With JCPOA revival uncertain, Iran is slowly and surely making the nuclear deal irrelevant

New Delhi

The latest round of talks on the revival of the Iran nuclear deal or the Joint Comprehensive Plan of Action (JCPOA) ended in Vienna on August 8, with all parties returning back to their respective capitals for ‘political consultations’. The talks were convened as a part of one last-ditch effort by Josep Borrell, EU’s high representative along with the lead Iranian nuclear negotiator Ali Bagheri Kani in yet another bid to revive the deal. Earlier too, eight rounds of talks in Vienna since April 2021 did not yield any positive results. It may be recalled that the Iran Nuclear Deal was revoked unilaterally by the US under President Trump in May 2018, calling it the “most horrible deal ever”. Talks to revive the deal and restore the JCPOA began in right earnest only in April 2021, soon after Joe Biden took over as the US president. At the end of the eighth round of talks in January 2022, the talks were paused for participants ‘go back to capitals for consultations’. In addition to the Vienna talks, there was also a round of indirect talks hosted at Doha on 28-29 June, which too failed to deliver despite initial positive messaging from both sides.

Politically, neither Iran nor the US look to budge from their stand on critical issues. There are basically two key sticking points to the nuclear deal; first is a sovereign assurance sought from the US by Iran that America will not unilaterally revoke the deal in future, and secondly, all economic sanctions imposed under “false excuses” must be lifted. It is also seeking that IRGC should be delisted from the list of foreign terrorist organizations. On all these issues, the US is not ready to concede yet. Any hopes of an early resolution were dashed by the IAEA's June 6 resolution formally criticising Iran for a lack of cooperation and failure to explain uranium traces found at undeclared sites in Iran. On the same day, the Terrorist Financing Targeting Center (TFTC), a group of countries led by the US and Gulf nations, sanctioned three individuals associated with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) on terror financing. In an almost immediate response, Iran started removing surveillance cameras from nuclear sites in the country, rendering the IAEA blind to nuclear activities in the Iranian plants.

Why is JCPOA important?

JCPOA, signed on July 14, 2015, and effective from January 2016, was a landmark deal, negotiated over five years between Iran and P5 plus1. It was an ‘instrument of faith’ between the two parties with strict checks and balances which was aimed to ensure that a strict vigil was kept on Iran’s nuclear program, lest Iran develops a nuclear weapon and at the same time, tough and crippling economic sanctions against Iran were to be revoked giving Iran the much needed economic relief. It was a win-win situation for both parties. Scaling down of the nuclear program by Iran coupled with strict monitoring by IAEA ensured that the delicate security and geopolitical balance in the region was not altered. Similarly, Iran was able to again commence its crude oil and natural gas trade and also invite global investments to prop its economy. With the US scaling down its active involvement in military conflicts in the West Asian region and Afghanistan under President Obama, it was necessary to ensure that the potential nuclear threat from Iran was contained and thus JCPOA was clearly a very critical and important deal towards that goal.

What happened to JCPOA?

Iran was sincere towards the implementation of the JCPOA and did everything that was required of it. Under the deal, Iran could not operate more than 5,000 first-generation IR-1 centrifuges to enrich uranium, that too, only up-to to 3.67 per cent. All uranium enriched to 20 per cent was to be scrapped or shipped out, the core of its Heavy Water Plant at Arak was to be demobilised and most importantly, Iran agreed to ‘anywhere, anytime’ inspections of its nuclear facilities by the IAEA and UN inspectors. Iran stuck to the deal and on 16th January 2016, designated as the Implementation Day, the IAEA verified that Iran had met its all nuclear related commitments, triggering the lifting of sanctions on Iran.

Despite former US president Trump unilaterally pulling out of the deal in May 2018, Iran continued compliance till March 6, 2019, the last time that IAEA reported that Iran was implementing all its nuclear-related commitments. The US designating the Islamic Revolutionary Guard Corps (IRGC) of Iran as a Foreign Terrorist Organization on April 8, 2019, was a trigger which was followed immediately by Iranian President Hassan Rouhani announcing on April 9 that Iran will install a cascade of 20 IR-6 centrifuges at Natanz. There has been no stopping thereafter in Iran scaling up its nuclear program.

How is Iran making the nuclear deal irrelevant?

As far as Iran is concerned, three things are vitally important to it; firstly is the removal of economic sanctions which are hurting it badly, secondly is its right towards a peaceful nuclear program meant for ‘medical research and other peaceful uses’, and thirdly is safeguarding its own role and standing in the region as a major regional power.

