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Pacta Sunt Servanda and the (Re?) Negotiation of the JCPOA

Pacta Sunt Servanda and the (Re?) Negotiation of the JCPOA

By Zach Kosbie, Staff Editor, N.Y.U. Journal of International Law & Politics

The repeated failure of talks to restore the United States and Iran to compliance with the Joint Comprehensive Plan of Action (JCPOA, also known as the Iran Deal) has already pushed Iran the closest it has ever been to nuclear weapons and threatens to push it still further in nuclear development.

The JCPOA is a multilateral arms control agreement concluded by Iran, the United States, Germany, the United Kingdom, France, Russia, and China in 2015 and cemented by United Nations Security Council (UNSC) Resolution 2231, whereby U.S. and international sanctions on Iran were rolled back in exchange for limits on Iran’s nuclear program. After the United States unilaterally withdrew from the JCPOA and re-imposed unilateral sanctions on Iran in 2018 and subsequently failed to re-enter JCPOA compliance when the Biden administration acceded to power in 2021, Iran began to remove limits on its nuclear development. Iran and the United States then entered into eight rounds of talks in Vienna to find a path back to U.S. and Iranian compliance with the JCPOA.

Although it remains possible that an interim “deal” to restore some compliance may be in the works, Iran’s recent insistence to base negotiations on a new “joint document” derailed what had hitherto been productive talks. Iran’s introduction of a new text could not have come at a worse time in the life cycle of the JCPOA. While the first six rounds of negotiations nearly resulted in the United States again becoming a state party and Iran returning to compliance, a change in Iranian governments brought a new Iranian negotiating team to the seventh round of talks. This team insisted on using the brand-new joint document, essentially erasing six rounds of progress.

The introduction of this new document violated Iran’s obligation to observe its commitments under the JCPOA in good faith, an obligation known in international law as pacta sunt servanda. While the United States remains the chief violator of the obligation to perform agreements in good faith, the introduction of this new document is a breach of Iran’s obligation of pacta sunt servanda under the JCPOA.

Despite the suggestions of some observers that the Iran Deal is merely a “political commitment” at international law, pacta sunt servanda does apply to the parties, especially given that it is a multilateral agreement and that Iran itself has claimed that the obligation applies to the United States. Pacta sunt servanda is embodied in Articles 26 and 31 of the Vienna Convention on Treaties and is widely-considered a jus cogens norm at international law, meaning it is fundamental and may not be violated. Therefore, even with the United States out of JCPOA compliance, whether by material breach or complete withdrawal, the obligation of good-faith compliance continues to apply to all remaining states party, including Iran. What pacta sunt servanda requires may vary; however, Iran’s attempt to use this joint document to unilaterally redefine U.S. obligations surely violates any obligation to observe agreements concluded in good faith.

The New Text – the Breach

Iran appears to have shown up in Vienna on November 29th and December 27th with texts that were at odds with the 2015 JCPOA, insisting that its new text anchor the negotiations instead of the original deal or a new version of the deal that had been hashed out at the conclusion of the sixth round of discussions in June of 2021.

The new Iranian document was a product of a domestic shift in power within Iran and not any intrinsic shift in negotiation position. On November 29th, the P5+1 (the six parties to the JCPOA besides Iran) met in a seventh round of talks with Iran to draw a “roadmap” that would bring the United States back into JCPOA compliance. In the preceding sixth round of talks, Iran agreed to a number of assurances regarding sanctions removal. But the transfer of power from the Rouhani to the Raisi administration that same month brought a new Iranian negotiating team with its own maximalist vision of that “roadmap.” This new team scrapped the previously agreed-upon June text and arrived in Vienna with two separate and entirely new texts, one for sanctions removal and one for nuclear commitments.

At the commencement of the eighth round of talks on December 27th, Iran announced that it would be working off of a new “unified document,” replacing the dual track model from before. This document, according to Iran, is “mutually acceptable” and addresses both “assurances and verification.” This new document is materially different from the June text but similar to the November text. Therefore, barring any significant substantive revision (which may not be made public for some time), issues raised in the seventh round were likely present in the eighth. Owing in large part to the introduction of this document, the talks have subsequently fallen apart, and the United States and Iran have begun considering bilateral negotiations towards a partial “interim” deal. Although Iran has claimed that the seventh round draft texts werebased on the draft texts of the last six rounds,” the E-3 (the United Kingdom, France, and Germany)—the chief go-betweens between the United States and Iran in Vienna—observed that the texts walked back virtually all of the June compromises.

In further rounds of talks since December 27th, Iran and the U.S. have managed to again finalize the “technical elements” of the Deal—but the continued U.S. designation of the Iranian Revolutionary Guard Corps (IRGC), an arm of Iran’s military that also controls much of Iran’s private sector, as a Foreign Terrorist Organization has caused negotiations to cease. Had Iran not introduced the new text and added a series of hurdles to the negotiations in November, this issue would likely have been resolved and a mutual return to JCPOA compliance reached.

Iran has breached pacta sunt servanda under the JCPOA by insisting on its new text because the new text altered the definition of compliance with the Deal despite the ongoing participation of all non-U.S. parties. Unilaterally changing the definition of the “agreement” that must be kept definitionally violates the rule that “agreements must be kept.”

