Beyond Compliance: Iran and the JCPOA

Timothy StaffordThe Henry Jackson Society July 2017

Centre for the New Middle East Research Paper No. 13 (2017)

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

Summary

Agreed on 14 July 2015, the Joint Comprehensive Plan of Action (JCPOA) is intended to

prevent Iran from becoming a threshold nuclear-armed state, by affording the country

extensive sanctions relief in exchange for its submission to a range of restrictions upon its

nuclear programme. These include limiting the number of its enrichment facilities and

holdings of enriched uranium, requiring it to purchase nuclear-related material through a

designated procurement channel, and requiring it to submit to international inspections.

There is widespread acceptance among the governments of the P5+1 (the five UN Security

Council members plus Germany) that Iran is in compliance with the terms of the

agreement.

Many of the restrictions imposed upon Iran are temporary in nature, and will expire at the

end of an agreed period. Accordingly, the JCPOA should not be regarded as an agreement

which “resolves” the Iranian nuclear issue, but as an accord which buys time for a process

of economic and political rapprochement. Success of the JCPOA therefore depends not

only upon Iranian compliance, but also on the capacity of the international community to

discourage Iran from returning to nuclear enrichment when its submission to restrictions

ceases to be mandatory.

Over the last two years, sanctions relief has not led to Iran’s full reintegration into the global

economy. Tehran has taken steps to profit from a relaxation of restrictions, resuming oil

sales to international customers. In addition, a number of Iranian airlines have moved to

modernise Iran’s civilian aerospace fleet through foreign purchases. However, foreign

direct investment has been inhibited by the threat of “snapback” sanctions, and the

continued insistence upon a protectionist “Resistance Economy” by the Iranian Supreme

Leader.

In addition, Tehran has used the relaxation of the UN arms embargo to acquire and

develop missile defences, which it has used to better defend its enrichment sites from

military action. In doing so, it has demonstrated that protecting its nuclear programme

remains its primary political priority.

The first two years of the JCPOA have undermined hopes that the agreement would

facilitate Iran’s adoption of a more moderate international posture. Renewed access to oil

wealth has enabled the country to adopt a much more assertive approach towards its region.

It has used the first two years of the JCPOA era to greatly expand its ballistic missile

capability and engage in regular testing. In addition, it has provided extensive support to

proxy militant groups in its region, most notably in Iraq and Syria where it has formalised

Shi’a militias into Popular Mobilisation Units (PMU). These actions have deepened the

hostility that characterises Iran’s relationship with Gulf Arab states.

A combination of the Trump administration’s election and Iran’s own actions have

undermined the likelihood that Tehran and Washington will engage in the kind of

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

meaningful rapprochement envisioned by supporters of the agreement. Iranian ballistic

missile tests have compelled the administration to impose additional sanctions against

Iranian entities, and led Congress to consider adopting a range of non-nuclear sanctions.

In addition, the White House is currently conducting a review that could result in nuclear-

related sanctions being reimposed, something that would be likely to result in the complete

collapse of the JCPOA.

In the coming years, UK decision-makers will need to determine how to balance the

desirability of Iran’s continued compliance with the JCPOA with the need to launch

initiatives that discourage Iran from returning to nuclear enrichment in the future. This will

require adopting an appropriate sanctions policy in readiness for the UK’s departure from

the European Union, and working behind the scenes to prevent American and European

approaches from diverging.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

1. Introduction: Understanding the JCPOA

Throughout the first half of July 2015, the world’s news media descended upon the Palais Coburg

Hotel in Vienna, eager to discover the contents of the Joint Comprehensive Plan of Action

(JCPOA).1

The document, agreed after 17 consecutive days of final-round negotiations between

representatives of Iran and states comprising the P5+1,2

resulted in three main outcomes. Firstly, it

unveiled the exact nature of the restrictions to be imposed upon Iran’s nuclear programme, and

outlined a staggered timeline for their removal. Secondly, it detailed the concessions that the P5+1

states would make to Iran in exchange for its submission to those restrictions, most of which took

the form of economic sanctions relief. Finally, it confirmed the sequencing of the steps each party

would need to take in order for the agreement to come into effect. At the time, the agreement was

heralded as a triumph of diplomacy. The EU’s High Representative for Foreign Affairs and Security

Federica Mogherini and Iranian Foreign Minister Javad Zarif issued a joint statement characterising

the JCPOA as “a shared commitment to peace”, and paid testament to negotiators for having

“resolved a dispute that lasted more than 10 years”. 3

This notion warrants a serious corrective. To suggest that the JCPOA “resolved” the decade-long

stand-off regarding Iran’s nuclear programme is to misunderstand its nature. In addition, a review

of the first two years of the JCPOA’s implementation reveals that the agreement is failing to dampen

the prospect of Iran ultimately returning to nuclear enrichment and, in time, the pursuit of nuclear

arms. To understand why this is the case, it is necessary to distinguish what the JCPOA actually

achieved from what it merely made possible.

1.1 What the JCPOA did – and did not – achieve

Prior to the implementation of the JCPOA, Iran’s nuclear programme was characterised by 14

individual components and dimensions.4

Each of these contributed to its overall ability to generate

enough material to construct a rudimentary nuclear device – roughly equivalent to 25kg of weapons-

grade uranium. For instance, a greater number of centrifuges empowered Iran to develop a larger

stockpile of enriched uranium, and additional enrichment sites such as its Fordow facility allowed

it to disperse its nuclear activity around the country, thus making it less vulnerable to military attack.

In addition, Iranian moves to block International Atomic Energy Agency (IAEA) inspectors from

conducting inspections at key sites made it impossible to determine Iran’s level of enrichment with

precision.

1 Text of the Joint Comprehensive Plan of Action (JCPOA), 14 July 2015, available at: https://www.state.gov/documents/organization/245317.pdf, last

visited: 7 July 2017. 2 The five permanent members of the UN Security Council (the United States, the United Kingdom, France, Russia, China) and Germany. 3 Joint Statement by EU High Representative Federica Mogherini and Iranian Foreign Minister Javad Zarif, 14 July 2015, available at:

http://collections.internetmemory.org/haeu/content/20160313172652/http://eeas.europa.eu/statements-eeas/2015/150714_01_en.htm, last visited: 7 July

2017. 4 (1) Its stockpile of low-enriched uranium (LEU); (2) its possession of uranium enriched to 20%; (3) its possession of LEU converted into oxide form; (4)

its ability to convert this material back into LEU; (4) its various enrichment facilities; (5) its number of dormant centrifuges; (6) its number of actively

enriching centrifuges; (7) its holding of IR-2m centrifuges; (8) its level of plutonium production at Arak; (9) its ability to block IAEA inspectors from sites

where they would be able to obtain reliable information about five different developments: (10) enrichment at declared sites; (11) production of uranium

at domestic mines; (12) importation of uranium from foreign sources; (13) its centrifuge production capacities; and (14) its possible covert enrichment

sites.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

At the time of the JCPOA agreement, Iran already possessed an extensive ballistic missile arsenal,

which formed the basis for constructing a suitable delivery vehicle for nuclear arms. In addition, it

was known to have engaged in experimentation with nuclear triggers,5

needed to perfect detonations.

Accordingly, its move to enrich towards the 25kg figure was rightly seen as the final hurdle to its

possession of all of the components it would need to become a threshold nuclear state.

The JCPOA was designed to reduce the likelihood of that outcome coming into being, by restricting

Iran’s enrichment capacity and activity. For instance, under the terms of the agreement, Iran is

barred from possessing more than 300kg of uranium enriched to 3.67%, enriching uranium beyond

3.67%, constructing any new nuclear-enrichment facility, and mandated to use a designated

procurement channel for the purchase of any nuclear-related equipment. In addition, it is required

to permit inspectors from the IAEA to monitor key sites throughout the country. In exchange for

submitting to these restrictions, Iran was afforded extensive sanctions relief, with the UN eliminating

sanctions contained within six previous Security Council resolutions, and the US moving to waive

financial sanctions. As a consequence, Iran was able to resume oil sales to customers on the

international market, and gain access to roughly $115 billion in revenue from past sales, which had

been frozen in escrow accounts.6

Though the JCPOA was vested within UN Security Council 2231, decisions regarding compliance

are national ones,7

and in keeping with Iran’s adherence to the above restrictions, each P5+1 country

– including the UK – currently assesses Iran to be in compliance with the agreement as a whole.

