BICOM

France has proposed a multi-billion credit package for Iran in exchange for Iran returning to full compliance with the 2015 JCPOA nuclear agreement and an end to the obstruction of shipping in the Gulf.

The background: In July Iran breached several limits on its nuclear programme in retaliation for the US’s decision to quit the agreement and re-impose economic sanctions on Iran. French President Emmanuel Macron has invested considerable time trying to create conditions that would bring the sides back to the negotiating table.

• Iran has pledged to take more steps to violate the nuclear deal within days if the economic benefits from remaining in the deal do not materialise.
• The credit line, which Iranian officials have said would be around $15bn, would be guaranteed by Iranian oil. However, US approval for the credit line would be crucial.

What was said:

• French Foreign Minister Jean-Yves le Drian said the idea is: “To exchange a credit line guaranteed by oil in return for, one, a return to the JCPOA … and two, security in the Gulf and the opening of negotiations on regional security and a post-2025 (nuclear programme). All this (pre)supposes that President Trump issues waivers.”
• A senior Trump administration official responded to questions about the credit line, saying “the Europeans are desperate to salvage a terrible deal”. A senior State Department official insisted: “There are no discussions taking place between State Department officials and European officials to reinstate Iran waivers or relax our pressure in any way.”
• An Iranian official said: “The question is to know whether we can reach this $15bn level, secondly who will finance it, and thirdly we need to get at the very least the tacit approval of the United States. We still don’t know what the US position is.”

Looking ahead: The credit line is wholly dependent on the Trump administration agreeing to issue waivers to sanctions on Iranian oil sales. At a G7 meeting in France last month, Trump appeared open to the idea of credit lines, though US officials later ruled out lifting sanctions as a condition for new talks.

• French Finance Minister Bruno Le Maire met US Treasury Secretary Steven Mnuchin in Washington on Tuesday but no details have emerged about what was discussed.
• If no solution is reached before the 6 September, Iran will announce further violations to the nuclear deal. This might include enriching uranium to 20 per cent (it is currently at 5 per cent, above the JCPOA limit of 3.67 per cent).