Iran Deal Includes Loophole in Sanctions ‘Snapback’ Mechanism

By Patrick Goodenough | July 14, 2015 | 9:34 PM EDT

Iranian Foreign Minister Mohammad Javad and members of the Iranian team pore over the draft nuclear agreement in Vienna. (Photo: Omid Vahabzadeh/Fars news agency)

(CNSNews.com) – The much-touted “snapback” provision in the Iran nuclear deal that will restore sanctions in the event of Iranian noncompliance involves a convoluted process that will last around 65 days and, after jumping a series of hurdles, may result in sanctions being reimposed – “unless the U.N. Security Council decides otherwise.”

That phrase in the final agreement text – “unless the U.N. Security Council decides otherwise” – is not explained or qualified in any way, raising the possibility that, despite assertions to the contrary, Iran’s longstanding ally and trading partner Russia, or indeed China, could ultimately block the move.

Furthermore, another as-yet little discussed element of the final Joint Comprehensive Plan of Action (JCPOA) is the fact that, even were sanctions reinstated, they would not retroactively affect business contracts that Iran has already signed by that point, unless those contracts are themselves in violation of the JCPOA or Security Council resolutions.

(So in the event of sanctions “snapback” actually occurring, a hypothetical lucrative oil deal with a European company that does not in itself violate the broader nuclear agreement or Security Council resolutions would be able to go ahead unimpeded, despite Iran’s JCPOA non-compliance.)

“Since there is likely to be a ‘gold rush’ of business rushing to sign deals with Iran upon lifting of sanctions, this exception might prove a pretty big hole in the ‘snapped-back’ sanctions,” Julian Ku, professor of law at Hofstra University’s School of Law, wrote on the Opinio Juris blog Tuesday.

“The expected Chinese and Russian deals with Iran for arms sales and oil purchases could survive any snapback, even if Iran was caught cheating,” Ku argued.

Sanctions “snapback” will be an important element of the administration’s attempts to sell the package announced in Vienna Tuesday to a skeptical Congress.

“If Iran violates the deal, all of these sanctions will snap back into place,” President Obama said in his White House statement on the JCPOA. “So there is a very clear incentive for Iran to follow through and there are very real consequences for a violation.”

In Vienna, Secretary of State John Kerry also highlighted the mechanism.

“I want to underscore: If Iran fails in a material way to live up to these commitments, then the United States, the E.U., and even the U.N. sanctions that initially brought Iran to the table can and will snap right back into place. We have a specific provision in this agreement called ‘snapback’ for the return of those sanctions in the event of noncompliance.”

 

According to the 159-page JCPOA text, however, Obama and Kerry’s contention that sanctions “will snap back into place” seems optimistic.

In the event that, say, the U.S. believes Iran is not complying with its commitments, the laid down “dispute-resolution” process is as follows:

1. The U.S. refers the complaint to a “Joint Commission,” comprising the six P5+1 countries – the U.S., Britain, France, Russia, China and Germany – Iran, and the European Union (E.U.)

2. The eight-member Joint Commission then has 15 days to resolve the matter – a period that can be “extended by consensus.”

3. If any participant feels the issue has not been resolved, it can refer the matter to the participants’ foreign ministers, who would have 15 days to resolve it. The period, once again, could be “extended by consensus.” (The above two 15-day periods may take place simultaneously.)

4. At the request of the U.S. or Iran, the matter may then be taken up by a three-member Advisory Board, comprising one member appointed by the U.S., one by Iran, and “a third independent member.”

5. The Advisory Board has 15 days to provide a “non-binding opinion” on the matter. If it’s still not resolved, the Joint Commission has five more days to consider the Advisory Board’s opinion. This takes the process to at least 35 days.

6. If the U.S. is still not satisfied, and if it views the issue as constituting “significant nonperformance” on Iran’s part, the U.S. can either stop complying with its own commitments, or refer the matter to the Security Council, or both.

7. The Security Council may then vote on a resolution. Crucially, the measure is not one to restore sanctions, but one to “continue the sanctions lifting.” (This unusual formulation is touted by JCPOA supporters as a “brilliant” solution to concerns that Russia could veto any resolution to reimpose sanctions; instead of Russia being able to veto a resolution restoring sanctions, the U.S. could veto a resolution to “continue the sanctions lifting.”)

8. Finally, in the words of the JCPOA text, “If the resolution described above has not been adopted within 30 days of the notification, then the provisions of the old U.N. Security Council resolutions would be re-imposed …”

Then follows the unexplained clause: “… unless the U.N. Security Council decides otherwise.”

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow

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