Iran – no military acquisitions embargo and no money as well

Even if Russia and China are waiting for the US elections’ result to establish new relation strategies with the Washington Administration, possible sophisticated weapons exports in Iran meet at least one obstacle – the funding!

Most likely, Iran sees the end of the embargo more as a change of status than an opportunity for huge weapons acquisitions.

What has happened?

 Despite US’s opposition, the embargo imposed on Iran over conventional weapons has expired, according to the provisions of a nuclear agreement signed between Iran and the global powers. The 13 years old interdictions, imposed by the Security Council of the United Nations ended Sunday (October 18^th), has announced the Iranian Foreign Affairs Ministry, as part of the 2231 Resolution of the Joint Comprehension Plan of Action (JCPOA) – an agreement signed in 2015, which allowed Iran to lift some of the sanctions it had in exchange of adopting national restrictions within its nuclear program.

In the statement the public mass-media published, the Iranian Foreign Affairs Minister has clarified that “starting today (October 18^th), all restrictions on the weapons’ transfer, related activities and financial services to and from the Islamic Republic of Iran (…), all stop automatically”. The end of the embargo means that Iran will be able to legally buy and sell conventional weapons, and the Iranian Minister of Foreign Affairs announced that Iran can now “buy any weapons and necessary equipment from anywhere, with no legal restrictions and only based on its defensive needs”.

How did we get here?

The US unilaterally withdrew from the JCPOA, in May 2018, imposing harsh economic sanctions to Iran. The Administration of the US president, Donald Trump, has also used all available methods to cancel the nuclear agreement and stop the embargo’s end on Iran.

In August, the US issued a resolution in the UN’s Security Council to unlimitedly extend the armament embargo, but it got rejected. Out of all the 15 members of the Council, the so-called “E-3” (France, Germany and Great Britain) and other eight members abstained, meanwhile Russia and China opposed the extension. Only the Dominican Republic supported US’s resolution. A month later, Washington announced, in September, that it unilaterally reestablished all UN’s sanctions on Iran that were lifted as part of the 2231 Resolution. If applied, the measures would extend the embargo on armament automatically. But a great majority of the UN’s SC rejected the initiative again, reasoning that there was not reestablishment process of the measures, because the action had no legal basis.

The most recent step was taken at the beginning of October, when 18 Iranian banks entered the US’s “black list”, including those processing humanitarian commercial transactions, basically keeping away the Iranian financial sector from the global economy. The Trump Administration was supported by Israel and some Arab countries, which are opposing the regional influence extension of Iran. Washington threatened with “consequences” for the countries that do not follow it. In its attempts to extend the embargo on Iran, the US is claiming that this will open a door towards armament transactions, which will rapidly lead to a bigger destabilization of the region.

For now, the Trump’s Administration is behaving as the international sanctions will be re-imposed, meanwhile the international community continues to act like nothing has changed. Hence, is this just a symbolic thought aimed at reminding the harsh attitude Washington has against Tehran or there are also some concrete measures ahead?

China and Russia enter the game…

It might take a while until Iran will be able to use the opportunity of not being constrained by an embargo. Firstly, the US sanctions have significantly limited Iran’s capacity to buy advanced systems, whose acquisition and maintenance could cost billions of dollars. Furthermore, China and Russia or any other country which analyses the possibility to sell guns to Iran would chase its own foreign policy interests, which would consider the power balance and future economic interests in the Gulf and the Middle East region.

The Iranian government seems to have approved an agreement project for 25 years with China on economic and political cooperation. Tehran did not reveal details of the agreement, but a report of Petroleum Economist suggests that Iran will offer China huge concessions, including great discounts on oil and gases prices and the capacity to delay the payments up to two years and make the payments in different currencies. Also, China will have an advantage when it comes to the opportunities to get involved in any petro-chemical projects in Iran. If this would be implemented, Iran would be dependent on China, economically speaking, meanwhile Beijing would get a huge and safe source of energy, as well as a support element in the Gulf. There are already many rumors in the media according to which Tehran would have given Beijing the Kish Island. Although such rumors are, most likely, false, Iran can offer China military facilities in its ports in the Gulf.

Tehran’s advantage would be, if Beijing stays committed, the infusion of a huge amount in its economy, especially in the energy field (280 million dollars) and the production and transport infrastructure (120 billion dollars). Such an infusion would definitely help Iran’s economy come back to life and create many jobs, thus consolidating the Islamic regime and weakening the internal opposition. If the Iran-China agreement will be implemented, it will repair Iran’s economy and will lead to an extended bilateral military cooperation. Furthermore, by offering China a permanent support element in Iran, the agreement would increase Beijing’s regional position and would underline the strategic supremacy of the US in the Gulf. But the faith of the agreement is not clear yet, because it must be approved by the parliament as well…

And there is also the result of the US presidential elections… If Biden will be the new president, Beijing will definitely try to repair the US-China relation… Thus, it is less likely for Beijing to endanger the opportunity to repair the connections with a Biden Administration by signing some important agreements on weapons with Tehran.

