran will find it very difficult, if not impossible, to continue implementing its provisions of the JCPOA while not receiving any economic relief.  I think that the sanctions pressure that will build on Iran in 2019 -- likely combined with the failure of the SPV to do much beyond humanitarian trade -- will make Iran's leaders consider seriously withdrawing from or at least reducing their compliance with the JCPOA.  I think that this would be a very regrettable and dangerous decision, just as I believe the Trump Administration's decision to withdraw from the JCPOA was itself regrettable and dangerous.  

Q: Iran has also stated that it is not only focusing on a financial mechanism with the European Union. Tehran believes that, in addition to Europe, it will be able to continue to trade with other countries, including Russia, China and India. Will Iran's economic and financial cooperation with non-European countries meet the goals of Tehran in a nuclear deal (JCPOA)?

A: I strongly doubt it.  The sorts of business that Iran does with India and China, and especially Russia, are not equivalent to what was being done and planned with Europe.  I think that Iran's goals were much more robust and wide-ranging, including a variety of investment projects as well as trade.  And, I think that it will be hard for anyone to substitute for Europe in Iran's eyes in this regard.  That said, part of Iran's goal was also to address and resolve the nuclear issue once and for all.  Iran can still do that, if it remains compliant with the terms of the JCPOA notwithstanding this pressure.  It may just be politically difficult for President Rouhani and the Iranian government more generally to justify doing so.