Iran has confirmed that on July 7 it began the second stage of reducing its commitments under the nuclear deal, which is known as the Joint Comprehensive Plan of Action (JCPOA).
Speaking at a government meeting on Wednesday, President of Iran Hassan Rouhani warned that starting from Sunday the enrichment level at Iranian nuclear centers will exceed a limit of 3.67% provided by the deal. "We will abandon this commitment and will increase the enrichment level to the level required," the news agency Mehr quoted the Iranian president as saying.
Earlier, spokesman of the Atomic Energy Organization of Iran Behrouz Kamalvandi said that two options had been under consideration: either a 5% or a 20% enrichment level.
Moreover, Rouhani stressed that Iran would start restoring the heavy water nuclear reactor in Arak in line with the initial design that envisaged the production of weapon-grade plutonium. "From July 7, if other parties don’t comply with all their commitments according to the timetable, Arak reactor will be restored to its original design which they claimed to be dangerous and able to produce plutonium."
There is one simple reason for these steps – more than a year ago, the USA quitted the deal, while the European participants that remained in it, the EU and E3 (France, the UK and Germany), have failed to fulfill their commitments and haven't ensured conditions under which the Islamic Republic could have enjoyed economic advantages under the JCPOA.
Let me remind that the reconfiguration of the Arak reactor was one of the most important Tehran's commitments under the JCPOA. In line with the agreement that took effect in January 2016, Iran had undertaken the commitment to stop building the reactor before that move, dismantle and fill its core with concrete. This was done under the full IAEA control. And the reconfiguration of the reactor began. Now Tehran could reinstate its initial plans.
Back on May 8, exactly one year after Donald Trump's administration withdrew from the JCPOA, Tehran announced plans of the gradual reduction of its commitments. The first stage was to increase the amount of enriched uranium exceeding the permitted limit of 300 kilograms, as well as heavy water reserves exceeding the limit of 130 tons. Iran promised not to dispatch the excesses of uranium and heavy water to other countries. Tehran also warned that should the EU and E3 have failed to begin fulfilling its part of commitments within 60 days, it would continue reducing its commitments.
It seems that Tehran isn't going to depart from its promises. It immediately started to increase the production of uranium enriched up to 3.67% at the Natanz facility. And its stockpile exceeded the permitted limits on June 27, which was recorded by the IAEA.
Tehran says that these countermeasures comply with its rights under Articles 26 and 36 of the JCPOA and that it would cancel these measures as soon as its demands are fulfilled. "Iran will quickly return to all its commitments if other parties do what they are required to do," Rouhani said.
Yielding to Washington's pressure, Europe is still offering just verbal support to the deal, refusing to ensure Iran's commercial interests amidst American bans, although it is obliged to do so under the contract, the Iranian president highlighted.
One cannot say that Europe was inactive. The EU had immediately updated the Blocking Statute that prohibits the compliance with American restrictions for European companies. However, this can be considered just as a political gesture, as actually Brussels failed to convince European companies to stay in Iran. And they started leaving the country one after another. European banks fearing of huge fines and secondary sanctions on behalf of the USA discarded all banking operations with Iran. They even stopped transactions related to trade in commodities that don’t fall under sanctions.
Last June, the EU ratified a plan easing financial operations of the European Investment Bank in Iran, which was designed to ensure European investments into the Islamic Republic. But that was a step to nowhere, the European Investment Bank also refused to act against US sanctions.
Europe created the Special Purpose Vehicle to facilitate operations with and financial deals with Iran. It had been expected that the vehicle would have taken effect before the American embargo on oil trade with Iran became effective on November 4, 2018. But that turned out to be a lost game either, as no European country agreed to accept this plan.
Finally, on January 1, the European trio of the UK, France and Germany announced the creation of INSTEX in Bucharest. It began "working" in late June. However, its operations arouse quite a lot of fair questions in Iran.
For example, INSTEX doesn't have credit funds and doesn't provide access to them. And Iran cannot make large deals on the European market without them. Governor of the Central Bank of Iran Abdolnasser Hemati thinks that INSTEX can be funded through Iranian oil exports to European countries, while a long-term line of credit could be opened for Iran in exchange for oil exports.
But the problem is exactly that Europe doesn't buy oil from Iran itself. At the same time, it demands that the Islamic Republic, however, forwards its revenues from oil exports to INSTEX. The mechanism is in turn limits itself to ensuring trade operations in food and medicines which weren’t covered by Washington's sanctions. And there is now no great demand for imported food and medicines in Iran. For example, Iranian Food and Drug Agency chief Mohammadreza Shanesaz said on Monday that Iran's pharmaceutical industry meets 97% of the domestic demand in medicines.
President of Iran Hassan Rouhani called INSTEX a "just for show measure". "Today, INSTEX is just a money-less mechanism. Empty INSTEX is worth nothing, but if it becomes active and covers our oil revenues, then despite all its drawbacks, the mechanism can be somewhat accepted."
Iran feels deceived. It is more frequently is voiced in Iran that the USA and Europe act together and coordinate their actions. This in particular was voiced by Deputy Chairman of the National Security and Foreign Policy Commission of the Iranian Parliament Mohammad Javad Jamali Nobandegani. The news agency Mehr quoted him as saying: "The European Union's failure to adhere to the JCPOA was not about their inability, but because of the lack of will of these countries. They are strategically and radically aligned with the United States against Iran."