However, compliance alone should not be conflated with a determination of whether the JCPOA

is achieving its overall goals. Indeed, as the fervent critics of the agreement have made clear,

compliance – especially on Iran’s behalf – can be understood in one of two ways. It can be

understood as evidence of the country’s willingness to submit to the will of the international

community, and forgo nuclear enrichment. However, it can also be understood as a tactical

decision, permitting the country to restore its economic health prior to returning to enrichment at

a time when the international community is less able to restrict its behaviour. This position is

embodied by Israeli Prime Minister Netanyahu, who has stated, “The problem isn’t so much that

Iran will break the deal … but that Iran will keep it because it just can [achieve] within a decade …

[the] industrial-scale enrichment of uranium.”8

This view can be more easily understood by examining the exact nature of the restrictions imposed

upon Iran by the JCPOA. A crucial aspect of these restrictions is that most are subject to “sunset”

clauses, meaning that they expire with the passage of time. For instance, as part of the JCPOA

settlement, negotiators agreed that international monitoring of Iranian centrifuge production would

expire after 20 years (in 2035), prohibition on the construction of new enrichment facilities and

holdings of enriched uranium would expire after 15 years (in 2030). Crucially, the prohibition on

enriching beyond 3.67% also expires in 15 years (in 2030) and the cap on the Natanz Fuel

5 ‘Watchdog Finds Evidence That Iran Worked on Nuclear Triggers’, The New York Times, 24 May 2011, available at:

http://www.nytimes.com/2011/05/25/world/middleeast/25iran.html, last visited: 7 July 2017. 6 Samore, G., ‘The Iran Nuclear Deal: A Definitive Guide’, Belfer Center for Science and International Affairs (2015), available at:

http://www.belfercenter.org/sites/default/files/legacy/files/IranDealDefinitiveGuide.pdf, last visited: 7 July 2017, p.59. 7 Kerr, P., ‘Iran’s Nuclear Program: Tehran’s Compliance with International Obligations’, Congressional Research Service (2017), available at:

https://fas.org/sgp/crs/nuke/R40094.pdf, last visited: 7 July 2017. 8 ‘Benjamin Netanyahu to discuss “bad” Iran nuclear deal with Donald Trump’, The Guardian, 4 December 2016, available at:

https://www.theguardian.com/world/2016/dec/04/benjamin-netanyahu-donald-trump-iran-nuclear-deal, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

Enrichment Plant’s capacity – set at 5,060 separate centrifuges – would expire after just ten years

(in 2025).9

In short, simply by complying with the restrictions of the agreement, Iran will be

permitted to expand its centrifuge capacity in eight years’ time, and be allowed to enrich an

unlimited amount of uranium – to weapons-grade levels if it so chooses – in 13 years.

Accordingly, the JCPOA is best understood not as an agreement that eliminates the threat posed

by Iran’s nuclear programme, but as an interim accord. Ultimately, successful prevention of a

nuclear-armed Iran will not depend on the country’s compliance with the terms of the JCPOA itself,

but on the steps taken to ensure that it is discouraged from returning to pre-2015 levels of

enrichment once its compliance with restrictions ceases to be mandatory.

Table 1: Restrictions on Iran’s nuclear programme and years of expiry:

Nature of restriction Year in which

restriction is

lifted

Number of years

until restriction is

lifted

Limitation on ballistic missile development 2023 6

Limitation on Natanz enrichment capacity 2025 8

Procurement channel for nuclear-related purchases 2025 8

Enriched uranium stockpile limited to 300kg at 3.67% 2030 13

Restricted testing of advanced centrifuges 2030 13

No enrichment of uranium beyond 3.67% 2030 13

No enrichment at Fordow facility 2030 13

No construction of any new enrichment facility 2030 13

Daily IAEA access to Natanz facility 2030 13

IAEA monitoring of centrifuge production 2035 18

Adherence to IAEA “additional protocol” N/A Permanent N/A Permanent

At the time the JCPOA was agreed, advocates expressed three key arguments for why the agreement

would negate Iran’s incentives to return to nuclear enrichment at a later date. The first was that the

relaxation of economic sanctions would build a more moderate political caucus within Iran itself.

By furthering economic engagement, made possible by the elimination of restrictions on Iranian oil

exports and foreign direct investment, the benefits of dispensing with nuclear enrichment – and

forsaking a return – would become clear. As a result, Iranian hardliners who regard an extensive

nuclear programme as a national requirement would become isolated. Addressing the House of

Commons on the day after the JCPOA was agreed, then Foreign Secretary Phillip Hammond stated

that “by providing the means through sanctions relief for Iran’s economic re-engagement with the

9 Samore, G., ‘The Iran Nuclear Deal: A Definitive Guide’, Belfer Center for Science and International Security (2015), p.16.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

world, it [the JCPOA] will allow the Iranian people to feel the tangible benefits of international co-

operation”.10

The second argument was that Iran had no inherent desire to seek nuclear arms, and that affording

Iran de facto recognition of its “right to enrich” would permit the country’s benign intentions to be

tested, if not proven.11

By respecting Iran’s desire to enrich, and removing the threat of military

action, Iran’s sense of insecurity would be addressed, allowing it to adopt a more moderate

approach to world affairs that included dispensing with any consideration of seeking nuclear arms.

Thirdly, advocates of the agreement argued that the JCPOA would facilitate Iran’s reintegration

into the wider international community. This was made explicit in a letter sent to the Iranian

Supreme Leader by President Obama, which stressed that progress on the nuclear issue could

enable US–Iranian cooperation in the fight against Islamic State.12

This hope was based on the

assumption that sufficient political will existed within both Iran and the West to pursue sustained

economic and political engagement, even if each continued to engage in actions which were seen as

hostile by the other. Accordingly, the JCPOA was intended to be the start of a gradual process of

rapprochement that would lessen tensions, reducing Iran’s sense of insecurity and in turn, its need

to maintain the option of seeking a nuclear weapons “breakout” capability.

1.2 Assessing the JCPOA at the two-year mark

As this paper seeks to demonstrate, progress on all three of these fronts has been poor. Firstly,

efforts to reintegrate Iran into the global economy have floundered. Where Iran has taken

advantage of sanctions relief, it has done so as a means of entrenching its nuclear programme, both

by insulating its economy against a return to economic pressure should it opt to restart enrichment

and by making the core components of its nuclear programme less vulnerable to military attack.

Secondly, rather than resulting in reduced geopolitical tension, Iran has used the last two years to

significantly escalate its involvement in aggressive activities throughout the region. Finally, the notion

that sufficient political will would exist for meaningful and sustained interaction between Iran and

the West has not been vindicated. Within Iran, continued commitment to a “Resistance Economy”

at the highest levels of government has thwarted the ability of more pragmatic forces to engage with

the West. In addition, not only has the United States elected an administration led by a President

who regards the JCPOA as a “disastrous deal”,13

but voices across the American political spectrum

have supported measures that seek to punish Iran for international transgressions that fall outside

the narrow parameters of the nuclear file itself. Implementation of the JCPOA by its signatories

therefore represents a tactical success at best. While the agreement is succeeding in discouraging

Iran from pursuing a nuclear weapons capability in the near term, its ongoing compliance takes

place within the context of trends which are all undermining the JCPOA’s core raison d’être:

preventing the country’s long-term trajectory encompassing the acquisition of a nuclear arsenal. This

10 House of Commons Official Record: Column 894, 15 July 2015, available at:

https://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm150715/debtext/150715-0001.htm, last visited: 7 July 2017. 11 Kahl, C. and A. N. Reza, ‘Zero-Sum Enrichment’, Foreign Policy, 14 October 2013, available at: http://foreignpolicy.com/2013/10/14/zero-sum-

enrichment/, last visited: 7 July 2017. 12 ‘Obama Wrote Secret Letter to Iran’s Khamenei About Fighting Islamic State’, The Wall Street Journal, 6 November 2014, available at:

https://www.wsj.com/articles/obama-wrote-secret-letter-to-irans-khamenei-about-fighting-islamic-state-1415295291, last visited: 7 July 2017.

13 Donald Trump speech to the Center for the National Interest, 27 April 2016, available at: http://nationalinterest.org/feature/trump-foreign-policy-15960,

last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

paper considers all of these issues in greater detail. It ends with observations on the likely challenges

this reality is likely to pose to the UK government in the coming years, as well as some of the

considerations that British decision-makers will need to make as a result.

2. Iran’s Economic Reintegration: Strategic and Limited

JCPOA-mandated sanctions relief has had some significant effects on the Iranian economy. Energy

has been one of three sectors in which economic engagement with the international community has

been most forthcoming. Following the waiving of US financial sanctions, Iran has been able to gain

access to funds that were frozen in escrow accounts during the pre-JCPOA period, such as $6.4

billion in oil wealth trapped in Indian accounts.14

In addition, it has been able to resupply the

international energy market with oil, with its exports rising to approximately 3.9 million barrels per

day (bpd),15

the cap to which it consented as part of the OPEC production cut agreed in November

of 2016.16

Demand for Iranian oil has largely been driven by Asian states, namely India, China,

South Korea and Japan, each of which more than doubled its imports over the course of 2016.17

In

addition, Iran now exports more than a million barrels of oil to various European countries on a

daily basis,18

as well as a further 100,000 to Russia.19

Moreover, the National Iranian Oil Company

has certified 29 international companies as being eligible to bid for oil and gas projects within Iran.20

As a consequence, specific agreements have now been reached with Royal Dutch Shell21

and Total.22

Iran has also strengthened its domestic infrastructure, agreeing a Memorandum of Understanding

(MoU) with Iraq on connecting its pipelines with facilities in Kirkuk,23

and making progress on a

series of contracts with Chinese, Japanese and Korean companies to modernise refining capabilities

at locations in Khuzestan and Esfahan.24

The second sector in which sanctions relief has had a significant effect is shipping. Owing to Iran’s

heavy reliance upon oil exports for foreign currency, strengthening its capacity to export its energy

resources has been a priority for Tehran. Iran has been able to re-establish ties with the Danish

Maersk Line,25

and two Iranian “supertankers” now ferry Iranian oil to the European marketplace.26

In addition, domestic Iranian media has reported that Lloyds of London has been persuaded to

