Global Geopolitical Series: EU in tough spot with Iran breaching JCPoA limits

The European Union is stuck between a rock and hard place as Iran announced this week that it is now officially in breach of the limits prescribed under the Joint Comprehensive Plan of Action (JCPoA), better known as the Iran nuclear agreement, which was agreed between Iran and six global powers (UK, Russia, China, Germany, France, and the United States).

As the United States under the leadership of President Donald Trump exited that agreement and re-imposed sanctions on Iran since 2018, Iran has been urging other partners, especially the European Union to take actions in order to protect Iran’s economic interest or else Iran would be forced to breach the agreement.

As Iran’s oil exports dwindled to less than half a million barrels in May 2019, compared to 2.5 million barrels in April 2018, Iran announced that it’s taking its first step in breaching the prescribed limits in the agreement as the offers so far from the European Union have been meager compared to Iran’s economic trouble facing U.S. sanctions. While Iran announced that it is now officially in breach of the stockpile limit of 300 kg prescribed under the JCPoA, Iranian foreign minister Javad Zarif pointed out n Twitter that despite the stockpile increase, Iran is not in breach of the agreement as Para 36 allows Iran to take up steps defying the prescriptions in the agreement as the agreement partners including the European Union failed to protect Iran’s economic gains from the agreement amid U.S. sanctions.

To facilitate non-dollar transactions between Iran and the EU, the EU launched a special purpose vehicle, better known as Instrument in Support of Trade Exchanges (INSTEX) but Iran deemed that it would be of limited use in protecting Iran’s economy from the wrath of U.S. sanctions. INSTEX is seen as key to EU efforts to preserve the deal but its promise of easing the bite of sanctions, which have cut Iran off from the international financial system and decimated its oil exports, has been slow to materialize.

To add further pressure on the EU and other members of the agreement, Iran announced that there would be more braches. Under terms of the nuclear deal, Iran agreed to have less than 300 kilograms of uranium enriched to a maximum of 3.67%. After breaching the 300 kg limit, Iran announced it would soon breach the 3.67 percent limit.