DISPATCHES FROM MOON OF ALABAMA, BY "B"
This article is part of an ongoing series of dispatches from Moon of Alabama
While the Europeans had said that they would continue to support the deal they have succumbed to the threat of secondary sanctions the U.S. said it would impose against them if they trade with Iran. As all payments between Iran and its trade partners are impeded by the sanctions, trade between Europe and Iran has come essentially to a halt. The Europeans have attempted to set up an alternative trade facilitating instrument known as INSTEX. But the mechanism, which also imposes additional conditions on Iran, has failed to function.
The Europeans could have implemented several other measures to counter the U.S. sanction threat. They failed to do so.
In June 2018 Iran triggered the Dispute Resolution Mechanism of the deal (explained below) by sending an official letter to the coordinator of JCPOA Joint Commission. A Joint Commission meeting was held in which the EU3 again promised that they would hold up their side of the deal:
6.The participants recognised that, in return for the implementation by Iran of its nuclear-related commitments, the lifting of sanctions, including the economic dividends arising from it, constitutes an essential part of the JCPOA.
8.The participants affirmed their commitment regarding the following objectives in good faith and in a constructive atmosphere:
- the maintenance and promotion of wider economic and sectoral relations with Iran;
- the preservation and maintenance of effective financial channels with Iran;
- the continuation of Iran’s export of oil and gas condensate, petroleum products and petrochemicals;
But those promises were empty. Trade between Europa and Iran failed to revive as the European countries failed to stand up against U.S. sanctions. By succumbing to Trump's secondary sanction threat the Europeans effectively reintroduced their own sanctions against Iran.
A year later and in consequence of the failure by the Europeans to provide effective sanction relief, as was promised under the JCPOA, Iran started to exceed certain limits the deal had set on its civil nuclear program. It justified the move by pointing to Article 26 of the JCPOA (pdf):
26. The EU will refrain from re-introducing or re-imposing the sanctions that it has terminated implementing under this JCPOA, without prejudice to the dispute resolution process provided for under this JCPOA. There will be no new nuclear- related UN Security Council sanctions and no new EU nuclear-related sanctions or restrictive measures. The United States will make best efforts in good faith to sustain this JCPOA and to prevent interference with the realisation of the full benefit by Iran of the sanctions lifting specified in Annex II.
Iran has stated that it will treat such a re-introduction or re-imposition of the sanctions specified in Annex II, or such an imposition of new nuclear-related sanctions, as grounds to cease performing its commitments under this JCPOA in whole or in part.
In five steps taken since, each two month apart, Iran began to use more modern types of Uranium enrichment centrifuges, increased the number of active centrifuges, lifted the level of enrichment and exceeded other limits the deal had set. All these steps were done under the watchful eyes of the International Atomic Energy Agency (IAEA) which continues to observe and report all details of Iran's program. All these steps can easily be reversed should the other signatories fulfill their commitments under the deal.
Today Britain, France and Germany themselves triggered the Dispute Resolution Mechanism of the deal with a common letter:
The E3 have fully upheld our JCPoA commitments, including sanctions-lifting as foreseen under the terms of the agreement. In addition to the lifting of all sanctions, required by our commitments under the agreement, we have worked tirelessly to support legitimate trade with Iran, including through the INSTEX special purpose vehicle.
However, in the meantime Iran has continued to break key restrictions set out in the JCPoA. Iran’s actions are inconsistent with the provisions of the nuclear agreement and have increasingly severe and non-reversible proliferation implications.
We do not accept the argument that Iran is entitled to reduce compliance with the JCPoA. Contrary to its statements, Iran has never triggered the JCPoA Dispute Resolution Mechanism and has no legal grounds to cease implementing the provisions of the agreement.
We have therefore been left with no choice, given Iran’s actions, but to register today our concerns that Iran is not meeting its commitments under the JCPoA and to refer this matter to the Joint Commission under the Dispute Resolution Mechanism, as set out in paragraph 36 of the JCPoA.
The approach is based on lies, extremely legalistic and unfair. Yes, technically the Europeans have lifted their sanctions. But at the same time they are imposing the U.S. sanctions against Iran. They do not buy Iranian oil or other products. They do not sell anything to Iran as payments from Iran are blocked. The outcome for Iran is no different than under the sanctions that were imposed before the deal was made. To point to the creation of INSTEX is laughable as no deals have been made under that mechanism beacause it only facilitates impractical barter deals and is restricted to certain products.
That Iran has "never triggered the JCPoA Dispute Resolution Mechanism" is an outright lie. The Joint Commission met on July 6 2018 at a ministerial level because Iran had triggered the mechanism. The Joint Statement issued after that meeting says so:
1. Upon the request of the Islamic Republic of Iran, a meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA) was held on 6 July in Vienna at ministerial level. The Joint Commission met to discuss the way forward to ensure the continued implementation of the nuclear deal in all its aspects ...
The Dispute Resolution Mechanism, laid out in article 36 and 37 of the JCPOA, foresees a short time discussion period about the grievances that triggered it. Should those discussions fail to find a solution the issue is escalated to the UN Security Council. If the UNSC fails to vote on a resolution in favor of Iran all UN sanctions that were imposed on Iran before the JCPOA deal was signed will be automatically reactivated.
The timeline for the process is tight. First the Joint Commission of JCPOA signatory countries has fifteen days to find a solution. Then the foreign ministers of those countries have another fifteen days. Five days later any JCPOA signatory can escalate the issue to the UNSC. If the UNSC does not vote against the reintroduction of sanctions within 30 days, which the U.S. would surely prevent by using its veto right, UN sanctions against Iran will automatically snap-back.
As the EU3 now triggered the process, 65 days from now Iran is likely to be again under full UN sanctions.
The EU3 will of course mealymouthily explain that they want Iran to pull back its program so that it does not exceed any limit of the deal. But why should Iran do that as long as the EU3 follow US sanctions against Iran and implement them against it? The EU3 have no reasonable answer to those questions.
Iran has no real incentive to stick to the JCPOA limits as long as sanctions are held up against it. When the UN sanctions snap back it is likely to leave the JCPOA even if China and Russia continue to trade with it.
The outcome here is 100% predictable. UN sanctions will snap back. Then the Trump administration will relaunch the 'nuclear Iran' propaganda campaign and will threaten Iran with war.
The EU countries who failed to hold up the deal will now globally be perceived as the poodles they are. They will, like the U.S., be seen as 'agreement incapable' countries who fail to stick to the deals they make. Their utterly servile behavior towards the U.S. is disastrous for their reputation.
Posted by b on January 14, 2020 at 19:23 UTC | Permalink
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