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Iran: Relations with Europe
Country Study > Chapter 4 > Government and Politics > Foreign Policy > Relations with Europe


Although Iran’s relations with the countries of the European Union (EU) had been harmed in 1989 by Khomeini’s fatwa (religious opinion) against British author Salman Rushdie (based on Rushdie’s characterization of the Prophet and his family in the novel Satanic Verses) and by assassinations of prominent Iranian political dissidents living in Europe, President Rafsanjani tried to improve ties during the 1990s. These efforts suffered a serious setback in April 1997, when a German court implicated top Iranian officials in the 1992 assassination of four Iranian Kurdish dissidents in Berlin. Germany and many other countries of the EU responded to the judicial finding by withdrawing their ambassadors from Tehran and suspending the EU’s “critical dialogue” with Iran.

After his inauguration, President Khatami moved quickly to repair relations with the EU countries. In November 1997, Iran and the EU reached an agreement under which all EU ambassadors would return to Iran. The EU also soon authorized a resumption of ministry-level contacts with Iran, although the critical dialog remained suspended. Iran conducted intense negotiations with Britain in this period over the Rushdie affair, and in September 1998 British officials announced an agreement under which the Iranian government would not enforce the death threat against Rushdie. Although the fatwa was not revoked, British officials expressed satisfaction with the agreement. Further, the assassinations of Iranian exiles that had begun in Europe in the early 1990s now had ceased. Despite potentially harmful U.S. economic sanctions, European businesses continued to increase their involvement in Iran after Khatami was elected, and many European NGOs became more involved in Iran as well.

Iran’s relations with the EU countries did not improve during Khatami’s second term. The arrest and trial of Iranian reformists who had participated in an April 2000 German Green Party–sponsored conference in Berlin on democracy in Iran raised concerns in Europe pertaining to human rights in the Islamic Republic. Furthermore, the August 2002 revelations that Iran had secretly built plants to enrich uranium and extract plutonium led the EU to reassess relations with Iran. A subsequent International Atomic Energy Agency (IAEA) inspection found that Iran’s nuclear program was very advanced. Even though the IAEA said that Iran had the right, as a signatory to the Nuclear Non-Proliferation Treaty (NPT), to enrich uranium to use as fuel in a civilian nuclear power program, it criticized Tehran for failing to report its enrichment activities and requested that Iran provide the IAEA with information on how it had obtained the centrifuges used in enrichment experiments. Following this report, Britain, France, and Germany, acting on behalf of the EU as the “EU3,” began negotiations with Iran aimed at persuading it to suspend its uranium enrichment activities voluntarily.

In 2003 the EU3 and Iran reached an agreement whereby Iran consented to suspend uranium enrichment activities voluntarily in return for verbal assurances that it would be offered a long-term trade agreement. In June 2004, citing a lack of progress in talks on a permanent agreement, Iran announced its intention of resuming uranium enrichment. This decision set in motion a new round of Iran–EU3 negotiations that yielded a new voluntary suspension agreement in November 2004. In return, the EU3 promised that talks on a permanent agreement would be held in tandem with talks on an overall trade agreement and support for Iran’s application for membership in the World Trade Organization. When talks made no progress on nonnuclear issues, in 2005 Iran again announced resumption of certain uranium fuel processing activities. Iran rejected a comprehensive proposal for trade in August, on the grounds that the proposal did not deal with the issue of U.S. economic sanctions, which were harming Iran’s economy. A stalemate then developed, with the EU3 contending that Iran’s rejection of the proposal had ended the negotiations while Iran asserted that it was willing to continue talking. In mid2006, the United Nations (UN) Security Council reacted to the IAEA’s appeal of the stalemate by demanding that Iran suspend uranium enrichment. When Iran failed to meet the UN deadlines and renewed European diplomatic efforts failed, the Security Council imposed limited sanctions in December 2006. No substantial progress was made to resolve the issue as of late 2007.

Data as of 2008

Last Updated: January 2008

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Iran was first published in 1987. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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