E3 Nations Initiate Process to Reinstate Sanctions on Iran

Britain, France, and Germany (collectively known as "E3") on Thursday initiated a 30-day United Nations process aimed at reinstating sanctions on Iran. This move comes amidst escalating regional tensions, just two months after reported Israeli and US airstrikes within Iran.

Iranian and International Reactions

A senior Iranian official swiftly accused the three European nations of undermining the diplomatic process and vowed that Tehran would not succumb to pressure from the E3's activation of the so-called "snapback" mechanism. The E3 had previously expressed concerns that they would lose their authority to reinstate sanctions by mid-October if they did not take concrete action. These sanctions were lifted under the 2015 nuclear deal that Iran signed with world powers.

Continued Diplomatic Efforts

French Foreign Minister Jean-Noel Barrot emphasized that this decision does not signify the end of diplomacy. German Foreign Minister Johann Wadephul urged Iran to fully cooperate with the UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), over the next month and pledged to engage in direct dialogue with the United States. A senior Iranian official described the E3's decision as "illegal and regrettable" but indicated that the door remained open for engagement. "This move is a disruption to the diplomatic process, not a push for it," the official stated. "But Iranian diplomacy with Europe will continue, and Iran will not yield to pressure."

Security Council Meeting

Diplomats revealed that the UN Security Council will hold a closed-door meeting on Friday at the request of the E3 to discuss the activation of the "snapback" mechanism against Iran.

Background of Tensions

Iran and the E3 have held multiple rounds of talks since the reported Israeli and US airstrikes on Iranian nuclear facilities in mid-June, aiming to reach an agreement to postpone the activation of the "snapback" mechanism. However, the E3 felt that Iran did not demonstrate sufficient willingness to reach a new agreement during talks held in Geneva on Tuesday.

Positions of Other Parties

The E3's action on Thursday is based on Iran's violation of the 2015 nuclear deal, which aims to prevent Iran from developing nuclear weapons capabilities in exchange for the lifting of international sanctions. The E3, Russia, China, and the United States are all parties to this agreement. Former US President Donald Trump announced the United States' withdrawal from the agreement in 2018, calling it "one-sidedly beneficial to Iran." Since then, the agreement has gradually unraveled as Iran has abandoned uranium enrichment restrictions. US Secretary of State Marco Rubio welcomed the E3's move, stating that the United States "remains willing to engage directly with Iran to advance a peaceful, durable resolution of the Iranian nuclear issue."

Iranian Conditions for Dialogue

In contrast, Iranian sources stated that Iran would only agree to dialogue if "Washington provides guarantees not to launch (military) attacks during negotiations."

A Deadline for Diplomacy

The E3 expressed hope that Iran will take action by the end of September to alleviate international concerns about its nuclear program, so that they can postpone taking substantial punitive measures. "The E3 is committed to using all diplomatic tools to ensure that Iran never develops nuclear weapons, including activating the snapback mechanism," they stated in a letter to the UN Security Council (obtained by Reuters). "Nevertheless, the E3's commitment to diplomatic solutions remains unwavering."

Iranian Response Options

Iran had previously warned that it would respond "strongly" if sanctions were reimposed. An Iranian official said that Iran is assessing response options, including withdrawal from the Non-Proliferation Treaty.

European Proposal

The E3 offered to extend the "snapback" mechanism activation for up to six months to create conditions for serious negotiations if Iran resumed allowing UN inspectors access (also to verify a large stockpile of Iranian enriched uranium whose status remains unclear since the June conflict) and began negotiations with the United States.

Israeli Stance

Israeli Foreign Minister Gideon Saar called the E3's decision "inevitable" and said it was "an important step in the diplomatic action to confront the nuclear ambitions of the Iranian regime."

Internal Discontent in Iran

The UN process takes 30 days, after which sanctions on Iranian financial, banking, oil and gas, and defense sectors will formally resume.

Russian-Chinese Proposal

Russia and China, strategic allies of Iran, on Thursday agreed on a draft Security Council resolution proposing to extend the 2015 nuclear deal for six months and urging all parties to resume negotiations immediately – but the two countries have not requested a vote on the draft resolution. "The world is at a crossroads," Russia's Deputy Permanent Representative to the UN Dmitry Polyanskiy told reporters. "One way is peace, diplomacy and goodwill… the other way is 'diplomacy under the barrel of a gun.'"

Impact of Sanctions on the Iranian Interior

Three sources close to the Iranian government revealed that the specter of renewed sanctions is stirring internal discontent in Iran. Economic anxiety is increasing in the country, and political divisions are deepening. There are disagreements within the Iranian leadership regarding a response strategy: anti-Western hardliners advocate resistance and confrontation, while moderates advocate a diplomatic solution.

Economic Impact Analysis (No Investment Advice)

The potential reinstatement of sanctions could significantly impact Iran's economy. Key sectors such as oil and gas, finance, and banking would face renewed restrictions, potentially leading to reduced export revenues and limited access to international financial markets. This could exacerbate existing economic challenges, including inflation and unemployment. While sanctions are intended to pressure the Iranian government, they often disproportionately affect the general population, leading to social unrest and dissatisfaction.