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The P4+1 and Iran Nuclear Deal Alert, June 29, 2018
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Arms Control NOW

Authored by Kelsey Davenport on June 29, 2018


UN Secretary-General Calls for JCPOA Implementation

UN Secretary-General Antonio Guterres said the nuclear deal with Iran is at a “crossroads” and expressed his deep regret over U.S. President Donald Trump’s decision to withdraw from the agreement and reimpose sanctions.

Guterres also called upon all states to support the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), saying “it is important that the withdrawal of one country not impede the ability of others to fully implement their commitments under the [JCPOA] or to engage in activities consistent with resolution 2231.”

Guterres’s remarks were part of a biannual report to the Security Council that assessed the implementation of Resolution 2231, which endorsed the JCPOA and called upon all states to support it. The resolution also put in place legally binding requirements for states to seek Security Council approval before transferring dual-use nuclear materials and technologies, ballistic missiles components, and arms. (See below for more details.)

The United States, however, is making it difficult for states to continue supporting the deal by conducting legitimate business with Iran. U.S. officials are traveling to capitals and urging states to abide by the sanctions Trump reimposed May 8. The penalties for these sanctions will be enforced Aug. 6 and Nov. 4 after 90- and 180-day wind-down periods.

A senior State Department official told press June 26 that the United States is pushing for all allies to cut oil imports from Iran to zero by Nov. 4 and that the “predisposition” is not to grant any waivers. The fiscal year 2012 National Defense Authorization Act only requires states to make a “significant reduction” for an exemption from sanctions but does not specify the amount of the reduction. It is unclear if the administration is actually interpreting that to mean “zero.” It is also not clear if the oil market could absorb zeroing out exports from Iran.

Chris Ford, assistant secretary of state for international security and nonproliferation, said on June 11 that the United States is prepared to “lean hard on our partners and the international community” as Washington pursues its strategy of using sanctions to pressure Iran into new negotiations on its ballistic missiles and regional activities, as well as its nuclear program.

Iran continues to maintain that it will pull out of the JCPOA if the sanctions relief envisioned by the deal dries up. Iran’s Deputy Foreign Minister Abbas Araghchi said June 22 in Moscow that "Iran's exit from the nuclear deal is probable in the coming weeks” but noted that Tehran is still waiting to evaluate Europe’s response to the U.S. violation of the deal and reimposition of sanctions. The EU has already adopted some measures, including an update to its blocking regulation that prohibits European entities from cooperation with U.S. sanctions, and is considering others (see below).

He called June 23 for Europe to deliver its “package” of economic measures to sustain the multilateral nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA), within 10 days. An Iranian Foreign Ministry Spokesperson later added that Russia and China must also endorse the European package.

Iranian President Hassan Rouhani met with Chinese President Xi Jinping June 11 at the Shanghai Cooperation Organization meeting in China. Xi said China was “determined to cement” economic relations with Iran and was “decisively against the U.S. unilateral move” to withdraw from the JCPOA and reimpose sanctions. Rouhani called for deepening the Iran-China relationship on banking and trade in national currencies.—KELSEY DAVENPORT, director for nonproliferation policy


EU Updates Its Blocking Regulation to Include Iran Sanctions

The EU updated its blocking regulation to include U.S. sanctions reimposed on Iran, fulfilling a decision made by the European Commission in May. EU members have two months from the June 6 adoption to oppose the measure before it enters into effect.

A number of companies have already announced that they are withdrawing from the Iranian market, but EU foreign policy chief Federica Mogherini told the European Parliament on June 12 that the focus is on small and medium-sized enterprises that “are less engaged in the U.S. market.” She also said that the “most important challenge now is to find solutions on banking and finance” to facilitate legitimate trade.

The European Commission agreed June 6 to update the European Investment Bank’s (EIB) mandate to enable lending to Iran. In a statement, the EU said the lending mandate update would make Iran eligible for investment activities, however, it does “not commit the EIB to actually support projects in Iran.” But it seems unlikely that the bank will decide to finance any activities in Iran. After the announcement, the bank said in a statement that it “is not the right tool” and that the bank cannot ignore the U.S. sanctions and remain a “solid and credible institution.”

