Sanctions on Iran and impacts on other States
· In October of 2020, the first set of United Nations Security Council (“UNSC”) sanctions against Iran are set to expire under the terms of the Joint Comprehensive Plan of Action (“JCPOA”), and endorsed by the UNSC in Resolution 2231 (2015), passed unanimously. The JCPOA was an agreement reached by Iran and the permanent five members of the UNSC plus Germany to halt Iran’s nuclear program in exchange for the relaxing of international sanctions and embargos against the Iranian government.
· In signing the JCPOA, a number of previous UNSC Resolutions imposed on the Islamic Republic of Iran (“Iran”) were to be lifted according to a schedule stipulated in Resolution 2231 (2015). These earlier-in-time resolutions included Resolution 1696 (2006), calling for end to Iran’s enrichment program; Resolution 1737 (2006), imposing sanctions banning the sale of nuclear related materials to Iran, as well as freezing certain Iranian assets; Resolution 1747 (2007), enacting an arms embargo; Resolution 1803 (2008), which extended previously enacted asset freezes; and Resolution 1835 (2008), reaffirming previous UNSC resolutions on Iran; Resolution 1929 (2010), banning Iranian ballistic missile tests, and tightened the Iranian arms embargo, among others. The lifting of these prior resolutions is subject to re-imposition in the event of Iran breaching the JCPOA.
· The UNSC is empowered under Chapter VII of UN Charter to enact sanctions regimes. Member States to the UN are also obligated under the charter to comply with UNSC Chapter VII actions, i.e. States which engage in trade with Iran in contravention of any existing sanction regime will have violated their UN obligations. Annex B of Resolution 2231 (2015) lists the sanctions to be followed by Member States. Under the Resolution, States must receive prior authorization on a case-by-case basis from the UNSC before any:
o “supply, sale or transfer directly or indirectly from their territories, or by their nationals or using their flag vessels or aircraft to, or for the use in or benefit of, Iran, and whether or not originating in their territories, of all items, materials, equipment, goods and technology set out in INFCIRC/254/Rev.12/Part 1 and INFCIRC/254/Rev.9/Part 2…”
o “provision to Iran of any technical assistance or training, financial assistance, investment, brokering or other services, and the transfer of financial resources or services, related to the supply, sale, transfer, manufacture or use of the items, materials, equipment, goods and technology…”
o “acquisition by Iran of an interest in a commercial activity in another State involving uranium mining or production or use of nuclear materials and technology as listed in INFCIRC/254/Rev.12/Part 1, and such investment in territories under their jurisdiction by Iran, its nationals, and entities incorporated in Iran or subject to its jurisdiction, or by individuals or entities acting on their behalf or at their direction, or by entities owned or controlled by them…”
· (See Resolution 2231 (2015) Annex B for the complete list of obligations under the UNSC Iranian sanctions regime, as well as their expiration dates.)
· Beyond the UNSC sanctions themselves, there are also broader U.S.-based sanctions which are not set to expire, but rather continue indefinitely. While these are not directly binding on other States, to the extent that the U.S. would be able to enforce judgment against violations that occur via U.S.-based financial institutions, States may still face enforcing judgments.
· Despite the looming expiration of said sanctions in October 2020, the United States has been lobbying other UNSC permanent member States to vote for the renewal of sanctions, as Iran has resumed uranium enrichment beyond JCPOA limits. Sources indicate that the U.S. has shared with Germany, France, and the UK a draft resolution to extend the sanctions.
· Should the U.S.’s move at the UNSC fail due to Russian or Chinese veto, the U.S. has also threatened to invoke certain “snapback” provisions of the JCPOA, which would automatically reimpose sanctions. However, these snapback provisions can only be invoked by a member to the JCPOA, from which the Trump administration formally withdrew 2018. U.S. Secretary of State Mike Pompeo has stated publicly that the U.S. will not allow conventional weapons to be sold to Iran even after JCPOA expiration.
· Additionally, earlier this year, Britain, France and Germany formally accused Iran of violating the terms of the JCPOA in moving beyond certain nuclear limits that the agreement had put in place. This accusation put into motion the JCPOA’s dispute settlement process. These three nations have stated publicly, however, that they do not support the re-imposition of sanctions under the JCPOA’s snapback provisions, as the U.S. has suggested it may push for.
· Iran has filed two suits at the International Court of Justice (“ICJ”) regarding the U.S.’s conduct around sanctions.
· The first case, Certain Iranian Assets (Islamic Republic of Iran v. United States of America), was brought by Iran after the 2016 U.S. Supreme Court decision in Bank Markazi v. Peterson, in which the Supreme Court allowed for the sanctioning of $1.75 billion in Iranian assets to satisfy U.S. court rulings in domestic terrorism cases. Iran also challenged then President Obama’s Executive Order 13599, which blocked all government of Iran assets within U.S. jurisdiction. While the U.S. disputed ICJ jurisdiction, the Court rejected most of the U.S.’ preliminary objections and moved on to hearing the merits of the case.
· The second case, Alleged violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v. United States of America), involves Iranian allegations that the U.S. breached a 1955 Treaty of Amity signed between the U.S. and Iran, which Iran alleges included obligations to provide “fair and equitable treatment,” prohibition of “restrictions on making of payments, remittances, and other transfers of funds,” and a general obligation to grant most-favored nation treatment. The U.S. has argued that its re-imposition of sanctions did not arise within the framework of the Treaty of Amity, but rather the JCPOA, and then its actions fell within the exceptions included in the Treaty of Amity language. Similarly, the ICJ has decided it has jurisdiction to hear the case’s merits, but has also issued interims order to the U.S. to “lift sanctions linked to humanitarian goods and civil aviation imposed against Iran.”
· States should keep abreast of these developments, as the legality of any trade with Iran will depend on the resolution of these questions.