Next for Iran: Lifting the Arms Embargoes

arms sales

by Emma Scott

Having survived the US Senate, the nuclear deal concluded between Iran and the P5+1 will now be formally adopted, and implementation will follow. Whether you are pro-deal or anti-deal, the truth is that the Joint Comprehensive Plan of Action (JCPOA) ends Iran’s international isolation, grants Iran legitimacy and international recognition, and is the beginning of a long process of reintegrating Iran into the community of nations. Resolution of the nuclear file was isolated from the region-wide conflict affecting the Middle East, but now comes the moment where diplomatic efforts and the political spotlight are increasingly focused on resolving the Syrian conflict and fighting the Islamic State. This poses new challenges because Iran is viewed as diametrically opposed to the West—and its allies Israel and Saudi Arabia—on the regional plan.

Iran’s financial and military backing of non-state groups across the region has granted it a reputation as a destabilizing power with hegemonic ambitions. The Quds Force, involved in conflicts including Syria, Iraq, and potentially Yemen, is even the first national military branch to be designated, by the former Bush Administration, as a terrorist organization. Expectedly, Iranian political leaders espouse a completely different view of Iranian behavior. Citing examples such as Iraq and Afghanistan, they say Iran is fighting terrorism and behaving responsibly toward its neighbors. These opposing viewpoints make it difficult to ascertain whom to believe. And the 2016 presidential race in the United States and parliamentary elections in Iran don’t seem likely to clarify the matter any further.

Speaking at the Brookings Institute, Hillary Clinton, as the leading Democratic Party presidential candidate, maintained that the nuclear agreement needs to be embedded in a broader Iran policy and that that policy needs to be embedded in a comprehensive regional strategy, which promotes stability and counters extremism. Now that we have a long-term nuclear agreement, a broader Iran policy could by all means include adoption of a more meaningful agenda with Iran. But as Clinton’s subsequent comments implied, a broader policy is likely to continue on a similar path of underlining regional differences, which risks effective implementation of the agreement.

Setting out her Five Pillar Strategy for Iran, Clinton maintained that she would enforce and strengthen if necessary the sanctions on Iran and the Revolutionary Guards related to terrorism, ballistic missiles, and other destabilizing activities as well as restrictions on sending arms to Iran and from Iran to bad actors like Syria. Outside the framework of the nuclear deal, the United States maintains its own terrorism and human rights-related sanctions against Iran, but the deal includes the lifting of a comprehensive UN arms embargo on Iran as provided for in Security Council Resolution 2231 endorsing the deal.

Lifting the Arms Embargo

The lifting of the arms embargo was one of the more controversial elements of the deal, which makes it particularly vulnerable to the electoral cycle in Washington. The embargo has three major components. It was initially adopted in December 2006 by means of Security Council Resolution 1737 with the intention to bring Iran into compliance with its obligations under the Nuclear Non Proliferation Treaty. In this regard, the first component of the embargo concerned the export to and import from Iran of items and technology related to nuclear weapons. The July 2015 nuclear deal effectively annuls this aspect of the embargo by providing for a procurement channel through which Iran will be able to obtain legally the items required for a civilian nuclear program.

The second component of the embargo, adopted in March 2007 by means of Security Council Resolution 1747, covers the export of all arms from Iran. This component was directed at Iran’s arms supplies to Iraq’s Shiite militias as well as to Hezbollah. At that time, Shiite Sadrist militias were targeting US troops in Iraq, and Iranian Quds Force personnel were supporting splinter groups militarily and financially. Additionally, Hezbollah and Israel had just fought the summer 2006 war, and Hamas, also supported militarily and financially at that time by Iran, had won elections in the Gaza strip. Therefore, the political environment provided an opportune moment for the US and Israel to achieve their broader geostrategic goal of restraining Iran by means of the international unity created on the nuclear program.

However, the geostrategic game has changed. The withdrawal of US troops from Iraq in 2011 in effect weakened previously imposed border restraints on arms exports from Iran. As US troops gradually withdrew from Iraq after 2010, Washington handed over to Iraqi security forces the US military bases built near the Iranian border. These had aimed to prevent cross-border weapons shipments and to close off routes used by Quds Force personnel, Shiite militias, and Hezbollah members to funnel Iranian weaponry into Iraq. Upon the US withdrawal, the embargo on exports from Iran became defunct. In fact, in 2015, Iran and Iraq inaugurated border crossings in provinces where the US previously had imposed border controls. Before 2003, even Saddam Hussein never managed to constrain the family and religious ties straddling the 1,458-kilometer border. The US-led coalition had reduced the number of official border crossing points from 19 to 3 and imposed stricter controls on the Syrian border with the aim of keeping out foreign insurgents.