The only real Iranian counterargument is that the new text is not a change in obligations, but rather a countermeasure to U.S. noncompliance. A “countermeasure,” as set forth in Article 22 and Chapter II of the Articles of State Responsibility, is an action that would otherwise be illegal but is justified by the pre-existing illegal conduct of the breaching party. Countermeasures must be necessary, proportionate to the breach, and designed to bring the breaching state back into compliance.

The New Text was Not a Valid Countermeasure

Many of Iran’s countermeasures to U.S. withdrawal from the JCPOA, such as its reversible nuclear gains, oil smuggling, and related nonlethal regional activity, are arguably valid countermeasures to the United States’ “maximum pressure” sanctions campaign. This campaign signaled future U.S. violations of pacta sunt servanda, and the continuation of many Trump-era sanctions under Biden also constitutes a continuing material breach. Therefore, the United States’ insistence on cessation of Iranian countermeasures as a precondition to a cessation of its own material breach is itself a breach of good faith.

However, the new November texts and the corresponding Iranian position that “we are not imposing preconditions [or] new conditions” cannot be said to be a rationally related countermeasure because it does not act to bring the United States into compliance. Instead, these maximalist negotiation positions constitute an independent breach of the obligation to perform agreements in good faith, subverting rather than reinforcing a jus cogens obligation.

Iran’s reading of JCPOA paragraphs 26, 36, and 37 (paragraphs that define the principles of how a state may respond to noncompliance, including a means for establishing valid countermeasures and resolving compliance disputes) does not overcome this presumptive violation. At first glance, Iran’s “commitments under this JCPOA” in paragraph 26 could suggest that, given the re-imposition of U.S. sanctions, a new text (i.e., another JCPOA) might be read into UNSC Resolution 2231, which codifies the JCPOA. Indeed, these paragraphs justify Iran’s retorsive (i.e., retaliatory but legal in a vacuum) breach of nuclear and other commitments, and demanding a text that thickens U.S. commitments does bear some relationship to avoiding future breaches.

Nevertheless, the subsequent practice of the parties, such as the United States’ release of funds at the Deal’s onset and statements from the E-3 regarding transforming the JCPOA and Resolution 2231 into a “hollow” “shell” suggest that good faith on the one hand and reciprocal noncompliance on the other do not permit holistic revision or rescission of the text of the Deal. The fact that Trump left the Deal de jure when he decided to demand a new text should confirm that re-interpretation and not revision is the line intended by the drafters: if it was possible to replace the JCPOA’s text with a “joint document” that contained new commitments, the Trump administration could have remained a state party to the JCPOA and, as Iran did in Vienna, insisted on a new text governing the agreement.

In sum, Iran is correct that the United States remains in material breach, but that does not give it license to change U.S. obligations under the JCPOA. Therefore, Iran’s November text is a breach of its obligations to comply in good faith. In short, Iran cannot have its cake (respond to the U.S. breach) and eat it, too (expand the JCPOA’s scope).

The Importance of Good Faith – Remedy and Confidence

In order to remedy this state of affairs, the parties must return to the proposed text that France and Germany offered in November regarding both technical and political issues, as France and Germany are the parties suffering the breach of good faith. This boundary is an important guardrail with a high dollar value for Iran: every strike against confidence in Iran’s commitment to the original text of the JCPOA undermines not only a return to U.S. compliance but also post-return implementation of U.S. obligations to lift sanctions, including on the IRGC.

Offering a new text as a countermeasure, rather than as a negotiation tactic (negotiation positions are non-binding commitments not beholden to the same rules as countermeasures), raises concerns about Iranian good faith that might continue after implementation—for example, if European companies assess that an increasingly hardline Raisi administration might offer a new text they may project higher expected costs to investment in Iran given anticipated U.S. sanctions in response. Following a December 21st decision from the European Court of Justice allowing E.U. firms to factor the expected costs of U.S. sanctions into decisions to terminate contracts in Iran, these types of cost projections may become prolific and could be a serious obstacle to effective implementation of a new agreement. This is especially true if the IRGC remains a designated Foreign Terrorist Organization, because the IRGC’s intimate involvement in many sectors of the Iranian economy heightens compliance risks to foreign investors.

Further, as Iranian firms learned the hard way between 2015 and 2018, the Memoranda of Understanding (MOUs, precursors to contracts staking out preliminary positions of the parties) ostensibly undergirding these contracts are entirely creatures of confidence: pacta sunt servanda may not apply to MOUs at all because MOUs are not necessarily agreements. Without a clear long-term commitment to the life of the Deal, these MOUs will be ultimately meaningless.

At base, the JCPOA does not import an obligation to assist the establishment of contracts beyond good faith measures to remove sanctions and promote trade, so absent private-sector confidence in the longevity of the Deal’s text, there is no way for Iran to translate the removal of sanctions into international trade. In other words, amid significant distrust, economic guarantees require legal ones, too.

To restore this lost trust, Iran must return to the original text. The proposed “interim deal,” likely a bilateral political commitment and product of direct U.S.-Iranian negotiations, could be a first step towards eventually restoring the United States as a state party and bringing Iran back in compliance with the original text of the JCPOA.

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