14 ‘India, Iran agree to clear $6.4 billion in oil payments via European banks: minister’, Reuters, 6 May 2016, available at:

http://www.reuters.com/article/us-india-iran-payment-idUSKCN0XX0P5, last visited: 7 July 2017. 15 ‘Iran’s oil output exceeds 3.8m bpd in February’, Tehran Times, 4 March 2017, available at: http://www.tehrantimes.com/news/411585/Iran-s-oil-

output-exceeds-3-8m-bpd-in-February, last visited: 7 July 2017. 16 ‘OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years’, Bloomberg, 30 November 2016, available at:

https://www.bloomberg.com/news/articles/2016-11-30/opec-said-to-agree-oil-production-cuts-as-saudis-soften-on-iran, last visited: 7 July 2017. 17 ‘Asia’s Dec imports of Iranian oil more than double from year earlier’, CNBC, 31 January 2017, available at: http://www.cnbc.com/2017/01/31/reuters-

america-asias-dec-imports-of-iranian-oil-more-than-double-from-yr-earlier.html, last visited: 8 July 2017. 18 ‘Iran’s oil exports to Europe rise’, TheOilandGasYear, 9 June 2017, available at: http://www.theoilandgasyear.com/news/irans-oil-exports-to-europe-rise/,

last visited: 7 July 2017. 19 ‘Iran to sign oil contract to sell Russia 100,000 bpd: state TV’, Reuters, 21 February 2017, available at: http://www.reuters.com/article/us-iran-russia-oil-

idUSKBN1602F1, last visited: 7 July 2017. 20 ‘Iran certifies 29 international companies to bid for oil, gas projects’, Reuters, 2 January 2017, available at: http://www.reuters.com/article/us-iran-energy-

idUSKBN14M0NW, last visited: 7 July 2017. 21 ‘Shell signs provisional oil and gas deal with Iran’, Financial Times, 7 December 2016, available at: https://www.ft.com/content/fa879b24-bc8c-11e6-

8b45-b8b81dd5d080?mhq5j=e3, last visited: 22 ‘Total Pledges $1 Billion Investment in Iran Gas Field’, The Wall Street Journal, 20 June 2017, available at: https://www.wsj.com/articles/total-pledges-1-

billion-investment-in-iran-gas-field-1497968780, last visited: 7 July 2017. 23 ‘Iraq and Iran sign MoU on Kirkuk oil export pipeline study’, Reuters, 20 February 2017, available at: http://www.reuters.com/article/iraq-iran-oil-

idUSL8N1G532F, last visited: 7 July 2017. 24 ‘Iran sees oil refining megadeals with Japan, China soon’, PressTV, 1 February 2017, available at:

http://www.presstv.com/Detail/2017/02/01/508680/Iran-oil-refining-deals-China-Japan-South-Korea, last visited: 7 July 2017. 25 ‘Maersk Line makes a comeback to Iran’, World Maritime News, 20 October 2016, available at:

http://worldmaritimenews.com/archives/204576/maersk-line-makes-a-comeback-to-iran/, last visited: 7 July 2017. 26 ‘Europe Chomps Most Iran Oil in Years With Supertankers Due in Days’, Bloomberg, 25 January 2017, available at:

https://www.bloomberg.com/news/articles/2017-01-25/europe-chomps-most-iran-oil-in-years-with-huge-snow-due-in-days, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

open an Iran-based office,27

having previously resumed insurance operations.28

Key to the shipping

resurgence has been the concerted effort played by South Korea to engage with Iran. Under the

Park administration, Seoul made seeking out new economic opportunities a governmental priority

as part of an effort to disrupt Iran’s ties with North Korea.29

That approach smoothed passage for

Hyundai Heavy Industries to reach agreement with Iran on the sale of ten commercial vessels as

part of a $700 million deal, something that will strengthen Iran’s ability to export oil to the

international markets in the years ahead.30

The final sector of Iran’s economy that has benefitted greatly from sanctions relief has been aviation.

Starved of resources and spare parts for years, Iranian companies have prioritised engagement with

international suppliers. Iran Air reached an agreement with Airbus in December of last year to

acquire 100 new airliners,31

following a deal with Boeing to acquire 80 aircraft in a deal estimated to

be worth $16 billion.32

In addition, Iran Air has signed contracts with the French-based manufacturer

ATR to provide further planes.33

Aseman airlines has also sought to purchase international aircraft.

In addition to an agreement with Boeing to purchase 30 737 aircraft,34

Aseman has struck a deal

with Mitsubishi to acquire 20 jets for domestic routes.35

Iran Airtour and Zagros airlines have also

formalised MoUs with Airbus with a view to future acquisitions.36

Collectively, these interactions seem to suggest that the JCPOA is facilitating the kind of economic

engagement that was envisaged at the time the agreement was formalised. However, the way in

which Iran has taken advantage of sanctions relief in the first two years of the JCPOA regime is

cause for concern, largely because it has been more strategic in nature than commercial. Tehran’s

move to re-establish its oil exports – together with access to the vessels and insurance upon which

they rely – is economically sound. So too is moving to end its reliance on an aging fleet of civilian

airliners, something that made air travel in Iran a far riskier prospect than in any other developed

country.37

At the same time, the nature of the industries that have been the first to benefit from

sanctions relief both inhibit the international community’s capacity to exert pressure upon Iran, and

reduce geopolitical tensions. By quickly re-establishing its oil exports, Tehran has insulated itself

against any return to sanctions, by creating economic dependencies in many of the countries which

are responsible for determining whether it is in compliance with the JCPOA. In addition, while the

private-sector purchases of aircraft have been civilian in nature, such airliners should be considered

as dual-use items, owing to the manner in which Iran has resupplied proxy groups fighting on behalf

27 ‘Lloyd’s to open branches in Iran’, PressTV, 20 November 2016, available at: http://presstv.ir/Detail/2016/11/20/494380/Lloyds-of-London-to-open-

branches-in-Iran, last visited: 7 July 2017. 28 ‘Lloyd’s of London says managing agents can offer Iran insurance for oil transportation’, Reuters, 18 January 2016, available at:

http://www.reuters.com/article/iran-nuclear-insurance-idUSL8N1523L6, last visited: 7 July 2017. 29 Berger, A., ‘North Korea’s Military Partnerships Under Threat?’, 38 North, 17 June 2016, available at:

http://www.38north.org/2016/06/aberger061716/, last visited: 7 July 2017. 30 ‘Hyundai Heavy Gets $700 Million Deal to Build 10 Ships for Iran Shipping Lines’, The Wall Street Journal, 10 December 2016, available at:

https://www.wsj.com/articles/hyundai-heavy-gets-700-million-deal-to-build-10-ships-for-iran-shipping-lines-1481426229, last visited: 7 July 2017. 31 ‘Airbus agrees to sell 100 planes to Iran Air’, Deutsche Welle, 22 December 2016, available at: http://www.dw.com/en/airbus-agrees-to-sell-100-planes-

to-iran-air/a-36881514, last visited: 7 July 2017. 32 ‘Iran Air signs huge deal for 80 Boeing aircraft’, Deutsche Welle, 11 December 2016, available at: http://www.dw.com/en/iran-air-signs-huge-deal-for-80-

boeing-aircraft/a-36727449, last visited: 7 July 2017. 33 ‘Airbus Joint Venture Seals Iran Air Plane Order’, The Wall Street Journal, 13 April 2017, available at: https://www.wsj.com/articles/airbus-joint-

venture-seals-iran-air-jet-order-1492075424, last visited: 7 July 2017. 34 ‘Boeing Co. says it signed new $3 billion deal with Iranian airline’, CNBC, 4 April 2017, available at: http://www.cnbc.com/2017/04/04/boeing-signs-new-

3-billion-deal-with-iranian-airline.html, last visited: 7 July 2017. 35 ‘EU bans Iran’s Aseman Airlines from flying in Europe’, Reuters, 8 December 2016, available at: http://uk.reuters.com/article/eu-airlines-safety-

idUKL5N1E32BF, last visited: 7 July 2017. 36 ‘Two Iranian airlines plan to buy 73 Airbus jets’, Reuters, 22 June 2017, available at: http://uk.reuters.com/article/us-airshow-paris-airbus-zagros-

idUKKBN19D0IG, last visited: 7 July 2017. 37 Handjani, A., ‘Sanctions cause Iranian plane crashes’, The Hill, 20 August 2014, available at: http://thehill.com/blogs/congress-blog/foreign-

policy/215406-sanctions-cause-iranian-airplane-crashes, last visited: 7 July 2017.

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of the Assad regime in Syria.38

As such, Iran’s commercial approaches have been in keeping with

how it could have been expected to act were its main priorities safeguarding its nuclear programme

and playing an aggressive military role in its region.

The true test of the JCPOA’s effectiveness will be whether it can prompt greater commercial

interactions in sectors that cannot be described as strategic in nature. Here the prospects are

decidedly less promising. Though the Rouhani government has sought to play up the benefits of

international commerce, it has been largely thwarted by continual interference from the Supreme

Leader’s office. For instance, Ayatollah Khamenei has repeatedly stressed that the continuing

economic challenges faced by Iran’s population spring not from the legacy of economic sanctions,

but from a failure to construct a “Resistance Economy” that is autarkic in nature. For instance,

addressing the Assembly of Experts in March, the Supreme Leader stressed that had “all the

necessary steps [regarding the Resistance Economy] been taken, today, we would have observed a

tangible difference in the country’s economic conditions and people’s lives”.39

That same month,

Khamenei proclaimed 1396 (equivalent to 20 March 2017 to 20 March 2018 in the Gregorian

calendar) to be the year of the Resistance Economy.40

These views are indicative of a strand of

Iranian thinking that continues to inhibit commerce. In May of last year, Khamenei stated, “We

[Iran] are engaging [economically] with the world, but importing, selling, and consuming foreign

goods in fields with domestic production must be recognized as antithetical to our values.”41

International observers have pinned great hopes upon the prospect of greater economic liberalism

resulting in an Iranian political posture that is more open and moderate. Indeed, economic

improvements, wrought in part by sanctions relief, have been a significant factor in bolstering the

fortunes of incumbent President Hassan Rouhani, who was re-elected to a second term in office in

March of this year.42

However, the JCPOA’s prospects for success depend on fulsome economic

engagement that enables the West to “purchase leverage” within the Iranian body politic, by

building up a prosperous middle class capable of resisting any hard-line effort to return to

enrichment once JCPOA restrictions expire. Yet protectionist interventions by Iran’s “principlist”

leadership – characterised by the frequent interventions of the Supreme Leader and the veto that

he and his ideological associates continue to exert over more pragmatic officials – casts doubt on

the likelihood of that prospect being realised.

