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Iran Challenges Remaining Partners to Save Nuclear Deal
Iran Challenges Remaining Partners to Save Nuclear Deal
A man passes a mural painted on the wall of the former U.S. Embassy in Tehran, Iran, on 9 May 2018. US President Donald Trump announced a 'withdrawal' from the Iran nuclear deal on 9 May 2018. Fatemeh Bahrami / Anadolu Agenc

Iran Challenges Remaining Partners to Save Nuclear Deal

Responding to the Trump administration’s “maximum pressure”, Iran has announced it will no longer respect all the limits placed on its nuclear research activities by its 2015 deal with world powers. With Washington having renounced the deal, the remaining signatories should hasten to save it.

One year ago today, President Donald Trump announced that he was withdrawing the U.S. from the 2015 Joint Comprehensive Plan of Action (JCPOA). Until now, Iran, as repeatedly confirmed by the International Atomic Energy Agency (IAEA), has abided by the restrictions placed by the nuclear agreement on its proliferation activities, despite rapidly declining returns. That status quo was increasingly untenable; Iran’s decision today is the predictable and unwelcome result. As Crisis Group has long argued, the burden now falls on the JCPOA’s remaining signatories to cooperate with one another on finding ways to provide Iran with a meaningful economic incentive that in turn could allow Tehran to come back into full compliance with the JCPOA and avoid a much more dangerous escalation.

In a statement issued on 8 May by the Supreme National Security Council (SNSC), which sets the country’s major domestic and foreign policies, Iran announced that it would no longer “commit itself to respecting the limits on the keeping of enriched uranium and heavy water reserves at the current stage”. It went on to present a 60-day ultimatum to the deal’s remaining participants (Russia, China, France, Germany and the UK) to ensure that the economic normalisation envisioned under the JCPOA’s terms, increasingly curtailed in the face of a withering unilateral U.S. sanctions campaign, is addressed. Should the two months pass without a breakthrough by the P4+1, the SNSC warned, “Iran will suspend compliance with the uranium enrichment limits and measures to modernise the Arak Heavy Water Reactor”. In remarks to the Iranian cabinet, President Hassan Rouhani asserted that “we are announcing the reduction of our commitments, not withdrawal from it”.

Iran has opted for minimum retaliatory measures in response to U.S. maximum pressure. This suggests that Tehran hopes to keep the deal alive until the outcome of the U.S. presidential election.

The response from Iran’s JCPOA interlocutors has thus far been cautious and concerned. Russian Foreign Minister Sergey Lavrov, who has been hosting his Iranian counterpart Javad Zarif in Moscow, put the blame for the looming crisis on Washington, citing “the U.S.’s irresponsible behaviour”. The Chinese government, too, suggested that “the U.S. has further aggravated the tension on the Iranian nuclear issue”, while urging that cooler heads prevail. The latter sentiment is also clear in the statements of European parties, but not without an accompanying warning. “There are no sanctions today from Europe because Iran has so far always respected the commitments it has taken”, France’s defence minister explained. “If these commitments were not respected, naturally this question would be asked”. 

There are several lessons from today’s developments:

  1. Iran has opted for minimum retaliatory measures in response to U.S. maximum pressure. This suggests that Tehran hopes to keep the deal alive until the outcome of the U.S. presidential election becomes clear in November 2020. The framing of these measures as in line with the JCPOA’s paragraphs 26 and 36 proves that Iran is trying to remain within the deal’s framework. In essence, Iran is signalling its desire to maintain its strategic patience policy, but coupling that gesture with a warning that its patience is wearing very thin, especially given rising domestic criticism of the Rouhani administration’s restraint.
     
