UN Watchdog IAEA contradicts President Trump’s claim that Iran is violating Nuclear Deal

On 01 September 2017, UN watchdog IAEA (International Atomic Energy Agency), contradicted President Trump’s claim that Iran is violating the Nuclear Deal. This may complicate President Trump’s efforts to find a rationale to justify statements that Iran is violating the Nuclear Deal, i.e. JCPOA.  

As reported earlier, the U.S. Executive has to certify to the U.S. Congress that Iran is complying with the JCPOA. Note that the Trump Administration has repeatedly certified that Iran is complying with the two-year-old deal. 

U.S. Waivers related to JCPOA
U.S. Sanctions Easing under JCPOA (source: Congressional Research Service/ Iran Sanctions 04 August 2017/ RS20871)

U.S. Laws Waived and Executive Orders Terminated

The suspension of U.S. sanctions required issuing waivers of the laws below. The relevant waivers were issued on January 16, 2016, and the Obama Administration renewed all waivers
on January 18, 2017, for the maximum time period of waiver allowed under each law.49 (For example, if one of the laws below allows a 180 day waiver period, the  waiver would be applicable for 180 days from January 16, 2017.) The sanctions waived are as follows:

  • the blanket energy/economic-related provisions of the Iran Sanctions Act (Section 4(c)(1)(A) of P.L. 104-172, as amended). These constitute the overwhelming bulk of the act’s provisions. The one WMD-related provision of ISA was not waived. The existing six month waiver of ISA was to expire on July 19, 2017, and was renewed on July 17, 2017. The existing waiver is to expire on January 17, 2018.
  • Section 1245(d) of the National Defense Authorization Act for FY2012 (P.L.112-81) that imposes sanctions on countries that do not reduce Iran oil imports. The most recent 120-day waiver was issued by the Trump Administration on May 18, 2017. The next waiver will be due on/about September 17, 2017. 
  • Sections 212 and 213 (the economy-related provisions) of Iran Threat Reduction and Syria Human Rights Act (P.L. 112-158) provisions, but not the human rights-related provisions. The existing six-month waiver period was to expire on July 19, 2017, and was renewed on July 17, 2018. This waiver is to expire on January 17, 2018. 
  • Sections 1244, 1245, 1246, and 1247 of the Iran Freedom and Counter Proliferation Act (Subtitle D of P.L. 112-239). The latest 180-day waiver period was due to expire on July 17, 2017, and was renewed. This waiver is to expire on January 14, 2018.
  • The core provision of CISADA (P.L. 111-195) that sanctions foreign banks was not waived, but most Iranian banks have been “de-listed” under various U.S. Executive Orders (13224 and 13382), thereby reopening many entities to the international financial system. Banks sanctioned for terrorism funding, including Bank Saderat, Ansar Bank, and Mehr Bank, were not de-listed;
  • Executive Orders: 13574, 13590, 13622, 13645, and Sections 5-7 and 15 of Executive Order 13628 were revoked outright by Executive Order 13716and
  • The United States “de-listed” for sanctions the specified Iranian economic entities and personalities listed in Attachment III of the JCPOA, including the National Iranian Oil Company (NIOC), various Iranian banks, and many energy and shipping-related institutions. That step enabled foreign companies/banks to resume transactions with those entities without risking being penalized by the United States. 
  • Request for Congress to Lift Sanctions Outright. The JCPOA requires the U.S. Administration, by “Transition Day,” to request that Congress lift virtually all of the sanctions that will be suspended under the JCPOA. No outcome of such a request is mandated. The JCPOA requires all U.N. sanctions to terminate after 10 years of adoption (“Termination Day”).
  • U.N. Sanctions on Arms Sales and Ballistic Missiles to Be Terminated After Several Years. One issue that arose during final negotiations on the JCPOA was the suspension of U.N. sanctions on Iran’s development of nuclear-capable ballistic missiles and on Iran’s importation or exportation of conventional weaponry. The JCPOA does not impose any specific requirements on Iran on these issues, but Resolution 2231, which endorsed the JCPOA, “calls on” Iran not to develop ballistic missiles “designed to be capable” of delivering a nuclear weapon for a maximum of eight years from Adoption Day (October 18, 2015). The Resolution bans Iran’s exportation of arms without Security Council approval for a maximum of five years and makes sales of major combat systems to Iran subject to Security Council approval for a maximum of five years. Since Implementation Day, the Administration has sanctioned additional entities, under Executive Order 13382, for involvement in Iran’s continuing tests of ballistic missiles, as depicted in the tables at the end of this report.
U.S. sanctions that have stayed parallel to JCPOA
source: Congressional Research Service/ Iran Sanctions 04 August 2017/ RS20871 