So too does the hesitancy of Western firms, something that can be discerned from the nature of

the commercial transactions that have occurred thus far. The first two years of the JCPOA have

seen a heavy emphasis on purchases – of Iranian oil by international customers, and of key assets

by the Iranian state and private entities. However, what the JCPOA has yet to prompt is significant

and enduring direct foreign investment within the country. While international firms have been

keen to engage in individual sales, they have been far less willing to commence enduring commercial

38 Bucala, P., ‘Iran’s airbridge to Syria’, American Enterprise Institute (2016), available at: https://www.aei.org/wp-content/uploads/2016/07/Irans-

Airbridge-to-Syria.pdf, last visited: 7 July 2017. 39 Threat Update, Critical Threats, 13 March 2016, available at: https://www.criticalthreats.org/briefs/critical-threats-today/critical-threats-today-march-13-

2017, last visited: 7 July 2017. 40 Majidyar, A., ‘Supreme Leader Piles up Pressure on Rouhani ahead of Elections’, Middle East Institute, 20 March 2017, available at:

http://www.mei.edu/content/io/supreme-leader-piles-pressure-rouhani-ahead-elections?utm_medium=email&utm_source=cc&utm_campaign=io-

daily&utm_content=headline, last visited: 7 July 2017. 41 ‘Iran News Round-up’, Critical Threats, 27 April 2016, available at: https://www.criticalthreats.org/briefs/iran-news-round-up/iran-news-round-up-april-

27-2016-1, last visited: 7 July 2017. 42 ‘Rouhani wins presidential election’, Financial Times, 20 May 2017, available at: https://www.ft.com/content/ca521252-3d35-11e7-9d56-

25f963e998b2?mhq5j=e3, last visited: 5 July 2017

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

relationships with Iranian partners. Part of this hesitancy is derived from the manner in which the

JCPOA was structured. In order to satisfy concerns about Iranian non-compliance, the agreement

included a “snapback” procedure, which allows any one of the P5+1 members to automatically

reinstate international sanctions against Iran should it consider the country to be in breach of the

agreement’s terms.43

This procedure is not dependent upon UN Security Council approval, and

affords significant power to national capitals to quickly curtail Iran’s economic relations with the

outside world. While that clause is a necessity given Iran’s ability to cease compliance with the

JCPOA at short notice and its history of misleading international actors,44

it is having a chilling effect

on businesses, which have shunned long-term investments in such a high-risk political

environment.45

The net effect is that economic rapprochement between Iran and the West has been

far less significant than many expected. Indeed, some Iranian officials have criticised European

governments for not doing enough to reassure banks that their investments will be protected,46

even

though Western officials have made significant efforts to offer such reassurance.47

A final cause for concern, which is also commercial in nature, is the way in which the Iranian state

has used sanctions relief to invest more heavily in missile defence. Most notably, Iran moved swiftly

to acquire S-300 surface-to-air missiles from Russia ahead of the JCPOA being agreed.48

Agreement

on the provision of the anti-aircraft system had been approved in 2007, but suspended owing to

international sanctions. Yet so keen was Tehran to acquire the system that it mounted legal action

to compel the sale, only to withdraw the lawsuit49

prior to taking the first delivery in July of last year.50

The shipment also enabled Iran to further develop its own domestically produced surface-to-air

missile, the Bavar 373, which President Rouhani unveiled in August of last year.51

Iranian media has

reported that the first deployment of the S-300 system has been at the Fordow enrichment facility,

a fact that further weakens Tehran’s claim that the site is purely civilian in nature.52

By deploying

surface-to-air missile defences around the enrichment site that is already the least vulnerable to

foreign airstrikes, Tehran has sent a powerful signal that safeguarding its nuclear programme

remains its primary political priority, and that its approach to greater economic opportunities is

strategic rather than commercial.

Though Tehran has permitted private-sector firms to cooperate with Western firms, it has done so

where such cooperation will help inoculate the country’s economy from any decision to “snap”

sanctions back into place. It has allowed private-sector firms to acquire Western technology and

43 Berger, A., ‘Explaining snapback in the Iran deal’, Royal United Services Institute, 16 July 2015, available at: https://rusi.org/commentary/explaining-un-

snapback-iran-deal-0, last visited: 7 July 2017. 44 ‘Iran “lied to UN inspectors about Qom nuclear site”’, The Guardian, 28 November 2010, available at:

https://www.theguardian.com/world/2010/nov/28/iran-lied-un-inspectors-qom-nuclear, last visited: 7 July 2017. 45 ‘HSBC criticises John Kerry over business with Iran request’, The Guardian, 13 May 2016, available at:

https://www.theguardian.com/business/2016/may/13/hsbc-criticises-john-kerry-business-iran-europe-banks, last visited: 7 July 2017. 46 ‘Iran accuses Europe of not fully supporting Iran deal’, Financial Times, 27 October 2016, available at: https://www.ft.com/content/0abe52f2-9b69-11e6-

8f9b-70e3cabccfae?mhq5j=e3, last visited: 47 ‘Kerry seeks to soothe European bank nerves over Iran trade’, Reuters, 11 May 2016, available at: http://www.reuters.com/article/us-iran-banks-kerry-

idUSKCN0Y30OJ, last visited: 7 July 2017. 48 Stephens, M., and J. Bronk, ‘Why the Iranian Purchase of the S-300 Should Worry the Gulf States’, Royal United Services Institute, 1 May 2015,

available at: https://rusi.org/publication/rusi-defence-systems/why-iranian-purchase-s-300-should-worry-gulf-states, last visited: 7 July 2017. 49 ‘Iran withdraws lawsuit against Russia over S-300 delivery’, The Iran Project, 21 May 2016, available at: http://theiranproject.com/blog/2016/05/21/iran-

withdraws-lawsuit-russia-s-300-delivery/, last visited: 7 July 2017. 50 Gady, F., ‘Russia Delivers First Missiles for Iran’s New Air Defense System’, The Diplomat, 19 July 2016, available at:

http://thediplomat.com/2016/07/russia-delivers-first-missiles-for-irans-new-air-defense-system/, last visited: 7 July 2017. 51 Binnie, J., ‘Iran unveils Bavar-373 long-range air-defence system’, Jane’s 360, 24 August 2016, available at: http://www.janes.com/article/63215/iran-

unveils-bavar-373-long-range-air-defence-system, last visited: 7 July 2017. 52 ‘Iran deploys Russian-made S-300 missiles at its Fordow nuclear site’, Reuters, 29 August 2017. Available at: http://www.reuters.com/article/us-iran-

missiles-fordow-idUSKCN1140YD, last visited 10 July 2017

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

assets where this will make a tangible impact on Iran’s wider geopolitical position. It has also

acquired military equipment geared towards strengthening its capacity to repel a military attack

against its nuclear facilities in the post-JCPOA period. At the same time, it has by and large moved

to hinder the kind of far-reaching economic engagement envisioned by the JCPOA’s advocates,

something that bodes poorly for broader political outreach. All these approaches are commensurate

with the actions Iran might have been expected to take were it laying the groundwork for returning

to nuclear enrichment – and by extension a latent nuclear weapons capability – once JCPOA

restrictions expire.

3. Iranian military assertiveness under the JCPOA

In his first month as President, Barack Obama stated that “if countries like Iran are willing to

unclench their fist, they will find an extended hand from us”.53

The JCPOA was in large part based

upon this logic. Diplomatic outreach was intended to end Iran’s pariah status, lessening its sense of

insecurity by binding it into the international community. Indeed, when mounting a public defence

of the accord, Obama’s Secretary of State John Kerry made parallels to President Nixon’s

diplomatic outreach to China in the 1970s.54

However, Iran was always likely to become more

assertive in its region following the passage of the JCPOA, rather than less. As former Secretary of

State Henry Kissinger noted, whereas China was faced by the threat of Soviet invasion at the time

of the Sino-American rapprochement, Iran geopolitical position was at its strongest for decades,

having seen both of its two neighbours – Iraq and Afghanistan – weakened due to US-led regime

change.55

Indeed, Iran’s actions in the first two years have contravened the notion that diplomatic

outreach would moderate its international behaviour. Released from the threat of American military

action, Iran has doubled down on two themes that have long been at the heart of its politico-military

strategy.

