Under the nuclear deal with Iran, a new mechanism was set up to regulate any procurements made by Tehran for its now limited nuclear programme. In a new research paper, Paulina Izewicz takes an in-depth look at the Procurement Channel, as it is known, examining its workings and effectiveness so far, and offers recommendations to policymakers to ensure its sustainability.

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Read the new report: Assessing the JCPOA Procurement Channel 

By Paulina Izewicz, Consulting Research Associate, Non-Proliferation and Nuclear Policy

Over the years, Iran’s illicit procurement of nuclear-relevant goods has been a major element of the broader concerns surrounding its nuclear programme. The Joint Comprehensive Plan of Action (JCPOA), agreed on 14 July 2015, established a dedicated mechanism through which Iran could legally procure goods for the now limited programme. It was expected that having such a legal channel would curb the illicit procurement. Officially known as the Procurement Channel, its purpose is to review proposals by states seeking to engage in trade with Iran involving nuclear and non-nuclear civilian end uses.

The mechanism covers three categories of goods, and associated assistance and services. The first covers goods that are ‘especially designed or prepared for nuclear use’. The second includes goods with both nuclear and civilian applications, commonly referred to as ‘dual-use’. Controlling this category of goods is generally more difficult because it comprises items which, in addition to their more sensitive use, also have wide industrial and commercial applications. Indeed, these have comprised the bulk of Iran’s procurement activities. 

The third category covers any other items that are determined by the ‘relevant State’ as having the potential to ‘contribute to activities inconsistent with the JCPOA’. This is akin to the catch-all provision in many national export-control regimes, the goal being to capture the less straightforward cases. These items typically have lower technical specifications than what would normally be used in a nuclear programme. They do, however, have the obvious advantage of being easier to procure, and can often be modified after purchase to make them useable in a nuclear programme. Indeed, Iran’s procurers have often focused on this type of goods once export-control enforcement has made purchasing others much more difficult.

How the process works

To export any of the items in question to Iran, a company needs to go through the established licensing process in its home country whilst also submitting documents required by the Procurement Channel. The national licensing body then conducts the initial review and, if the application meets the licensing criteria, forwards it to the Procurement Channel. Each member of the Procurement Working Group (PWG) has 20 working days to review the proposal; if more time is required, this can be extended by ten days. At the end of this period, if no member dissents, the PWG will recommend to the United Nations Security Council that the application be approved. If there is no consensus, Iran, with the support of one other member, can refer the case to the Joint Commission within five days; the Commission will then have ten days to consider it. The Security Council, in turn, has five working days to make a final decision. All in all, the process can take up to 50 working days. 

The proposal has to contain certain specific information, largely in line with standard export-control practice. What is different, however, is that the Procurement Channel takes a rigorous approach to end-use verification. Whereas end-use certifications involving other countries are normally issued by the importing entity, the Iranian government now assumes ultimate responsibility for goods imported through the Procurement Channel. For goods intended for Iran’s nuclear programme, this certification is issued by the Atomic Energy Organisation of Iran, while the Ministry of Industry, Mine and Trade provides certificates for dual-use items. 
This requirement is unusual in that it makes the Iranian government ultimately responsible for ensuring that no goods purchased via the Channel are diverted to illicit use. On top of that, the exporting state assumes the responsibility for conducting end-use verification, and the Iranian government explicitly commits to allowing this verification. If the items are intended for nuclear use, the IAEA is charged with verifying their stated end use.

But can the Channel really be effective?


When the Procurement Channel was initially envisaged, one of the main concerns was that it might not be able to cope with the number of submitted proposals. Instead, the mechanism had a slow start, with only one proposal submitted in the first six months. Although the number of applications grew in the months that followed – to a total of 24 in the first two years of its existence – it still seems to have fallen short of expectations, raising concerns about whether the Procurement Channel is, indeed, fit for purpose.

Assessing the JCPOA Procurement Channel’, a new research paper, examines the mechanism in depth, seeking to answer whether it is capable, in conjunction with other tools, of curbing Iran’s covert procurement of nuclear and dual-use goods. This exploration is based on the assumption that, for the mechanism to work as intended, three basic requirements need to be met. Firstly, the Procurement Channel needs to function in practice, allowing Iran to purchase the items it justifiably needs. Secondly, it needs to be accompanied by a credible enforcement mechanism that will deter covert procurement. And thirdly, to continue adhering to restrictions on procurement, Iran needs to believe that the broader nuclear agreement, of which the Procurement Channel forms part, continues to serve its interests. 

The first section of the paper offers a brief overview of Iran’s illicit procurement prior to the JCPOA, followed by an examination of the scope and procedures of the Procurement Channel. It then provides a summary of its implementation to date. The section that follows examines in detail the three conditions mentioned above, from the challenges in the Channel’s implementation, to Iran’s adherence to procurement restrictions to date and, finally, to the prospects for the JCPOA’s continued implementation. The final section of the paper then addresses whether the Procurement Channel should be extended beyond the ten-year time frame imposed in the JCPOA and offers recommendations to policymakers.   

For the full analysis, read Assessing the JCPOA Procurement Channel by Paulina Izewicz

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