Iran Nuclear Deal : What Might Happen If The United States Does Not Extend The Sanctions Waiver On May 12, 2018 ?

Author:Mr Pierre Sellal, Hassan Razavi and Karol Bucki
Profession:August & Debouzy

During his speech of January 12, 2018, the United States ("US") President Donald Trump stated that he would not extend the waiver of the currently-suspended sanctions against Iran if the signatories of the Joint Comprehensive Plan of Action ("JCPOA") fail to fix "deal's disastrous flaws" by May 12, 2018.1 As this deadline is fast approaching, this article analyzes possible legal consequences of a potential non-renewal of the Iran sanctions waiver.

The ultimatum made by the US President to fix the JCPOA by May 12, 2018

Pursuant to Annex II to the JCPOA, the US committed to cease on the Implementation Day of the JCPOA the application of various nuclear-related sanctions related to Iran and Iranian persons that used to apply to non-US persons (the so-called secondary sanctions). The suspension of some of such sanctions required from the US President to apply a waiver mechanism that is provided in several acts containing provisions on sanctions against Iran. This is notably the case of the Iran Sanctions Act, the Iran Threat Reduction and Syria Human Rights Act, the National Defense Authorization Act and the Iran Freedom and Counter-Proliferation Act ("Statutory Sanctions").

Waivers of such Statutory Sanctions must be renewed by the US President every 120 or 180 days, depending on the wording of the act. Such waivers have consistently been granted up to now by the US Presidents since the Implementation Day of the JCPOA. However, while accepting to waive the Statutory Sanctions on January 12, 2018, the US President stated that he would not grant another waiver in May 2018 if the signatories of the JCPOA fail to fix its "disastrous flaws". Indeed, the US President explained that no further waiver of the Iran sanctions can be granted unless the JCPOA is amended to include measures aiming at (i) ending the so-called "sunset clauses", which are the provisions that will allow Iran to resume some civil nuclear activities in 2025 and 2030, (ii) intensifying the inspections of Iran's nuclear sites and (iii) adding measures covering inspection of Iran's ballistic missile program.

However, Iran as well as the other signatories of the JCPOA seem to all have excluded so far any possibility to amend the JCPOA in the near future. Indeed, political leaders representing France, Germany, the United Kingdom, Russia and China have all confirmed their strong support to the deal in its current shape. This position is shared by the United Nations ("UN") High Representative...

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