Recent Legal Developments Regarding US Economic Sanctions against Iran

The International Court of Justice, on October 3, 2018, addressed the Iranian Government’s claims regarding the re-introduction sanctions by the US against it following the latter’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018.

Iran has sought provisional measures pursuant to Article 41 of the Statute of ICJ, alleging the violation of the 1955 Treaty of Amity between the two countries, due to the imposition of the sanctions. In its request for the provisional measures, Iran sought the Court’s order that the US shall, inter alia, suspend its reintroduction of the sanctions, as well as allow transactions already licensed to be implemented.

The Court did indicate some of the provisional measures requested by Iran, dismissing all the objections that were posed by the US against the prima facie jurisdiction of the court. Under this, the Court required that the US ‘remove, by means of its choosing, any impediments arising from the measures announced on 8 May 2018 to the free exportation to the territory of the Islamic Republic of Iran of (i) medicines and medical devices; (ii) foodstuffs and agricultural commodities; and (iii) spare parts, equipment and associated services (including warranty, maintenance, repair services and inspections) necessary for the safety of civil aviation’.

The order also required that the US must ‘ensure that licenses and necessary authorizations are granted and that payments and other transfers of funds are not subject to any restriction’ where they relate to the goods and services noted above, and that both parties ‘refrain from any action which might aggravate or extend the dispute before the Court or make it more difficult to resolve.’

Provisional measures in international law are similar to interim relief and the International Court of Justice is empowered to indicate it in order ‘to preserve the respective rights of either party’. The emphasis laid by this provision is on the preservation of rights. It suggests that the primary purpose of the Court’s power is ‘to prevent irreparable prejudice to the rights that are the subject of the dispute’.

Given the highly controversial history of relations between the two countries, this order of the ICJ is very phase-shifting in terms of global political economy, which comes only a month ahead of the second round of the scheduled sanctions. With the European Commission instructing and advising its member state Governments and private firms to completely ignore the demands from the White House about dropping all trade with Iran, Trump administration’s foreign policies on Iran are attracting lesser international support than before. As reported by the Economic Times, India is continuing its oil imports from the Islamic Republic despite the US imposed the ban, indicating state refiners’ contracted import of 1.25 million tonnes of crude oil and replacement of dollar payments with rupee trade.

Successive Indian governments have followed a policy of not honouring sanctions slapped unilaterally by any country. Only sanctions which are endorsed by the United Nations Security Council are followed by Delhi. Washington is constantly racketing up the pressure on Delhi along with other consumers of Iranian crude to slash their oil imports to zero. Although India has been negotiating some possibilities out of these sanctions, similar to waivers under the Countering America’s Adversaries through Sanctions Act, its position against compliance with unilateralism becomes slightly stronger after the provisional measures indication by the ICJ. However, a clearer picture would surface only after November 4, the deadline set by the US establishment led by President Donald Trump to set in the sanctions on Iran.