On Wednesday, May 27, the US State Department set a deadline for foreign companies and entities involved in Iran’s nuclear program, giving them 60 days to end their nuclear cooperation with the Islamic Republic and to wind down their activities with three Iranian nuclear projects. Secretary of State Mike Pompeo said he would revoke all but one of the sanction waivers covering civil nuclear cooperation with Iran. The waivers had allowed Russian, European and Chinese companies to continue work on Iran’s civilian nuclear facilities without incurring American penalties after the US withdrawal from the nuclear agreement with Iran or, as it is officially known, the Joint Comprehensive Plan of Action (JCPOA). These waivers have now been removed.
The three projects named in US Secretary of State Mike Pompeo’s statement are the renovation of Arak Heavy Water Reactor, which was being carried out with Chinese cooperation, the provision of enriched uranium for the Tehran Research Reactor, and a deal with Russia that involved the export of Iran’s spent reactor fuel from Bushehr Nuclear Power Plant. From July 27, 2020 any entity working with these projects will face secondary sanctions by the United States.
Secondary sanctions mean that, from Washington’s point of view, it is not only the US that will enforce the sanctions, but other countries will have to do so as well. Otherwise, they might face fines, sanctions and even prosecution.
One project escaped immediate cancelation of the sanction waivers. “The United States is providing a 90-day extension for the waiver covering ongoing international support to the Bushehr Nuclear Power Plant Unit 1 to ensure safety of operations,” said Pompeo. “We will continue to closely monitor all developments in Iran’s nuclear program and can modify this waiver at any time.”
During the nuclear negotiations that led to the JCPOA, the Arak Heavy Water Reactor was the subject of one of the most serious disagreements between Iran and the world powers. The plutonium produced by this reactor can be used in weapons of mass destruction and the other parties to the negotiations wanted it to be shut down. In the end, with Iran’s insistence, the two sides agreed to a formula that kept the reactor running but with adjustments that would reduce its capability to produce weapons-grade material.
Russia, China and Two Nuclear Projects
According to the JCPOA, the US and China agreed that they would supervise and guide changes to the Arak reactor. The US started work on the project but when President Trump announced that the US was withdrawing from the nuclear agreement in May 2018, the entire project became the responsibility of China. Now that the US has revoked the waiver for the work on the Arak reactor, China can no longer cooperate with Iran on it.
The same situation exists in the case of fuel for Bushehr Nuclear Power Plant. Iran claims that it has the capability of producing fuel for the power plant but, according to an agreement signed in the 2000s, it is Russia that has provided Bushehr plant with fuel.
Since the spent fuel of the power plant can be used in building nuclear weapons, Russia and Iran had agreed that Russia would remove the spent fuel from Iran but now that the waiver for the project has been removed, it will cease, unless Russia ignores the US sanction and continues to provide fuel for the power plant in exchange for the spent fuel.
The situation in the Tehran Research Reactor is somewhat different because there is no major foreign partner helping run the reactor. The fuel for the reactor is 20 percent enriched uranium, which had mainly been provided by Argentina in the years after the 1979 revolution. However, Argentina stopped selling nuclear fuel for the reactor when President Barak Obama imposed nuclear-related sanctions on Iran. About 10 years ago, Iran started producing its own fuel for the Tehran reactor, but its production of 20 percent enriched uranium was a point of deep concern for world powers because the process can increase the ability to produce nuclear weapons.
During negotiations for the JCPOA, Iran agreed to stop enriching uranium to 20 percent and to convert its stockpile to fuel rods for the Tehran Research Reactor. If Iran runs out of fuel for this reactor, it will have to purchase further fuel or restart its production. Since this reactor is under sanctions, the purchase of fuel is not possible. Restarting the production of 20 percent enriched uranium could trigger another crisis in relations between the Islamic Republic and its JCPOA partners.