Via CNBC

This handout image supplied by the IIPA (Iran International Photo Agency) shows a view of the reactor building at the Russian-built Bushehr nuclear power plant as the first fuel is loaded, on August 21, 2010 in Bushehr, southern Iran.

Getty Images

After more than 18 months of sticking up for the Iran nuclear deal after the U.S. administration left it in May 2018, European Union signatories have triggered a dispute mechanism in the accord over Tehran’s suspension of compliance.

France, Germany and the U.K. (the E3) in a joint statement informed the EU on Tuesday that they had set off the mechanism, which they say is aimed at saving the deal, also known as the JCPOA (Joint Comprehensive Plan of Action).

The motion does not reimpose sanctions; rather, it appears to allow the E3 to officially “register our concerns” that Iran is not meeting its commitments under the deal. What concrete consequences the mechanism actually has is unclear.

Still no sanctions

“We do not accept the argument that Iran is entitled to reduce compliance with the JCPoA,” the statement read. “Iran’s actions are inconsistent with the provisions of the nuclear agreement and have increasingly severe and non-reversible proliferation implications.”

The statement went on to say that the E3 “have therefore been left with no choice, given Iran’s actions, but to register today our concerns that Iran is not meeting its commitments under the JCPoA and to refer this matter to the Joint Commission under the Dispute Resolution Mechanism” set out in the agreement.

READ ALSO  SE: OPEC Faces Difficult Dilemma About Production: Morgan Stanley

At the same time, the three countries stressed their commitment to upholding the deal and their desire for a diplomatic solution.

“The E3 remain fully committed to this diplomatic effort and intend to resume it as soon as conditions allow,” the statement said, stressing the countries’ “objective of preserving the JCPoA” and “sincere hope of finding a way forward to resolve the impasse through constructive diplomatic dialogue,” while remaining in the deal’s framework.

In doing so, the statement added, “our three countries are not joining a campaign to implement maximum pressure against Iran.”

EU ministers have long threatened to re-impose sanctions or “consequences” of some sort if Iran breaks its obligations under the deal, though critics have accused them of fecklessness after the threats failed to materialize despite months of incremental deal breaches from Tehran.

Iran increasing enrichment and centrifuges

The news comes after Tehran’s series of progressive rollbacks in compliance over the last year to the multilateral 2015 agreement that was meant to keep Iran’s nuclear program in check. Iran has pledged to return to higher levels of uranium enrichment in response to intensified U.S. sanctions, and in early January announced it was dropping all obligations to the deal — including limits on its number of nuclear centrifuges — in the wake of the U.S. killing of top Iranian general Qasem Soleimani.

Iranian officials noted that the country would still work with International Atomic Energy Agency inspectors, and held that while compliance was suspended, the deal was not officially dead and that the rollbacks could be reversed if heavy U.S. sanctions on the country were lifted.

READ ALSO  Peter Schiff: Gold Stands The Test Of Time

The sanctions have crippled Iran’s economy, slashing vital oil exports and bringing inflation up to more than 40%.

European signatories to the 2015 deal in January 2019 launched INSTEX, a special purpose vehicle designed to enable trade with Iran by using currencies other than dollars, sidestepping U.S. sanctions. The mechanism has had limited success, but was a sign of Europe’s determination to defy the Trump administration’s efforts. Trump on Wednesday reiterated his call for the deal’s remaining non-Iranian members — France, Germany, the U.K., Russia and China — to abandon it, a call they have so far resisted.

U.K. Prime Minister Boris Johnson also discussed the deal on Tuesday, telling the BBC that if the 2015 Iran nuclear deal does collapse, a “Trump deal” negotiated by the American president should replace it. He reiterated his support for the JCPOA, saying that it prevents Iran from acquiring a nuclear weapon — stressing that if it isn’t upheld, it must be replaced.