JCPOA talks: Deal or no deal?

A restored nuclear deal may not be as strong and comprehensive as originally hoped but given what is at stake, a deal with Iran is still better than no deal.

Expert comment Published 19 January 2022 Updated 24 January 2022 3 minute READ

The Iran nuclear negotiations in Vienna, aimed at resurrecting the Joint Comprehensive Plan of Action (JCPOA) after President Trump’s 2018 withdrawal, have entered their eighth round. After a number of delays and disagreements, the US, UK, France, Germany, Russia and China (known as the P5+1) and Iran, led by the new Raisi administration, finally appear to be making progress at the technical level. This is partly due to Russia and China helping to steer Iran back to what had already been agreed and partly because the so-called Plan B scenarios remain so unappealing to all parties.

The clock is ticking and progress is too slow for Washington and Europe who fear that Iran is playing for time.

The JCPOA is a hugely complex, 154-page technical agreement. Narrowing the gaps on the issues of compliance, sanctions relief, sequencing and addressing deficiencies would require time, space and creativity under normal circumstances but is now made even harder because the Tehran delegation has refused to meet with the Biden team. While appetite for a deal remains high among all parties and would signal an important step forward in addressing the challenges posed by Iran, extreme levels of mistrust, a narrowing window of time, the danger of a miscalculation and escalatory risks continue to loom over the process and could make or break the deal once and for all. 

What are the sticking points?

For a solid deal to be achieved, important political decisions are needed on sanctions relief, sequencing, Iranian compliance and demand for assurances. When the Trump administration introduced sanctions against Iran, they designated over 1,500 Iranian individuals and entities while also constraining Iran’s energy sales and prohibiting its access to financial markets. However, a number of these sanctions are not listed as nuclear sanctions but instead have terror or human rights designations. While Iran has demanded that all Trump era sanctions are lifted, the Biden administration is unlikely to lift non-nuclear sanctions.

The sequencing of compliance and verification is also critical. Despite maintaining its commitment to the deal, Tehran was burned by the US withdrawal and is reluctant to return to nuclear compliance without guarantees that US sanctions have been lifted. On the other hand, as Iran rolls back its nuclear programme, a framework is needed to monitor its stockpile of uranium enrichment, advanced centrifuges and enhanced knowledge. Ensuring that International Atomic Energy Agency (IAEA) monitoring and verification of Iran’s nuclear facilities is restored will be key.

Iran’s demand for assurances that the deal and its economic rewards will be guaranteed should the US withdraw from the deal for a second time remains the biggest sticking point.

But the clock is ticking and progress is too slow for Washington and Europe who fear that Iran is playing for time. US negotiators are beginning to suggest that ‘the runway is very, very short – weeks not months’ for progress to be made. With US Congressional elections set for November 2022, Biden has limited time to dedicate to this issue, while the expiration of certain JCPOA restrictions from 2023, the so-called ‘sunset clauses’, remains a key issue for the P5+1 as well as Israel.

Iran’s demand for assurances that the deal and its economic rewards will be guaranteed should the US withdraw from the deal for a second time remains the biggest sticking point. Iran cannot risk falling into the same trap without safeguarding its economy from further rounds of US sanctions. For Iran’s newly elected conservative president, Ebrahim Raisi, the issue of a sustainable JCPOA is essential to protecting Iran’s economy and one-upping former president Rouhani, while also increasing his domestic legitimacy following his win in an election marked by low turnout and calls for boycott.

While the Iranian demand for assurances is understandable, President Biden – with only a razor-thin margin in Congress – is unlikely to expend political capital on a limited treaty with Iran that is also not seen as iron clad. This leaves the issue of assurances and protection of the deal in the hands of the remaining signatories who will have to go out on a limb and protect the economics of the deal from the potential actions of future US administrations.

The dangers of Plan B

Should no significant political progress be achieved in the coming weeks, Washington, London and Europe will move on to Plan B scenarios. They will begin by floating the possibility of an interim agreement that would aim to freeze Iran’s nuclear programme. Thus far, Iran has balked at this prospect suggesting it would not forgo its leverage without benefits. Europe and the UK are also weighing up how snapback sanctions and European sanctions might increase pressure on Tehran, while Washington intends to build leverage through sanctions enforcement alongside additional designations.

Without a deal, further escalation will undoubtedly be part of Tehran’s playbook.

With Plan B, the risk of regional and nuclear escalation looms large. Having finally acknowledged that a nuclear deal is better than an unchecked alternative, Israel has for the time being tempered its threat of attack. But without a deal, the war of words will no doubt resume, raising tensions around the region. Iran, for its part, will see escalation as the only way out of any deadlock. With its nuclear breakout time already reduced to a few months, nuclear acceleration is dangerously close. Iran can threaten to increase enrichment levels even higher than its current level of 60 per cent, or worse, withdraw from the Non-Proliferation Treaty (NPT). Both moves risk a response from Israel, if not the wider international community. 

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In the region, despite moves towards de-escalation such as its dialogue with the UAE and Saudi Arabia, Iran-backed groups continue to sponsor destabilizing attacks across the Middle East. The recent drone attack in Abu Dhabi by Yemeni Houthi forces is a case in point. Without a deal, further escalation will undoubtedly be part of Tehran’s playbook, which would threaten the semblance of peace pursued by the GCC states and could also potentially force the Biden administration to invest further in a region it seeks to disengage from. With popular expectation for a deal and already under strain from years of sanctions, Iran would face a dangerous combination of external pressure and internal demands from a frustrated and isolated population.

A restored JCPOA may not be as strong and comprehensive as originally hoped but given what is at stake, a deal with Iran is still better than no deal.