3.1 Iranian ballistic missile development and testing

Primarily, access to oil wealth has dramatically increased Iran’s ability to spend money on

conventional military capabilities. For instance, the Iranian Defence Minister stated in May that the

country’s domestic weapons manufacturing capability had increased 100-fold under the Rouhani

administration.56

In January, the Iranian Majlis approved legislation to increase the Iranian defence

budget to 5% of government spending, even though Iran’s defence budget had already increased by

145% during President Rouhani’s first term in office.57

Notably, the legislation paved the way for

further development of ballistic missiles, to include the acquisition of missiles from abroad. Such

purchases have been made possible by the manner in which the JCPOA relaxed the existing arms

53 ‘Iran: Obama must “unclench” America’s fist’, CBS News, 28 January 2009, available at: http://www.cbsnews.com/news/iran-obama-must-unclench-

americas-fist/, last visited: 7 July 2017. 54 ‘Assessing the Iran Nuclear Accord’, Council on Foreign Relations, 24 July 2015, available at: https://www.cfr.org/event/assessing-iran-nuclear-accord,

last visited: 7 July 2017. 55 Kissinger, H., World Order (Penguin Books, 2015), p.165. 56 Majidyar, A., ‘Iran’s Arms Production Capacity Has Reportedly Seen 100-Fold Increase under Rouhani’, Middle East Institute, 3 May 2017, available

at: http://www.mei.edu/content/io/iran-s-arms-production-capacity-reportedly-increased-100-fold-under-

rouhani?utm_medium=email&utm_source=cc&utm_campaign=io-weekly&utm_content=headline, last visited: 8 July 2017. 57 Majidyar, A., ‘Rouhani Says Iran’s Military Budget Increased by 145 Percent During His Term, Middle East Institute, 18 April 2017, available at:

http://www.mei.edu/content/io/rouhani-says-iran-s-military-budget-increased-145-percent-during-his-

term?utm_medium=email&utm_source=cc&utm_campaign=io-daily&utm_content=headline, last visited: 8 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

embargo upon defence-based purchases. The agreement brought an end to a blanket ban on the

export of armaments to Iran, replacing it with a system in which:

[The UN] Security Council decides on a case-by-case basis whether to permit the transfer

of goods and technology that could contribute to the development of nuclear weapon

delivery systems based on the inclusion of appropriate end-user guarantees and Iran

committing not to use such items for nuclear weapon delivery systems.58

This formula – which is slated to remain in place until 2023 – was one of the final concessions made

to the Iranian regime at the time of the agreement’s negotiation,59

and has been one of the most

controversial aspects of Iran’s relationship with the international community over the last two years.

Western officials and commentators tend to take the view that Iranian purchases and tests of ballistic

missiles are either prohibited under the terms of the JCPOA and thus appropriate triggers for the

imposition of new sanctions, or not covered by the JCPOA, thereby affording states the right to

respond to them with the imposition of sanctions whilst remaining in compliance. By contrast,

Iranian officials tend to assert that the JCPOA and UN Security Council 2231 provide express

permission to Iran to purchase and test ballistic missiles that are not suited to serving as a delivery

vehicle for a nuclear device, and that any sanctions-based response to their acquisition or test

constitutes a breach of the JCPOA and/or Security Council 2231.

Failure to reconcile these competing understandings has enabled Tehran to significantly strengthen

its ballistic missile arsenal. Indeed, Iran’s leadership has elevated further development of ballistic

missiles to a central political objective over the last two years. Ayatollah Khamenei has repeatedly

stressed the importance of continuing to expand Iran’s missile capabilities irrespective of

international concerns,60

and President Rouhani has praised the Iranian Revolutionary Guards

Corps’ missile development programme.61

In addition, the Iranian and South African defence

ministers reached agreement on an MoU in December of last year,62

which is expected to result in

Iranian imports of the Umkhonto, a mobile surface-to-air missile.63

This development comes in

spite of past efforts by British intelligence services to prevent Iran from improving its ballistic missile

capabilities through commercial acquisitions from South Africa.64

Access to foreign ballistic missile

technology not only allows Iran to enhance the threat it poses to states in the region, but also leaves

it better placed to construct a delivery vehicle suited for a nuclear payload when the JCPOA

prohibition on doing so expires in six years’ time.

58 ‘UN arms embargo on Iran’, Stockholm Institute for Peace Research, 20 January 2016, available at:

https://www.sipri.org/databases/embargoes/un_arms_embargoes/iran, last visited: 8 July 2017. 59 Lynch, C., ‘Washington Made It Easy for Iran to Fire Its Ballistic Missiles’, Foreign Policy, 16 March 2016, available at:

http://foreignpolicy.com/2016/03/16/washington-made-it-easy-for-iran-to-fire-its-ballistic-missiles/, last visited: 7 July 2017. 60 Majidyar, A., ‘Khamenei Vows to Enhance Missile Capability, Urges Candidates to Resist U.S. and Israel’, Middle East Institute, 10 May 2017, available

at: http://www.mei.edu/content/article/io/khamenei-vows-enhance-missile-capability-urges-candidates-resist-us-and-

israel?utm_content=buffer7b33d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer?utm_medium=email&utm_source=cc&utm_ca

mpaign=io-weekly&utm_content=headline, last visited: 7 July 2017. 61 Majidyar, A., ‘Rouhani Lauds I.R.G.C. for Developing and Using Missiles’, Middle East Institute, 26 June 2017, available at:

http://www.mei.edu/content/io/rouhani-lauds-irgc-developing-and-using-missiles, last visited: 7 July 2017. 62 ‘Iran, South Africa sign defense cooperation agreement’, Tehran Times, 13 December 2016, available at:

http://www.tehrantimes.com/news/409130/Iran-South-Africa-sign-defense-cooperation-agreement, last visited: 7 July 2017. 63 Tsiboukis, G., ‘Iran looks to buy South Africa’s Umkhonto surface to air missile’, Dartmouth Centre for Seapower and Strategy, 28 March 2017,

available at: http://blogs.plymouth.ac.uk/dcss/2017/03/28/iran-looks-to-buy-south-africas-umkhonto-surface-to-air-missile/, last visited: 7 July 2017. 64 ‘Spy cables: MI6 intervened to halt South African firm’s deal with Iranian client’, The Guardian, 23 February 2015, available at:

https://www.theguardian.com/world/2015/feb/23/spy-cables-mi6-south-african-iranian-client, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

The move to acquire foreign technology comes on top of a greatly enhanced effort to engage in

ballistic missile testing. In March of last year, Iran test-fired Ghadr H and F type missiles, which

have a range of between 1,400 and 2,000 kilometres. The following month, Iran attempted to place

a satellite into orbit through the use of a Simorgh rocket, a system unveiled by former President

Ahmadinejad in 2010,65

which US intelligence officials had previously confirmed could form the

basis for an ICBM-class delivery vehicle.66

In December of last year, Iran followed the Ghadr and

Simorgh tests with a no-notification test of its Shahab-3 missile.67

Since the turn of the year, the

drumbeat of Iranian missile tests has quickened, with repeated tests being conducted over the last

six months. In January of this year, Iran test-fired one of its Khorramshahr medium-range ballistic

missiles,68

in what later proved to be a failed test of a re-entry vehicle. It followed the move with

extensive military exercises in February,69

which saw test-fires of shorter-range Fajr 3, 4 and 5 rockets,

which are designed for conventional use.70

In March, Iran conducted further tests, this time

launching a Hormuz-2 ship-to-ship missile designed to strike foreign naval vessels.71

Sustained tests of different systems are designed to perfect proficiency and accuracy, as well as

intimidate regional rivals. Commenting on the Ghadr launches, the deputy director of the IRGC

Brigadier General Hossein Salami played up Iran’s capacity to target states in the region, stating,

“We can target regional targets, including Israel, from any point, at any volume and with any launch

system, simultaneously [as well as] consecutively.”72

At the same time, so confident has Iran become

in its rocket capabilities that it recently reverted to their use in a non-peace-time environment. In

response to last month’s ISIS attack on the Iranian Parliament in Tehran,73

Iran responded by

launching intermediate-range surface-to-surface missiles, as well as several short-range ballistic

missiles74

against a range of targets within Syria. The action represented a significant escalation of its

intervention in the country’s civil war, as well as Iran’s first use of missiles beyond its borders in

more than a decade.75

It also violated past promises that Iran would only maintain ballistic missiles

for deterrent purposes, and refrain from attacking targets in foreign countries.76

3.2 Iranian support for proxy groups in the Middle East

A second key theme has been expanded support for proxy militant groups. Since the revolution of

65 ‘Iran launches long-range rocket but fails to put satellite into orbit’, Fox News, 21 April 2016, available at:

http://www.foxnews.com/world/2016/04/21/iran-launches-long-range-rocket-but-it-doesnt-reach-orbit.html, last visited: 7 July 2017. 66 Clapper, J., ‘Statement for the Record on the Worldwide Threat Assessment of the U.S. Intelligence Community for the House Permanent Select

Committee on Intelligence’ (2011), available at: https://intelligence.house.gov/sites/intelligence.house.gov/files/documents/dnisfr021011.pdf, last visited: 7

July 2017. 67 ‘Iran launched another ballistic missile in secret last month, US officials say’, Fox News, 31 January 2017, available at:

http://www.foxnews.com/world/2017/01/31/iran-launched-another-ballistic-missile-in-secret-last-month-us-officials-say.html, last visited: 7 July 2017. 68 ‘Iran Launches a Missile, Testing Trump’s Vows of Strict Enforcement’, The New York Times, 30 January 2017, available at: https://www.nytimes.com/2017/01/30/world/middleeast/iran-missile-test.html, last visited: 7 July 2017. 69 ‘Iran launches “advanced” rockets during military exercises’, CNBC, 20 February 2017, available at: http://www.cnbc.com/2017/02/20/iran-launches-

advanced-rockets-during-military-exercises.html, last visited: 7 July 2017. 70 Majidyar, A., ‘Iran Test-Fired More Missiles amid Heightening Tension with Washington’, Middle East Institute, 21 February 2017, available at:

http://www.mei.edu/content/io/iran-test-fired-more-missiles-amid-heightening-tension-

washington?utm_medium=email&utm_source=cc&utm_campaign=io-daily&utm_content=headline, last visited: 7 July 2017. 71 ‘Defiant Iran successfully tests another ballistic missile’, Times of Israel, 9 March 2017, available at: http://www.timesofisrael.com/defiant-iran-

successfully-tests-another-ballistic-missile/, last visited: 7 July 2017. 72 ‘Iran News Round-up’, Critical Threats, 9 March 2016, available at: https://www.criticalthreats.org/briefs/iran-news-round-up/iran-news-round-up-march-

