UK Says Iran Must Be Allowed to Sell Its Oil

Macaire made the remarks in an exclusive interview with Etemad daily newspaper, which was published on Saturday July 27, 2019.

In this interview, the British diplomat has discussed a wide range of issues, from Europe’s efforts to save the Iran nuclear deal by establishing a special mechanism called the Instrument in Support of Trade Exchanges (INSTEX) to the Iranian and British seizures of their oil tankers.

He has also expressed London’s support for bilateral talks between Iran and the United States to settle their disputes.

On the Saudi-led coalition’s aggression against Yemen, Macaire defends the UK’s arms sales to the Arab kingdom, arguing that if the UK stops selling weapons to Saudi Arabia, they would buy it from other countries, and that will make no difference.

What follows is the full text of the interview conducted by Sara Massoumi:

Mr. Ambassador, as you know the Iran deal is in a coma. What does the E3 have in its pocket to save one of the most important multilateral agreements in the world?

Well I agree with you that it’s one of the most important diplomatic achievements, and one of the most important agreements that’s been signed in recent years and let’s just remind ourselves why it’s so important, and why we got into this agreement. It’s important not only because it’s vital for international security and for the stability of this region, but it’s also important because it demonstrated that Iran could resolve issues with the international community through discussion and agreement rather than confrontation and conflict. That’s why we are extremely keen, in the UK but I know also in other parties of the agreement, to maintain it and to make it work. The early withdrawal of the United States from the agreement was a very significant blow but as you know we on the European side have been trying to do everything we can to ensure that the full agreement is implemented, including economic benefits for Iran that were part of sanctions-lift.

Do you have any new update about INSTEX and whether it is going to be operational in the near future?

INSTEX is moving ahead consistently, involving intensive work from the shareholder governments and from the institution itself. So the first transactions are now in the process of being negotiated and finalized. We will need to see those first transactions and make sure they are a success before we can then expand to do more work. But I would repeat what I have said before: it is important to understand what INSTEX is. You know INSTEX is not going to solve all the problems of Iran’s economy and that was never the case. And INSTEX is not a way of persuading companies who have decided they can’t do business with Iran but they should do business with Iran. But there are many companies and I talk to them all the time who do want to do business and who we want to encourage to do business but they can’t because of the failures of the banking channels and INSTEX is meant to be a mechanism designed to deal with that problem.

You know that Iran depends on its oil sale for its economy and one of the initial P5+1 commitment to Iran in JCPOA was the lifting of oil sanctions; so what’s your plan to help Iran sell its oil?

We support Iran’s legitimate oil trade, we regard that as part of Iran’s legitimate economic activity, and we have always said with INSTEX that it needs to start with sectors that are of most immediate importance, the humanitarian sectors, and that’s what INSTEX is doing. But we do think that Iran should be allowed to sell its oil, and this would be said to the United States as well.

Iran’s foreign minister says Europeans lack determination and power to implement JCPOA. What’s your response?

My response is that European parties are implementing JCPOA. The JCPOA required the EU to lift all of its nuclear-related sanctions on Iran which it did and the sanctions remain lifted. It also of course cancelled seven UN Security Council resolutions. It put in place plans for cooperation on Iran’s civil nuclear program. All these still stand.

You removed European sanctions but it seems that your companies and banks are following OFAC and US Treasury instructions rather than their own governments. Do Europeans have any desire or determination to free themselves from the hegemony of US financial system?

I think you need to recognize the reality that the United States is the biggest economy in the world and when the US does something it will have a big impact. So what we’re doing is to say that we pursue our own policy as European countries and as parties to JCPOA and we want to see JCPOA implemented so we’re doing our best to make sure that happens. We also have a source of great concern that Iran has now stopped implementing the nuclear side, some of the elements of the nuclear side of the agreement.

If we accept all these excuses, don’t you think it’s a kind of confession to EU’s political and economic inability, and don’t you think that JCPOA experience shows it to other countries that the EU is not a reliable and credible partner regarding multilateral agreements?

