Tuesday, May 15, 2018

What is the “snap back”?

The extent to which it solves the problem of the Iran deal; its merit as a precedent for better management of sanctions

by Ira Straus

(First Publish in 2015)

The Obama Administration stated many times, in the course of negotiating the Iran deal, that sanctions would "snap back" if Iran cheats. It did not however specify how this would happen.

A lot of people were skeptical that this could ever happen. They pointed out that it had been hard to get the necessary countries to agree on sanctions in the first place. It took years. Some of these countries have made it clear that they want to be rid of the sanctions and would not agree to reimpose them, were they ever lifted. These countries have a veto on the UN Security Council (SC). So if the sanctions are lifted now, they will in fact never be reimposed. Moreover: once sanctions are lifted, economic links will be developed rapidly, economic interests will become attached to these links, further preventing governments from agreeing to reimpose sanctions. So how could sanctions ever simply “snap back”?

This was a powerful critique. Yet the agreement does have a specific “snap-back” provision. It was achieved in no small part as a consequence of the strength of the aforementioned criticisms -- the drumbeat of demands for something more serious than general statements that sanctions would be reimposed if needed. The resultant of these pressures is a more robust snap-back provision than anyone anticipated.

That makes a favorable impression on me, as one who had been skeptical. I had elaborated and put out some “snap-back” options on my own, in the absence of any serious one put forward by the Administration in past months. I am pleased to see some overlap with what actually came out, along with some differences.

The assurances on a snap-back had long sounded vacuous. Now they have substance.

It is important to give credit to this accomplishment.

To be sure, there can still be debates as to whether the deal's snap-back provision is sufficient. Preliminary steps would have to be gone through prior to the “snap-back”, some of them dilatory and discouraging to actually implementing the snap back. There are limitations placed on what would be snapped back. And, were the snap-back provision to be invoked, it could prove hard to get all the relevant countries to comply with their legal obligation to in fact “snap back” and reimpose sanctions.

There are also other provisions in the deal that have raised serious objections, but I will not deal with the other provisions here. My purpose is to focus on three questions about snap-back mechanism itself: Does it justify the Administration's claim that sanctions will “snap right back” if Iran violates the deal? How important is it as an innovation in international procedures? Can it serve as precedent for better sanctions-management in the future?

The legal mechanism for sanctions to “snap back”

Here is the text of the snap-back paragraph of the agreement:

[After several preliminary procedures are exhausted, a party to the deal] could treat the unresolved issue as grounds to cease performing its commitments under this JCPOA in whole or in part and/or notify the UN Security Council that it believes the issue constitutes significant non-performance.  Upon receipt of the notification from the complaining participant, as described above, including a description of the good-faith efforts the participant made to exhaust the dispute resolution process specified in this JCPOA, the UN Security Council, in accordance with its procedures, shall vote on a resolution to continue the sanctions lifting. If the resolution described above has not been adopted within 30 days of the notification, then the provisions of the old UN Security Council resolutions would be re-imposed, unless the UN Security Council decides otherwise.”

That’s the snap-back in a nutshell. The sanctions-relief could be ended by any party to the deal, simply by its bringing a complaint about Iranian non-compliance to the Security Council (SC); ended, that is, unless the SC adopted, by unanimous agreement among the P5, a new resolution maintaining some or all of the sanctions-relief.

Another way of putting it would be: The sanctions are lifted only up to the moment when one of the parties to the agreement raises a complaint against Iran and gets to the point of bringing it to the SC, assuming that the SC doesn't agree on a new resolution within 30 days to maintain some of the sanctions-relief. Or, yet another way: The SC is unanimously agreeing to lift sanctions for as long, and only as long, as none of the P5 parties to the agreement supports a complaint brought against Iran to the SC.

The deal itself, providing sanctions relief, must be adopted unanimously, as were the sanctions themselves initially. But the agreement proceeds to establish a sphere of subsequent corrective decisions or revisions -- namely, reversal or reduction of the sanctions relief -- that can be made without unanimity.

This avoids the careening that the veto in the SC traditionally creates between equal and opposite unanimity requirements. Under the traditional arrangement, it requires unanimity among the P5 for the SC to impose sanctions; then it requires an opposite unanimity to lift sanctions; and then it requires getting another opposite unanimous agreement in order to reinstate sanctions. There is a kind of surrealism in this. It is not conducive to rational decision making. In particular, it is not conducive to imposing sanctions, for fear that they could not be lifted if appropriate. It is equally unconducive to lifting sanctions for fear that they could not be reimposed if needed. And this makes it unconducive in turn to practical negotiations with the target of the sanctions: it is too hard to bring pressure to bear on it, too hard to lift the pressure in return for a deal, and too hard to renew pressures if the deal is not honorably implemented.

Under the arrangement in the Iran deal, unanimity is still required to get this deal itself and lift the sanctions; but once that is done, the challenge is not to get a renewed unanimity for reimposing sanctions, but instead, to maintain through the duration of the deal the unanimity in support of the sanctions-lifting. Concretely in this case, it is not Russia or China that gets a veto on reinstating sanctions, but the U.S. or any of its allies that gets a veto on continuing the lessening of sanctions.