  2. The two measures announced today pose different proliferation risks. Heavy water overproduction would not in the short run enhance Iran’s capabilities to dash for nuclear weapons, if it decided to do so. A new IAEA report is expected later this month, but according to the last one Tehran had 124.8 metric tonnes of heavy water back in February. If Iran continues producing at the same average pace as before (two tonnes per month), it would not reach the threshold before 7 July. As to the low enriched uranium (LEU) threshold, Iran had 163.8kg of uranium enriched to 3.67 per cent. Tehran has the capacity to produce around 100kg of LEU per month. If it does so, it will surpass the limit before the 60-day deadline, and thus start shortening its breakout timeline (the time needed to enrich enough uranium for a single nuclear weapon) from one year to less than that. But Tehran remains in control of how fast it desires to escalate. The good news is that because Iran is still implementing the Additional Protocol to the Nonproliferation Treaty, the IAEA can monitor all of these activities closely.
     
  3. Washington is no position to complain about these Iranian violations, because it committed the original sin by unilaterally withdrawing from the deal last year. Moreover, by revoking waivers for countries to purchase excess production of Iran’s heavy water and LEU last week, the Trump administration had rendered compliance with these commitments nearly impossible for Tehran. So by choosing these two measures as its first response, Iran is making clear where the blame lies.
     
  4. The bigger concern is the 60-day deadline, which raises risks of an escalatory spiral. This agreement's erosion could well pick up pace in the next few months as Washington doubles down on its sanctions and Iran digs in. If Iran restarts work on the Arak heavy water reactor or increases the volume or level of its uranium enrichment in July, it will compel the Europeans to trigger the snapback of the UN sanctions, which will be the kiss of death for the JCPOA.
     
  5. With Iran insisting that they step up their efforts to salvage the deal, and threatening otherwise to withdraw, the ball is now in the court of the deal’s remaining signatories. Europe has done a lot to establish a banking channel, but this step is only one of many to which Brussels committed, and it is not yet operational. The reality is that Russia and China have not done much, either, and the latter seems to have given in to U.S. pressures by reducing its oil imports from Iran. Now is the time for Russia, China, France, Germany and the UK to intensify their cooperation with one another and implement steps that could provide Iran with a meaningful economic incentive that in turn would allow Tehran to come back into full compliance with the JCPOA. For instance, China could continue to buy oil from Iran or Russia could engage in oil swaps with Tehran (with the latter providing some of Russia’s energy needs in the south in return for the former exporting the same amount of oil on Iran’s behalf) and inject the proceeds as credit into the European special banking channel that would allow Iran to import goods from Europe.

The Trump administration’s continuous tightening of the economic squeeze and repeated calls on Europe to exit the agreement always carried the risk of provoking an Iranian response. The administration’s self-proclaimed goals were to change Iran’s behaviour and get a better deal. As should have been clear from the outset, those stated aims were always wholly unrealistic. But they were not the real objectives. For at least some senior U.S. officials, escalation with Iran is and always has been the name of the game. That is precisely what the remaining parties to the deal should strive to avoid.

U.S. Secretary of State Mike Pompeo attends the Security Council meeting at United Nations headquarters in New York City, United States on 20 August 2019. ANADOLU AGENCY/Atilgan Ozdil

Iran Briefing Note #10

Iran Briefing Notes highlight and provide context for the previous week’s major events featured on International Crisis Group’s Iran-U.S. Trigger List. This infographic resource tracks developments on key flashpoints between Iran, the U.S. and their respective allies in the Middle East.

Events of Note

16 August: U.S. issues warrant for Grace 1 tanker.

17 August: Iran hosts talks with Huthis and E4 (France, UK, Germany and Italy) ambassadors.

18 August: The Grace 1 sets sail from Gibraltar.

19 August: Iran indicates it has warned U.S. via intermediaries against detaining Grace 1.

19 August: Bahrain signs on to U.S.-led International Maritime Security Construct. 

19 August: Prime Minister Netanyahu warns that “Iran has no immunity, anywhere… we will act – and currently are acting – against them, wherever it is necessary”.

20 August: Explosions at Iraqi paramilitary base north of Baghdad, the third such incident in the past month.

20 August: U.S. Secretary of State Pompeo tells UN Security Council that Iran “has gone all in on a campaign of extortion diplomacy”.

20 August: Huthis claim downing of U.S. drone over Yemen; U.S. National Security Council spokesperson says “this attack is only possible because of Iran’s lethal aid to the Huthis”.

21 August: Australia announces “modest, meaningful and time limited” contribution to U.S.-led International Maritime Security Construct.