In a June 4 letter to U.S. Treasury Secretary Steven Mnuchin and U.S. Secretary of State Mike Pompeo, the foreign ministers and finance ministers of the E3 (France, Germany, and the United Kingdom) requested sanctions exemptions that would allow European entities to maintain banking channels with Iran and allow existing contracts to go forward. They wrote that, as U.S. allies, they expect Washington “will refrain from taking action to harm Europe’s security interests” and reaffirmed that they consider the nuclear deal critical for protecting “collective security interests.”
There is no indication from the Trump administration that exemptions will be granted. 


UN Reports on Resolution 2231

The UN Secretary-General issued its biannual report on the implementation of Resolution 2231, which endorsed the JCPOA and put in place certain restrictions on Iran’s missile program and arms trade, to the Security Council.

The Security Council was briefed on the report June 27 and states sparred over the findings.  Russian Ambassador to the UN, Vasily Nebenzya, said that it is “absolutely incomprehensible” that the report did not mention that U.S. reimposition of sanctions is a “flagrant violation” of the JCPOA and Resolution 2231 and mentioned it only in passing.

Niki Haley, U.S. Ambassador to the UN, said that the report included “troubling, but not surprising, evidence that that Iran has and continues to violate UN Security Council Resolutions” and the United States will not allow Iran’s activities to go “unchecked.”

In the June 12 report, the Secretary-General noted two alleged violations of the procurement channel and concluded that components of ballistic missiles fired at Saudi Arabia from Yemen came from Iran. The Secretariat was unable to determine if the missile components were transferred before or after January 2016, when Resolution 2231 came into effect. After that point, any transfer of ballistic missile components would require Security Council approval.

Tehran told the Secretary-General that Iran does not seek to transfer arms to Yemen and said that Yemen had a stockpile of ballistic missiles and the means to manufacture them.

The alleged procurement channel violations did take place after January 2016. Unlike the missile transfers, which would violate Resolution 2231, but not the JCPOA, illicit transfer of dual-use nuclear materials and technologies would violate both the nuclear deal and the resolution. The Security Council is the final arbiter of the procurement channel set up by the JCPOA to monitor Iran’s imports of dual-use materials.

According to the Secretary-General’s report, the United Arab Emirates notified the UN that it seized shipments bound for Iran in May 2016, and April, July, and December 2017 that included dual-use materials such as tungsten, titanium, and capacitors. According to the UAE’s assessment, these materials required approval from the Security Council under the procurement channel set up by the JCPOA.

The Secretary-General also noted a U.S. letter sent April 27 alleging that carbon fiber and an aluminum alloy had been transferred to Iran in 2017 without approval by the Security Council.

Iran responded to the allegations in a June 1 letter stating that it is the “responsibility of the exporting state to seek approval through the procurement channel,” and urged the UN to conduct more outreach on Resolution 2231. The Secretariat reached a similar conclusion about the need for better understanding of Resolution 2231’s provisions in past reports.

Ignorance, either by the exporting state or Iran, is not an excuse for failure to comply with the JCPOA procurement channel and the allegations that Iran is importing dual-use goods outside of the procurement channel is troubling. Even if the materials are for non-nuclear projects, Iran must adhere to the process put in place by the JCPOA and Resolution 2231. These allegations underscore the importance of full implementation of the JCPOA and Resolution 2231 by all parties.

The report also noted that of the 37 applications to the procurement channel, 24 were approved, three were rejected, seven were withdrawn, and three were currently being reviewed.


Iran Announces New Centrifuge Facility

Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, announced the opening of a new centrifuge production facility June 6. Iran notified the IAEA about its intention to build the facility during the IAEA’s Board of Governors meeting in Vienna, June 4-8.

Building a new facility for centrifuge production is not a violation of the deal, so long as Iran notifies the agency in accordance with its safeguards obligations, which Tehran appears to have done.