The restrictions on the snap-back

Immediately after making this innovative snap-back provision, the text places a limitation on just what it is that snaps back: “In such event, these provisions would not apply with retroactive effect to contracts signed between any party and Iran or Iranian individuals and entities prior to the date of application, provided that the activities contemplated under and execution of such contracts are consistent with this JCPOA and the previous and current UN Security Council resolutions.” This is a subtraction from the scope and effectiveness of the snap-back. It could prove a far-reaching waiver.

Next comes a commitment to keep snap-back for the last resort: “The UN Security Council, expressing its intention to prevent the reapplication of the provisions if the issue giving rise to the notification is resolved within this period, intends to take into account the views of the States involved in the issue and any opinion on the issue of the Advisory Board. Iran has stated that if sanctions are reinstated in whole or in part, Iran will treat that as grounds to cease performing its commitments under this JCPOA in whole or in part.” This set of declarations is only on paper, but it could have political effectiveness in making a snap-back less likely, and could delegitimize a snap-back and make it harder to get other countries to comply with them. It is constructive, in that it obstructs a flippant reimposition of sanctions. It is destructive, in that it can be invoked arbitrarily for diplomatic pressure purposes by opponents of a snap-back, and for subsequent justification of noncompliance. It is sure to be used in the arguments of any party that wants to deny a reality of noncompliance and create an alternative reality of he-said-she-said neutrality. This alternative reality that is bound to crop up, not only in the universe of interested powers, but in a wider social universe that is familiar to us all from its prominence in the public discourse space: a universe that makes a practice of standing in-between any two sides. Both universes are always around; there are always powers with economic and geopolitical interests against sanctions, and there are always social milieus that claim a higher truthfulness for itself against through a rejection of taking sides, specifically a rejection of the side associated with its own society.

Prior to the snap-back paragraph, the text lays out at length some stages that have to be gone through before getting to the SC.[1] It might be difficult to get a violation recognized as a violation in these early stages; the Joint Commission would have 3 members -- Iran, Russia, and China -- inclined to deny any violation, while the other 5 Western members are not known for always sticking together to outvote the 3 naysayers; at the next stage it would go to the foreign ministers of the same countries; at the next stage, to an advisory board. Nevertheless, these steps are not decisive, since finally, even if the complaint failed at all these stages, the complainant party could take it to the Security Council. That assumes, to be sure, that the complainant would be able to withstand the social and diplomatic pressures, which could build up considerably in these preliminary stages, to back off and fall silent.

How to evaluate this?

The strong side of it:

If a complaint does finally make it to the Security Council (SC), the sanctions would indeed “snap back”, unless the Security Council passed a new resolution stating otherwise in 30 days.

The mechanism is clever: Instead of the Security Council voting on whether to reimpose sanctions, the Security Council would have to make a new decision by unanimous vote among the P5 in order to avoid reimposing sanctions. This makes re-imposition more likely, than would a simple positive decision by majority vote. It is indeed a kind of automaticity.

For those who are opposing the sanctions, the automatic reimposition, in the absence of a new SC resolution, would put a premium on their compromising in the Security Council on whatever resolution they could get the U.S. or Iran-criticizing powers to accept. For example, they might agree to reimpose partial or modified sanctions, if they want to avoid the whole set getting reimposed.

If the U.S. holds out, then in principle -- or more precisely, in fact, as a matter of international law -- the entirety of sanctions will be reimposed. However, getting the compliance of the other powers with this law would be difficult, once they have started up major economic relations with Iran again. Even the U.S. too would face pressure to compromise on a new SC resolution, in order to get the other powers more in a mood for complying.

The weak side of it:

1. The process is less flexible and deliberative than a simple majority-determined decision on sanctions reinstatement. A majority process in the SC could provide for ratcheting sanctions up and down, in keeping with diplomatic needs, until the day when the issue is resolved. That would seem more optimal. However, a majority would not be easy to obtain, once economic pressures mounted to maintain trade, and a majority vote might have an even harder time than this snap-back process in commanding compliance on the part of those who vote against it, since it would be openly violating their customary right to veto, whereas the present snap-back makes a show of preserving that custom, even if not in reality since it is done in an inverted form in which they cannot veto the snap-back.

2. There is likely to be considerable pressure within international society to drop a complaint in the course of the 35-day dispute settlement process, during which multiple ambiguities will usually emerge. Already the text contains clauses wherein Iran threatens to retaliate if any sanctions are reimposed, and countries pledge to try to avoid reimposing sanctions.

3. The economic obstacles to effective “snap-back” -- the resistance of vested interests in trade with Iran, which will grow geometrically from the day sanctions start getting lifted -- are not addressed. This problem is compounded by the provision that, even if sanctions are reimposed in full, contracts made during the off-sanctions interlude will remain valid. Those contracts could be so large as to nearly obviate the reimposed sanctions. Is there a danger that this will be done deliberately by Iran? The day after sanctions-lifting provides an opening of the window, Iran and some of its partners might rush to make far-reaching long-term contracts. This would provide a substantial measure of insurance against a reimposition of sanctions -- and reduce Iran’s incentive to remain in compliance with the deal. Similarly, the unfreezing of assets, which will bring Iran an estimated $100-150 billion, will likely be used by Iran to put its assets where it can control them and they cannot be refrozen; or spent by Iran, not all of it for benign purposes, with a part going to Islamist and Shi’a ideological and terrorist purposes.