Of all these, the economy is perhaps the most important and Iran has been steadily working on working around the sanctions over the years. Its 25-year strategic partnership with China offers a large assured market of oil as well as non-oil trade. The ongoing war between Russia and Ukraine, too, has provided an opportunity for Iran. Both Russia and China have joined forces and have challenged the western-oriented Dollar trade system based on SWIFT clearance system and have proposed their own trade system. India too announced a sovereign international trade clearing system based on Rupee payment in July 2022. With Iran enjoying close ties with each of these nations, such alternate systems open up great trade opportunities for Iran. This, when seen in the context of the ongoing US-China standoff, India exercising its sovereign choices to buy oil from Russia (and possibly from Iran) and Turkey recently announcing that it will pay Russia in Rubles for natural gas, provide a perfect opportunity for Iran to leverage it and join alternate payment systems and mutual arrangements with these countries to bypass sanctions. Also, with Syria under President Assad stabilizing politically and Iraq heavily under Iran's influence, oil exports through these countries provide additional revenue to Iran. It is perhaps due to this and more loopholes being exploited by Iran that the US Treasury, on 02nd August announced sanctions against UAE and HK-based companies accused of facilitating the sale and transfer of Iranian petrochemical products. On the same day, a media report quoted United Against a Nuclear Iran (UANI), a watchdog group that tracks Iran's network of illegal oil tankers, stating that Iran’s export revenues between March 2021 and March 2022 from oil, gas, and related products totalled $39 billion, compared to $22 billion for the previous year, a rise of 77 per cent and an extra $17 billion, with exports primarily to China and Syria. Iran is therefore slowly and steadily working around economic sanctions imposed by the US.

The second issue is the nuclear enrichment program. Iran commenced nuclear enrichment beyond the stipulated limits of JCPOA in April 2019. Later, on 02nd December 2021, Iran's Guardian Council approved the legislation mandating the Atomic Energy Organization of Iran to increase enrichment levels to 20 per cent and to suspend implementation of the Additional Protocol in 60 days if sanctions are not addressed. On 13th April this year, soon after a cyber-attack on the Natanz nuclear plant, Iran announced its intention to enrich uranium to 60 per cent. A resolution adopted by the IAEA on 06th June formally criticizing Iran for a lack of cooperation with it prompted Iran to switch off surveillance cameras resulting in the IAEA having no information on the progress of nuclear enrichment in Iranian plants. Most recently, on 02nd August, Iran announced its plans for further enrichment and stockpiling after the US announced sanctions on companies of UAE and Hong Kong for petrochemical trade with Iran. IR6 centrifuges are enriching uranium at a fast pace and with 27 surveillance cameras switched off, IAEA and the world is virtually blind to Iran’s nuclear activities. With each passing day, Iran is close to stockpiling enough ‘Highly Enriched Uranium’ to produce a nuclear weapon, if it so wants.

Last is the issue of geopolitical alignments in the region. Here too, Iran has been carefully forging new ties. The GCC-Qatar standoff in June 2017 brought Qatar closer to Iran. Turkey too is realigning ties with Iran with President Raisi calling the Turkish president’s visit to Tehran in July this year an "important turning point" in improving the relations between the two neighbouring countries. With Saudi Arabia, there have been five rounds of talks, mediated by Iraq, and there were recent reports of both foreign ministers likely to meet soon. The Yemen ceasefire is holding off since Ramadan, an important factor in ties with Saudi Arabia. With UAE, too, there has been a marked progress. UAE recently announced the return of its ambassador to Tehran, and in December 2021, UAE National Security Advisor Sheikh Tahnoon bin Zayed Al Nahyan visited Tehran, signalling an approach to the normalisation of ties. Although it is too premature to say that Iran would be accepted as a trustworthy partner in the largely Sunni Arab world, but new emerging dynamics maybe be beneficial to Iran in the long run.

Conclusion

For P5 plus 1, the Iran nuclear deal is very important. It gives them and the world an effective control who can watch over suspected Iran’s nuclear weapons program. For Iran, on the other hand, the nuclear deal has now become more of a bargaining chip for issues which transcend the limited context of the nuclear program. Each passing day is making it more and more difficult for the deal to be revived. The world will perhaps one day rue the manner in which former US president Trump blew up the deal and virtually let Iran off the hook. Josep Borrell, the EU’s foreign policy chief, at the conclusion of the Vienna talks on August 8 said, “What can be negotiated has been negotiated, and it’s now in a final text.” The deal is clearly now more than mere technicalities and requires political decision making at the highest level at both ends. Meanwhile, Iran is merrily chugging along, making sure that deal or no deal it is doing enough to safeguard its interests.