Borrell extends timeline for Iran deal dispute mechanism

Hogan Lovells

Hogan Lovells

Earlier this month, France, Germany and the UK triggered the dispute process under the Iran nuclear deal, saying they had been "left with no choice" after Iran decided to further reduce compliance with the agreement. The triggering of the dispute mechanism should have started a 15-day consultation process, but an EU high official has now extended the timeline in an attempt to save the deal. This development is important as the EU could well decide to reinstate sanctions against Iran if the deal cannot be salvaged.

What has happened?

EU High Representative for Foreign Affairs and Security Policy Joseph Borrell has extended the timeline to discuss trying to save the 2015 Iran nuclear deal, after France, Germany and the UK triggered the dispute process against Iran earlier this month.

What does this mean?

On 14 January, the E3, namely France, Germany and the UK, triggered the dispute resolution mechanism under the Iran nuclear deal, which is officially known as the Joint Comprehensive Plan of Action (JCPOA).

The three countries said they had been "left with no choice", after Iran decided earlier this year to further reduce compliance with the JCPOA, including announcing that the country "discards the last key component of its limitations in the JCPOA, which is the ‘limit on the number of centrifuges'", and that its "nuclear programme no longer faces any operational restrictions", including on enrichment and enrichment-related matters.

In theory, the triggering of the dispute mechanism was meant to start a 15-day consultation period.

However, Borrell said that he entered into "extensive" talks with all concerned, with all JCPOA participants reconfirming their commitment to preserving the agreement.

"Notwithstanding differences on modalities, there is agreement that more time is needed due to the complexity of the issues involved. The timeline is therefore extended," Borrell said.

At a further press conference on 27 January, he added:

"On Iran, … it is very clear for me, after talking with the German minister, that we share one clear common goal: to preserve the nuclear deal. The launch of the dispute resolution mechanism is not a way of taking it to the Security Council, but on the contrary - to look for a diplomatic field to preserve this deal."

A meeting of the Joint Commission to discuss progress is to be held in February.

Why does this matter?

This development is noteworthy as if the deal cannot be saved, the EU could well envisage reintroducing sanctions against Iran, which would have numerous consequences on organisations doing business there.

What is the JCPOA?

The Iran deal is an agreement on the Iranian nuclear programme, listing requirements and actions in respect of, among others, enrichment, uranium stockpiling, fordow, advance centrifuge research and development, arak reactor, monitoring and verification, as well details of various sanctions regimes.

It was signed in Vienna in July 2015 between Iran and the P5+1 (China, France, Germany, Russia, the UK and the US) and then endorsed by a UN Security Council Resolution later that month.

In May 2018. President Donald Trump announced that the U.S. would withdraw from the JCPOA and reinstate U.S. nuclear sanctions on Iran.

In May 2019, Iran announced that it would cease to meet some of its commitments under the agreement, as a result of which, in December 2019, the E3 notified Iran that "unless it reversed course", they would have no choice but to take action within the JCPOA framework, including with through the dispute resolution mechanism.

The deal is meant to end in October 2025, 10 years after its adoption.

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