Yet, the inefficacy of those measures became evident relatively early on in the post-Saddam era as political, social, and economic ties between Iraq and Iran rapidly expanded and as Iranian-manufactured arms and ammunitions turned up in Iraq. Sunni insurgents and foreign fighters battling coalition forces had also managed to carve out a safe haven across the Iraq-Syrian border. Therefore, the lifting of the embargo on arms exports from Iran is not per se about to fuel regional conflict because that aspect of the embargo never really worked. Rather, dating back to 2003, Iran perceived US and foreign involvement in Iraq as threats and the power vacuum as an opportunity. Therefore, Iran functioned not within the terrorism paradigm but as an emerging weapons exporter, and it should be viewed as such, given its important relative weight at the regional level. This latter function will become all the more apparent in the years ahead if Iran reforms and cleans up its act as it seeks status recognition at the international level. Hence, to the extent that Iran fuels regional conflicts, the fuel comes from arms exports to allied sub-state groups and not from support for terrorism. 

Engaging Iran as an Arms Exporter

Left out in the cold from 2005 to 2013, Iran changed, and significantly so. Iran was unable to participate openly in international markets and therefore had little choice but to become self-reliant by means of the so-called resistance economy—replacing imports with domestic inputs in productive processes—and through under-the-table deals across the globe. As one French man accustomed to doing business with Iran pre-2009 told me, the Iranians learned how to do things by themselves. During the years Iran was under sanctions, in addition to the nuclear program, it expanded its missile, drone, and small shipping capabilities to unprecedented levels—in stark contrast to the other Gulf countries, which are for the most part buyers of arms. Under sanctions constraints, such a development path is not specific to Iran. During the apartheid period 1975 to 1989, South Africa built up its defense industry in the context of an arms embargo. The Armaments Corporation of South Africa (Armscor), akin to Iran’s state-owned Defense Industries Organization (DIO) and its amalgamation of subsidiary bodies affiliated to the Ministry of Defense, was infamous for its secretive and covert culture, involving corruption, fuzzy business deals, and arms smuggling.

But in 1994-5, when South Africa transitioned from apartheid to democratic majority rule, Armscor tried to recast itself as a responsible institution committed to greater transparency and openness, according to Susan Willet, a former researcher in defense economics at Kings College London. Many of the issues that emerged surrounding South Africa’s defense industry then are akin to those affecting Iran today. A domestic struggle took place between the institutions of the old military guard and the newly empowered constituencies who wanted to reduce the role of the military.

Since his election win in June 2013, President Hassan Rouhani has repeatedly told the Revolutionary Guards to stay out of politics, to pay their taxes, and basically to clean up their act as Rouhani has considered the problem of corruption as much as sanctions responsible for Iran’s economic troubles. DIO, which employs an estimated 20,000 people, plays a job-creation function, and Iranian hardliners have continuously emphasized protection of indigenous technology. Therefore, the challenge for Iran, now that the external military threat from the United States has diminished, is to find an alternative to the domestic market for military supplies even as hardliners try to maintain relevance through reliance on military output for the IRGC and army. Thus, it is useful to accept Iran as a seller of arms and then lobbying it to come into line with export control systems, notably the fledgling Arms Trade Treaty that seeks to regulate the commerce of arms.

In fact, Iran is no millennium newbie to selling arms under cover, which truth be told, the United States has at times encouraged. During the 1990s, while a UN arms embargo was in effect on Bosnia during the break-up of the former Yugoslavia, State Department officials engaged in very astute diplomacy to facilitate the smuggling of Iranian arms to Bosnian Muslims. Earlier, during the Iran-Contra Affair of the 1980s, the Reagan administration oversaw the provision of anti-tank missiles to Iran in its war with Iraq in exchange for the release of hostages held by Iranian-linked groups in Lebanon and high sums of money subsequently diverted to Contra rebels fighting Nicaragua’s socialist-leaning government. The nuclear deal thus provides a solid foundation for the first time in 36 years to engage with Iran differently, and openly, as an arms exporter.

