Iran - EP 6

Duration: 16-Jan-2016 to Present

On 18 October 2015, ninety days after UNSCR 2231 (which incorporated and endorsed the JCPOA), the agreement came into effect and established a timeline for the resolution of the Iranian nuclear issue. On 16 January 2016 the IAEA confirmed in a report to the Council that Iran was in compliance with nuclear-related commitments outlined in the agreement, terminating the provisions of previous sanctions resolutions and substituting them with restrictions outlined in Annex B of the JCPOA.

The entry into force of Annex B of the JCPOA on 16 January 2016 placed the Iran sanctions regime in a state of calculated ambiguity, in which a set of euphemisms are used to replace sanctions-related terminology. While sanctions under Chapter VII were lifted, “restrictions” with equal effect on a list of individuals and entities were established under “Article 41” (under Chapter VII of the Charter). The Sanctions Committee was dismantled and replaced by a UNSCR 2231 “Facilitator” and the role of the PoE was taken over by the Secretariat which hired additional personnel to cover the monitoring of the Iran agreement.

This ambiguity, a response to Iran’s demands for diplomatic normalization, contributed to creating an atmosphere conducive to the implementation of the JCPOA, but also complicated the actual enforcement of the measures. The lack of clarity affects private sector implementation and maintains uncertainty about investing in Iran – diminishing returns for Iran and complicating the implementation of the JCPOA.

Between January 2016 and May 2019, the IAEA reported to the Security Council 15 times that Iran had been in compliance with its nuclear-related obligations under the JCPOA. It repeatedly verified the absence of non-declared nuclear material, the non-diversion of the materials declared, and the provisional application of the Non-Proliferation Treaty Additional Protocol, as well as other transparency measures agreed upon. Despite its compliance, Iran reiterated its view that it “has not been able to fully benefit from lifting of Sanctions due to a series of deficiencies and/or non-performance on the part of either U.S. or the EU.”

As the Secretary-General stated, however, the JCPOA is only one part of UNSCR 2231 (2015), and there have been concerns over Iran’s alleged violation of the restrictive measures described in the resolution’s annex B. First, Iran has conducted medium-range ballistic missile tests. While there is a controversy within the UNSC as to whether this violates the JCPOA (Iran argues the missile was not designed to carry a nuclear warhead, others say it could be easily adapted), the resolution (and subsequent SG reports) called upon Iran to avoid ballistic missile launches. Second, weapons of Iranian origin and/or shipped from Iran were seized in or on their way to Syria and Yemen, in a clear violation of the arms export embargo.

From a technical standpoint, the implementation of the UNSCR 2231 and the JCPOA, with its Joint Commission and procurement channel for nuclear materials, has been adequate. Between Implementation Day (16 January 2016) and June 2020, 48 proposals were submitted to the special procurement channel, with 33 being approved, 5 disapproved, 9 withdrawn, and 1 remaining under review.

The greatest challenge to the implementation of the JCPOA and UNSCR 2231 has been political. With the election of Donald Trump as President of the United States in 2016, the prospects for a smooth implementation of the agreement were severely compromised. On 8 May 2018, the United States announced its withdrawal from the JCPOA citing Iran’s involvement in armed conflicts in the region, a decision the Secretary General “deeply regret[ted].” However, the United States chose not to initiate the dispute resolution mechanism or the so-called sanctions “snapback” mechanism in the JCPOA, preferring to withdraw from the agreement unilaterally. This was possibly motivated by a choice to avoid the lengthy dispute-settlement mechanism necessary for the re-imposition of UN sanctions. In response to the US unilateral withdrawal, the other parties pledged to continue to abide by the agreement.

Since the May 2018 withdrawal announcement, the JCPOA has deteriorated, without yet leading to its full collapse. On the one hand, the United States re-imposed and significantly expanded unilateral sanctions on Iran as a part of a self-declared "maximum pressure" campaign. These included the restoration of sanctions against Iran's oil exports (November 2018), the labelling of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization (April 2019), sectoral sanctions against metal and petrochemical industries (May-June 2019), the imposition of sanctions targeting political leaders, including Supreme Leader Khamenei and Foreign Minister Zarif (June and July 2019), and the listing of Iran's Central Bank and national development fund (September 2019). The US has also claimed extra-territorial jurisdiction for its unilateral measures, threatening secondary sanctions on potential violators of the US measures. These actions have had a significant impact on the Iranian economy and, in practice, undermined the deal's promise of financial normalization for Iran – a critical motivation for Iranian compliance with the terms of the agreement.

