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NUCLEAR PUZZLE

Will US sanctions trigger new negotiations with Iran?

Author:

15.06.2020

At the end of May, the US granted international companies from Russia, China and EU a period of 60 days to finish projects in Iran related to the peaceful use of nuclear energy at Iranian nuclear facilities.

The ultimatum concerns the nuclear reactor in Arak, which Iran, with the support of other countries, had to rebuild to conduct nuclear research for peaceful purposes. Other reasons include the provision of enriched uranium to a research reactor in Tehran and the export of exhausted fuel from Iran. An exception for 90 days has been recognised for international assistance to the Bushehr nuclear power plant.

On June 10, Republicans submitted a bill to the House of Representatives, which, if approved, will become “the largest punitive measure in Congress’s history imposed against Iran.” Many believe that this initiative is unlikely to receive the approval of the majority of representatives, mainly the Democrats.

 

What are Trump's intentions?

After US President Donald Trump unilaterally pulled the country out of the Joint Comprehensive Plan of Action (JCPA) in May 2018, Washington launched an unprecedented campaign of pressure on Iran, including news sanctions against Iran introduced almost every month. According to Trump, he wants to put "maximum pressure" on the Tehran government to force it to reconsider the agreement, which the Trump administration considers "the worst deal ever discussed."

The resumption of US sanctions in 2018, especially those introduced in the energy, maritime, and financial sectors, significantly decreased foreign investment in Iran and Iranian oil exports. Sanctions prohibit US companies, as well as companies from other countries, from trading with Iran. As a result, Iran's GDP fell by 4.8% and 9.5% in 2018 and 2019, respectively. The unemployment rate increased from 14.5% in 2018 to 16.8% in 2019.

The five other countries that signed the nuclear deal with Iran - Russia, China, Britain, France, and Germany - remain committed to the agreement. They claim that the agreement is the key to ongoing inspections by the International Atomic Energy Agency (IAEA) and does not allow Iran to develop nuclear weapons. Europe has created an alternative payment mechanism, or Special Purpose Vehicle (SPV), which aims to help companies trade with Iran without facing US sanctions.

As a result, the large-scale punitive measures against the Iranian economy have not come true to satisfy the intentions of the Trump administration. On the contrary, they caused the expansion of Iran’s nuclear activities and contributed to increased tension in the Middle East.

To break the double impasse in relations with Tehran and between the Trump administration and its internal and external critics, the US must minimise tension with its allies over the US sanctions regime. Secondly, Washington needs to offer a clear plan for the transition from pressure to negotiations. Otherwise, it seems that these sanctions are imposed haphazardly and aimlessly.

 

Soft blackmailing

The fact that Iran continues to comply with the basic terms of the JCPA, despite the newly imposed US sanctions and inability of other parties to the agreement, underlines the importance that Iranian leaders attach to the plan’s strategic rather than economic advantages. Therefore, Tehran is trying to force the US to return to the JCPA. These attempts seem to go in two directions. First, Iran launched a campaign, both directly and through intermediaries, to escalate tensions with the US and its allies in the region. A striking example is the drone attack in May 2019 on the East-West pipeline, through which Saudi oil is delivered from the country’s eastern provinces to the port of Yanbu. In addition, there were a series of attacks on commercial vessels near the port of Fujairah in the UAE and in the Gulf of Oman, the destruction of an American drone in the Strait of Hormuz in June, as well as the shelling of the Saudi Aramco refineries in last September.

The US has long refused to respond to Iranian provocations. Moreover, Trump’s reaction to the attacks on Aramco plants seemed that Washington was no longer interested in protecting its allies in the Persian Gulf or regional energy infrastructure from such an aggression. It looked like a clear departure from Carter’s doctrine, according to which the US was ready to use military force if necessary to protect its interests in the Persian Gulf. Thus, the escalation of tension in the region, caused by the actions of Iran, led to some cooling of relations between Washington and its regional allies.

