What's Next for Iran as Europe Moves to Reinstate UN Sanctions?

European Nations Take Action Against Iran

In Dubai, France, Germany, and the United Kingdom initiated a process on Thursday aimed at reinstating United Nations sanctions against Iran due to its nuclear activities. This move comes in the wake of a 12-day conflict with Israel, during which Iran's nuclear facilities faced repeated attacks.

The mechanism, known as 'snapback,' was included in the 2015 nuclear agreement with world powers and is designed to be immune to vetoes at the UN, making its implementation likely.

If enacted, the sanctions would freeze Iranian assets overseas, prohibit arms transactions with Tehran, and impose penalties on any advancements in its ballistic missile program, further straining the nation's already struggling economy.

This European initiative triggers a 30-day countdown for the sanctions to be reinstated, a period expected to see heightened diplomatic efforts from Iran, particularly following its non-compliance with the International Atomic Energy Agency (IAEA) inspections that led to the current crisis. The upcoming UN General Assembly in September is anticipated to focus heavily on Iran.

French and German foreign ministers indicated that they view the 'snapback' as a catalyst for renewed negotiations with Tehran.

French Foreign Minister Jean-Noël Barrot expressed on social media that this action does not signify the end of diplomatic efforts, emphasizing their commitment to engage in dialogue with Iran during the 30-day window.

In response, Iran's Foreign Minister Abbas Araghchi condemned the European actions as 'unjustified, illegal, and lacking any legal foundation' during discussions with his European counterparts.

He warned that Iran would respond appropriately to what he termed an unlawful measure, although he did not provide specific details.

Warnings from European Nations

On August 8, the three European countries cautioned that Iran could trigger the snapback mechanism after it ceased inspections by the IAEA following Israeli airstrikes at the beginning of the recent conflict. These strikes resulted in the deaths of key Iranian military leaders and forced Supreme Leader Ayatollah Ali Khamenei into hiding.

Prior to the announcement, Iran had threatened to cease all cooperation with the IAEA if the snapback process proceeded.

"We have informed them that if this occurs, our collaboration with the IAEA will be severely impacted, and the process will likely be halted," stated Kazem Gharibabadi, a deputy foreign minister, during a television interview. "If they choose to implement the snapback, it would be illogical for Iran to continue its cooperation with them."

The activation of the snapback mechanism is expected to escalate tensions between Iran and Western nations, particularly in a region still reeling from the Israel-Hamas conflict in Gaza.

According to the New York-based Soufan Center think tank, the U.S. and its European allies view the invocation of the snapback as a strategy to keep Iran strategically weakened and prevent it from rebuilding its nuclear program, which has been damaged by U.S. and Israeli strikes.

Iranian officials perceive the snapback of sanctions as a Western attempt to undermine Iran's economy indefinitely and potentially incite enough public unrest to destabilize the regime.

Iran's Response and Economic Situation

Initially, Iran downplayed the threat of renewed sanctions and engaged in minimal visible diplomacy following Europe's warning. However, recent days have seen a brief diplomatic effort amid the turmoil affecting its government.

As of Thursday, Iran's rial was trading at over 1 million to $1, a stark contrast to its value of 32,000 to $1 at the time of the 2015 agreement, highlighting the currency's dramatic decline. The rial reached its lowest point in April, trading at 1,043,000 rials to $1.

Outside a currency exchange in Tehran, resident Arman Vasheghani Farahani expressed to the Associated Press a pervasive sense of uncertainty and despair regarding the currency's collapse amid nuclear tensions.

"Should we keep trying, or is it time to give up? And how long will this situation last?" he questioned. "No official seems willing to take responsibility for what’s happening."

Nuclear Enrichment Concerns

Before the June conflict, Iran was enriching uranium to 60% purity, just a technical step away from weapons-grade levels of 90%. The country also amassed a stockpile of highly enriched uranium sufficient to produce multiple nuclear weapons if it chose to do so.

Iran has consistently maintained that its nuclear program is peaceful, although Western nations and the IAEA have assessed that Tehran had an active nuclear weapons program until 2003.

It remains uncertain how significantly the U.S. and Israeli strikes during the conflict disrupted Iran's nuclear ambitions.

Under the 2015 agreement, Iran consented to grant the IAEA enhanced access to its nuclear program compared to other member states, including the installation of permanent cameras and sensors at nuclear facilities.

However, IAEA inspectors have faced increasing restrictions on their activities since the U.S. unilaterally withdrew from the nuclear deal in 2018 and have yet to access those sites. Iran has indicated that it relocated uranium and other materials prior to the strikes, potentially to undisclosed locations, raising concerns that monitors could lose track of the program's status.

On Wednesday, IAEA inspectors were present to observe a fuel replacement at Iran's Bushehr nuclear reactor, which operates with Russian technical support.

Impending Deadline for European Nations

The snapback mechanism is set to expire on October 18, prompting the three European nations to act swiftly. Under this mechanism, any party to the agreement can declare Iran in noncompliance, triggering renewed sanctions.

Once the mechanism expires, any sanctions efforts would likely face a veto from UN Security Council members China and Russia, both of whom have historically supported Iran but remained neutral during the June conflict. China continues to be a significant buyer of Iranian crude oil, which could be impacted if the snapback is enacted.

Recently, Russia has proposed extending the UN resolution that grants the snapback authority. Additionally, Russia is expected to assume the presidency of the UN Security Council in October, which may exert further pressure on the European nations to take action.