No, I don’t agree with that at all, what you’ve seen is a remarkable consistency and determination by the EU. A lot of people in this country were predicting that when United States of America walked out, other parties would also walk out on the European side; we remained committed to the JCPOA. I noticed that you’re not including in this Russia and China who are also parties to the agreement and all of those parties are committed and try to make it work. That is not to say we can simply wish away the impact of American withdrawal.

The EU’s inability to confront US sanctions made the Iranian people ask if the P4+1 couldn’t afford to implement their own commitments then why did we started negotiations with them. We could have ignored them and choose US as the only negotiator and maybe we would not be in this situation today.

I think that in our view, Iran and America do need to sort out their issues, we are not saying they shouldn’t. There is clearly a very very big dimension. What we would like is to deescalate the tensions and to see international negotiations that allow concerns of both sides to be met and I think the JCPOA showed that when the international community deals with Iran with respect and enters into good faith negotiations a lot can be achieved.

Europe believes Iran and America do need to sort out their issues through bilateral talks. The UK would support the two sides’ speaking to each other about their differences.

 

But why should Iran work with EU while it couldn’t implement its commitments?

Europe is one of the strong partners and strong supporters of the diplomatic solution that we would like to see.

Maybe a strong political partner but your companies withdrew from Iran as the US withdrew. It seems that they’re American companies, not European companies.

There are many companies, I can speak for British companies, but I know from other European countries also, who are doing business in Iran and more who want to do business in Iran. Even new companies are coming talking to us all the time, asking about how they can do business with Iran. And the reason why we’re setting up INSTEX is to help for the mechanism that will enable these companies to do business with Iran.

Are they just asking or coming?

There are British and European companies still doing business with Iran and there are still new companies entering the market. But obviously not nearly at the scale we would like to see.

Some experts believe that JCPOA experience shows E3’s inability to fulfill their commitments in a deal while the US intervenes. So INSTEX is their first step to a long road of economic independence from US.

No. INSTEX is a pragmatic mechanism to enable the trade with Iran that we believe that is legitimate and is covered by the JCPOA.

What’s E3 expectation from Russia and China in saving JCPOA?

I think we expect Russia and China to continue to do whatever they can to implement JCPOA as we are doing.

Did you ask China to buy Iranian oil as a kind of solution to fulfill Iran’s demand about its oil sale?

We have stated very clearly, publicly, that we regard Iran’s oil trade as legitimate and we would support legitimate trade in Iran’s oil whether it’s with China or Russia.

Does E3 have any plan to pre-purchase oil from oil?

UK is not a customer for Iran’s oil. I’ve been very clear about what it is we are trying to do to promote trade and when it comes to purchasing oil the reality of the situation of EU is oil is purchased by private companies not our governments.

Britain’s Ministry of Defence has rejected a plea from the Foreign Office to hand over £400m owed by the UK government to Iran from a decades-old British tank sale. It seems there is a struggle between 2 ministries. Do you have any idea about the time of paying Iran debt?

What you say is not quite right about the process. There is a process for settling that historic debt. We would like to see that resolved, it’s a longstanding issue, it’s been going too long, we would like to see it resolved, it is going through the courts in the UK.

This process takes so long and don’t you think now that JCPOA is in danger because of P4+1’s inability, UK move in paying this debt could help so much?

We want to see it resolved, but it is going through the courts in the UK. We can’t change the court process.

There are British and European companies still doing business with Iran and there are still new companies entering the market.

 

Iran has started to reduce commitment to JCPOA according to its right in the deal. It seems the P4+1 couldn’t take any significant step to stop Iran. If Iran takes the third step what would be E3 reactions?

Well, the joint commission meeting is happening in four days’ time, that is part of the diplomatic process and we would hope to bring Iran back into compliance with the agreement through a diplomatic process.

Is there any possibility of referring the case to the Security Council by E3?

The JCPOA is a reciprocal agreement, it requires implementation by both sides. Our efforts would be directed to try to make sure that Iran does comply with its nuclear commitments under that agreement, otherwise the agreement will no longer exist.

What is the risk of the JCPOA failing?

There’s clearly a risk of the JCPOA failing, but we do not think it’s inevitable and we believe that it’s an important enough agreement for Iran and for the region and for the wider world for it to be worth putting all efforts into trying to maintain it.

Does E3 has any plan to assign a credit line to INSTEX?