Only after a rocket attack on an American military base in Iraqi Kirkuk in late December 2019 did President Trump react, according to Bloomberg. He ordered the removal of the commander of the Islamic Revolutionary Guards Corps (IRGC) Qassem Soleimani. American intelligence believed that he was involved in the attack and was preparing other terrorist attacks in the region.

Later, however, the US did not respond to attacks on its bases in Iraq, despite at least 20 attacks since January 3, since the death of Soleimani.

The second direction of Iranian pressure is a gradual (starting from May 2019 and then with a two-month periodicity) demonstrative reduction of its obligations under the nuclear deal. At the same time, Tehran constantly warned that the next step would be taken on schedule if the US and the EU did not begin to comply with the agreement.

The first stage concerned a sharp increase in enriched uranium and heavy water reserves.

The second is to increase the level of enrichment in excess of the permitted 3.67%. Third, Tehran no longer associates itself with restrictions on research and development in nuclear technology. Fourth, the use of centrifuges to enrich uranium at the facility in Fordo begins, although, according to the agreement, it should only function as a research centre. Finally, in January 2020, Iran announced that it would no longer comply with any restrictions on the number of centrifuges for uranium enrichment.

Since then Tehran has not only not taken any new actions, but also not fully completed the previous ones. For example, despite repeated threats, Iran did not start enriching uranium up to 20%, did not activate new IR-1 centrifuges at its Natanz facility, and did not withdraw from the Additional Protocol, which gives the IAEA opportunity for inspections.

Perhaps this was because the Supreme Leader of Iran, Ayatollah Khamenei, is trying to avoid unnecessary risks. In addition, in the past few months, Iran has been facing problems, including because of the pandemic, large-scale protests and increasing economic pressure. Therefore, most likely, Tehran has decided not to rush with the escalation of threats.

 

Iran not punished

Nevertheless Iran has persistently continued to build up its stocks of low enriched uranium, reducing the time it takes to produce fissile material for nuclear weapons (the so-called “breakthrough time”). Reducing this time in 2015 was the main argument of the Obama administration in favour of the need for an JCPA. According to Obama, at that time the US had to make a choice between a diplomatic agreement or war. As of March 2020, the breakthrough time is 3.5 months, while in January 2016 it was 12 months.

According to the latest IAEA report published on June 5, Iran almost eight times exceeded the limit on enriched uranium reserves stipulated by the nuclear agreement, bringing them to 1,571.6 kg. The country also increased the permitted level of purity of uranium. In addition, Tehran has exceeded the limit of 130 tons for heavy water used in nuclear reactors. The report also notes that Iran still does not allow experts to two sites that may contain undeclared nuclear materials. Based on these data, the IAEA believes that Iran has become even closer to accumulating enough fissile material to create a nuclear bomb.

Nevertheless, Iran has not yet been punished for violating the conditions of the JCPA. In January, after Iran announced its intention to stop complying with any restrictions on the number of centrifuges for uranium enrichment, France, Germany and the United Kingdom launched the Dispute Settlement Mechanism under the agreement. However, this process promises to be lengthy and, most likely, pointless, as it will not lead to penalties.

The diplomatic efforts urgently undertaken by French President Emmanuel Macron and British Prime Minister Boris Johnson were also unsuccessful. They could not convince Trump to ease sanctions in exchange for direct communication with Iranian President Hassan Rouhani, an interest in which he has been publicly expressing all the time.

 

Survive until November

Both Iran and the US seem to continue to go in line with the strategies they set in 2019. Iran’s goal, apparently, is to preserve the JCPA, which would allow the country to enjoy political benefits, while maintaining the possibility of creating nuclear weapons in the future.

The Trump administration continues to carry out "maximum pressure" to increase economic costs for Iran.

Small changes in the approach of both states can occur, most likely, on the eve of the US presidential election in November 2020.



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