9-2016-1, last visited: 7 July 2017. 73 ‘At Least 12 Killed in Pair of Terrorist Attacks in Iran’, New York Times, 7 June 2017, available at:

https://www.nytimes.com/2017/06/07/world/middleeast/iran-parliament-attack-khomeini-mausoleum.html, last visited: 8 July 2017. 74 Taleblu, B. ‘Iranian media reports missile strike in Syria’, Long War Journal, 7 June 2017, available at:

http://www.longwarjournal.org/archives/2017/06/iranian-media-reports-missile-strike-in-syria.php, last visited: 7 July 2017. 75 Keck, Z., ‘Iran's Mili tary Is Armed to the Teeth with Miss i les ’ , The National Interest , 25 June 2017, available at :

http://nationalinterest.org/blog/the-buzz/irans-military-armed-the-teeth-missiles-21294, last visited: 7 July 2017. 76 ‘Iran confirms missile test, drawing tough response from Trump aide’, Reuters, 1 February 2017, available at: http://www.reuters.com/article/us-usa-iran-

missiles-idUSKBN15G3ZO, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

1979, Iran’s regard for the sovereignty and borders of its neighbours has been chequered, owing to

its sustained support for proxy sub-state groups in other parts of the Middle East. For instance, Iran

has long been Lebanese Hezbollah’s primary economic and political sponsor, and was instrumental

in funnelling support to anti-American militant groups during the Iraq War, such as Moqtada al-

Sadr’s Mahdi Army.77

The prospect that an influx of oil wealth would enable Iran to provide greater

support for sub-state actors in neighbouring countries was acknowledged by Western leaders at the

time the JCPOA was agreed.78

Yet its importance was largely downplayed, on the basis that easing

concerns about Iran’s nuclear programme, and reducing the likelihood of US-led military action

against Iran, would serve to calm regional tensions.

However, over the last two years, Iran’s efforts to bolster proxy militant groups across the broader

Middle East, especially in Iraq and Syria, has been dramatic. Beginning in 2014 – when the JCPOA

negotiations were still underway – Iran moved to unify anti-ISIS Shi’a militias under a single

command, establishing Population Mobilisation Units (PMU).79

These forces, deeply sectarian in

nature, have since been at the vanguard of the on-the-ground resistance to ISIS in Iraq and Syria.

Owing to a combination of Iraq’s domestic political weakness, ongoing coalition air operations

against ISIS and Russia’s intervention in the Syrian civil war, these forces have now begun to make

extensive gains. For instance, in recent months pro-Iranian forces have captured control of towns80

and checkpoints81

along the Iraqi–Syrian border.

3.3 Implications of Iranian assertiveness for the JCPOA

Iran’s regional and conventional assertiveness might be considered acceptable were it the price to

be paid for permanent nuclear restraint. However, Tehran’s bold approach to expanding and

deploying its capabilities are setting in motion trends which make it much less likely that Iran will

engage in restraint once the JCPOA’s key provisions expire. The progress made by PMU in

capturing territory in Iraq and Syria and Iran’s unyielding focus on building ballistic missiles capable

of striking its neighbours have dramatically reduced the likelihood that Iran will be able to extricate

itself from long-term hostility with its neighbours. A key consequence of its revanchist response to

regional instability has been a deepening estrangement from the Gulf and Arab states to its west,

which repeatedly condemn Iran’s encroachment as a malign influence. At their most recent summit

in March of this year82

, the six nations of the Gulf Cooperation Council (GCC) collectively pledged

to “confront Iran’s destabilizing activities”, and announced a series of intended arms purchases,

77 ‘Mahdi army commanders withdraw to Iran to lie low during security crackdown’, The Guardian, 15 February 2007, available at:

https://www.theguardian.com/world/2007/feb/15/iraq.iran, last visited: 7 July 2017. 78 ‘Barack Obama admits Iran nuclear deal will mean more money for terror groups’, The Telegraph, 5 August 2015, available at:

http://www.telegraph.co.uk/news/worldnews/middleeast/iran/11786027/Barack-Obama-admits-Iran-nuclear-deal-will-mean-more-money-for-terror-

groups.html, last visited: 7 July 2017. 79 Weiss, M., ‘The U.S. Is Providing Air Cover for Ethnic Cleansing in Iraq’, Foreign Policy, 28 March 2017, available at:

http://foreignpolicy.com/2015/03/28/the-united-states-is-providing-air-cover-for-ethnic-cleansing-in-iraq-shiite-militias-isis/, last visited: 7 July 2017. 80 Majidyar, A., ‘Iran-Supported Iraqi Paramilitaries Capture al-Baaj Region near Iraqi-Syrian Border’, Middle East Institute, 5 June 2017, available at:

http://www.mei.edu/content/io/iran-supported-iraqi-paramilitaries-capture-al-baaj-region-near-iraqi-syrian-

border?utm_medium=email&utm_source=cc&utm_campaign=io-daily&utm_content=headline, last visited: 7 July 2017. 81 Majidyar, A., ‘Iran-Supported Iraqi Armed Groups Expand Their Control of Syrian-Iraqi Border Area’, Middle East Institute, 2 June 2017, available at:

http://www.mei.edu/content/io/iran-supported-iraqi-armed-groups-expand-their-control-syrian-iraqi-border-area, last visited: 7 July 2017. 82 ‘Statement of Extraordinary Summit of the Cooperation Council for the Arab States of the Gulf (GCC) and the United States of America’, 23 May

2017, available at: https://www.whitehouse.gov/the-press-office/2017/05/23/statement-extraordinary-summit-cooperation-council-arab-states-gulf-gcc, last

visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

including up to $110 billion in purchases by Saudi Arabia alone.83

In return, Iranian entities blamed

Saudi Arabia for the recent ISIS attack in Tehran.84

This downward spiral in regional relations is indicative of the fact that Iran’s actions are not only

failing to hasten its isolation, but prompting key nations to take steps that make that isolation more

pronounced. This provides Iran with further incentives to engage in ballistic missile development.

Yet more importantly, the increased level of hostility Iran has prompted among its neighbours, and

their efforts to respond through military acquisitions, makes it likely that Tehran’s sense of

insecurity will grow rather than diminish in the years ahead. Unless arrested, this state of affairs will

incentivise Iran to return to enrichment as a hedge against seeking nuclear arms when JCPOA

restrictions are lifted – the exact opposite of the agreement’s intended effect.

4. The US and the JCPOA

Given its extensive use of financial sanctions against Iran, and its capability to employ military force

against components of the Iranian nuclear programme itself, any outcome from the JCPOA

negotiation process was always subject to an implicit veto by Washington. At the same time, the

United States was the driving force behind the JCPOA, initiating secret diplomatic talks with Iran

in 2009,85

and acting as the de facto lead negotiator within the P5+1. However, over the last two

years, the level of US governmental support for the JCPOA has declined significantly. Primarily,

this can be attributed to the election of an administration deeply hostile to the terms of the

agreement itself. Speaking at a protest in Washington days after the agreement was finalised, Donald

Trump stated, “Never, ever, ever in my life, have I seen any transaction so incompetently negotiated

as our deal with Iran … and I mean never.”86

Though the new administration has certified that Iran

is in compliance with the terms of the JCPOA, as it is required to do under US law, senior officials

have made no secret of their lack of faith in the agreement. Addressing the certification, Secretary

Tillerson outlined his belief that the agreement “fails to achieve the objective of a non-nuclear

Iran”.87

Yet irrespective of the Trump administration’s innate hostility to the JCPOA, developments

over the last two years have significantly lessened the likelihood of the agreement prompting the

kind of Iranian–American rapprochement on which of the agreement depends.

A key reason for this is that the Trump administration’s hostility to the JCPOA is reflective of

broader political opposition that existed within the United States at the time the agreement was

finalised. For instance, while the Obama administration oversaw and consented to the accord, it

failed to secure widespread support for it from across the US political spectrum. In the months

following the final round of negotiations, the administration was forced to take advantage of Iran-

specific legislation that enabled it to implement sanctions relief without the support of the

83 ‘US-Saudi Arabia seal weapons deal worth nearly $110 billion immediately, $350 billion over 10 years’, CNBC, 20 May 2017, available at:

http://www.cnbc.com/2017/05/20/us-saudi-arabia-seal-weapons-deal-worth-nearly-110-billion-as-trump-begins-visit.html, last visited: 7 July 2017. 84 Revolutionary Guards blame Saudi Arabia for Tehran attack’, Financial Times, 7 June 2017, available at: https://www.ft.com/content/190e854e-4b58-

11e7-919a-1e14ce4af89b?mhq5j=e3, last visited: 85 ‘Secret Dealings With Iran Led to Nuclear Talks’, The Wall Street Journal, 28 June 2015, available at: https://www.wsj.com/articles/iran-wish-list-led-to-

u-s-talks-1435537004, last visited: 7 July 2017. 86 ‘Donald Trump Brings Theatrics to Iran Nuclear Deal Protest’, The New York Times, 9 September 2015, available at:

https://www.nytimes.com/politics/first-draft/2015/09/09/donald-trump-brings-theatrics-to-iran-nuclear-deal-protest/, last visited: 7 July 2017. 87 ‘Tillerson declares the Iran nuclear deal a failure’, Associated Press, 19 April 2017, available at:

https://www.apnews.com/95402efa2a4845649fda6c3b64cba109, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

Republican-led Congress.88

In addition, even though leading Democratic voices backed the JCPOA,

many were deeply sceptical of pursuing any broader US–Iranian interaction. In late 2015 Hillary

Clinton – then a candidate for the presidency – told the Brookings Institution that “this is not the

start of some larger diplomatic opening and we shouldn’t expect that this deal will lead to broader

changes in their behaviour”,89

even though the logic of the JCPOA’s success largely depends upon

greater political and economic cooperation in order to prompt domestic moderation within Iran.