The way that INSTEX will develop will depend on the success of the first transactions and how we can expand it but clearly credit lines are one way that can work.

We have in the news that France put a new initiative on the table to save JCPOA. Do you have any information about it?

We support the French diplomatic effort to achieve de-escalation in the tensions that are happening at the moment.

Any information about the details?

I think these are currently confidential diplomatic discussions.

Does Britain try to push in Washington for Iran to sell its oil?

Yes. We made very clear that we support the JCPOA, which includes sanctions relief, which includes Iran being able to sell its oil. This is our position and we have these discussions very frankly with the United States.

Mr. Zarif recently forward a proposal in which Iran would officially sign the AP in return for Washington to lift its sanctions. How practical Britain find this proposal?

I think there are many ideas that have been put out for ways Iran and the US could come to agreement and resolve the differences, and we would support the two sides’ speaking to each other about these differences.

Has Britain asked US to come back to JCPOA and do you consider any chance of this?

I think the current administration in Washington has made very clear what its position on the JCPOA is. We regret that. They’ve made it very clearly that they don’t support the JCPOA but that doesn’t mean to say that America is not going to negotiate with Iran.

President Trump left a multilateral agreement and now asks for bilateral negotiation with Iran. Don’t you consider it as a kind of ignoring EU which has been behind the table for at least 19 years?

We’re very pragmatic. We would like to see diplomatic solutions that walk the region away from confrontation. And if there is bilateral or multilateral, whatever works, would be very pleasing to us.

Iranian had a bitter memory from E3. Once in 2005, E3 left the nuclear agreement because of US opposition and now history is repeating itself which shows EU’s inability. You are not worried about its impact on Iran public opinion?

All we’re trying to do is to support the current agreement, and as in the period you talked about, we were trying to reach an agreement then, and you know we can only do our best, and our aims are to remove the threat of conflict and to see the opportunity for more stability and more prosperity in the region.

It seems the UK is now following the US maximum pressure campaign against Iran by making restriction on oil exports. Britain as a JCPOA partner is aware of Iran’s need to sell its oil but under these circumstances it has seized Iran’s oil in Gibraltar.                 

The government of Gibraltar that seized the tanker and the British government in London have both been very clear that this is about the requirements of the law. The EU sanctions regime on Syria requires that assets going to sanctioned entities should be stopped in EU territory. Now, this was a vessel in EU territory, territorial waters of Gibraltar and that’s why Gibraltar acted to arrest the ship.

Iran is not a member of the EU, so there is no necessity for Tehran to follow EU sanctions and as far as experts claim selling oil to Syria is not categorized as violations of sanctions.

No. The EU legislation is very clear. It’s about the transfer of any economic resources, whether it’s money or oil or anything else, to certain sanctioned entities, all that is banned at EU level. But we have said and the Gibraltar government said very clearly this is not about Iran and this is not at the request of any other government, but it’s purely because we are required to do this under international law: but they would like to approach the solution to this in the spirit of de-escalation and it’s currently in front of the Gibraltar courts.

EU sanctions aren’t extraterritorial and can’t be imposed on other countries. Actually Europeans have been always against the extraterritoriality nature of US sanctions

European sanctions apply on European territory. Obviously, the United States has an approach that some of its sanctions are applied extraterritorially but we are talking here about a case that is on EU territory.

[On seizure of Iranian tanker in Gibraltar] They would like to approach the solution to this in the spirit of de-escalation and it’s currently in front of the Gibraltar courts. The UK is trying very hard to resolve this in a way that de-escalates the situation.

 

Iran informed UK that the destination of its oil was not Syria and as far as I know you have the details about the destination but the UK refuses to release the tanker.

That is what the court in Gibraltar is looking at. The government in Gibraltar says it has clear evidence that the cargo was going to Syria and the court are now establishing whether or not that is the case.

As far as I know since the first moments of the seizure of tanker in Gibraltar, back channels have been activated and Iran informed you privately about the final destination of tanker and we all know Iran under US sanctions couldn’t disclose it publically. If the UK’s intention is what it said publicly about Syria, why didn’t you release the tanker sooner to prevent this kind of escalation?

