End of JCPOA – the real work starts now

The evening of May 8 was likely the beginning of the end of the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal. US President Donald Trump will likely begin the process of withdrawing from the landmark Obama-era international agreement, negotiated between the five permanent members of the United Nations Security Council, Germany, the European Union and Iran. Washington has continually made clear its disapproval of the deal, taking issue with Iran’s ballistic missile program, which was not addressed within the JCPOA, as well as the sunset clauses and the flawed verification mechanisms enshrined in the deal. President Trump has before him several options that will greatly affect the viability of the JCPOA, the Iran nuclear program and the national security of the State of Israel.

One of the most likely scenarios was explored in a recent simulation and subsequent report conducted by the Institute for National Security Studies (INSS) in conjunction with the California-based RAND Corporation.

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The simulation shows that President Trump will likely begin the American withdrawal incrementally over a period of many months, reintroducing sanctions at regular intervals by not signing the sanction waivers as required by US domestic law in order to keep the agreement alive.

The first such sanctions waiver Trump will likely not sign will be on May 12 and is related to Iran’s central bank, but more specifically it targets Iran’s ability to work with international companies to develop and export oil and gas. The return of these sanctions will not be overly harmful to the Iranian economy but will be a wakeup call to the other parties of the JCPOA that President Trump means business.

This step should be taken seriously as the next sanctions waiver is only a few months away in July.

President Trump could seriously hurt the Iranian economy by not signing that waiver, as it would negatively affect Iranian insurance, transportation, finance and shipping industries, all crucial for any national economy in a globalized world.

Iran should avoid escalating the situation and wait for things to play out. If Iran were to immediately begin nuclear activities that violate the JCPOA, under the pretext of an American withdrawal from the deal, things will deteriorate quickly without any opportunity to find a solution to the crisis. For its part Iran has a good deal with the JCPOA, and if it wants the deal to remain in place it is going to have to compromise on issues it has refused to negotiate on in the past. On top of Iran’s ballistic missile program, the issue of the sunset clauses and the problematic verification system, Iran’s regional activity must be addressed, especially its presence and continued activities in Syria which have the potential to spark a war with Israel.

The European states who are parties to the deal (France, Germany and the UK) have a vested economic interest in addressing President Trump’s concerns as their private companies have the most to lose from a return of an American-imposed sanctions regime.

Many private European companies, along with their governments will be forced to toe the US line or risk being on the wrong end of sanctions themselves.

The Europeans must find a way to bring together the other parties to the deal (specifically Russia and China), and find a way to address President Trump’s concerns quickly so as to prevent events from spiraling out of control and past the point of no return.

Russia and China have significant clout with Iran, albeit for very different reasons. Iran is dependent on Russia in Syria, as its proxies depend on Russian air support. Russia and Iran have a strong economic relationship and Russia is also one of Iran’s main arms suppliers.

China and Iran also have strong economic ties, with Iran being a crucial stop on both land and sea on the Chinese Belt and Road Initiative (BRI).

Russia, China and the Europeans states do not want to see a nuclear-armed or nuclear threshold state in the Middle East and must find common ground to address President Trump’s largely rational concerns in a comprehensive manner.

Israel for its part must use this opportunity to push its American and European allies to address issues that are crucial to its national security. Continued Iranian transfer of advanced missiles and precision-guidance technology to Hezbollah via Syria, the entrenchment of other proxy forces as well as Iranian Revolutionary Guard Corps (IRGC) detachments on Syrian soil are all red lines for Israel. If these topics – alongside the ballistic missile program and nuclear related issues – are not addressed in a comprehensive way via international negotiation, conflict between Iran and Israel will not be a matter of if but when.

There are many potential outcomes to the US withdrawal, and it would be unwise to attempt to predict the future given the circumstances. What we do know is that we will likely find ourselves in a situation where the agreement is breached and Iran has resumed work on its nuclear program, and it seems that given the current circumstances the American administration is not prepared to take serious action against Iran, beyond leaving the agreement and slapping on sanctions.

The departure of the United States, particularly if it imposes secondary sanctions come July, will de facto neutralize the Iran nuclear deal. Following such a development I highly doubt we will see much restraint from Tehran, either on the Syrian front or the nuclear realm itself.

The author is a project manager at the Institute for National Security Studies (INSS) in Tel Aviv.