Iran’s Ultimatum to Europe: Is the JCPOA Doomed?

On May 8, 2019, Iran sent a message to Germany, Britain, China and Russia that it was suspending the fulfilment of certain obligations under the “Iranian nuclear deal” – the Joint Comprehensive Plan of Action, or JCPOA. In particular, Tehran refuses to comply with restrictions that were placed on the production of uranium and heavy water reserves. In addition, if Iran’s partners fail to fulfil their obligations “in the banking and oil fields sectors” within 60 days, Tehran intends to proceed with the modernisation of the nuclear reactor in Arak. How these statements can be interpreted, whether the JCPOA should be considered “buried” in advance, and what Russia can do in this case, Andrey Kortunov, director general of the Russian International Affairs Council, discussed in an exclusive interview with valdaiclub.com.

On May 8, 2019, Iran sent a message to Germany, Britain, China and Russia that it was suspending the fulfilment of certain obligations under the “Iranian nuclear deal” – the Joint Comprehensive Plan of Action, or JCPOA. In particular, Tehran refuses to comply with restrictions that were placed on the production of uranium and heavy water reserves. In addition, if Iran’s partners fail to fulfil their obligations “in the banking and oil fields sectors” within 60 days, Tehran intends to proceed with the modernisation of the nuclear reactor in Arak. How these statements can be interpreted, whether the JCPOA should be considered “buried” in advance, and what Russia can do in this case, Andrey Kortunov, director general of the Russian International Affairs Council, discussed in an exclusive interview with valdaiclub.com.

Iran’s decision now looks like a largely forced one. According to the original agreement, Iran was left with the right not only to store stocks of enriched uranium and heavy water, but also to sell their surplus on the international market. However, now, given the US sanctions, Iran has actually lost this opportunity and faces an unpleasant dilemma: either to stop the enrichment program, or to exceed the limits that were provided for in the JCPOA agreement of 2015. Naturally, Iran prefers to pursue the second path, referring to the fact that, because of the sanctions, it does not have the technical ability to fulfil this part of the agreement. Therefore, the latest statement of Iran should not be over-dramatized.

As for the 60-day period, this is a much more serious ultimatum, addressed primarily to the European parties of the agreement. From this we can conclude that Iran does not consider their efforts to create separate trading mechanisms sufficient to fulfil the JCPOA’s conditions. Since it is obvious that for Russia and China, US sanctions are not so important and fundamental, the ball is being thrown to the Europeans. It is a call to show more energy and somehow ensure that the European companies won’t comply with unilateral American sanctions. Achieving this, for obvious reasons, is very difficult, since no one wants to be targeted with lawsuits and multi-million-dollar fines for engaging in economic cooperation with Iran.

This is the outcome the Trump administration actually hopes to achieve: Iran’s withdrawal from the deal will relieve tensions in US-European relations and confirm US fears that Iran is insincere and does not intend to comply with the terms of the deal. Moreover, it will give the United States formal grounds for moving the issue to the UN Security Council and demanding the restoration of sanctions at the level of the international community, as they existed before 2015. Therefore, the problem here is to what extent the Iranian leadership is able to show enough restraint and readiness to continue implementation of the JCPOA’s main provisions, despite growing American pressure.

Andrey Kortunov:
What Is the US Endgame in Iran?

If we talk about whether it is possible to save the deal, this is primarily a question for Europe. Iran has some idea about ​​what to expect from Russia and China, even if the deal fails. The position of the European countries, from which Iran expects an increase of trade volume, investment and technological exchange, looks rather two-sided, because they do not want to quarrel with the United States, and their businesses do not want to lose this big market. The Europeans could accelerate the establishment of alternative financial settlement mechanisms that would take the businesses out of the US sanctions, or take other steps towards Tehran.

On the whole, the task of the international community is to find a worthy place for Iran in the region’s security system, so that it could act as a stakeholder rather than as a spoiler. This is about Iran’s behaviour in the region, which raises questions from its Sunni Arab neighbours, not to mention Israel. The solution of this formidable task will require a lot of time, the gradual building of confidence, a reduction in hostile rhetoric, contacts between the militaries, a refusal to interfere in the internal affairs of other countries, an agreement on the status of foreign armed forces in Syria, and similar measures. Now, however, this process is not only difficult, it has been effectively paralyzed due to pressure from the United States. However, using a “stick” method in the absence of “carrots” cannot solve this problem.

As for the possible contribution of Russia, it cannot significantly affect the economic situation in Iran: if you look at the total trade and investment between the two countries, it is not very significant. Russia can block the resolutions that the United States may put forward in the UN Security Council and to some extent act as a mediator between Iran and its opponents in the region, such as Saudi Arabia. For example, Russia is believed to have played a big role in connecting Iran to the OPEC+ agreement, which restricted the supply of oil to world markets. Hypothetically, we can even assume that Russia, as a country with good relations with both Iran and Israel, could help relieve tensions and increase predictability in these very complex and painful relations. In other words, Russia can do quite a lot at the political level, but it cannot replace Europe as a potential driver of Iran’s economic and social development.

First published in the Valdai Discussion Club.