The government in Gibraltar stated clearly there is evidence that the cargo was meant to be going to Syria and that is what the court is looking at because that is the basis for the EU law.

Does it mean that you are not still convinced about the final destination of the tanker?

I can only say we are trying very hard to resolve this in a way that deescalates the situation.

Do you think Iran detained the British tanker in retaliation?

Well, that is how it is being presented here in Iran but we don’t see any relationship between the two because the action to take the Stena Impero was an illegal act, there is no basis in international law for that.

Iran accused the British vessel of “violating international regulations.” And it seems that you know the details of the violations. Do you have any idea about the legal process for releasing your vessel and what has been done since then?

These explanations appear to be wrong. The location and the track of the ship was through the correct shipping lane and that information is publicly available to anyone in the world because the AIS track record of these ships show were they are at all times. It’s a brand new tanker, empty of cargo, so the environmental argument seems to be implausible. And there are no signs of it having broken any regulations, its tracking system was turned on throughout and that’s a public record everyone can see. So these allegations don’t seem to work.

Iran formally reported the violations and it has enough documents to do that because of the safety of shipping in Persian Gulf.

Even if they were true, there’s absolutely no basis in international law for Iranian forces to come out of Iranian territorial waters into Omani territorial waters and to capture a ship in International shipping lanes, even if all of those were true.

Iran says preserving security in Persian Gulf is its responsibility.

International law is very clear about this.

Even if Iran’s charges against the UK tanker were true, there’s absolutely no basis in international law for Iranian forces to come out of Iranian territorial waters into Omani territorial waters and to capture a ship in International shipping lanes, even if all of those were true.

 

Are you going to hold Iranian oil in Gibraltar until Iran released the British tanker?

There is a legal process in Gibraltar and we don’t see these issues as linked.

And you don’t have any idea about the approximate time?

I can’t give you a time, but I know that the authorities in Gibraltar would like to resolve it soon and in a de-escalatory way.

Is it possible for the UK to accelerate the legal process in a way as you said we could call it Britain’s attempts for de-escalation?

My country believes in the rule of law. This is a legal requirement. This is why the government in Gibraltar acted and why we supported them.

So you consider the same right for Iran to keep the British tanker until the time which judicial process will accomplish?

If Iran arrested a tanker in its own territorial waters it would apply, but obviously Iran is breaking the law by coming out of its territorial waters to take the ship.

You have probably read the Guardian exclusive article which says Bolton’s national security team was directly involved in fabricating the Gibraltar incident.

This was a decision taken by the government of Gibraltar in line with the law and it has been made very clear that it was not at the request of any other government.

JCPOA is in a critical condition and I know that the E3 claims in public that they are separating JCPOA from other issues in which you have different ideas with Iran. But in this situation don’t you think following the US will negatively undermine JCPOA?

I would strongly disagree that we follow the US on this, because we’ve been clear for a very long time as have many countries that some of Iran’s activities in the region are destabilizing. This is a serious problem and it’s not gone away but we have said that it is separate from the JCPOA and that we believe it’s easier to tackle these problems if we have dealt with the nuclear issue in that agreement.

Does Britain talk about regional cases like Syria or Yemen with Iran?

Yes, we do. We talk a lot about Yemen, which is a very high priority for my government and we put a huge amount of effort not only into the humanitarian side but into the international effort to bring peace in Yemen. We obviously talk to Iran about that. We talk to Iran about Syria. We talk to Iran about issues in Iraq. And I’ve been having these discussions with the MFA even in the recent days.

It seems tension between Iran and Britain is the topic of Iraq’s prime minister’s latest trip to Tehran. Did London ask him to convey a message to Iran?

I think if you want to know what transpired between the Iraqi prime minister and your president you should ask one of them not us.

Prime Minister Abdul-Mahdi talked to the British defence minister just before he left Baghdad for Tehran. Did London ask him to convey a message to Iran?

We talk to Prime Minister Abdul-Mahdi the whole time about many issues including regional issues and we would hope these conversations are reflected when he talks to Iranian officials.

So London did not ask him to be a kind of mediator?

We would hope that he would reflect with President Rouhani our views as well as Iraq’s very real concerns about region’s stability.

