WarSclerotic

Denmark and France briefed their EU counterparts at a meeting in Brussels on the alleged plots and ministers agreed to consider targeted sanctions on Iranians in response, although no details or names were discussed, five diplomats told Reuters.

Though still at an early stage, the EU’s readiness to penalize Iranians would be the first such move in years after months of internal division over how to punish Iranians accused of destabilizing activities in Europe and the Middle East.

Until now, the EU has been straining to uphold the 2015 nuclear accord between Iran and world powers that US President Donald Trump pulled out of in May. It has been less willing to consider sanctions, instead seeking talks with Tehran.

Iran has warned it could ditch the nuclear deal if EU powers do not protect its trade and financial benefits.

France has already imposed sanctions on two Iranians and Iran’s intelligence service over what it says was a failed plot to carry out a bomb attack at a rally near Paris organized by an exiled Iranian opposition group. One option is to establish those asset freezes at an EU-wide level, diplomats said.

Denmark, which in October said it suspected an Iranian government intelligence service had tried to carry out an assassination plot on its soil, is also open to EU-wide sanctions, the diplomats told Reuters.

In October, France said there was no doubt that Iran’s intelligence ministry was behind the June plot to attack the demonstration by Iranian exiles near Paris.

It froze assets belonging to Tehran’s intelligence services and two Iranian nationals – a Vienna-based diplomat now under arrest in Belgium for the plot and the deputy minister and director general of intelligence, Saeid Hashemi Moghadam.

Neither appear to have held any assets in France. Paris also discreetly expelled an Iranian diplomat, diplomatic sources told Reuters last month.

Iran has denied any involvement in either alleged plot.

Under the 2015 deal, Iran restricted its disputed nuclear program, widely seen in the West as a disguised effort to develop the means to make atomic bombs, in exchange for an end to international sanctions against it.

MISSILE SANCTIONS DIDN’T FLY

In March, Britain, France and Germany proposed to sanction Iran over its development of ballistic missiles and its role in Syria’s war, but the initiative failed to gather sufficient support across the EU to take effect.

Italy was one EU country unwilling to countenance new measures as it sought to preserve business ties with Iran.

In an effort to balance Iran policy, the ministers at their meeting on Monday also tried to press ahead in setting up a special mechanism to trade with Iran that could be under EU, not national, law.

The Special Purpose Vehicle (SPV) is a kind of clearing house that could be used to help match Iranian oil and gas exports against purchases of EU goods in an effective barter arrangement circumventing U.S. sanctions, which are based on global use of the dollar for oil sales.

Despite technical difficulties and delays, the EU believes this formula could shield individual member states from being hit by U.S. sanctions that have been reimposed on trade with Iran after Washington’s pullout from the nuclear deal.

“There is a willingness for the financial vehicle … to be set up quickly,” French Foreign Minister Jean-Yves Le Drian told reporters.

However, no country has come forward as a potential host. Their reluctance arises from fears that SPV reliance on local banks to smooth trade with Iran may incur US penalties, severing the lenders’ access to US markets, diplomats said.

Luxembourg is seen as a good candidate to manage the Iran SPV given its experience in creating a similar mechanism during the 2009-12 euro zone financial crisis.

Iranian media reported on Monday that the Iranian-backed Houthi rebels in Yemen fired a precision missile at Saudi-led coalition headquarters. It is not the first time the Yemeni-produced Badr P-1 ballistic missile has been used, but it represents another attempt by Iranian media to boast about the accuracy of their ballistic missile program, which is part of the wider network of Iranian-backed precision-missile weapons programs and technology transfer, including Hezbollah.

In late October, Houthi rebels in Yemen unveiled what they called a “domestically designed and manufactured smart missile intended to precisely hit specific targets.” It had all the trappings of a highly sophisticated weapon. They claimed it would minimize collateral damage and “increase lethality against designated targets.” It was designed to counter the Riyadh regime and the “atrocities of aerial bombardment” carried out by the Saudi-led coalition, which has been fighting the Houthis since 2015.

The missile used solid-propellant and was termed as Badr P-1, an upgrade from the Badr-1. It was said to have a pinpoint accuracy of “up to three meters.” The UN and other countries have alleged that Iran has transferred missile technology and parts to the Houthis. In early November, the Houthis claimed to have fired a Badr P-1 at a Saudi military base. Now another missile has been fired at Saudi forces in the Midi desert.

“The missile hit the target with high precision and led to the deaths and injuries of a number of military allied forces with the Saudi coalition,” said Fars News on Monday. It claimed that the missile’s success was part of a larger program, which may include “other missiles.” How the Iranian-based Fars knows there are “other missiles” is unclear.

The missile firing was mentioned on social media as well. The missile appears to be around six meters long, making it similar to a Fajr-5 artillery rocket. In February 2017, Iran unveiled a guided version called the Fajr-5C. Iran has an extensive missile program and has been increasing the precision of its ballistic missiles in the past year, by striking at Kurdish opposition forces in Iraq in September and against ISIS in Syria in October.

The Houthi decision to go public with the missile – hosting a kind of reception for it with non-alcoholic beverages and a TV screen claiming to show its attributes as if it was a sales presentation at an arms show – shows they are trying to illustrate their abilities. The fact that Iranian media got fed the video shows a clear notion of where the support comes from. On the one hand, the Houthis put forward a narrative of starving Yemen being attacked by Saudi Arabia, while they developed precision munitions. This would appear to show that while there is massive suffering in Yemen and millions at risk of starvation, the actual conflict between the Houthis and the Saudi coalition is not so clear cut. The missile program they exhibit also has links to the wider Iranian attempt to support missile programs among Hezbollah and Hamas, either through financial support or direct technology transfers.