The other parties to the JCPOA vowed to keep the agreement alive despite the US withdrawal, and the EU created a special-purpose vehicle for trade with Iran to bypass US sanctions (INSTEX or the Instrument in Support of Trade Exchanges). On 31 March 2020, the first transaction using the mechanism was processed (EUR 500,000 for blood treatment medication supplies), but INSTEX has not become operational at the scale anticipated by Iran. In response to the US unilateral measures and INSTEX's inability to ensure the expected trade inflows, and after continuing to comply with JCPOA obligations for almost a year after the US withdrawal (as verified by the IAEA), Iran initiated a policy of deliberate incremental breaches of its JCPOA commitments, presumably in an effort to sustain its bargaining position. Notably, it proceeded to no longer comply with restrictions on its enriched uranium and heavy water stockpiles (July 2019), lifted the cap on enrichment level (July 2019) and restrictions on research and development (September 2019), in the use of its most advanced centrifuges, including the symbolic Fordow plant (November 2019). In both 2019 and 2020, Iran conducted space vehicle launches, which may be a violation of its ballistic missile testing restrictions. Yet, Iran has kept its options open by maintaining some critical commitments in the JCPOA, such as the IAEA inspection regime and restoring heavy-water reactors in Arak to their pre-JCPOA design.

The gradual degradation of the JCPOA agreement has taken place in the context of increased military friction between the United States and Iran in the region. Following a series of incidents centered in, but not limited to, the Gulf (attacks on vessels, oil pipelines and facilities), the tension further increased between the two countries through their operations in Iraq. Most significantly, after a mob attacked the US embassy compound in Baghdad on 31 December 2019, the US killed Iranian military leader Quasem Soleimani and Abu Mahdii al-Muhandis, the Kataib Hizbollah's militia leader, in a drone strike on the Baghdad airport. Iran retaliated with an attack on US military bases in Iraq, although there were no fatalities.

Within the Security Council, there has been an impasse about potential next steps with regards to the Iran sanctions regime, and the future of the JCPOA itself remains uncertain. The United States pursued a renewal of the arms embargo slated to end in October 2020 (per the JCPOA), but its resolution garnered only two votes (the US and the Dominican Republic). The US next declared it was invoking the dispute settlement mechanism in pursuit of a snapback of the suspended UN sanctions as an alternative strategy. In June 2020, with the November US elections in the backdrop, France, Germany, and the UK positioned themselves against the triggering of the snapback mechanism, while Russia and China challenged the legality of the use of that mechanism by the United States, given its withdrawal from the JCPOA in May 2018. The US argued it still had that authority because it is described as a participant to the agreement in UNSCR 2231. The US declared the UN sanctions re-imposed at the end of September 2020, but no other member of the Security Council recognized the action as legitimate. In 2020, both the EU (on 14 January) and Iran (4 July) triggered the dispute resolution mechanism to signal the imperfect implementation of the agreement on the other side, while keeping these negotiations within the JCPOA.


Coerce

N/A.

Constrain

Constrain Iran’s access to sensitive technologies in support of its nuclear and missile programs, and from supporting armed groups in the region.

Signal

Signal a relative normalization in relations with Iran on the nuclear issue.


Mandatory

Adjustments to ongoing sanctions:
  • Re-imposed individual / entity asset freeze, travel ban, and arms exports embargo from Iran.
  • Restrictions on proliferation sensitive goods and technology imports and exports ban (specific items and the related transfer, training, assistance, investment, brokering, and other services, including nuclear weapon delivery systems restrictions), investment and acquisition of interest in foreign commercial activity involving uranium mining or nuclear material and technology, and arms imports to Iran (specific weapons and related training, services, advice, and assistance) made subject to prior case-by-case Security Council approval (exemptions and the related procedures specified).
Termination of existing sanctions:
  • All provisions of UNSCR 1696, 1737, 1747, 1803, 1835, 1929, and 2224 terminated;
  • A “snapback” mechanism for their reintroduction specified.

Conditional

Previously imposed conditional restrictions (bunkering ban) were terminated.


Maximum number of designees during the episode: 23 individuals and 62 entities; currently remaining on 23 individuals and 61 entities.


Potential scope of impact

Medium

UN sanctions can have some non-discriminating impact on the general population, since they include arms embargoes, diplomatic sanctions, and/or restrictions on the conduct of particular activities or the export of specific commodities.