Hundreds of women and kids have been killed by Saudi Arabia and the UAE but Britain still will not stop selling arms to these countries. Why?

We have a longstanding relationship with Saudi Arabia and that includes defence sales. Our defence sales are subject to some of the strictest criteria in the world in terms of ensuring that they’re not in breach of international humanitarian law but what our foreign secretary has been very clear about is that breaking our links with the Saudi would not in any way bring peace to Yemen. We’re engaged with Saudis trying to bring peace in Yemen.

If you want to bring peace why don’t you stop selling arms to them?

The war in Yemen didn’t start because of arms sales. This is an issue that is not the key to bringing peace in Yemen. The key to bring peace in Yemen is getting the sides to implement the Stockholm agreement, to allow humanitarian access, and to bring a political process that would lead to the end of the fighting. We have obviously a close relationship with Saudi Arabia, and we’re using our close relationship with Saudi Arabia to pursue a political solution. We’ve made very clear throughout that we cannot see a military solution in Yemen. Iran has a relationship with the Houthis and we need Iran to use that relationship to bring peace also.

Q. If you want to bring peace in Yemen why don’t you stop selling arms to Saudis?

A. The war in Yemen didn’t start because of arms sales. This is an issue that is not the key to bringing peace in Yemen. If London doesn’t sell arms to Riyadh, they can buy it from someone else.

 

Mr. Ambassador you couldn’t ask for peace and sell arms to aggressor at the same time. Why don’t you put pressure on Saudi Arabia by imposing sanctions on selling arms to them?

They can buy it from someone else. I mean this is an artificial argument.

Let someone else to be responsible for the killing of kids in Yemen.

If you look at the efforts we’re putting into supporting the UN process to bring peace, Britain is doing more than anyone else to do that. We have a relationship with Saudi Arabia. Like many countries in the world, our relationship includes defence sales. But that’s not going to be the solution to this problem.

Britain always talks about necessity of observing human rights and now what is happening in Yemen is a gross violation of human rights. But you said because we have relations with Saudi we couldn’t stop selling arms to them.

This is an incredibly important subject. Yemen is the biggest humanitarian catastrophe in the world and we are playing a leading role in trying to bring that conflict to an end. We hope that Iran will do the same. Though both sides have been accused and have been found by non-governmental bodies and others, to be abusing humanitarian or human rights.

Mr. Ambassador there is strong evidence and thousands of photos about the causalities of Saudi bombardment of civilian areas in Yemen and even if the allegations about Iran’s help to Houthis are correct, you cannot compare these two issues. Could you guarantee that British weapons are not those which killed kids and civilians in Yemen?

Our arms sales to Saudi Arabia are covered by very strict licensing conditions in the UK which are subject to review by the courts and those conditions, arms sales criteria, are regarded internationally as being some of the tightest in the world to make sure that what we sell is not misused.

What’s Britain position about The “Deal of the Century”? So far details of this US initiative shows the Palestinians rights are ignored and the public opinion in Muslim countries are strongly opposed this deal.  

Our position on the Middle East peace process has been consistent for many years we support the two-state solution and we support the rights of Palestinians and the right of Israel to live in peace. The current situation is extremely concerning and we will engage in any international efforts to try to improve it but the principles on which we work are unchanged.

Do you think Boris Johnson’s foreign policy toward Iran would be different from his predecessor?

You wouldn’t expect me to comment on the position of our new government, which has not taken office yet. I would say is that in general, there is generally a lot of continuity in British foreign policy even when there’s a change of party in power.

Some media describe the Iranian foreign minister’s tweet in which he congratulated Prime Minister Johnson as a warning. What do you think?

I am sure that the new British government, just as the current British government, want to stay closely in touch with foreign minister Zarif in finding solutions to reducing tensions in the region.

It seems Britain and the US had difficult times in which is called special relations. POTUS called your former PM foolish and put so much pressure on your former ambassador that he had no way but to resign. Do you think the famous special relations between the two countries is affected by Trump’s presidency?

The United States is an extremely close ally and friend of the United Kingdom, has been for a very long time, and that is unlikely to change but as we are such close friends, we can also frankly speak about things we disagree about and that’s been what are minister have been very clear about.