Returning to the Mechanisms of the Nuclear Agreement: US Attempts to Prevent Iran from Obtaining the Right to Weapons under the Agreement

EPC | 20 May 2020

In October 2020, the ban on trade in conventional weapons with Iran imposed under article 5 of Annex II of the nuclear agreement — which prohibits all countries from trading in such weapons with Iran — will come to an end. The ban was scheduled to last for five years from the day that the agreement came into effect, ending in October of this year. The various parties to the agreement are ramping up their political maneuvers, however, as the US administration and the remaining parties to the agreement appear to hold incompatible positions regarding the end of the embargo.

Disagreement on this article, among others (including article 3 of Annex II), was one of the key factors in the US administration’s decision to withdraw from the nuclear agreement. The issue has now returned to the forefront. According to sources, the US administration is looking for legal avenues available to it under the nuclear agreement (and the dispute mechanism provided for therein) through which it could prevent Iran from obtaining conventional weapons, which has sparked widespread controversy among the parties to the agreement.

The importance of article 5 of Annex II of the nuclear agreement

According to various Iranian officials, including President Hassan Rouhani, the Iranian government considers article 5 of Annex II of the nuclear agreement to be one of its key achievements and a point in its favor. The Iranian government has therefore attempted to persuade conservative forces in the country, such as the Revolutionary Guard and Supreme Leader Khameini, to uphold the agreement despite the US withdrawal. The article clearly has important implications for the balance of power and for US and regional politics:

  1. Once the embargo has been lifted, Iran will be able to buy and sell various types of tactical weapons, including fighter jets, tanks, heavy artillery, combat helicopters, naval ships, and missile systems, according to the United Nations’ list of conventional weapons. Iran has indicated its desire to obtain some such weapons once the embargo is lifted, primarily from Russia and China; the former commander of the Iranian navy himself stated that Iran wished to purchase Sukhoi Su-30 fighter jets and to build a factory to produce Russian T-90 tanks and surface-to-air and surface-to-surface missiles. However, both Annex II of the nuclear agreement and resolution 2231 of the UN Security Council prohibit Iran from testing ballistic missiles until October 2023. Many observers doubt that Iran will be able to obtain such weapons, owing not only to international opposition, but also to the fact that Iran lacks the financial resources required to make such purchases, which sources have estimated to value around $8 billion. Nonetheless, in recent years Iran has proven its determination to complete such a deal, and it may be able to resolve its liquidity crisis through alternative means, including by partnering with China and Russia to develop its oil fields or by drawing on the stocks of currency held by the Central Bank of Iran in Chinese and Russian banks, which would allow it to purchase the desired weapons.
  2. The issue poses a general setback for the US administration, which must contend with presidential elections the month after the embargo expires. This setback will fuel Democratic criticism of Trump’s decision to withdraw from the nuclear agreement, on the grounds that the decision failed to push Iran into comprehensive negotiations, instead having merely deprived the USA of the ability to use the agreement’s provisions to deter Iranian armament. Once the embargo expires, any future negotiations between Iran and the USA will have to start again from square one.
  3. While economic pressure resulting from US sanctions in particular, and the escalation of US actions against Iran under the Trump administration in general, have managed to significantly curb Iranian military forces in the Gulf and the Sea of Oman and to reduce the pace of modernization of Iran’s naval and land arsenal, if Iran were to obtain the list of weapons published by sources close to Russia and Iran (which include Sukhoi Su-30 and Yak-130 fighter jets, Mil Mi-8 and Mil Mi-17 helicopters, T-90 tanks, the Bastion coastal defense missile system used with P-800 Oniks missiles, and modern Russian submarines and frigates) it could upset the status quo and give Iran the upper hand in the waters of the Gulf and the Sea of Oman, which would undermine the security of the Gulf States.

Such considerations would explain the rapid efforts launched several months ago by the US Secretary of State Mike Pompeo to address the issue of article 5 with a view to preventing Iran from obtaining modern weaponry.

Thus far, US efforts have focused on encouraging its European partners to withdraw from the agreement in order to force its collapse before October 2020, and while the three European States parties to the agreement announced that they would withdraw if Iran continued to ignore its obligations under the agreement, they have yet to take any concrete action. US efforts have also focused on encouraging the European States to implement the dispute resolution mechanism as a way of eliminating Iran’s chances of seeing the end of the embargo in October 2020, by returning to the international sanctions lifted by resolution 2231. Initially the European States seemed to be moving in this direction in response to US economic pressure, but such action was stymied by Germany and the European Union. Over the past two weeks, however, the US administration appears to have adopted a new tack. It has become clear that the US administration now intends to use its position as one of the signatories to resolution 2231 and as a member of the Security Council to bring a case against Iran for violating its commitments under an agreement approved by UN resolution. While the USA’s withdrawal from the agreement prevents it from triggering the dispute resolution mechanism, its position with regard to resolution 2231 authorizes it to object to Iran’s violation of its commitments under the agreement.