There are, as noted at the start, other major defects in the deal. There is the allowance of renewed trade in weapons and ballistic missiles. There is the neglect of issues of terrorism, subversion, and destabilization. The economic strengthening of Iran by the deal could enable Iran to give the world more trouble along these lines. And then it could still go nuclear after the expiration date, at its convenience.

However, these other defects are not related to the “snap back” mechanism per se. They are a matter of concessions on what in principle are separate matters; concessions that were made in the name of getting an agreement at all against the nuclear program. Whether they were wise is not what this paper is about. I would like, in my remaining paragraphs, to focus instead on the possible future merits of the snap-back mechanism per se. The merit of such future use is not affected by the other provisions thrown into the present deal, or others missing from it.

Let me reiterate: My speaking on the snap-back mechanism, on the whole favorably, does not require judging the rest of the deal. The snap-back itself is more efficacious than was expected. Whether it is efficacious enough to outweigh the negative aspects of the deal, I leave to others to judge. I am simply discussing the merits of the snap-back as an international operational mechanism. Irrespective of whether or not it redeems this particular deal, it is of importance in its own right, for future instances.

Use of this snap-back procedure as a precedent?

In future SC resolutions that impose sanctions or other penalties on countries, there ought to be a similar snap-back provision. This would create a new flexibility to use sanctions for effective negotiations. It would become possible to reduce sanctions, in face of good behavior or partial accommodations by the sanctioned country, with the assurance that there is an efficient “snap back” mechanism to restore full sanctions if needed. Similarly, it would be made feasible to reduce or eliminate the sanctions as a part of a Security-Council ratified agreement with the sanctioned country, yet have the sanctions would “snap back” to their original level if a complainant party to the agreement submitted its complaint about a violation to the Security Council and if the SC  failed to pass within 30 days a new resolution against the sanctions. Moreover: such negotiations, reductions, and reinstatements could occur in multiple iterations. That would be true flexibility: a flexibility of strength not of weakness. It would render sanctions a much more useful instrument of diplomacy than in the past.

This is probably not the absolutely optimal mechanism, to be secure. One might envisage making SC resolutions make sanctions susceptible, after their original adoption by the usual P5 consensus, to being relaxed, reimposed, re-relaxed, ratcheted up and down, etc., by simple majority votes on the SC, rather than requiring unanimity for relaxing the sanctions and a single objector for restoring the sanctions. But it would come close to the same thing, and would be a good beginning, considerably better than traditional practices in handling sanctions. It would be an inversionary use of the harsh requirement of unanimity in the Security Council, by the tactic -- a clever one, but not unprecedented -- of requiring the SC to pass a new resolution by unanimity or else the current resolution would lose all force and a previous one be reverted to. As such, it would evade the need to give an appearance of breaking from SC rules of requiring unanimity among the P5.

The use of this method, in the present high-visibility case of Iran, should be tested and used to its fullest. To the extent that it works, it should be used as a precedent to the extent it fails, it should be improved upon. If the precedent becomes more widely used and proves on the whole a favorable experience, it might in turn serve as a step toward subsequently trying the more optimal, majority-vote method.

                [1] “DISPUTE RESOLUTION MECHANISM. If Iran believed that any or all of the E3/EU+3 were not meeting their commitments under this JCPOA, Iran could refer the issue to the Joint Commission for resolution; similarly, if any of the E3/EU+3 believed that Iran was not meeting its commitments under this JCPOA, any of the E3/EU+3 could do the same. The Joint Commission would have 15 days to resolve the issue, unless the time period was extended by consensus. After Joint Commission consideration, any participant could refer the issue to Ministers of Foreign Affairs, if it believed the compliance issue had not been resolved. Ministers would have 15 days to resolve the issue, unless the time period was extended by consensus. After Joint Commission consideration – in parallel with (or in lieu of) review at the Ministerial level -  either the complaining participant or the participant whose performance is in question could request that the issue be considered by an Advisory Board, which would consist of three members (one each appointed by the participants in the dispute and a third independent member). The Advisory Board should provide a non-binding opinion on the compliance issue within 15 days. If, after this 30-day process the issue is not resolved, the Joint Commission would consider the opinion of the Advisory Board for no more than 5 days in order to resolve the issue. If the issue still has not been resolved to the satisfaction of the complaining participant, and if the complaining participant deems the issue to constitute significant non- performance, then that participant could treat the unresolved issue as grounds to cease performing its commitments under this JCPOA in whole or in part and/or notify the UN Security Council that it believes the issue constitutes significant non-performance. “ (etc.; the above-cited snap-back provision begins here.)

Further reading: Trump should use the Iran deal's provision for making sanctions “snap back” (May 2018)

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