US Sanctions and Iran's Nuclear Plans

What is the issue?

• Iran has notified IAEA of it's nuclear enrichment plans.
• Iran should cooperate with Europe and China to work around U.S. sanctions.

What is Iran's stance?

• Iran said that it was in “preparatory works” to restart nuclear activities.
• This is in the event of the failure of the 2015 accord.
• In such a scenario, Iran could restart its activities without any limits.
• The preparatory works mentioned refer to steps to boost uranium enrichment capacity by producing new centrifuges.
• In addition, it had notified of a plan to restart activity at its uranium conversion facility to produce the UF6 feedstock for centrifuges.

What are the other developments in this regard?

• France, Britain, Germany and the EU have sent a joint official request to the U.S.
• It asks for their companies to be exempt from punitive measures resulting from fresh U.S. sanctions on Iran.
• It calls for exempting European businesses doing legitimate trade in Iran from all extraterritorial American sanctions.

What are the implications?

• Iran’s notification illustrates the risks associated with the recent U.S. withdrawal from the nuclear deal. (Click here to know more).
• According to the deal, Iran can enrich uranium, but under tight restrictions.
• It would not be technically violating the agreement as long as it does not produce centrifuges.
• But the move to open a production facility could be seen as a provocative step by the remaining parties to the agreement.
• The other signatories to the deal said they remain committed to the agreement.
• But they are yet to come up with a framework to continue the deal.
• The latest Iranian announcement could pressurise the European powers.
• They are forced to come up with guarantees that the deal’s benefits will be in place even with U.S. sanctions.

What is the way forward?

• It is uncertain if European companies would make investments in Iran, or even continue to do business, with U.S. sanctions.
• Earlier, they had discussed providing companies that do business with Iran, special financing from the European Investment Bank.
• Passing legislation to protect them from U.S. sanctions was also discussed.
• Concrete decision on these fronts are not yet taken and the EU is wary of giving any guarantee to Iran.
• The way forward is to continue a dialogue to find an economic and legislative package.
• This has to shield European companies and Iranian economic interests from U.S. sanctions.

Source: The Hindu