Laying the final part of the Eilat-Ashkelon Pipeline, 1969. Photo by Daniel Rosenblum / Starfot

There has recently been a significant breakthrough in talks over the Iranian nuclear program. However, one state wasn’t impressed at all and looked ready to bet the whole wed in order to hamper Iran’s justification. If you are still making guesses – the country’s name is Israel. If you learn what the Israeli leadership have been saying on the topic and how many visits they have made to western countries attempting to keep the existing status quo you will conclude that stability in the region is something, that Israel is trying to avoid. Why? When it comes to big money everything is possible.

In 1968, a decade before the Islamic Revolution in Iran, the Shahdom of Iran and Israel signed an agreement on Iranian oil transportation from the Red Sea to Europe through the territory of Israel bypassing the Suez Canal. The agreement established a joint venture company EAPC between the Israeli government and the National Iranian Oil Company. EACP owned the pipeline, crude oil loading terminals and oil depot terminals.

In order to carry out the contract’s terms NIOC registered the Fimarco company in Lichtenstein, while Israel registered the Tao company in Panama. The joint venture company responsible for transportation, Frigate, was also registered in Lichtenstein.

Everything went smoothly until the change of regime in Iran in 1979 when the mutually beneficial affair came to a full stop. By that time Frigate transported 14.75 million cubic meters of Iranian oil worth $450 mn in advance, but has never been paid for that.

On May 19, the Iranian media cited the legal department of the Iranian presidential administration as saying that a Swiss court had obliged Tao to pay around 1.1 billion of debt plus late fees to NIOC. Tao’s counter claim against NIOC accusing the later of defying the contract’s conditions has been rejected.

That settled the matter, though not for Israel. Tel-Aviv pulled on the table the time-honored British Trading with the Enemy Act dating back to 1939. In 2000 the Israeli justice dubbed Iran “the enemy” despite the fact that the two countries weren’t involved in a conflict. Of course, in the context of the international law this makes no sense if only because neither company – Tao, Firamco and Frigate – has been registered in Israel. However, the Israeli finance minister said that NOIC won’t see the money and without a second thought referred to the Act.

A few years ago, when Iran was the second most isolated country in the world just behind North Korea, this way of thinking could be well justified. But since then Teheran’s relations with the West have significantly improved. Under these circumstances, Israel could have shown more respect to Iran especially taking into the consideration that this wasn’t Iran’s only legal claim against Israel. One of the other three claims, the so-called Big Arbitration, is yet another headache for Israel as it could cost the country $7 billion.

In 1979, during the Islamic revolution in Iran, Israel capitalized on breaking of diplomatic relations with Teheran to take full control of the pipeline. Tel-Aviv didn’t even try to justify this illegal seizure. Only two decades later they included Iran in the Trading with the Enemy Act. During the whole period they de facto nationalized what was once a joint venture company. However, this has never been confirmed by the country’s leadership. From 1979 to 2015 the company’s rare financial reports read that there were no Iranians or Iranian companies in the list of beneficiaries.

In the meantime, volumes of trade have grown significantly and the nearby infrastructure has changed to the better. While in 1994 Iran estimated its share in EACP at around $800 mn, in 2013 the figure skyrocketed to around $7 billion.

In response to these claims Israel completely classified all information concerning EACP citing national security interests and its negotiating positions. In reality, national security interests are nothing but the interests of the country’s political elite and special services. If you look at the information about EACP’s subsidiaries registered outside Israel you will see numerous Israeli retired generals and ministers on senior positions in the company – former diplomat Uri Lubrani, 88, and former Mossad head Zvi Zamir, 89, are the two most noticeable figures in EACP, who were involved in the Israeli-Iranian project from the very beginning. However, this is just the tip of the iceberg – as mentioned above, most of the information has been hidden by Israel.

Once Iran is cleared from sanctions it is highly likely to demand its share in the project back. But instead of trying to find common ground with Teheran Tel Aviv is putting at risk the joint project worth billions of dollars and refuses to change its rhetoric.

By the way, despite Teheran’s anti-Zionist stance Israel sold weapons to Iran during the Iran-Iraq war in 1980. As the saying goes, money has no smell.