The Trump administration is currently conducting an interagency National Security Council review

to “evaluate whether suspension of sanctions related to Iran pursuant to the JCPOA is vital to the

national security interests of the United States”.90

Though no timetable has been given, analysts

expect the review to report ahead of the next 90-day certification deadline later this month.

Accordingly, it is conceivable that the administration may soon discontinue waivers and reimpose

nuclear-related sanctions, something that would contravene the JCPOA, and permit Iran to

withdraw on the basis of American non-compliance.

Even if the administration refrains from taking such dramatic action, it may still find alternative ways

to adopt a more forceful approach towards Iran’s nuclear programme. One option under

consideration is designating the IRGC as a sponsor of terrorism,91

something that would indirectly

target Iran’s nuclear weapons latency by impacting the organisation responsible for the country’s

missile forces.92

Another is to deny Iran the ability to benefit from sanctions relief by blocking

purchases it is seeking to make. For instance, the administration has come under pressure from

Republican lawmakers to intervene in Boeing’s sale of civilian aircraft,93

on the basis that Iran has

“used commercial aircraft to transport the weapons and troops that have fuelled the conflict in

Syria”.94

Indeed, legislation mandating the administration to do so has already cleared the US House

of Representatives.95

The Trump administration has also made a much more concerted effort to

reassure Gulf partners about its commitment to roll back Iranian advances. President Trump made

Riyadh his first international trip as President and signed a number of letters of intent regarding

defence and security cooperation during his visit.96

At the same time, Iran’s military assertiveness has prompted cross-party consensus in favour of

supplementing those sanctions which remain in place under the terms of the JCPOA, with

additional non-nuclear sanctions. The US response to Iran’s ballistic missile tests is a case in point.

Following the spate of Iranian missile tests, the Treasury Department designated a raft of individuals

88 Stafford, T., ‘How Obama beat Congress on Iran’, Royal United Services Institute, 2 September 2015, available at: https://rusi.org/commentary/how-

obama-beat-congress-iran, last visited: 7 July 2017. 89 Transcript: ‘Hillary Clinton Addresses the Iran Nuclear Deal’, The Brookings Institution, 9 September 2015, available at:

https://www.brookings.edu/wp-content/uploads/2015/09/20150909_clinton_iran_transcript.pdf, last visited: 7 July 2017. 90 US Department of State Press Statement: ‘Iran Continues to Sponsor Terrorism’, 18 April 2017, available at:

https://www.state.gov/secretary/remarks/2017/04/270315.htm, last visited: 7 July 2017. 91 Vatanka, A., ‘Targeting Iran’s Revolutionary Guard Is the Right Move’, Middle East Institute, 10 February 2017, available at:

http://www.mei.edu/content/article/io/targeting-irans-revolutionary-guard-right-move, last visited: 7 July 2017. 92 Vatanka, A., ‘Designating I.R.G.C. a Terror Organization Could Undo Iran Nuclear Deal’, Middle East Institute, 13 February 2017, available at:

http://www.mei.edu/content/io/designating-irgc-terror-organization-could-undo-iran-nuclear-deal, last visited: 7 July 2017. 93 ‘Republican Lawmakers Urge Trump to Suspend Deals Between Boeing, Iranian Airlines’, Haaretz, 11 April 2017, available at:

http://www.haaretz.com/us-news/1.782789, last visited: 7 July 2017. 94 ‘Lawmakers to Trump: Cancel Obama-backed Boeing sales to Iran’, Washington Examiner, 10 April 2017, available at:

http://www.washingtonexaminer.com/lawmakers-to-trump-cancel-obama-backed-boeing-sales-to-iran/article/2619898, last visited: 7 July 2017. 95 ‘U.S. House Passes Legislation To Block Sale Of Boeing Airliners To Iran’, Radio Free Europe/Radio Liberty, 8 July 2016, available at:

https://www.rferl.org/a/us-house-passes-legislation-block-sale-boeing-airliners-iran/27845641.html, last visited: 7 July 2017. 96 ‘Trump signs “tremendous” deals with Saudi Arabia on his first day overseas’, The Washington Post, 20 May 2017, available at:

https://www.washingtonpost.com/politics/trump-gets-elaborate-welcome-in-saudi-arabia-embarking-on-first-foreign-trip/2017/05/20/679f2766-3d1d-11e7-

a058-ddbb23c75d82_story.html?utm_term=.be1bb8db4dfd, last visited: 7 July 2017.

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

connected with the ballistic missile programme on separate occasions in February97

and May, moves

which drew widespread support.98

In addition, a bipartisan collection of US lawmakers introduced

legislation in March that would sanction any individual or organisation with links to Iran’s ballistic

missile programme.

Iran’s response to these moves has been predictably hostile. The Iranian Foreign Ministry

blacklisted nine American entities99

in response to the passing of additional sanctions, and the

Supreme Leader vowed a “crushing response” to any effort to impose sanctions against the IRGC,

or its overseas operations Qods force.100

Iranian anger does not necessarily suggest that

Washington’s desire to curtail Iran in the non-nuclear realm is misplaced. Yet such virulent

opposition to the continued willingness of the administration and the Congress to consider sanctions

does underscore the extent to which broader US–Iranian relations have deteriorated since the

JCPOA was agreed. This highlights a fundamental weakness of the JCPOA itself: namely that its

success depends on an extensive degree of US–Iranian diplomacy, for which there isn’t adequate

political support, and isn’t likely to be for the foreseeable future.

5. Implications for UK Diplomacy

The UK government played an instrumental role in bringing the JCPOA into effect, with UK

officials taking part in the formal negotiations. In addition, then Prime Minister David Cameron101

and Foreign Secretary Phillip Hammond102

took the rare step of intervening in domestic US politics

to caution against further Congressional sanctions against Iran, out of concern that such a step would

undermine ongoing international negotiations. The British government also offered upbeat and

optimistic assessments of the JCPOA’s merits once finalised. In an oral statement to the House of

Commons the day after the agreement was signed, then Foreign Secretary Philip Hammond stated:

With the conclusion of these negotiations, the world can be reassured that all Iranian routes

to a nuclear bomb have been closed off, and the world can have confidence in the

exclusively peaceful nature of the Iranian civil nuclear programme going forward.103

Hammond reiterated the government’s view in January of last year, stating that “the threat of an

Iranian bomb was removed” by the JCPOA, and that ongoing implementation of the agreement

“cements this achievement”.104

Indeed, the government continues to regard the JCPOA as a success.

Foreign Secretary Boris Johnson told reporters as recently as January of this year that the JCPOA

97 ‘U.S. Imposes New Sanctions on Iran Over Missile Test’, The New York Times, 3 February 2017, available at:

https://www.nytimes.com/2017/02/03/us/politics/iran-sanctions-trump.html, last visited: 7 July 2017. 98 ‘Trump admin. rolls out new sanctions against Iran’, The Washington Times, 17 May 2017, available at:

http://www.washingtontimes.com/news/2017/may/17/trump-admin-rolls-out-new-sanctions-against-iran/, last visited: 7 July 2017. 99 Majidyar, A., ‘Iran Blacklists Nine American Entities In Response to New Missile Sanctions’, Middle East Institute, available at:

http://www.mei.edu/content/io/iran-blacklists-nine-american-entities-response-new-missile-

sanctions?utm_medium=email&utm_source=cc&utm_campaign=io-daily&utm_content=headline, last visited: 7 July 2017. 100 Majidyar, A., ‘Iran Vows “Crushing Response” to U.S. Sanctions against I.R.G.C. and Quds Force’, Middle East Institute, 9 June 2017, available at:

http://www.mei.edu/content/io/iran-vows-crushing-response-us-sanctions-against-irgc-and-quds-

force?utm_medium=email&utm_source=cc&utm_campaign=io-daily&utm_content=headline, last visited: 7 July 2017. 101 ‘UK’s David Cameron is phoning Senators about Iran Sanctions Bill’, CBS News, 16 January 2015, available at: http://www.cbsnews.com/news/uks-david-

cameron-helps-obama-urge-congress-against-iran-sanctions-bill/, last visited: 7 July 2017. 102 ‘Give diplomacy with Iran a chance’, The Washington Post, 21 January 2015, available at: https://www.washingtonpost.com/opinions/on-irans-nuclear-

programs-give-diplomacy-a-chance/2015/01/21/0cdb4dcc-a185-11e4-b146-577832eafcb4_story.html?utm_term=.8f3fd3f6b9f2, last visited: 7 July 2017. 103 House of Commons Official Record: Column 894, 15 July 2015, available at:

https://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm150715/debtext/150715-0001.htm, last visited: 7 July 2017. 104 ‘Iran: Implementation Day: Written Statement’, available at: https://www.parliament.uk/business/publications/written-questions-answers-

statements/written-statement/Lords/2016-01-19/HLWS464/, last visited:

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

“is a deal which we think has great merit and we want to keep going”.105

The UK has backed this

position through a range of substantive measures. One month after the JCPOA was finalised, the

Foreign Office reopened its embassy in Tehran,106

and the month after that appointed a new

ambassador.107

In addition, ministers have made concerted efforts to reassure Iranian authorities

that the government is doing all it can to facilitate increased business links with the country.108