Iran as an Arms Buyer

The third component of the embargo adopted in June 2010 covered the export of most major conventional weapons to Iran, except Surface-to-Air Missile (SAM) systems and Small Arms and Light Weapons (SALW). The embargo therefore never covered the S-300 missile air defense system that Russia pledged to deliver to Iran. It’s uncertain, however, whether Russia will actually provide the system, and whether an advanced or older model will be delivered. A Russian arms deal with Libya, following the lifting of a decade-long arms embargo and the dismantlement of its nuclear program and renouncement of terrorism in 2003, included an S-300 air defense system. Yet, finalization of the deal was never confirmed with certainty. Therefore, the same applies for Iran. Chalk it up to the lack of transparency in arms deals.

Libya is the only case comparable to Iran where an arms embargo was imposed for global security concerns and subsequently lifted. As with Libya, part of the process of integrating Iran into the international community is its acceptance as a buyer of arms. According to the JCPOA, the Security Council will decide in advance the provision of conventional arms previously under embargo on a case-by-case basis for the five years following adoption of the JCPOA. Therefore, opposition to lifting this aspect of the embargo comes with the assumption that arms suppliers would export these systems to Iran. But neither Russia nor China seems to be in a hurry to supply Iran with conventional weapons systems. Indeed, through Security Council Resolution 2231, they have agreed to restrict themselves. In the Libyan case, not only Russia, but European Union countries including France, the United Kingdom, and Italy were at the forefront of refurbishing the Gadhafi regime.

European Union High Representative Federica Mogherini has laid out an ambitious agenda for Iran in the post-deal environment. But truth be told, the EU as a single unitary actor has thus far failed to develop a unified strategic approach toward Iran. Rather, the trade and investment interests of individual member states have quickly come to dominate EU-Iran relations as national delegations continue to flock to Iran after the deal to secure business. Germany, which never fully closed its business operations in Iran during the sanctions years, is likely to re-emerge alongside Italy as a source of high technology for Iran. Following the resumption of diplomatic relations between Washington and Beijing in 1979, Western European states quickly increased their diplomatic and economic ties with China as it pushed for transfers of dual-use technologies to continue developing its industrial base.

Iran now seems to have adopted a similar development strategy. During the Europe-Iran forum, which took place in Geneva on September 24-5, Iranian representatives emphasized technology transfers in addition to foreign direct investment, exports, and job creation. Iran needs German technology while Germany views Iran as an export market, and Italy needs Iranian oil while Iran needs Italian investment in energy infrastructure and high technology. Therefore, trade and investment bring obvious economic benefits for European and Iranian industry. If Iran’s development strategy comes to fruition, the embargo on dual-use exports may well become irrelevant in the long run. Take, for example, the United Kingdom’s supplies of military-related goods and US supplies of dual-use technology to Saddam Hussein during the Iran-Iraq war, effectively busting embargoes in place under domestic and international law.

An arms embargo placed on China in 1989 in response to the suppression of the Tiananmen Square protests remains in place today. Therefore, the EU will not likely lift the actual arms embargo on Iran in the foreseeable future. But the reasons for sustaining the embargo are likely to evolve from aiming to hinder Iran’s nuclear efforts and military modernization to human rights concerns. Despite its missile development and geographical proximity to Europe, which certainly play a role in the EU’s threat perceptions of its external security environment, Europeans do not really consider Iran a threat. In the EU view, the foremost threat from the Middle East and North Africa is currently the Islamic State.

EU member states will likely perceive the arms embargo through the lens of their own interests. Hence, in spite of progress toward a common European defense and security policy, EU-Iran policy will probably fragment along the lines of the competing economic interests of the member states. But in view of Iran’s preoccupations with the conflict in Iraq and the Islamic State, it’s even questionable whether Iran would devote a growing proportion of its defense budget to the purchase of major conventional weaponry. Iran will focus first and foremost on small arms produced domestically and on obtaining the civilian aircraft that countries involved in civil wars often employ.

Emma Scott is a former assessor and peer reviewer for Transparency International’s Defense and Security program. She has also written for the Jamestown Foundation. She previously worked as a defense and security analyst on the Middle East and North Africa region with Business Monitor International Research in London, and interned on Iran at the European Union Institute for Security Studies in Paris. She is also an alumnus of the EU-Middle East Forum of the German Council of Foreign Relations in Berlin. Emma has two research Masters and two post-graduate certificates in geopolitics, conflict, international relations, and similar topics from universities in the United Kingdom, the Netherlands, Australia, Belgium, and France.

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