Iranian Nuclear Deal: Twists and Turns of Fate

Approved in 2015, the Joint Comprehensive Plan of Action (JCPOA) on the Iranian nuclear issue became a compromise document. It scaled down, rather than shut down, the Iranian nuclear program and confirmed Tehran’s right to peaceful nuclear projects and it also abolished international sanctions. The Iranian side perceived the latter decision as its main goal. The international community persuaded Iran to limit the scale of its nuclear activities, although for a limited period of time, and received an opportunity to conduct regular intrusive monitoring of all nuclear facilities in this country, so as to prevent their conversion to military programs.

This deal’s Western participants, including the United States, the United Kingdom, France and Germany, perceived it as the first step for completely eliminating their concerns linked with the Iranian nuclear program. While signing this deal, they also hoped to eventually involve Iran in compromise agreements on other matters, including its missile program and the regional agenda.

The Iranian leadership’s reformist wing headed by President of the Islamic Republic of Iran Hassan Rouhani staked on the JCPOA, hoping that the nuclear deal’s implementation would help launch active trade, economic and other cooperation with the West and attract foreign investment and cutting-edge technology. This policy was expected to improve the country’s socio-economic situation and to strengthen the reformists’ domestic-policy positions. The government of Hassan Rouhani also aimed to create favorable pre-requisites for normalizing Iranian-US relations but did not publicly advertise this goal.

One could hardly predict that these plans would never materialize. The impulsive and unpredictable Republican candidate Donald Trump who unexpectedly won the 2016 US presidential election and tried to torpedo his predecessor’s domestic and foreign policy legacy ruined everyone’s game. During the election race, he countered Barack Obama’s policy aiming to involve Iran, and clearly voiced his rejection of the nuclear deal with Iran and an openly anti-Iran position.

The US withdrawal from the JCPOA in May 2018, Washington’s categorical demands with regard to Iran that obviously aim to change the Iranian regime, as well as the resumption of tough economic sanctions and a focus on containing regional ambitions of the Islamic Republic of Iran, demoralized the Iranian establishment’s moderate liberal wing and seriously consolidated the positions of conservative radical circles during the principled standoff with the United States.

Washington’s withdrawal from the JCPOA dealt a painful blow to the deal’s European participants who hoped very much that the implementation of the Vienna agreements would close the military aspects of Iran’s nuclear activities and would also strengthen the traditionally close trade and economic ties with Tehran and would increase the influence of reformist circles on the domestic and foreign political decision-making process. In the long run, the deal’s implementation was expected to scale down Iran’s regional policies that aimed to confront the West.

After the US withdrawal from the nuclear deal, its other participants issued a joint statement and reaffirmed their commitment to the JCPOA and a readiness to continue fulfilling their obligations to abolish anti-Iran sanctions and to secure the deal’s economic benefits for Iran.

In this connection, the United Kingdom, France and Germany voiced their intention to implement a range of measures for shielding European businesses from exterritorial US sanctions. After lengthy procrastinations, accompanied by Washington’s threats to punish the Europeans and Tehran’s threats to withdraw from the nuclear deal, in January 2019, European countries announced the creation of the special Instrument in Support of Trade Exchanges (INSTEX) mechanism of payments and settlements to facilitate trade between European economic operators and Iran. The deadline for launching this mechanism has not been specified. To Tehran’s disappointment, this mechanism will only cover food, pharmaceuticals and medical equipment which are not covered by the sanctions per se. The Iranian side insists that INSTEX apply to broader commodity groups, primarily crude oil which is the main source of the Iranian budget revenues.

However, the European Union did not display firm political will and a determination to counter US pressure. The EU has failed to resume the 1996 Blocking Regulations as a countermeasure to the US economic sanctions against Cuba, Iran and Lebanon that would protect European business interests, although its representatives discussed this matter in great detail. There was no need for these regulations back then. Many major European companies and banks, closely linked with the US financial system and market, have already left Iran because they do not expect any support from EU bureaucratic agencies and because they don’t want to face multi-million dollar fines.

