Why ‘snapback’ is of little issue to Iran’s economy

The Europeans appear to be miffed by being left out of the nuclear negotiations with Iran, dangling the threat of potentially returning all the UN sanctions that were lifted as part of their 2015 nuclear deal with the Islamic Republic.

Europe’s sidelined diplomats watch as US President Donald Trump’s team tussles with Iran over a new deal. With a mechanism called “snapback” allowing any signatory state to take action, Britain, France and Germany now see a chance to shape the deal or risk being mere spectators.

The Europeans are reportedly preparing to push the UN nuclear agency’s board at its next quarterly meeting to declare Iran in breach of its non-proliferation obligations for the first time in almost 20 years.

Their push comes after a leaked report by the International Atomic Energy Agency (IAEA) accused Iran of having stepped up production of enriched uranium.

Using the “findings”, the Europeans reportedly plan to submit a draft resolution for the board to adopt at its next meeting on June 9, creating a window of opportunity to trigger the snapback mechanism before it expires in October.  

The sudden hustle by the Europeans comes after Trump on Friday reiterated his belief that Washington was “fairly close” to reaching a nuclear deal with Iran.   

An IAEA resolution could further complicate nuclear talks between Tehran and Washington. Tehran has already pledged to take decisive countermeasures should the snapback mechanism be activated.

On Monday, IAEA Director Rafael Mariano Grossi got a dressing down in Cairo from Iran’s Foreign Minister Abbas Araghchi who reminded him of his duty to professionally carry out his statutory duties.

Araghchi said the “IAEA should not allow its credibility to be undercut by political motives and pressures from some member states”, apparently referring to the three European powers known as E3.

Iran has held five rounds of talks with the United States in search of a new agreement and is pressing the United States for guarantees that it will drop sanctions as a condition for a nuclear deal.

The country has vowed to keep enriching uranium “with or without a deal” on its nuclear program.

E3 leaders, on the other hand, think they must act swiftly because the snapback mechanism which they see as leverage to coerce Iran into concessions is slipping out of their hands.

The Islamic Republic is not in a state of flummox, however.

Experts say the threat of reimposing all UN sanctions will not significantly impact Tehran’s ability to trade oil.  

Snapback would bring into force six previous Iran-related Security Council resolutions adopted between 2006 and 2010. It would reinstate the expired UN arms embargo that barred countries from supplying, selling, or transferring most combat equipment to Iran and prohibited Tehran from exporting any weapons.

It would also impose export controls, travel bans, asset freezes, and other restrictions on individuals, entities, and banks involved in certain Iranian nuclear and missile activities.

Iran is currently under the “maximum pressure” of the US government which has imposed the most intensive sanctions ever on the country.

Tehran has weathered repeated currency shocks and oil sanctions. Therefore, restoring UN sanctions would not add much to the pressure scale.

In other words, the return of sanctions would not translate into imposing new economic pressure on the nation, because the country is already taking in more than enough.

To be more precise, the UN sanctions are mainly technical in nature, while what hurt Iranians the most are the secondary sanctions imposed by the United States which are currently in force at maximum.  

Under the circumstances, Iran’s referral to the UN Security Council would have no a significant impact on its economy other than legal implications.

The potential economic consequences of snapback are truly limited and the mechanism is effectively the emergency stop button for nuclear negotiations, the triggering of which would be taken as a definitive sign that talks had failed.

With little economic implication, the political goal of snapback is to influence Iranian public opinion or the country’s officials about a major adverse impact in order to force the Islamic Republic into making new concessions.

After what was said, the snapback trigger and Security Council resolutions are no worse than unilateral US sanctions which Iran has already taken in its stride.

Iran’s capabilities, on the other hand, are of strategic importance which should not be traded for the snapback mechanism and the like with no significant economic and military impact.

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