However, if Iran were to produce centrifuge machines at that location in the future, it might breach the limits of the accord. Under the deal, Iran can produce advanced centrifuges in line with its research and development plan and can only produce IR-1 machines, which are currently used for enriching uranium, when the number of machines in monitored storage drops below 500. Iran is not yet to that point.

Reza Najafi, Iran’s ambassador to the IAEA, told press June 6 that the decision to open the facility is the “preparatory works for a possible scenario” if the JCPOA fails and reiterated that Iran will not start “any activities contrary to the JCPOA” at this time. Iran’s Supreme Leader made a similar statement in a June 4 tweet, saying Iran would begin preparations for increasing its uranium enrichment capacity “for now within the JCPOA.”

Mogherini tweeted that the move is not a violation of the deal but said that by making the announcement at this “particularly critical juncture, they will not contribute to building confidence in the nature of the Iranian nuclear programme.”

The announcement to build a new centrifuge production facility, while unhelpful, should not come as a surprise. After Trump’s decision to violate the deal and throw the sanctions relief envisioned by the agreement into doubt, it was expected that Iran would remind the world that it could resume troublesome nuclear activities limited by the accord. Iran made a similar announcement June 28, saying it restarted production of uranium hexafluoride gas at a conversion facility in Esfahan. At the conversion facility, uranium yellowcake is turned into uranium hexafluoride gas, which can be fed into centrifuges for enrichment. 

But given that the remaining parties to the deal – China, France, Germany, Russia, the United Kingdom, and the EU – are looking for options to sustain the deal, Iran should act with restraint and refrain from actions that undermine the accord or push the limits of the agreement.


IAEA Report on Iran Indicates Compliance

The International Atomic Energy Agency (IAEA) released its quarterly report on Iran’s nuclear program June 6. The report's findings indicate that Iran continues to comply with the JCPOA.

The report, finalized May 24, was the first IAEA report issued since Trump withdrew the United States from the accord. The report bears out what Iranian officials stated after Trump’s announcement – that Iran would remain within the JCPOA, for now.

According to the report:

  • Iran’s stockpile of uranium enriched to 3.67 percent uranium-235 was 123.9 kg, below the 300 kg limit set by the accord;
  • Iran’s stockpile of heavy water was 120.3 metric tons, below the 130 metric ton limit set by the deal;
  • no more than 5,060 IR-1 centrifuges were installed at Natanz for enriching uranium;
  • Iran enriched uranium only to 3.67 percent uranium-235, the limit set by the deal;
  • Iran’s research and development activities using advanced centrifuges were in line with the state’s long-term plan; and
  • Iran has continued to implement the additional protocol to its safeguards agreement and permit additional monitoring and verification measures under the JCPOA.

The report did indicate that Iran’s cooperation with IAEA inspectors on access provisions under the additional protocol could be more timely. The report, and comments made by IAEA Director General Yukiya Amano in his June 4 address to the agency’s Board of Governors, said that “timely and proactive cooperation by Iran in providing such access would facilitate implementation of the Additional Protocol and enhance confidence.”

The JCPOA requires Iran to implement the additional protocol in perpetuity. The additional protocol gives inspectors access to more information and a greater number of sites in Iran – it is a critical tool for guarding against diversion and covert activities. While it is concerning that Iran may not be cooperating in a timely fashion and Tehran should rectify this, the IAEA did not indicate that Iran had blocked access or violated the deal. The report noted that the IAEA has had access to “all the sites and locations in Iran which it needed to visit.”

U.S. Chargé d’Affaires Nicole Shampaine told the IAEA’s Board of Governors during its meeting June 5 that the IAEA “should never again have to appeal for ‘timely and proactive cooperation’ by Iran.”

If the JCPOA collapses, Iran would no longer be bound to implement the additional protocol. That would be a significant blow to efforts to verify that Iran’s nuclear program is peaceful. While the additional protocol is becoming a norm – 148 states have adopted it –it is not mandatory. The nuclear Nonproliferation Treaty requires only a safeguards agreement with the IAEA. 


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Author: 
Kelsey Davenport