In addition, Washington has listed the Islamic Revolutionary Guard Corps, a state-run military organization serving as an alternative to the national army, among international terrorist organizations. This will further complicate trade, economic and other ties with the Islamic Republic of Iran for all countries. Apart from fulfilling its functions to maintain the country’s domestic and external security, the Islamic Revolutionary Guard Corps is seriously involved in financial-economic and trade operations. It controls major industrial-production conglomerates, companies and banks that have ties with foreign partners. The introduction of sanctions not only against certain divisions and persons linked with this organization, but against the entire Islamic Revolutionary Guard Corps, shut down the remaining channels and mechanisms of foreign economic and trade activities.

The United States continues to believe that its withdrawal from the JCPOA and tougher sanctions will seriously aggravate Iran’s domestic socio-economic problems and would force Tehran to negotiate the nuclear issues and other matters on Washington’s terms. Washington believes that, if this does not happen, the current Iranian regime will eventually have to step down under pressure from increasingly greater popular protests.

All this points to the fact that the incumbent US administration either does not know the mentality and psychology of the Iranians or disregards these factors. In its 40-year-plus history, the Islamic Republic of Iran has repeatedly faced serious external challenges that only served to consolidate the people of Iran and increased their determination to resist these threats. The United States hopes that it will become possible to change the Iranian regime; however, this remains absolutely impossible in the foreseeable future. There is no revolutionary situation in Iran. Sporadic protests involving various population groups mostly imply economic demands, have no political implications and are quickly neutralized by the authorities. Young people, the largest and most active segment of the Iranian population, are not prepared for radical actions as had been the case on the eve of the 1979 Iranian revolution. This was proved by civil unrest involving young people in the spring of 2009 when, according to many Iranians, Mahmoud Ahmadinejad’s reelection for a second term was accompanied by gross violations and election rigging.

There is no powerful and well-organized opposition in the country. The exiled leftist-radical People's Mojahedin Organization of Iran on which Trump’s entourage wants to stake, had compromised itself by supporting Saddam Hussein during the Iranian-Iraqi War and by staging terrorist attacks against Iranian officials. Iran’s ethnic minorities mostly manage to come to terms with the central government and are not very eager to confront the country’s security and law enforcement agencies, especially the Islamic Revolutionary Guard Corps.

The toughening of the US sanctions has certainly had a significantly negative impact on Iran’s economy and the mundane lives of ordinary Iranians. The worsening devaluation of the national currency, a slowdown in economic growth, progressing inflation and unemployment have led to growing discontent among the population. So far, the Iranian authorities have been able to contain such sentiments. In order to do that, they’ve implemented a number of measures to mobilise the financial and economic spheres, within the framework of the “economic resistance” policy Tehran plans to carry out using the country’s forces and resources. Criticism of the anti-Iranian policies of the US administration has intensified, and it is said to be the main reason for the aggravation of Iran’s socio-economic unrest. In addition, the authorities aim to stir up the religious nationalist feelings of the Iranians as a means of rallying the nation in the face of an external threat. The country’s leadership is also confident that the country’s flexible system of checks and balances and maintaining all the branches of government balances, along with manual adjustment of all the emerging problems and disagreements by the Iranian Supreme Leader’s institution, can neutralise the economic and political challenges to the Islamic Republic.

It should be noted that the Iranian leadership, including Sayyid Ali Hosseini Khamenei, the current Supreme Leader of the Islamic Republic of Iran, realizes the importance of preserving the JCPOA even without US involvement. They comprehend the fact that Iran’s withdrawal from the nuclear deal and the resumption and, all the more so, intensification of its nuclear activities (on which Iranian radicals insist), would reinstate an international anti-Iran coalition and would also resume full-scale sanctions under UN Security Council Resolution 2231 that had legitimized the JCPOA in its time.

The continuing strengthening of US sanctions, the European Union’s inaction, and the increasing pressure of local radicals on the government of Hassan Rouhani to force him to toughen Tehran’s positions, led him to retaliate. On May 8, a year after the US left the JCPOA, Tehran announced plans to suspend voluntary commitments on the nuclear deal and that the country would resume selling its surplus low-enriched uranium and heavy water abroad.

