November 2006 Monthly Forecast

Posted 30 October 2006
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MIDDLE EAST

Iran

Expected Council Action
The five permanent members of the Council are now discussing an EU3 (France, Germany and the UK) proposal for sanctions against Iran.  P5 plus Germany discussions of how to deal with Iran’s non-compliance with resolution 1696 are likely to be prolonged and difficult.  But, as with previous Council negotiations on nuclear proliferation a compromise resolution is likely.  Also, following recent precedent extensive discussion with the ten elected Council members seems unlikely.

Key Recent Developments
The report from the Director-General of the International Atomic Energy Agency (IAEA) submitted to the Council on 31 August indicated that Iran had not complied with its obligations under The Non-Proliferation Treaty Safeguards Agreement and under Security Council resolution 1696.

Instead of immediately referring the issue back to the Security Council the EU3, the US, China and Russia (EU3+3) decided to explore with Iran the possibility of a return to the negotiations. Contacts between Javier Solana, the EU Foreign Policy chief, and Ali Larijani, the Iranian nuclear negotiator, resumed on 9 September. They last met in Berlin on 27 September but failed to achieve any agreement.

On 6 October, the EU3+3 met in London. They indicated that the Iranian refusal to suspend its uranium enrichment and reprocessing activities during negotiations was the breaking point. At time of writing, an EU3 draft resolution including measures under article 41 of the UN Charter as envisaged in resolution 1696 had been submitted to the US, Russia and China. Press reports suggest that the draft involves sanctions similar to those in resolution 1718 on North Korea, but somewhat less in scope.

Options
The Council has the following options:

  • Decide that Iran’s nuclear activities constitute a threat to international peace and security and adopt sanctions such as an embargo on nuclear material and technology and on military material for the delivery of nuclear weapons and perhaps also some targeted sanctions;
  • Impose more limited measures such as an embargo on the transfer of technology and on civilian and military dual use equipment, services and personnel as well as travel bans and asset freezes for Iranian nuclear scientists; and
  • Establish a sanctions committee.

Key Issues
Since the diplomatic route was tried and failed in September, the issue of action versus diplomacy is less to the fore than previously.  And certainly the behaviour of North Korea has weakened the hand of China and Russia who had been advocating a longer term and more nuanced approach.  However, the underlying issue still remains whether imposing sanctions on Iran will succeed or whether it will increase the risks of proliferation. A related issue, therefore, remains whether some other formula for a return to the negotiation table, without suspension as a precondition, can be devised.

Issues related to sanctions likely to be dividing the P5 include:

  • Implementation of Sanctions: The creation of a sanctions committee signals strong willingness to implement the measures. An issue may be whether to delay deciding on a committee at this stage (as occurred with North Korea in resolution 1695 of July).
  • Choice of Items: A key issue may be whether sanctions should strictly target nuclear items or also extend to chemical and biological items, as well as the means of delivery.
  • Exemptions: The extent to which Russia should be exempted from any future ban on trading nuclear items with Iran, given its contribution to the construction of the Bushehr nuclear power plant.

Reference to Chapter VII and related legal questions seem unlikely to be such a vexed issue as in the past because an acceptable formula seems to have been reached in resolution 1718 on North Korea.

Council Dynamics
The US argues that sanctions should be as wide and tough as possible. Russia and China prefer more limited and less severe measures and certainly not ones that would affect their economic interests with Iran. It seems that the Europeans are in between these two approaches. This will impact discussions on the nature of items to be embargoed (Russia and China may reject the listing of the means of nuclear weapons delivery) and whether a sanctions committee should be established. A consensus may be found on an incremental approach.

As before, the elected members of the Council seem likely to become part of the discussions only at a later stage.

Underlying Problems
Sanctions against Iran modelled closely on the North Korean resolution could have very significant effect on banks involved in processing payment for Iranian oil exports. American financial institutions have little to lose because of American bilateral sanctions on Iran already in place.  However, these kinds of measures would seriously affect others, especially European banks.

Most Recent Documents

 Security Council Resolution
  • S/RES/1696 (31 July 2006)  demanded that Iran suspend all enrichment-related and reprocessing activities, requested a report from the IAEA and expressed its intention to adopt measures under article 41 of the UN charter in case of Iranian non-compliance.
 Security Council Presidential Statement
 Last IAEA Board Resolution
 Last IAEA Report
 Selected Letters
  • S/2006/806 (11 October 2006) was a letter from Iran transmitting its response to the EU3+3 June package of proposals.
  • S/2006/521 (13 July 2006) was a letter from France to the president of the Council enclosing the proposals of the EU3+3 for a comprehensive long-term arrangement with Iran.

For Historical Background and Other Relevant Facts, please refer to our February 2006 Forecast.

Useful Additional Sources

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