Sanctions were imposed for a limited time period. Proliferation sensitive goods and technology and investment ban restrictions were imposed for 10 years from JCPOA Adoption Day (18.10.2015), restrictions related to development of nuclear weapon delivery systems and asset freeze were imposed for 8 years, and restrictions on arms and travel were imposed for 5 years.

All UNSCR 2231 restrictions will be terminated earlier if IAEA report confirms the Broader Conclusion of JCPOA or terminated and replaced with provisions of UNSCR 1696, 1737, 1747, 1803, 1835, and 1929 as a result of significant non-performance of commitments by Iran under the JCPOA and UNSCR 2231 “snapback” mechanism.

Sanctions Committee and Panel of Experts were dissolved (their functions taken over by other actors – Security Council, UN Secretariat, and the Secretary General).

Designation criteria were specified and targets designated. Enforcement authorities specified.


Coercion

N/A

Policy outcome

N/A.

Sanctions contribution

N/A.

Constraint

Ineffective

Policy outcome

While Iran’s nuclear program has been constrained by the IAEA inspection requirements of the JCPOA, its ballistic missile program and arms exports have continued. Since 2019, Iran has been reestablishing aspects of its nuclear program in a policy of incremental non-compliance with the agreement in response to the US decision to reimpose and expand unilateral sanctions.

Sanctions contribution

While UN targeted sanctions remain in place, constraints to the development of Iran’s nuclear program came chiefly from the enhanced monitoring and verification mechanisms established in the JCPOA and from the July 2020 explosions at its Natanz centrifuge facility. The re-imposition of unilateral sanctions by the United States undermined the agreement and contributed to the reconstitution of some of Iran's nuclear capabilities.

Signaling

Mixed

Policy outcome

The change of tone and very careful language used in resolutions, agreements and reports signal the relative normalization of relations with Iran, but the ambiguity provoked by the use of euphemistic and ambiguous language harm the clarity of the signal and a more complete de-stigmatization of Iran. The United States decision to withdraw from the agreement undermined the unified Security Council message on Iran, despite the other parties’ continued commitment to the agreement.

Sanctions contribution

UN sanctions are a critical mechanism through which the normalization of diplomatic relations with Iran takes place, although unilateral sanctions and broader diplomatic and commercial activities are more important to determine Iran’s standing in the world.

Overall

Ineffective

Strengthening of political factions, increase in international enforcement capacity in different issue domains.


