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US signs sanctions waivers as countdown begins

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05-02-2018

Iran

On 12 January 2018, US President Donald Trump agreed to temporarily waive US secondary sanctions against Iran (sanctions which seek to target dealings by non-US persons with Iran), which were suspended by the United States pursuant to the Joint Comprehensive Plan of Action (“JCPOA”). The JCPOA requires the President to sign the relevant sanctions waivers to certify Iran’s compliance with the JCPOA every 120 days to uphold Iran’s nuclear sanctions relief and prevent US secondary sanctions from being re-imposed.

In his announcement, the President stated that the waiver will be the last waiver he will sign unless there are radical changes to the JCPOA, including an agreement with "the Europeans" to "fix the deal's disastrous flaws...". The President laid down certain conditions that must be met prior to signing the next waiver on 12 May 2018, which include:

  • immediate access to all sites requested by international inspectors; and
  • the indefinite extension of the restrictions on Iran’s nuclear weapons programme, which are otherwise subject to sunset clauses in the JCPOA.

President Trump has stated that “if Iran does not comply with any of these provisions, American nuclear sanctions would automatically resume”. A White House official has suggested that Trump is willing to work with European allies to produce some form of follow-on agreement which captures the above conditions. The President is further seeking new "triggers" with the EU for sanctions to snap back and US legislation and sanctions relating to the development and testing of long-range missiles by Iran, which currently fall outside of the scope of the JCPOA.

While waiving the nuclear sanctions, President Trump has authorised a new tranche of non-nuclear sanctions targeting 14 individuals and entities in Iran, including the head of the Iranian judiciary, Ayatollah Sadeq Larijani, over alleged human rights abuses or support for Iran's ballistic missile programmes.

Commentary

Trump has in effect commenced a 4 month countdown until the next waiver is due to be signed on 12 May 2018. This move may be an attempt to tear up the nuclear deal or to create leverage for a potential renegotiation of the JCPOA.

If Trump fails to certify Iran’s compliance with the JCPOA on 12 May, it will trigger a 60 day window during which time Congress may opt to “snap back” the suspended nuclear sanctions by a majority vote. As such, any failure by Trump to re-certify the sanctions waivers on 12 May 2018 could signal the US’ de facto withdrawal from the JCPOA.

There is no indication that other signatories to the deal have any appetite to renegotiate or withdraw from the deal at this stage. European partners to the JCPOA have criticised the President’s threats to withdraw US support and re-indicated their commitment to the deal.

President Trump previously refused to sign the JCPOA sanctions waivers on 13 October 2017. However, the 60 day deadline expired in December 2017 without Congress seeking to re-impose sanctions.

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