Some

progress has already been seen, with British Airways resuming direct flights to Iran in September of

last year,109

and the value of UK exports to Iran rising by 42% in the first six months of 2016

compared to the same period in 2015.110

Confidence in the JCPOA continues to characterise the

government’s position. Addressing the Manama dialogue in Bahrain late last year, Foreign Secretary

Boris Johnson referred to the JCPOA as “a genuine achievement of diplomacy that has helped to

make the world a safer place”.111

Such fulsome praise underpins the widely held notion that the

JCPOA will successfully prevent Iran from ever being permitted to obtain a nuclear weapon.112

At the same time, the government has recognised that Iran’s regional activity poses a major threat

to peace and security. For instance, in an interview with al-Riyadh, Prime Minister Theresa May

stated, “We have no doubts regarding Iran’s role in destabilising the region,” and added that the

UK would “support the Gulf countries against Iranian overreaches in the region”.113

In addition, UK

officials have played an active role in monitoring Iran’s purchases through the procurement channel

established by the JCPOA, holding up a purchase of yellowcake from Kazakhstan, something which

has frustrated Iranian officials.114

It has also made strenuous representations on behalf of Nazanin

Zaghari-Ratcliffe, a British–Iranian dual national jailed by Iranian authorities on vague charges

pertaining to national security.115

However, the government has thus far failed to conclude that

Iranian support for proxy groups and conduct of ballistic missile tests is undermining the JCPOA,

by making it more likely that the country will return to nuclear enrichment at a later date. For that

reason, the UK has refrained from adding further non-nuclear sanctions to those which remained

in place following the finalisation of the JCPOA.

The situation is complicated by the fact that the UK will inherit sole responsibility for setting its

sanctions policy after its withdrawal from the European. Union. Though shadowing the European

position will likely make the most sense in the near term, Washington’s growing willingness to

sanction Iran for its role in the Syria conflict and for its ballistic missile tests will place the UK in an

105 ‘EU: JCPOA-Driven Boost to Mutual Trade Significant’, Financial Tribune, 17 January 2017, available at:

https://financialtribune.com/articles/national/57586/eu-jcpoa-driven-boost-to-mutual-trade-significant, last visited: 7 July 2017. 106 ‘British embassy in Iran reopens’, The Guardian, 23 August 2015, available at: https://www.theguardian.com/politics/2015/aug/23/british-embassy-iran-

tehran-reopens, last visited: 7 July 2017. 107 ‘UK and Iran appoint ambassadors for first time since 2011’, The Guardian, 5 September 2016, available at:

https://www.theguardian.com/world/2016/sep/05/britain-iran-appoint-first-ambassadors-since-2011-nazanin-zaghari-ratcliffe, last visited: 7 July 2017. 108 ‘Britain trying to facilitate banking transactions with Iran: Hammond’, Tehran Times, 22 May 2016, available at:

http://www.tehrantimes.com/news/402706/Britain-trying-to-facilitate-banking-transactions-with-Iran, last visited: 7 July 2017. 109 ‘British Airways to resume direct flights to Iran’, BBC News, 1 September 2016, available at: http://www.bbc.co.uk/news/uk-37240977, last visited: 7

July 2017. 110 ‘UK cautiously eyes $600bn opportunity in Iran investment drive, The Telegraph, 16 April 2017, available at:

http://www.telegraph.co.uk/business/2017/04/16/uk-cautiously-eyes-600bn-opportunity-iran-investment-drive/, last visited: 7 July 2017. 111 ‘Foreign Secretary speech: “Britain is back East of Suez”’, 9 December2016, available at: https://www.gov.uk/government/speeches/foreign-secretary-

speech-britain-is-back-east-of-suez, last visited: 7 July 2017. 112 ‘Full text: Obama gives a speech about the Iran nuclear deal’, 5 August 2015, available at: https://www.washingtonpost.com/news/post-

politics/wp/2015/08/05/text-obama-gives-a-speech-about-the-iran-nuclear-deal/, last visited: 7 July 2017. 113 Majidyar, A., ‘British Premier’s Remarks in Riyadh Prompt Angry Reaction from Tehran’, Middle East Institute, 6 April 2017, available at:

http://www.mei.edu/content/io/british-premier-s-remarks-riyadh-prompt-angry-reaction-tehran?utm_medium=email&utm_source=cc&utm_campaign=io-

daily&utm_content=headline, last visited: 7 July 2017. 114 ‘Missing “political will” in UK obstacle to yellow cake deal’, Tehran Times , 17 April 2017, available at:

http://www.tehrantimes.com/news/412696/Missing-political-will-in-UK-obstacle-to-yellow-cake-deal, last visited: 7 July 2017. 115 ‘British-Iranian woman jailed in Tehran loses legal appeal’, The Guardian, 24 April 2017, available at:

https://www.theguardian.com/world/2017/apr/24/british-iranian-woman-jailed-in-tehran-loses-appeal-nazanin-zaghari-ratcliffe, last visited: 7 July 2017.

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awkward position. Firstly, it will force the UK to determine which of its former JCPOA negotiating

partners is adopting the appropriate approach. In addition, it may confront the UK with the

challenge of acting as a moderator, in order to keep the JCPOA negotiating coalition together. For

instance, Russia has already shown its willingness to skirt the boundaries of the agreement’s

provisions by selling missile defence systems despite a prohibition on arms sales that is due to

remain in place until 2020. Likewise, European firms are likely to engage in much more trade and

commerce with Iran than the United States in the coming years, especially with respect to oil

purchases. Accordingly, the UK is likely to be faced with the prospect of European and American

“decoupling” on the Iranian nuclear issue, something that will require it to commit much more in

the way of diplomatic resources to the Iranian nuclear file if it wishes to see the JCPOA succeed.

6. Recommendations

At the time the JCPOA was negotiated, Iran’s level of enrichment was continuing to increase,

making it much more likely that its nuclear programme would result in a confrontation with external

powers. The agreement averted that possibility, by imposing significant restrictions upon Iran’s

nuclear programme. However, regarding Iranian compliance with the JCPOA as tantamount to

strategic success would be an error. Iran has engaged in more economic interactions with the West

over the last two years, but often as a way to enhance its strategic position, not as a means of achieving

political rapprochement, or even economic integration. In addition, the sanctions relief afforded to

Iran, necessary to secure its compliance with those restrictions, has allowed it to play a destabilising

role in its region. This makes it more likely that Tehran will remain locked in confrontation with its

neighbours, and will thereby come to regard a substantial nuclear programme as being within its

vital interest. Lastly, the low level of support for the JCPOA within US governing circles has made

it more likely that the UK could be caught off-guard by a sudden collapse in the JCPOA. As a result,

this paper makes the following recommendations:

UK decision-makers should reconceptualise the JCPOA and resist the temptation of

regarding it as an agreement which “resolves” the Iranian nuclear issue. Instead, they should

consider the document an interim accord which buys time for a sustainable solution to be

found.

UK policy-maker should keep recognise that Iran may simply be using the “breathing

room” afforded by the JCPOA era to consolidate its geopolitical position before returning

to enrichment. Indeed, nothing it has country’s leaders have done in the last two years

would betray otherwise. Accordingly, Iranian compliance with the JCPOA should no

longer be regarded as the benchmark for success. Instead, much greater emphasis should

be placed on the overall nature of relations between Iran and the West.

British officials should give thought and consideration to a variety of different approaches

towards Iran in the coming years. This should include the possibility of applying pressure

in the non-nuclear realm, by sanctioning Iran for its regional adventurism and unnecessary

ballistic missile testing. Alternatively, the UK could make a more concerted effort to

enhance Anglo–Iranian trade, as a means of doubling down on efforts to bring about greater

political moderation within Iran through greater engagement. Crucially, the UK should

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BEYOND COMPLIANCE: IRAN AND THE JCPOA

seek to prevent the current situation from drifting along unchallenged. Absent diplomatic

attention, Iran is likely to be strengthened by the reduced impact of sanctions, but remain

eager to return to nuclear enrichment once JCPOA restrictions on its nuclear programme

expire.

The UK should make discussions about the JCPOA and the Iranian nuclear programme

a major feature of transatlantic relations. This will require ongoing discussions with current

(and in time former) EU partners, as well as close cooperation with both the Trump

administration and US Congressional officials. Preventing American and European

“decoupling” in the years ahead will become an increasingly important task, especially as

the volume of Euro–Iranian trade increases.

The UK should begin to formulate its post-Brexit approach towards Iran sanctions in

advance, as a matter of priority. It is vital that UK decision-makers establish benchmarks

for what would constitute legitimate grounds for the imposition of non-nuclear sanctions,

given that it will no longer be able to revert to a European consensus. In addition, once the

UK recovers sole responsibility for its sanctions policy, it is likely to be more frequently

called upon to change course, and by states whose preferred approaches are very different.

Grounding its approach in a long-term plan, rather than an ad hoc approach, will be vital if

the UK is to continue to play a positive role on an issue of immense significance.

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About the Author

Timothy Stafford is Research Director at the Henry Jackson Society. He previously held research

posts with the Royal United Services Institute (RUSI) in London and Pacific Forum–CSIS in

Honolulu, Hawai’i, in addition to working in the Parliamentary offices of Theresa May and Sir

Malcolm Rifkind. He holds an undergraduate degree in history and politics from the University of

Oxford, and a master’s degree in Security Studies from Georgetown University in Washington,

DC.

Acknowledgements

I am indebted to Alan Mendoza for providing comments on an outline of this paper, and a

preliminary draft. I would also like to thank my HJS colleagues Ross Cypher-Burley and Henry van

Oosterom providing comments, as well as Jonathan Paris of the Chertoff Group and Shata Shetty

of the European Leadership Network for agreeing to consider an earlier draft.

About The Henry Jackson Society

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