U.S. Sanctions that Remain in Place
The JCPOA does not commit the United States to suspend U.S. sanctions on Iran for terrorism or human rights abuses, on foreign arms sales to Iran or sales of proliferation-sensitive technology such as ballistic missile technology, or on U.S.-Iran direct trade (with the selected exceptions). The sanctions that remain include

  • E.O. 12959, the ban on U.S. trade with and investment in Iran;
  • E.O. 13224 sanctioning terrorism entities (not specific to Iran);
  • E.O. 13382 sanctioning entities for proliferation (not specific to Iran);
  • the Iran-Iraq Arms Non-Proliferation Act that sanctions foreign firms that sell arms and weapons of mass destruction-related technology to Iran; 
  • the Iran-North Korea-Syria Non-Proliferation Act (INKSNA); 
  • the section of ISA that sanctions provision to Iran of WMD-and arms related technology to Iran;
  • the Executive Orders that sanction Iran’s interference in Iraq (E.O. 13438) and assistance to repression by the Assad regime in Syria (E.O. 13572);
  • Executive Orders (E.O. 13606 and 13628) and the provisions of CISADA, ITRSHRA, and IFCA that pertain to human rights or democratic change in Iran; sanctions under various executive orders on the IRGC, military, proliferation related, and human rights- and terrorism-related entities, which were not “de-listed” from sanctions;
  • all sanctions triggered by Iran’s designation as a state sponsor of terrorism. The JCPOA does not commit the United States to revoke Iran’s placement on the
    terrorism list;
  • Treasury Department regulations barring Iran from access to the U.S. financial system. Foreign banks can pay Iran in dollars out of their existing dollar supply,
    and the Treasury Department revised its guidance in October 2016 to stress that such transactions are permitted.

Re-imposition of Sanctions (“Snap-Back”)

Under a U.S. Policy Shift or for Iranian Violations Should the incoming Trump Administration decide to abrogate the JCPOA, one potential scenario would be to unilaterally reimpose those sanctions that were lifted. The President could reimpose those Executive Orders that were revoked, and terminate the waivers that were issued to implement the JCPOA. Doing so would render foreign firms vulnerable to U.S. penalties were they to enter into transactions with Iran that were again made subject to U.S. sanctions.

The JCPOA (paragraph 36 and 37) contains a mechanism for the “snap back” of U.N. sanctions if Iran does not satisfactorily resolve a compliance dispute. According to the JCPOA (and Resolution 2231), the United States (or any veto-wielding member of the U.N. Security Council) would be able to block a U.N. Security Council resolution that would continue the lifting of U.N. sanctions despite Iran’s refusal to resolve the dispute. In that case “... the provisions of the old U.N. Security Council resolutions would be reimposed, unless the U.N. Security Council decides otherwise.”

A related question is whether the effect of sanctions currently realized could ever be reconstituted if the United States alone reimposed sanctions. The effect of sanctions depended on the substantial degree of international cooperation with the U.S.-led sanctions regime. A wide range of countries depend on energy and other trade with Iran and might be reluctant to resume cooperating with U.S. sanctions unless Iran commits a material breach of its JCPOA commitments. However, many foreign companies might be deterred from transactions with Iran if U.S. sanctions were reimposed, in order not to risk their business prospects in the United States.

