On January 14, Germany, France and the UK initiated the dispute resolution mechanism in the Joint Comprehensive Plan of Action (JCPOA) based on Iran’s decision to pull away from its obligations under the agreement. While the European participants see the dispute resolution mechanism as a way to keep the JCPOA alive, triggering the mechanism also serves as the first of several steps that must be taken before UN and EU sanctions could potentially be reimposed. Though the reimposition of sanctions is far from inevitable, it is important to understand the functioning of the dispute resolution mechanism in order to anticipate the timeline of any possible future developments.

  • Referral to the Joint Commission: Under paragraphs 36-37 of the JCPOA, the dispute mechanism process is triggered when one or more participants refers an issue of non-compliance to the Joint Commission. The commission was established as part of the JCPOA and includes members from all participants (Iran, China, France, Germany, Russia, and the UK). Germany, France and the UK took this step on January 14. The Joint Commission has 15 days to resolve the issue, unless that period is extended by consensus.
  • Referral to the Ministers of Foreign Affairs and/or the Advisory Board: If the issue cannot be resolved by the Joint Commission, the participants have two options: Either, they can refer the issue to the Ministers of Foreign Affairs for another 15-day period (subject to extension) or they may directly refer the issue to an Advisory Board. The Advisory Board can consider the issue either in parallel with (option 1) or in place of (option 2) the Ministers of Foreign Affairs’ consideration. The Advisory Board is made up of three members, one selected by each party and a third independent member. By the end of the second 15-day period, the Advisory Board will issue a non-binding opinion on compliance.
  • Reconsideration by the Joint Commission: If the opinion itself does not resolve the issue, the Advisory Board will refer the issue along with the opinion back to the Joint Commission. The Joint Commission then has an additional 5 days to resolve the issue.
  • Notification to the Security Council of Non-compliance: If the Joint Commission remains unable to resolve the issue, the European JCPOA signatories “could treat the unresolved issue as grounds to cease performing [their] commitments.” At this point European signatories could decide to notify the UN Security Council that they believe Iran’s behavior constitutes significant non-performance. According to the JCPOA, only “the complaining party” may notify the Security Council, suggesting that the United States would not be able to initiate the snap-back of UN Sanctions if Germany, France and the UK chose not to notify the Security Council.
  • Reimposition of UN Sanctions: Upon referral to the Security Council, UN sanctions are automatically re-imposed after 30 days unless the Security Council adopts a resolution to continue the lifting of sanctions. The reimposition of sanctions are “automatic” because they do not require the passage of another UN Security Council resolution, meaning that China and Russia could not veto the reimposition of sanctions. The sanctions that would be reimposed would be those found in UN Security Resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008), 1835 (2008), 1929 (2010), and 2224 (2015). If reintroduced, EU Member States would automatically implement the UN sanctions.
  • Reimposition of EU Sanctions: In addition to UN sanctions, independent EU measures could also be reimposed. In a 2015 declaration, EU Member States indicated that they could “reintroduce without delay all EU nuclear-related sanctions that have been suspended and/or terminated in case of significant non-performance by Iran of its commitments under the JCPOA.” This would require a joint recommendation of the EU High Representative, Germany, France and the UK and a unanimous support of all EU Member States under the standard procedures.

It remains too early to tell how much of the dispute resolution process the parties will use and whether the initiation of this process signals the resumption of UN or EU sanctions against Iran. Over the past year, many European states have strongly dissociated themselves from the US administration’s decision to withdraw from the JCPOA and reimpose US sanctions on Iran. Even in the announcement triggering the dispute resolution mechanism, France, Germany and the United Kingdom reiterated their commitment to the JCPOA and their determination to preserve it. Moreover, the EU and its Member States continue to support a diplomatic solution that will enable de-escalation. Future developments will largely depend on Iran’s reaction in the weeks to come.