On June 4, 2018, Iran’s Supreme Leader Ayatollah Ali Khamenei gave orders to be ready for build-up of uranium enrichment and plutonium processing. Earlier, the country’s leadership declared its readiness to honor obligations under the nuclear deal (the Joint Comprehensive Plan of Action, JCPOA) even despite the US withdrawal from it. Anton Khlopkov, Director of the Center for Energy and Security Studies (CENESS), discusses the intentions of Iran, its economic relations with the EU and the future of the nuclear deal in an interview with valdaiclub.com.
One can assume that in the coming months the Islamic Republic of Iran will continue to follow its obligations on the nuclear deal in full, despite the Unite States’ withdrawal. Current statements are on the one hand directed at the domestic audience, because currently in Iran there is no consensus on the JCPOA. Indeed, there was no such consensus even before. The “internal” pressure on the country’s leadership led by Hassan Rouhani will increase, because Iran has dismantled (in some places irreversibly) part of the nuclear infrastructure in the framework of the JCPOA, while expecting a long-term reduction of the sanctions pressure and easing the conditions for the foreign business presence in the country. Earlier, these opportunities were seriously limited both by the UNSC sanctions and by unilateral sanctions. With the US withdrawal from the JCPOA, it is obvious that the opponents of the deal in Iran have strengthened their positions.
However, such statements are simultaneously directed at the international audience – above all the EU. Today the United States is again trying to create unacceptable conditions for foreign companies to conduct business in Iran, primarily due to the so-called secondary sanctions. A number of big European companies made it clear that they are already considering the possibility of revising their participation in projects in Iran or are planning to do so in the near future. Thus, the US not only left the deal, but also threatens with sanctions to other countries and their companies, if they continue to work in Iran. The situation is more complicated than it seems.
Iran may eventually lose the incentives to fulfill its obligations. Tehran has neither economic, nor political, nor military motivation to begin enrichment beyond the level which was agreed in the JCPOA. Therefore, if European countries, taking into account (in one form or another) the participation of Iran’s largest trade and economic partners from Asia, primarily Japan, South Korea, China, as well as Russia, cannot develop legal mechanisms that would protect big and medium foreign businesses from the US sanctions in case of their implementation, then European businesses will start to leave massively the country, and Iran will have to react. Therefore, it is premature to talk about the withdrawal of Iran from the JCPOA today. The country’s leadership declares its commitment to the agreement, and this is confirmed by the inspections of the International Atomic Energy Agency (IAEA), which is authorized to verify Iran’s compliance with its obligations. It is another matter whether an effective mechanism to protect foreign businesses in Iran from the US secondary sanctions is not found. It is clear that Iran will have less incentives to remain in the JCPOA.
Now relations between the European countries and the United States are far from cloudless, but there is still a gap between the statements in support of the JCPOA and the readiness to defend the businesses. In order to protect their companies, the Europeans have to risk an acute, open and deep conflict with Washington. But so far it seems that the Europeans will not go beyond the rhetoric in support of the JCPOA. There are no signs of willingness to defend seriously their businesses in Iran, to undertake creative measures – including, among other things, readiness to introduce retaliatory measures against American companies if the US translates its threats into reality and begins to impose secondary sanctions. I would like to hope that the situation will change. Otherwise, there is a high probability that the JCPOA finally will cease to exist.