US sanctions scare EU firms from Iran, imperilling nuke deal

The Iran nuclear deal requires that its partners take action to boost the country’s economy, but European companies remain fearful of exposing themselves to US sanctions. (File/AFP)
Updated 09 May 2019

US sanctions scare EU firms from Iran, imperilling nuke deal

  • Iran’s Supreme National Security Council on Wednesday sent a letter to the deal’s other signatories, saying it had decided to suspend commitments it made under the deal
  • The banking issue is particularly sensitive, with major European lenders wary of running into problems with US authorities

LONDON: The Iran nuclear deal requires that its partners take action to boost the country’s economy, but European companies remain fearful of exposing themselves to US sanctions, experts told AFP.
Iran’s Supreme National Security Council on Wednesday sent a letter to the deal’s other signatories, saying it had decided to suspend commitments it made under the deal, some immediately and some after 60 days, if no progress was made on its economy.
Leaders of China, France, Germany, Britain and Russia all received a letter, but it is of particular relevance to the European countries who have so far proved unable to deliver the promised economic advantages.

European powers said they still backed the nuclear deal with Iran, but rejected any “ultimatums” from Tehran to keep it alive.

“We reject any ultimatums and we will assess Iran’s compliance on the basis of Iran’s performance regarding its nuclear-related commitments” under a 2015 deal, the EU’s foreign policy chief Federica Mogherini and the foreign ministers of Britain, France and Germany said in a statement.

In their statement, the Europeans underlined “our own firm commitments under the agreement including as regards sanctions-lifting for the benefit of the Iranian people” but criticized the US sanctions.

“In this regard, we regret the re-imposition of sanctions by the United States following their withdrawal from the JCPoA,” — Joint Comprehensive Plan of Action — as the nuclear deal is known.

“We call on countries not party to the JCPoA to refrain from taking any actions that impede the remaining parties’ ability to fully perform their commitments.”

The European powers added that they were “determined to continue pursuing efforts to enable the continuation of legitimate trade with Iran” in an effort to keep the imperilled pact afloat.

But it said that Iran must at the same time “implement its commitments under the JCPoA in full as it has done until now and to refrain from any escalatory steps.”

The main reason is the reluctance of private companies on the continent to do business in Iran.
They fear the “so-called US secondary sanctions,” lawyer Anahita Thoms told AFP, referring to US penalties that apply to any non-US organization that engages in certain parts of the Iranian economy.
They also face “practical challenges, such as finding a bank, a transporting company or an insurer,” added the German-based expert in sanctions law.
The banking issue is particularly sensitive, with major European lenders wary of running into problems with US authorities.
In April alone, Italian bank UniCredit and British lender Standard Chartered were each fined more than $1 billion for violating US sanctions against Iran and other countries.
The situation has become more difficult since last year, when the US ramped up measures against Iran’s oil industry and key sectors including shipping and aviation, coupled with a blockage in processing financial transactions.
“The Iranian financial system has been subject to secondary sanctions since November 2018, which apply to all banking institutions, not just American ones, even if the transactions are in euros or other currencies,” said Olivier Dorgans, a sanctions lawyer at Hughes Hubbard & Reed.
“These secondary sanctions make it impossible for European institutions to trade, even if they have no banking links with the United States,” added the French-based lawyer.
The so-called Instex’s trading system was set up by Paris, Berlin and London at the end of January to facilitate transactions between Iran and the EU in products not covered by the secondary sanctions, matching Iranian oil and gas exports with EU goods.
But Instex does not have a banking license and must therefore rely on banks to channel the funds — a service European banks are wary of providing.
“It seems very unlikely that the EU will be able to do anything concrete at this stage which would give sufficient comfort to encourage more European businesses to engage in Iran,” warned Michael Lyons, a London-based lawyer at Clifford Chance.
“Particularly now in circumstances where there is a prospect of the deal falling apart altogether and the sanctions environment tightening,” he added.
French army minister Florence Parly did not rule out the possibility of the EU imposing sanctions against Iran, while in London, foreign minister Jeremy Hunt spoke of “consequences” if Tehran ceased to respect its nuclear commitments.


Electric luxury vehicles, SUVs ‘more likely to cause accidents’

Updated 23 August 2019

Electric luxury vehicles, SUVs ‘more likely to cause accidents’

  • As EV sales rise, French insurer AXA warns that drivers are struggling to adapt to cars’ rapid acceleration

LONDON: Electric luxury cars and sport utility vehicles (SUVs) may be 40 percent more likely to cause accidents than their standard engine counterparts, possibly because drivers are still getting used to their quick acceleration, French insurer AXA said.

The numbers, based on initial trends from claims data and not statistically significant, also suggest small and micro electric cars are slightly less likely to cause accidents than their combustion engine counterparts, AXA said at a crash test demonstration on Thursday.

AXA regularly carries out crash tests for vehicles. This year’s tests, which took place at a disused airport, focused on electric cars.

Overall accident rates for electric vehicles are about the same as for regular cars, according to liability insurance claims data for “7,000 year risks” — on 1,000 autos on the road for seven years — said Bettina Zahnd, head of accident research and prevention at AXA Switzerland.

“We saw that in the micro and small-car classes slightly fewer accidents are caused by electric autos. If you look at the luxury and SUV classes, however, we see 40 percent more accidents with electric vehicles,” Zahnd said.

“We, of course, have thought about what causes this and acceleration is certainly a topic.”

Electric cars accelerate not only quickly, but also equally strongly no matter how high the revolutions per minute, which means drivers can find themselves going faster than they intended.

FASTFACT

Accident rates among luxury and SUV electric vehicles are 40 percent higher than for their combustion engine counterparts.

Half of electric car drivers in a survey this year by AXA had to adjust their driving to reflect the new acceleration and braking characteristics.

“Maximum acceleration is available immediately, while it takes a moment for internal combustion engines with even strong horsepower to reach maximum acceleration. That places new demands on drivers,” Zahnd said.

Sales of electric cars are on the rise as charging infrastructure improves and prices come down.

Electric vehicles accounted for less than 1 percent of cars on the road in Switzerland and Germany last year, but made up 1.8 percent of Swiss new car sales, or 6.6 percent including hybrids, AXA said.

Accidents with electric cars are just about as dangerous for people inside as with standard vehicles, AXA said. The cars are subject to the same tests and have the same passive safety features such as airbags and seatbelts.

But another AXA survey showed most people do not know how to react if they come across an electric vehicle crash scene.

While most factors are the same — securing the scene, alerting rescue teams and providing first aid — it said helpers should also try to ensure the electric motor is turned off. This is particularly important because unlike an internal combustion engine the motor makes no noise. In serious crashes, electric autos’ high-voltage power plants automatically shut down, AXA noted, but damaged batteries can catch fire up to 48 hours after a crash, making it more difficult to deal with the aftermath of
an accident.

For one head-on crash test on Thursday, AXA teams removed an electric car’s batteries to reduce the risk of them catching fire, which could create intense heat and toxic fumes.

Zahnd said that studies in Europe had not replicated US findings that silent electric vehicles are as much as two-thirds more likely to cause accidents with pedestrians or cyclists.

She said the jury was still out on how crash data would affect the cost of insuring electric versus standard vehicles, noting this always reflected factors around both driver and car.

“If I look around Switzerland, there are lots of insurers that even give discounts for electric autos because one would like to promote electric cars,” she said.