Iranian officials, including the Minister of Foreign Affairs Mohammad Javad Zarif, have rejected suggestions that the US administration could use the dispute resolution mechanism or other possibilities provided for under the agreement to address the issue, stressing that, as the USA is no longer party to the agreement, it is no longer entitled to use such mechanisms. While China has remained silent on the issue, Russia has also voiced clear opposition to the USA using the mechanism. Although EU representative for foreign affairs Josep Borrell also reiterated that the USA was no longer a member of the agreement and therefore could not use the mechanisms provided in it, the European trio have affirmed that the USA is entitled to raise the issue within the Security Council as it is a permanent member. Pompeo has indicated that the USA does not intend to return to the agreement, stating that the agreement contained serious flaws and that the USA could not accept it. According to Pompeo, the USA intends to instead make use of the options provided for by resolution 2231, to which it is a signatory.

Sources have also indicated that the US administration is attempting to bring a draft resolution before the Security Council to extend the ban on arms sales to Iran. It is therefore clear that the USA is simultaneously testing various options aimed at preventing Iran from obtaining arms trading rights in October 2020.

What is on the horizon? The options available to the USA and the likelihood of their success

Analysis of US positions on the issue shows that the Trump administration is intensifying its efforts on various fronts in order to achieve a freeze on article 5:

  1. The USA has attempted to raise the issue of its participation in the nuclear agreement, with US officials declaring that the USA is entitled to return to the agreement as no decision has yet been made to end its participation. If the United States were still considered party to the agreement, it could resort to the dispute resolution mechanism and could refer the issue of Iranian violations to the Security Council. In that event, according to the nuclear agreement and resolution 2231 neither Russia nor China could use their veto within the Security Council to oppose the return of sanctions. Although this would allow the USA to circumvent a potential Russian or Chinese veto, this outcome is unlikely to occur, given that the remaining parties to the agreement, including the European States, agree that the USA is no longer party to the agreement following the official announcement of its withdrawal in May 2018.
  2. Given those obstacles, the Trump administration has instead focused on using its position as a permanent member of the Security Council to pass a Security Council resolution condemning Iran’s violations under resolution 2231 and reimposing either the sanctions provided for in previous UN resolutions (including resolutions 1737, 1747, 1835, and 1929) or sanctions to postpone the implementation of article 5 for a significant period. Despite having withdrawn from the nuclear agreement, the USA remains a signatory to resolution 2231; as such, the USA is entitled to assess Iran’s implementation of the resolution’s provisions (but not those of the nuclear agreement). Various parties, including the EU representative for foreign affairs and other European officials, as well as Iranian experts, have confirmed that the USA is entitled to use its position in relation to the Security Council and resolution 2231 to attempt to push through a Security Council resolution to extend the arms embargo with Iran. Following Iran’s recent missile tests, most notably the launch of the Noor satellite using a ballistic Qased missile (which could be considered a violation under article 3 of Annex II of the agreement, which stipulates that Iran must not commit any ballistic missile tests for eight years following the implementation of the agreement), the Western powers seem to support the USA’s efforts to extract such a resolution from the Security Council. Unlike the dispute resolution mechanism, however, this tactic faces the risk of a Russian or Chinese veto, which is very likely under the current circumstances (while China has remained silent on the issue, Russia has made it clear that it does not view the recent Iranian tests as a violation of any UN resolutions).
  3. The third route that the USA has attempted to pursue in recent months is to push Europe, represented by the European trio and the European Union, into escalating the situation and implementing the dispute resolution mechanism. Thus far, attempts to use economic pressure to achieve that goal have failed, owing to resistance from Germany and the European Union, and the USA has subsequently put a hold on that tactic. Nonetheless, despite the resistance encountered, this method remains the most likely to achieve an extension to the arms embargo with Iran, given the slim likelihood that the previous two options will succeed.

General conclusions

Recent US efforts have shown that, while the USA is committed to achieving an extension to the arms embargo with Iran, it does not have unified approach to achieving that goal (for several reasons, including the fact that numerous bodies have an influence over US decisions on the issue). Given the capabilities offered by the nuclear agreement to all parties, and the capabilities and limitations of the USA as a Security Council member, the following conclusions can be drawn:

  • Despite US attempts to make use of the capabilities offered by the nuclear agreement, the chances of the USA being allowed to use the dispute resolution mechanism as a participating member of the agreement are non-existent, given the complete consensus among the remaining members on the fact of the USA’s withdrawal. US efforts to use an alternative dispute mechanism provided for under resolution 2231 also appear futile. Consequently, the US administration is attempting to use its position on the Security Council to propose a draft resolution that would impose a long-term ban on arms dealing with Iran. For the resolution to pass, the USA needs to win a majority of votes on the Council, and neither China nor Russia must exercise their veto. If the USA does win a majority of votes, the resolution will undoubtedly face opposition from either Russia or China.
  • Given the impossibility of getting such a resolution through the United Nations, the dispute mechanism provided for in the nuclear agreement remains the only avenue through which the Iranian arms embargo may be extended without facing a Russian or Chinese veto. This would tip the scales in all directions: while the US administration is likely to attempt to encourage the European States to remain in the agreement — as opposed to its previous efforts to encourage them to pull out of it — in the hope that it will be able to persuade its European allies to use the dispute mechanism, Iran and Russia will try to force the European States to withdraw from the agreement, while stopping short of allowing its complete collapse.
  • The US administration has already attempted to push the European States into implementing a dispute mechanism. Those attempts have failed, however, owing to resistance from within the European Union that prevented Europe from adopting a unified position. Nonetheless, there remains a glimmer of hope at the end of this avenue, given that, under the nuclear agreement, the European signatories are considered to be independent parties, rather than a single entity. Therefore, even though the USA failed to mobilize Europe as a whole, it may be able to convince at least one European party to the agreement to trigger the dispute mechanism. The United Kingdom appears to be the US ally most likely to take on that role, given the close relationship between the Johnson and Trump administrations. Although this plan faces many obstacles in the form of pressure from other European partners, Russia, and China, British cooperation remains the only way for the USA to get what it desires without having to face a Russian or Chinese veto in the Security Council.

Possible scenarios

Possible scenarios: These scenarios are based on the general conclusions drawn in this paper, and can be divided into two based on their likelihood of occurring. The less likely scenarios include those that assume that the USA is able to extract a new Security Council resolution imposing a long-term ban on arms trade with Iran or to trigger a dispute resolution mechanism as a signatory to resolution 2231. Despite the USA’s efforts, these scenarios seem highly unlikely, given the general consensus that the USA is no longer a member of the agreement and given that China or Russian may use their veto to thwart any new resolution on the matter unless the USA can persuade them to adopt a neutral position during such a vote, which seems unlikely to happen. The following scenarios are more likely:

Scenario 1: The USA pushes the United Kingdom into triggering the dispute resolution mechanism: In this scenario, the USA is able to use the dispute mechanism via one of its European partners. As it will be difficult (although not impossible, given recent developments and US pressure) for the USA to mobilize all the European parties to support the decision to trigger the dispute resolution mechanism, the US administration may rely instead on its closest ally among the European parties, namely the United Kingdom, to take the lead in that regard. This scenario, which circumvents the participation of the Russian and Chinese veto-holding partners, draws on the mechanisms provided for in the nuclear agreement. The United Kingdom would request the implementation of the dispute mechanism, even though the UN resolutions that were overruled by resolution 2231 carried longer-term sanctions for arms dealing with Iran. A compromise may therefore be reached, in which Russia and China agree to extend the ban on trade in conventional weapons with Iran in order to prevent a return to the implementation of all resolutions that preceded resolution 2231.

Scenario 2: Iran succeeds in preserving the nuclear agreement until October 2020: This assumes that Iran is able to delay proceedings enough to keep the agreement in place until October, at which point the embargo will be lifted. In this scenario, Iran would then be able to use alternative sources of finance to obtain advanced Russian (and Chinese) weapons that would enable it to substantially upset the balance of power between it and the Gulf States, particularly if it can obtain advanced technologies for manufacturing tanks and planes. Although Iran is working hard to this end, it faces a number of obstacles, including pressure from the USA and Europe and the possibility that sanctions may be imposed on Russia if it supplies Iran with such weapons. While the continued imposition of sanctions preventing financial transfers to and from Iran may pose another obstacle, it will not prevent this outcome entirely.

Scenario 3: Compromise: This scenario represents a compromise on the outstanding issues, in which Iran refrains from further escalating its actions to undermine its obligations under the nuclear agreement, in exchange for a commitment from its European partners to uphold the agreement and to provide Iran with reasonable compensation for the US withdrawal. In this scenario, the USA will likely return to the agreement in exchange for Iran voluntarily postponing its return to the arms trade. The Iranian government has indicated its support for this outcome, which has prompted some members of the Iranian parliament to call for a closed session to discuss the country’s approach. This scenario also faces a number of possible obstacles, namely opposition from among conservative forces that do not wish to be drawn into discussion of Iran’s missile activities. It also faces potential US opposition, as this outcome would leave a number issues outstanding, whereas the USA hopes to achieve a comprehensive solution. Nonetheless, this scenario remains the most desirable in the eyes of Iran’s partners in the nuclear agreement and in the eyes of the Iranian regime.

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