Greenwald Publishes Article on the EU and Iran
Michael B. Greenwald (Pardee ’07), Lecturer at the Frederick S. Pardee School of Global Studies at Boston University, published a recent article examining the current state of relations between the European Union and Iran.
Greenwald’s article, entitled “Too Big to Evade: The Costs of Europe Sticking with Iran,” was published on February 20, 2019 by the Harvard Kennedy School’s Belfer Center for Science and International Affairs.
From the text of the article:
The European Union unveiled the Instrument in Support of Trade Exchanges (INSTEX) as a special purpose vehicle (SPV) in February 2019 to facilitate trade in humanitarian goods between the EU and Iran. Presently, these goods do not fall under the purview of American sanctions, but private sector participants ranging from banks to pharmaceutical companies remain reluctant to conduct business in the country.
These concerns stem from a business environment that lacks the rule of law, concealing the involvement of Specially Designated Nationals (SDNs), terrorist groups like the IRGC, and other government entities within legitimate commercial channels. One such example is Parsian Bank, a private Iranian bank responsible for handling a significant portion of humanitarian transactions, which was designated by the U.S. Treasury in October 2018 for links to the Basij.
Should it stick to the transfer of humanitarian goods, INSTEX will remain outside the lens of Washington’s sanctions apparatus; however, Tehran seems unwilling to stay in the JCPOA with just the promise of food and medicine. It is likely that the Iranian government will pressure the EU to expand INSTEX to include transactions in sanctioned goods, especially oil, likely to be denominated in euros to avoid touching the dollar.
In spite of initial hopefulness, the Europeans will eventually face a reckoning with the facts: Washington’s financial leverage over Brussels has, arguably, never been greater since the establishment of the euro in 1999. The power of the U.S. Dollar and weaponization of the U.S. financial system cannot be challenged successfully by Europe at this moment.
Michael B. Greenwald is currently a Senior Vice President of Tiedemann Advisors and is responsible for working with clients and prospective clients and assisting with the Firm’s business development efforts. Michael is also the Senior Advisor to the President and CEO Fred Kempe of the Atlantic Council. Learn more about him here.