21 August: An Iraqi enquiry into the 12 August explosion of a munitions warehouse assesses it was caused by a drone strike; paramilitary units issue statement asserting that “the U.S. is ultimately responsible”.

21 August: President Rouhani warns that “if Iran’s oil export is reduced to zero, international waterways will not have the same security they used to”.

22 August: Iran unveils missile defence system, Bavar-373, that President Rouhani claims “is more powerful than the [Russian] S-300”.

Exit Grace 1, Enter Adrian Darya 1

An Iranian tanker detained in Gibraltar on 4 July set sail on 18 August.

Why it matters: In a 15 August statement, the Gibraltar government announced that Iran had provided “written assurance” that the Grace 1’s $140m crude oil cargo was not headed for Syria in contravention of EU sanctions, and that the ship was free to go. Case closed? Not quite. The U.S. on 15 August warned that it could deny visas to sailors linked to the Grace 1 and other vessels it connected to the Islamic Revolutionary Guard Corps (IRGC), and the following day issued a warrant for the ship’s seizure; it has since warned against possible offers of harbour to the now-renamed Adrian Darya 1. Meanwhile, the CEO of Stena Bulk, whose UK-flagged vessel Stena Impero was seized by Iran on 19 July under alleged “maritime violations” currently under consideration by an Iranian court, met with Foreign Minister Zarif in Sweden on 20 August to press for its release.

Quid (and Euro) Pro Quos

Foreign Minister Zarif on 21 August indicated that “even if the U.S. does not come back to the JCPOA and Europe simply implements its part of the bargain, then we will immediately – not within even days, within hours – reverse to the original state [of JCPOA compliance]”.

Why it matters: Iran in July breached the 2015 nuclear deal’s limits on enriched uranium stockpile size and enrichment rates, while warning of a “third step” in September if Europe cannot deliver the economic dividends Tehran expects for its compliance. Recently released EU-Iran trade data gives a sense of the impact of the re-imposition of U.S. sanctions: over the first half of 2019, Iran’s European exports amounted to €418m, down more than 93 per cent year-on-year, while imports more than halved. Getting the French/German/British special purpose vehicle (INSTEX) through its fitful start, including via the injection of export credits, may not completely mitigate these reversals, but – in light of Foreign Minister Zarif’s statement – even a partial redress could help the JCPOA from unravelling further.

Pre-Biarritz Blitz

French President Emmanuel Macron on 21 August indicated that “before the G-7 I will have meetings with the Iranians and propose ideas”, adding that “we have made proposals either for a softening of sanctions or a compensation mechanism to enable the Iranian people to live better”.

Why it matters: In the burst of “active diplomacy” that Iran’s top diplomat has been undertaking (Finland, Sweden and Norway this week, France on Friday and trips to Japan and China later this month), the meeting with President Macron just before he hosts President Trump in Biarritz for the G-7 stands out as a key opportunity for de-escalating tensions between Iran and the U.S. As Crisis Group recently argued, one path worth exploring is for Washington to partially reinstate sanctions waivers on Iranian crude sales and Tehran to resume full JCPOA compliance and refrain from provocations in the Gulf – a tactical détente that Macron may be in a prime position to mediate. Progress toward the release of dual nationals held by Iran on dubious charges would also be welcome.

What to Watch

23 August: Foreign Minister Zarif expected in Paris for meetings with President Macron and Foreign Minister Le Drian.

24-26 August: G-7 meeting in Biarritz, France.

28-29 August: Informal meetings of EU defence and foreign ministers in Helsinki, Finland.

30 August: Next quarterly report of the International Atomic Energy Agency (IAEA) on the JCPOA’s implementation.

6 September: Iran’s next announced deadline for reducing its JCPOA commitments if it is not satisfied with Europe’s steps to mitigate the impact of U.S. sanctions.

17-30 September: UN General Assembly, which Iran has announced Rouhani would attend; JCPOA Joint Commission meeting on the sidelines.

Click here to see the U.S.-Iran Trigger List, and here for a two-page, printable PDF of the Briefing Note.