The United States' Failures with JCPOA Compliance

By AIC Research Fellow Gabriela Billini

The United States has now withdrawn from the JCPOA, citing Iran’s failure to comply with its commitments, despite repeated confirmation from a diverse array of partners who solidly confirm the opposite. There have been accusations since the JCPOA’s signing that Iran has not acted in the spirit of the deal because of their legal ballistic missile tests and regional activity, both of which lie outside of the JCPOA’s areas of concern. What has rarely been discussed, however, is the fact that the US itself has violated the JCPOA. Given the US’ most recent violation of the JCPOA in pulling out of the deal without due cause, what follows is a summary of the ways in which the US has been in violation of the deal since President Trump assumed office. 

Iranian compliance

The International Atomic and Energy Agency (IAEA) is the sole and neutral entity responsible for verifying Iran’s compliance to the JCPOA through a variety of methods. The JCPOA has provided the IAEA full access to all 18 Iranian facilities and 9 other facilities, as well as the possibility to install surveillance cameras for monitoring. They are to also verify that all nuclear activity is exclusively for peaceful purposes. IAEA Director General Yukiya Amano has most recently verified Iranian compliance to the JCPOA in March 2018 for the tenth consecutive time since the JCPOA’s implementation.

In addition to the IAEA’s confirmation of Iranian compliance, US government officials have also acknowledged Iranian compliance with the JCPOA. Former Secretary of State Tillerson demonstrated his overall support for the JCPOA while at the post, though did take the position of the deal requiring revisions in order to address American concerns. Earlier this year while in London, he said, “I think there is a common view among the E3 that there are some areas of the JCPOA (nuclear deal) or some areas of Iran[’s]behavior that should be addressed.” Tillerson also looked forward to cooperating with European allies in finding said solutions to yield a stronger JCPOA, but was far more inclined to providing a proper fix to the JCPOA, as opposed to throwing his support behind scrapping it altogether.

At his Senate Confirmation Hearing, now Secretary of State Mike Pompeo was questioned by Senator Tom Udall from New Mexico on previous statements Pompeo made regarding the JCPOA and Iran’s commitments. A statement from 2014 expressed Pompeo’s concerns over the ‘sunset clause’ in the JCPOA, which he claimed would allow Iran to develop a nuclear weapon after fifteen years. Udall brought to his attention the fact that Iran is party to the Non-Proliferation Treaty and signed the Additional Protocols as part of the JCPOA. Regarding compliance, Udall further pressed Pompeo regarding his beliefs on Iranian compliance and whether he has evidence which would dispute the IAEA’s confirmation of Iran’s compliance. Pompeo confirmed, “I have seen no evidence that they are not in compliance today.”

US Failures to Comply with the JCPOA

With the consideration that the United States calls fowl on Iran’s compliance despite the aforementioned verification, it is worth considering that the United States has in fact failed to comply to its own commitments under the agreement. These failures have emerged in a more damaging fashion under the Trump administration, serving as a source to forecast this week’s withdrawal. Some would also argue that the Obama Administration failed to offer more reassurances to investors, as the ‘spirit’ of the JCPOA would suggest. There are, however, three particular Articles and a section in the Preamble in the JCPOA which the United States failed to deliver on, more discernibly, under the Trump Administration, which can be observed through a variety of sources.

·         Article 22

“The United States will, as specified in Annex II and in accordance with Annex V, allow for the sale of commercial passenger aircraft and related parts and services to Iran; license non-U.S. persons that are owned or controlled by a U.S. person to engage in activities with Iran consistent with this JCPOA; and license the importation into the United States of Iranian-origin carpets and foodstuffs.”

Though American businesses are still prohibited from trading with Iran, an exception was made in the JCPOA for the sale of aircrafts and parts. Before the Revolution, most Iranian passenger aircrafts were American-made, a tradition of the Shah. Over the years of the Islamic Republic, it turned to operating Russian passenger aircrafts, some of which are banned in the West due to safety regulations. Iran suffered many aircrafts accidents and crashes over the years, resulting in damaged aircrafts and missing parts. As a result, Iran has one of the worst records in air safety. Iran has not been able to buy the necessary parts for American aircrafts or new American aircrafts as a result of these economic sanctions over many years. The JCPOA opened this exception to address the dangers of the passenger aircrafts, with Boeing selling 80 passenger aircrafts to Iran at $16 billion dollars.

US sanctions regime against Iran dictates that any American company that gets more than 10% of its components from American companies requires permission from the Treasury Department’s Office of Foreign Assets Control. They ensure the transaction does not violate other American sanctions. It turns out, that upon Trump’s inauguration, the Office of Foreign Assets Control has largely ignored the requests for transactions with Iran under this mechanism. These requests have gone unanswered since the first and only round of approvals were issued in November 2016 under President Obama. Requests have been submitted by Boeing, Airbus, Bombardier and ATR, with all but one being foreign-owned.