According to the IAEA, Iran’s stockpile of low-enriched uranium is well within the agreed upon limits under the JCPOA. For that matter, Iran’s stockpile of heavy water is also below the agreed limits.

The IAEA latest report, which was leaked, comes at a critical moment, as President Trump continues to threaten not to certify Iran’s compliance with the nuclear deal. The next certification report to U.S. Congress is expected in mid-October 2017.

There are reports that the White House is pressurizing governmental officials to report Iranian JCPOA infractions, which could pave the way for the U.S. to withdraw from the nuclear accord. In this context, Israel has also accused Iran from establishing missile production sites in Syria and Lebanon. This pressure has also included a trip of the current U.S. United Nations ambassador, Nikki Haley, to the IAEA headquarters in Vienna, in which she pressed the watchdog to implement a more aggressive inspections regime, and to focus on Iran’s military sites.

Yukiya Amano of Japan is the top UN official tracking Iran’s nuclear programme. Photograph: Ronald Zak/AP

Until now, the other signatories of the JCPOA, have stated their commitment to the deal. They will probably not revoke the deal without credible evidence that Iran is not honoring it’s JCPOA commitments. 

The IAEA director, Yukiya Amano, has defended it’s agency monitoring responsibilities vis-a-vis Iran’s JCPOA commitments.

Firstly, he, rightly emphasizes, that the IAEA is a fact-finding organization, geared towards verifying facts and not a political organization. As we saw in the case of Iraq, the independence of the IAEA should be guarded, as it should deliver objective information to UN member states and the UN Security Council. 

Secondly, the IAEA has the power to inspect any “sensitive,” locations – military or civilian – that it deems necessary to verify Iran’s commitments to the nuclear deal. In this context, to compel access to suspect locations, the watchdog only needs the approval of five of the eight signatories to the agreement. However, the watchdog will only do this on the basis of credible intelligence. Note that during her trip,according to the IAEA, ambassador Nikki Haley did not disclose any information  which justifies the inspection of military sites. 

However, the IAEA’s inspection regime has been criticized by two former IAEA inspectors – David Albright and Olli Heinonen. These two are critical of Tehran’s attitude towards the nuclear deal. They published an article in which they argue that the UN watchdog could make better use of provisions in the JCPOA to verify that dual-use items are not being used to violate the nuclear accord. This could include the inspection of military sites to confirm that dual-use items are not being used to research warhead design.

President Hassan Rouhani of Iran, center, in Parliament in Tehran in August. Iran on Thursday welcomed a report by a United Nations monitor that found it had adhered to the 2015 nuclear agreement. Credit Abedin Taherkenareh/European Press photo Agency

As usual, the knee-jerk reaction of Iran is not helpful.

It has stated in no unclear terms that it will not allow military sites to be inspected. The government spokesman Mohammad Bagher Nobakht this week dismissed the campaign for military inspections as “a dream.”

Ambassador Haley responded to this by saying: if “inspections of Iranian military sites are ‘merely a dream’, then Iranian compliance … is also a dream.”

It’s clear that President Trump is not happy with the JCPOA. However, the question is whether it’s wise for the U.S. to withdraw from the deal, instead of enforcing it. An unilateral withdrawal of the U.S. would certainly isolate it from it’s allies, which an already embattled Trump Administration does not need. 

Unclear is whether allies would accept the re-imposition of U.S. sanctions, especially secondary sanctions. This would certainly not help U.S. companies – especially those already legally conducting business with Iran. 

A wiser course would be for the U.S. to enforce the JCPOA; provide the IAEA with sufficient evidence in order to verify not only Iran’s compliance, but also to maintain some unity with other JCPOA signatories to ensure that the nuclear deal is a success. 

When trying to achieve peace, what both ambassador Haley and Mohammad Bagher Nobakht could consider; is that there are two types of dreams, those which are fulfilled, and those which should be. 

 

 

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