In fact, the United States itself provoked these steps, by having “forbid” other states from buying such surpluses from Tehran. Hassan Rouhani also said that if the other parties to the agreement did not take any comprehensive steps to ensure Iran’s economic interests within two months, in the oil and banking sectors in particular, Iran would begin to enrich uranium beyond the bar set by the JCPOA. At the same time, the President of the Islamic Republic emphasized that if the Europeans meet the legitimate requirements of Iran, he would not take these measures.

As usual, the European Union reaffirmed its commitment to the JCPOA, but described these requirements as an “unacceptable ultimatum” that “can have consequences” and called on Tehran to fulfil its obligations regarding the JCPOA. When the Europeans took no action, Iran exacerbated the situation. In mid-June, it announced that it is beginning to accelerate uranium enrichment in order to exceed the bar of 300 kg established by the nuclear deal by the end of the month. At the same time, Iran not only fulfilled this promise, but also exceeded the uranium enrichment level of above the established level of 3.67 percent, and announced that if the Europeans remained inactive, it would successively abnegate its other obligations every two months.

The decisive behaviour of Iran this time has seriously worried the European Union. Brussels has announced the practical launch of the INSTEX mechanism for payments on humanitarian supplies to Iran and intensified internal consultations on finding a way out of this situation. A meeting of the JCPOA Joint Commission for the settlement of problems was held. Contacts between the EU leadership and American representatives on Iranian issues have intensified.

The European Union, unable to withstand US sanctions against Iran and secure the economic benefits laid down under the terms of the nuclear deal (including the introduction of INSTEX) is trying to persuade the United States to ease sanctions against Tehran in exchange for some concessions from Iran on a “little by little" principle. This is seen in Brussels as a first step towards relieving growing tensions around the JCPOA and the possible resumption of negotiations on its “reconfiguration”, as the US President has consistently insisted. In particular, this is about renewing permission to sell Iranian oil to a number of its main importers, including China, India and Japan, which previously had such a permit from Washington. In response, the Europeans suggest that Tehran could return to complying with its nuclear deal obligations. The liberal part of the Iranian leadership is also looking for compromises. In particular, Iranian Foreign Minister Mohammad Javad Zarif, reacting to Donald Trump’s repeated statements that the US’s sole purpose is not to overthrow the government of the Islamic Republic, but to prevent it from developing nuclear weapons, said in an interview with American journalists in New York that Tehran is ready to ratify without delay the Additional Protocol to the IAEA Safeguards Agreement, which provides for the continuous intrusive monitoring of all Iran’s nuclear facilities in exchange for the lifting of sanctions. The aggravation of the tanker war has negatively affected the situation with the JCPOA. Lacking any evidence, the United States and its Western allies insisted that Tehran was behind the mysterious bombings of the Norwegian and Japanese oil tankers in the Gulf of Oman, which were followed by yet another tanker incident. On July 4, British marines detained an Iranian oil supertanker in the Strait of Gibraltar, which was allegedly heading for Syria in violation of EU sanctions against Damascus. It cannot be ruled out that the actions of the British authorities, who took a tougher stance against Iran than France and Germany, were taken in response to the phased termination of Tehran's fulfilment of its obligations under the JCPOA. The incident in the Strait of Gibraltar, which was clearly orchestrated with the United States, can also be considered a means of provoking Iran to resort to violence in order to aggravate relations with the EU, destroy the JCPOA and subsequently prompt the revival of European sanctions against Tehran.

Iran responded symmetrically to the Gibraltar incident, capturing a British oil tanker in the Straight of Hormuz on July 18. This forced London to negotiate with the aim of resolving both incidents and to temporarily stop sending its tankers to the Persian Gulf. The tense situation in the Persian Gulf region, fuelled by the US military presence build-up, the tanker incidents and bellicose rhetoric on both sides, is fraught with potential for kindling armed conflict. If that happens, it will not only bury the JCPOA, but also lead to catastrophic consequences of a military, geopolitical and economic nature, not only within the region, but around the globe.


Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.