20-07-2015

Substantive

  • Provisions of UNSCR 2231 entered into force on 16.01.2016 [JCPOA Implementation Day]
  • Permits, upon prior case-by-case approval by the Security Council, imports to Iran of all items, materials, equipment, goods and technology which could contribute to Iran’s enrichment-related, reprocessing or heavy water-related activities, or development of nuclear weapon delivery systems (10 years after JCPOA Adoption Day – 18.10.2025, earlier if IAEA report confirms the Broader Conclusion)
  • Specifies such items, materials, equipment, goods and technology (INFCIRC/254/Rev.12/Part 1, INFCIRC/254/Rev.9/Part 2, or their most recent versions, and any items states determine could contribute to reprocessing or enrichment-related or heavy water-related activities inconsistent with the JCPOA)
  • Permits, upon prior case-by-case approval by the Security Council, technical training, technical or financial assistance, investment, brokering or other services, and transfer of financial resources or services, related to supply, sale, transfer, manufacture or use of prohibited items, materials, equipment, goods and technology (10 years after JCPOA Adoption Day – 18.10.2025, earlier if IAEA report confirms the Broader Conclusion)
  • Permits, upon prior case-by-case approval by the Security Council, investment and acquisition of an interest in foreign commercial activity involving uranium mining or production or use of nuclear material and technology listed in INFCIRC/254/Rev.12/Part 1 by Iran, its nationals, entities under its jurisdiction, or individuals and entities owned or controlled by them, acting on their behalf, or at their direction (10 years after JCPOA Adoption Day – 18.10.2025, earlier if IAEA report confirms the Broader Conclusion)
  • Specifies exemptions from prior Security Council approval and the related exemption procedures for (1) items, materials, equipment, goods and technology set out in INFCIRC/254/Rev.9/Part 2; (2) equipment covered by B.! of INFCIRC/254/Rev.12/Part 1 when such equipment is for light water reactors, low-enriched uranium covered by A.1.2 of INFCIRC/254/Rev.12/Part 1 when it is incorporated in assembled nuclear fuel elements for such reactors; and (3) items, materials, equipment, goods, technology, and related technical training, technical and financial assistance, investment, brokering or other services directly related to (a) necessary modification of two cascades at the Fordow facility for stable isotope production, (b) export of Iran’s enriched uranium in excess of 300kg in return for natural uranium, and (c) modernization of the Arak reactor based on agreed design
  • Specifies that in case of IAEA report confirming the Broader Conclusion before 18.10.2025, prior Security Council approval requirements will be suspended immediately and the related exemptions will continue to apply, permitting such activities upon prior case-by-case Security Council and Joint Commission notification
  • Permits, upon prior case-by-case approval by the Security Council and specified conditions, imports to and exports from Iran of all items, materials, equipment, goods and technology which could contribute to the development of nuclear weapon delivery systems, as well as related technology or technical assistance or training, financial assistance, investment, brokering or other services, transfer of financial resources or services, and Iran’s acquisition of an interest in foreign commercial activity regarding their supply, sale, transfer, manufacture, or use (8 years after JCPOA Adoption Day – 18.10. 2023, earlier if IAEA report confirms the Broader Conclusion)
  • Upon prior case-by-case approval by the Security Council, permits arms imports to Iran of specific weapons (battle tanks, armoured combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems, as defined by UN Register of Conventional Arms, and related materiel) and related technical training, financial resources or services, advice, and other services or assistance related to their supply, sale, transfer, manufacture, maintenance, or use (5 years after JCPOA Adoption Day – 18.10.2020, earlier if IAEA report confirms the Broader Conclusion)
  • Decides that states shall prevent and prohibit any activities inconsistent with the specified nuclear and arms imports restrictions until the Termination Day (10 years after JCPOA Adoption day – 18.10.2025, provided sanctions have not been reinstated under the “snapback” mechanism) or earlier if IAEA report confirms the Broader Conclusion
  • Imposes arms exports embargo from Iran and specifies case-by-case UN Security Council exemption (5 years after JCPOA Adoption Day – 18.10.2020, earlier if IAEA report confirms the Broader Conclusion)
  • Imposes asset freeze on individuals and entities on UNSCR 1737 sanctions list on the date of the adoption of UNSCR 2231 except those specified in Attachment (8 years after JCPOA Adoption Day – 18.10.2023, earlier if IAEA report confirms the Broader Conclusion)
  • Specifies asset freeze exemptions and exemption procedure for funds, financial assets, or economic resources for (a) necessary basic expenses, (b) necessary extraordinary expenses, (c) necessary for civil nuclear cooperation projects described in Annex III of the JCPOA, (d) subject to judicial, administrative, or arbitral lien or judgment, and (e) necessary for activities directly related to permitted proliferation sensitive items or required for the implementation of the JCPOA
  • Imposes travel ban on individuals on UNSCR 1737 sanctions list on the date of the adoption of UNSCR 2231 except those specified in Attachment (5 years after JCPOA Adoption Day – 18.10.2020, earlier if IAEA report confirms the Broader Conclusion)
  • Specifies case-by-case travel ban exemptions for humanitarian, religious, and other approved purposes
  • Specifies designation criteria
  • Calls for inspection of cargo to and from Iran if reasonable grounds for UNSCR 2231 or JCPOA violation

Procedural

  • Specifies a "snapback" mechanism for reintroduction of provisions of UNSCR 1696, 1737, 1747, 1803, 1835, and 1929 and termination of provisions in paragraphs 7, 8, 16, and 20 of UNSCR 2231 if the UNSC fails to adopt a resolution to continue the termination of previous resolutions within 30 days of notification of an issue constituting significant non-performance of commitments under JCPOA by a JCPOA participant State [paragraphs 11 and 12 of UNSCR 2231 and 36 and 37 of JCPOA], unless the notifying state informs the UNSC that the issue has been resolved before the end of the 30-day period [paragraph 13 of UNSCR 2231]
  • Specifies criteria for optional additions of account payments and interests
  • Specifies that the Security Council will directly undertake the tasks related to UNSCR 2231, including monitoring and improvement of implementation, answering of inquiries, provision of support and guidance, review of proposals for nuclear, ballistic missile, and arms-related transfers to and activities with Iran, examination of alleged inconsistencies with the resolution, and granting of exemptions to the restrictions
  • Asks for Secretary-General reports on restrictions implementation (every 6 months)