The lack of compliance based on Article 22 on behalf of the United States lies in its failure to continue allowing the sales, which is a condition for the JCPOA and a benefit for Iran in exchange for halting its nuclear program and continued commitment. By not answering the requests, the United States is halting the sales of commercial passenger aircrafts and parts to Iran. Though there is no public registry for the Office of Foreign Assets Control’s licenses, many companies that have submitted requests have publicly admitted to the freeze on responses.

·         Article 29

“The EU and its Member States and the United States, consistent with their respective laws, will refrain from any policy specifically intended to directly and adversely affect the normalisation of trade and economic relations with Iran inconsistent with their commitments not to undermine the successful implementation of this JCPOA.”

Another aspect to consider in the United States’ compliance is Article 29, which has lived in the political sphere since Trump took office. There have been many examples in which Trump has purposefully aimed at drawing investment and business away from Iran, in direct violation to the JCPOA. One example is from his speech during his state visit to Saudi Arabia. There, he said, “Until the Iranian regime is willing to be a partner for peace, all nations of conscience must work together to isolate Iran, deny it funding for terrorism, and pray for the day when the Iranian people have the just and righteous government they deserve.” This serves as a very public violation to Article 29, suggesting that every state, particularly American allies, should cease from any economic investment or involvement with Iran.

Further, the Washington Post reported that Trump encouraged European partners to end business ties with Iran while attending a NATO summit in May 2018. This is a direct violation of Article 29 and has only produced a frenzy among European partners and businesses who have continued up until 8 May, to encourage business ties and investments in Iran. The anti-JCPOA tirade Trump has gone on has sparked heaps of uncertainty among European investors. With over two years of threats since the campaign of tearing up the deal, Trump’s rhetoric has halted the economic growth and progress Iran expected to see.

Such encouragement to continue isolating Iran also produces difficulties in Iran domestically, as ordinary Iranians have not reaped the economic benefits expected. It challenges the platform Iran’s ‘moderate’ President Rouhani campaigned and got elected twice on. This further damages the perceptions Iranians hold towards America and provides further support for the regime in its anti-Western campaign.

·         Preamble, Section viii

“The E3/EU+3 and Iran commit to implement this JCPOA in good faith and in a constructive atmosphere, based on mutual respect, and to refrain from any action inconsistent with the letter, spirit and intent of this JCPOA that would undermine its successful implementation. The E3/EU+3 will refrain from imposing discriminatory regulatory and procedural requirements in lieu of the sanctions and restrictive measures covered by this JCPOA. This JCPOA builds on the implementation of the Joint Plan of Action (JPOA) agreed in Geneva on 24 November 2013.”

Trump’s aforementioned approach to the JCPOA also violates the Preamble. What also violates the Preamble is Trump’s rhetoric, overall approach to Iran and the Office of Foreign Assets Control’s convenient ignoring of all business requests. His intent seems to always have been about continuing to isolate Iran, despite the required implementation of the deal “in good faith and in a constructive atmosphere, based on mutual respect.” Nor has his rhetoric respected the “spirit” of the deal, ironically something the President and US lawmakers cite as a constant violation on Iran’s behalf. The most recent bilateral sanctions regime is another example of the Administration’s neglect of the spirit of the deal, lacking the discretion and leeway to allow Iran some time to adjust and potentially relax its policies the West does not agree with.

The Administration has also failed in treating other policy issues, such as Iran’s ballistic missile program and regional activity, independently from the JCPOA, as the deal is designed to function. Withdrawing from the JCPOA on the grounds of Iran’s actions in Yemen is incomprehensible, particularly because or Trump’s complete disregard for Saudi Arabia’s equally, if not more, destructive action within the poorest Arab state.

·         Article 36

“If Iran believed that any or all of the E3/EU+3 were not meeting their commitments under this JCPOA, Iran could refer the issue to the Joint Commission for resolution; similarly, if any of the E3/EU+3 believed that Iran was not meeting its commitments under this JCPOA, any of the E3/EU+3 could do the same.”

Another miss on behalf of the Administration is addressing its concerns with the JCPOA outside of the Joint Commission, specifically designed to address any disputes and concerns any of the six states party to the JCPOA may have. Through the Joint Commission, the Administration’s concerns could have been presented before all partners, including Iran, to potentially find a diplomatic approach to outstanding issues without having to categorically impose economic sanctions and allow the Western partners to lose all leverage as a result of the withdrawal. Through the Joint Commission, a thorough review with an equal presence from all countries could have been conducted with open negotiation avenues. Instead, the President politicized this issue, abandoning all strategic advice from American and European diplomats and advisors.

While we wait to see the results of a US withdrawal from the JCPOA unfold in the upcoming weeks, it is important to remember that intelligence and an appointed partner consistently verified Iranian compliance, despite these very visible actions Trump and his Administration have conducted against the JCPOA. The JCPOA has been called many things, one of which is historic and a variety of conditions had to align in order to yield such a diplomatic success. Now, we must observe Tehran’s next steps closely to see if they will continue to support the JCPOA with the remaining signatories and what effect US sanctions may have on them all.