Tomorrow, negotiators from the parties to the original Iran Deal, the JCPOA, will return to Vienna to continue talks on restoring the accord that was broken by the Trump Administration. In the coming days and weeks, the focus will move squarely to Iran's demands for sanctions relief. As Ruti Teitel & I recently posted here, Iran is also seeking "guarantees" that if a future GOP Administration were to breach America's commitments to sanctions relief, the economic benefits from sanctions lifting can nevertheless be secured. Teitel and I gave several examples of how this might be done-committing to Iran's accession to the WTO (habitually blocked by the U.S. in the past); political risk insurance; and the possibility of binding international arbitration for disputes over sanctions relief under a restored agreement.
But there is, arguably another risk of backtracking from commitments under a renewed JCPOA: abuse by one of the JCPOA partners of the snapack provision in the original text. Snapback was intended to allow as a last resort a JCPOA partner to trigger the reimposition of UN Security Council sanctions against Iran, in the case of an alleged significant non-compliance with the nuclear constraints in the agreement. The alleged violation would first be subject to consultations and a mediation process (involving an expert Advisory Report). If this failed to solve the dispute, the right of any JCPOA partner to impose the return of previous UNSC sanctions would kick in.
The provision in question (Article 37) reads in relevant part:
Upon receipt of the notification from the complaining participant, as described above, including a description of the good-faith efforts the participant made to exhaust the dispute resolution process specified in this JCPOA, the UN Security Council, in accordance with its procedures, shall vote on a resolution to continue the sanctions lifting. If the resolution described above has not been adopted within 30 days of the notification, then the provisions of the old UN Security Council resolutions would be re-imposed, unless the UN Security
Council decides otherwise.
As the drafting of this clause suggests, if a new resolution of the UNSC fails, say because one or more of the permanent Members exercises their veto, there is an automatic default to the reimposition of sanctions that were lifted through the UNSC resolution that entrenched the Iran deal, Resolution 2231.
In the resolution itself, the procedure for initiating snapback is described in the following terms:
if the complaining participant deems the issue to constitute significant non performance, then that participant could... notify the UN Security Council that it believes the issue constitutes significant non performance...
The Security Council process for triggering snapback was already tested (sort of) when the Trump Administration attempted to invoke the mechanism after the Administration had announced its repudiation of the JCPOA. The overwhelming view of Security Council Members was that only a participant in good standing of the JCPOA could properly seize the Security Council of the snapback obligations pursuant to Resolution 2231. The significance of this episode for the functioning of snapback in future situations is considerable. What is illustrated is that snapback is not simply self-judging. There needs to be some kind of positive decision of the UNSC at least as a matter of competence-competence that the snap back demand is procedurally and jurisdictional correct. Agenda items for a meeting of the UNSC have to be approved by the President of the Council and "adopted."
So let's play out a hypothetical scenario. A right-wing President is elected in France who is out to destroy the restored JCPOA. Or perhaps Boris Johnson decides to engage in some mischief. One of these participants invokes snapback, even though the others do not agree that Iran is in significant non-compliance. The stratagem is to use snapback to sabotage a renewed JCPOA by reintroducing the original UNSC sanctions. How much does Iran have to worry?
Perhaps not so much, as long as the US (with its sway over the financial system) and most of the other JCPOA participants don't agree with the outlier participant.
The language "deems the issue to constitute significant non-performance" suggests that the the UNSC is only properly seized of a snapback demand where the requesting participant has a good faith belief that Iran is seriously in violation of the JCPOA. Using snapback as a political trick to undermine the JCPOA would be an act of bad faith. If the President of the Security Council isn't on side with the outlier participant, or if there is sufficient support for objecting to the inclusion of the item on the agenda, the path to snap back is far from evident.
Of course, an outlier state might argue that snap back is automatic, not even requiring any consideration by the Council. but the language of Resolution 2231 seems designed precisely to avoid this possibility, by establishing the proper route for snapback as notification and then a vote on a new positive resolution. Unless such a vote fails to adopt a new resolution, an essential condition precedent for snapback is missing.
But let's say the outlier participant manages to jump through these procedural hoops such that a default to sanctions under earlier UNSC resolutions is perfected. What then?
It is important to recognize that the JCPOA and Resolution 2231 permit the individual outlier participant in this situation to become fully non-compliant and thus re-impose whatever domestic sanctions it wants, but neither the JCPOA nor Resolution 2231 require other JCPOA participants to reimpose domestic sanctions that they lifted when the JCPOA was agreed. Once there is a jurisdictionally and procedurally valid default to earlier UN resolutions, the obligation of all JCPOA participants (and indeed all UN member states) becomes to re-impose those sanctions (but only those sanctions) required under the prior resolutions.
The sanctions are on entities, transactions, and individuals that directly and specifically aid Iran's nuclear development. In the case of snapback, there is a non-retroactivity provision in Resolution 2231:
....these provisions would not apply with retroactive effect to contracts signed between any party and Iran or Iranian individuals and entities prior to the date of application, provided that the activities contemplated under and execution of such contracts are consistent with this JCPOA and the previous and current UN Security Council resolutions.
Even if snapback provoked by an outlier JCPOA participant were to happen, a great deal of economic activity with Iran would still be permissible skirting around these nuclear development-related sanctions. Ultimately, each JCPOA participant is self-judging in its reading of how broad or narrow the various original UNSC sanctions are. Nevertheless, it might be useful to develop a list of important entities and transactions that are protecting against snapback, in that there is wide understanding among JCPOA participants that snapback UN sanctions would not affect these entities and transactions. Such a move would reduce the economic risk from a snapback event, encourage new commerce, and therefore enhance the value of sanctions-lifting under a restored JCPOA.
