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France Seeks to Rescue Iran Nuclear Deal With Washington Talks

Gregory Viscusi and Helene Fouquet

(Bloomberg) -- French Finance Minister Bruno Le Maire met with U.S. authorities in Washington as part of a plan to offer Iran a $15 billion economic lifeline and rescue the Iran nuclear accord, an idea a Trump administration official said was a non-starter.

The scheduled talks were officially about a French digital tax that has riled President Donald Trump, but they’ve been extended to look at ways that Iran could receive waivers from U.S. sanctions, French officials said.

The U.S. visit is part of a flurry of talks aimed at rescuing the 2015 nuclear deal after a series of maritime confrontations that have threatened shipping near Iranian waters. While the talks are a sign of progress, the French officials said Tehran would be sending the wrong signal if it went ahead with threats to ramp up its nuclear activities this week in a further violation of the accord.

Iran Foreign Minister Mohammad Javad Zarif met with counterpart Sergei Lavrov in Moscow Monday while his deputy Abbas Araghchi went to Paris with a team of economists and central bank officials. Araghchi discussed a French proposal for a $15 billion letter-of-credit to help restore Iran’s oil exports, the backbone of its economy, according to Iranian press and officials. French officials wouldn’t confirm the size or details of the letter of credit.

Washington Talks

Le Maire met his U.S. counterpart Steven Mnuchin and tweeted afterwards that he had constructive talks about the digital tax, without mentioning Iran. He’s due to later meet with Trump’s economic adviser Lawrence Kudlow, and chief U.S. trade negotiator Robert Lighthizer. According to a French official, Le Maire discussed waivers for companies that would allow Iran to sell oil. China, India and Japan would be the expected clients.

A senior U.S. administration official, who asked not to be identified discussing internal deliberations, poured cold water on the idea, saying Trump has been clear that Iran won’t receive any economic benefit from the U.S. for reverting back to the nuclear accord. The official said European nations are desperate to save what the administration believes is a terrible deal.

Araghchi’s talks in Paris lasted 10 hours, state-run Islamic Republic News Agency reported, without giving details. It was Araghchi’s second trip to the French capital in less than six weeks, continuing the most substantive negotiations between Iran and a western power since Trump exited the nuclear accord last year and slapped a slew of crippling sanctions on Iranian oil and other sectors.

According to an Iranian lawmaker, the French proposal -- hammered out in hours of telephone negotiations between Iranian President Hassan Rouhani and French President Emmanuel Macron, and at a recent meeting with Zarif -- includes a $15 billion credit line to Iran for oil “pre-purchases,” the semi-official Tasnim news reported, citing an interview with conservative lawmaker Ali Motahari.

France has suggested the money be paid in three installments and in return, Iran would lift its threat to ramp up atomic activities on Sept. 6 and eventually revert back to full compliance with the accord, Motahari said. Macron and Rouhani spoke for two hours this weekend, French officials said.

The difficulty the proposal will face is that any likely buyer of Iranian oil would need the U.S. to waive sanctions restricting such sales. But those sanctions have been a key part of Trump’s “maximum pressure” campaign aimed at forcing Iran back to talks to come up with a new nuclear deal.

Rapprochement With Tehran

“Iran’s and France’s points of view have grown closer,” Iranian government spokesman Ali Rabiei told reporters at a news conference in Tehran, adding that Iran was “moving forward and advancing” in its efforts to resolve the crisis through talks.

Araghchi said Saturday that discussions between Trump and Macron at the Group of Seven summit last week “have shown flexibility with regard to Iran’s oil,” according to the semi-official Iranian Students’ News Agency. Trump said at the meeting in Biarritz that he’d agree to have other countries extend a letter of credit to Iran, secured against oil sales.

(Updates with U.S. government response in first, sixth and 10th paragraphs.)

--With assistance from Abbas Al Lawati, Arsalan Shahla and Nick Wadhams.

To contact the reporters on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net;Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Bill Faries

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