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Iran | Summary of nuclear deal timeline and sanctions relief

Iran | Summary of nuclear deal timeline and sanctions relief

From Adoption Day, signatory states will take the appropriate ‘legal and administrative preparations’ in order to implement the agreement. Iran must make available to the IAEA information about ‘past and present issues’ related to its nuclear activity. It should also complete several key measures to limit its nuclear programme.

Iran and the P5+1 reached an agreement on the Iranian nuclear programme on 15 July. The accord came more than a year after the initial deadline to reach a comprehensive deal proposed in the 2013 Joint Plan of Action, and followed three extensions in the past fortnight. Named the Joint Comprehensive Plan of Action (JCPOA), the accord is the most significant step towards US-Iran rapprochement since the 1979 Iranian revolution.

The EU released the complete text of the agreement on the day of the announcement. The following is a preliminary summary of the implementation timeline and sanctions relief based on the text and public statements. It appears that the full terms of the deal – including sanctions relief – will not come into effect until late 2016 at the earliest. Even then, it seems that restrictions on US companies from doing business with Iran will remain in place.

Based on the EU document, all negotiating states must first endorse the JCPOA. Within the next few days, the P5+1 will send the text to the UN Security Council ‘for adoption without delay’. However, the terms of the agreement will not come into effect until three months after the UNSC endorses the accord.

At the earliest then, ‘Adoption Day’ – which is not the same as implementation – will take place in late October. It seems that the US will not wait until after Congress votes on the agreement to endorse the JCPOA in the UNSC. UN diplomats have told the international press that the Security Council will probably consider the text as early as next week.

Congress has 60 days to vote on the accord in the US. But because President Obama will probably secure the support of 34 members of Congress to avert a veto-proof majority against the deal, we assess that those opposed are unlikely to succeed in blocking the agreement.

From Adoption Day, signatory states will take the appropriate ‘legal and administrative preparations’ in order to implement the agreement. Iran must make available to the IAEA information about ‘past and present issues’ related to its nuclear activity. It should also complete several key measures to limit its nuclear programme.

Previous statements by nuclear experts have suggested that it will probably take Iran at least six months to complete these steps, and an additional one to two months for the IAEA to verify Iranian actions. At the same time, the EU and the US will adopt resolutions and issue waivers on all nuclear-related sanctions. The EU document suggests that these should take effect on ‘Implementation Day’, which is when the IAEA has verified Iranian compliance.

On Implementation Day, the US and EU will remove all nuclear-related sanctions, and the UN will terminate its sanctions. Iran will have to complete the remainder of its commitments for the agreement to remain in place and the provision on UN sanctions specifies that these will be reimposed if Iran violates the accord.

EU sanctions relief on Implementation Day appears to be extensive. Restrictions on financial transactions (including SWIFT), investment, energy imports, and even some arms will all be removed (a UN arms embargo will remain in place for five years). The US, however, will only waive secondary sanctions – restrictions on non-US individuals or companies. The president will ‘cease the application’ of these restrictions, meaning he will not have to seek congressional approval for their removal, and they could be re-instated.

The document states clearly that ‘US persons and US-owned or -controlled foreign entities will continue to be generally prohibited from conducting transactions’ with Iran. The exceptions to this are specific licenses approved by the Department of Treasury. But these appear to be limited to the commercial aviation industry and specifically the importation of ‘Iranian-origin carpets… pistachios and caviar’.

These terms suggest that significant hurdles remain before the deal fully comes into place. And uncertainty remains over the future of long-term Iranian sanctions. Over the next couple of months, statements from the IAEA on Iranian commitments to the ‘roadmap’ and the text of proposed sanctions legislation in the EU will be important indicators of whether the deal will hold, and whether the EU will seek to speed up its drawdown of sanctions.
Image: PA

Published: 16th July 2015
Categories: Company News