As for Russia, a report of the US Directorate of National Intelligence from 2019 was claiming that Iran will buy the Su-30 fight aircrafts, Yak-130 training aircrafts, T-90 tanks, mobile coast defence missile systems Bastion and S-400 air defense systems. The Iranian defence minister, the brigade general Amir Hatami, travelled in Russia at the end of August to visit the International Military Technique Fair Army 2020 and talk with several Russian officials. The visit stimulated the speculations that Iran would be interested in Russian weapons.

However, there is no clue that Russia and Iran have actually established to negotiate over a list of possible weapons acquisitions, although it is not totally tenuous the hypothesis for the two countries to wait for the result of the US elections. Both parties have enough reasons to oppose Biden if he will get reelected: Iran with the JCPOA and Russia with the New START (a treaty that envisages the reduction of weapons and the last nuclear weapons control agreement still into force between Russia and the US, to expire in February, next year). The Russian president, Vladimir Putin, has proposed, on October 16, an extension of the agreement. Furthermore, Moscow announced that it will consider the US sanctions, especially that it would like to sell weapons to other states which could be subjected to the US sanctions. Moreover, the funding seems to be the biggest obstacle for a possible important weapons agreement between Iran and Russia.

What Iran says…

Following the implementation of the nuclear deal, in 2016, Russia completed the delivery of the S-300 defense missile system to Iran, which was successfully tested by Tehran in early 2017. It eventually signed an agreement worth of 800 millions of dollars, signed between the two states in 2007, which remained unfulfilled by Russia after pressure from multilateral sanctions on Iran increased.

But since then, much has changed in Iran. After years of multilateral and unilateral sanctions, Iran has concluded that it must rely on the expertise of its own engineers and experts to increase its defense capabilities. Having this in mind, extensive efforts have been made to develop a wide range of advanced locally produced weapons and systems that are, according to Iranians, comparable to those of developed nations. These include unmanned aerial vehicles (UAVs) and the Bavar-373 missile defense system, which was officially launched in August 2019 and which Iran says is "on par" with Russia's S-400 system. But on the other hand, it has not been possible or economically feasible for Iran to produce a number of other complex weapons, including fifth-generation fighter jets.

The purchase of fighter jets could thus be pursued by Iran, but it might also aim to its own develop modern fighter jets. Several countries have expressed interest in Iranian weapons, but have been unable to buy them due to sanctions.

Posts-sanctions opportunities and limitations

Iran has been subjected to huge US-led sanctions since the 1979Islamic Revolution. To make up for its military shortcomings and in lacking a reliable supplier, Tehran has built its own military industry in recent decades. Despite major shortcomings in some areas, Iran is considered to have a well-developed defense industry, making it independent for much of its light military needs. Expanding its regional influence over the past decade, Iran is believed to have developed the largest and most diverse arsenal of missiles in the region. But Iran's capabilities are not limited to missiles. It also produces its own tanks, armored personnel carriers, fighter jets, submarines and a wide variety of UAVs.

Despite this progress, in November last year, Iranian President Hassan Rouhani indicated that the Islamic Republic intends to take full advantage of any easing of the arms embargo to rebuild the depleted weapons arsenal. However, local realities indicate that Iran lacks the capacity to import large volumes of advanced military equipment at the scale suggested by Israeli and US officials. Iran's sick economy and a major government revenue deficit as a result of a series of US sanctions on Iranian oil exports have led to a decline in the country's purchasing power. In fact, Iran cares more about its legal right to buy weapons than how many new weapons systems it will start buying. Instead, Tehran could use the new situation to import the technology and parts needed to boost its military industry, rather than import real military goods.

There are also speculations that the Trump administration is exaggerating the consequences of lifting the arms embargo to force Iran to drop the JCPOA ahead of the US presidential election, waiting for a single reason to impose a more restrictive embargo than before.

To sum up…

Although Russia is the main option Iran has in terms of the weapons acquisitions, most likely, Tehran will try to cover its needs calling on different countries, like China, to prevent a big dependency on Moscow. The main need is to consolidate its air forces, the air defence systems, naval defencec and the radar systems and electronic warfare. Due to concerns of countries/ companies exporting weapons on sanctions and the secrete of weapons transactions, there are not concrete information available on the weapons Iran asked for.

But Russia and China will be careful with selling guns, as well as quite circumspect when it comes to confronting the US. Moscow and Beijing know how sensitive Washington is on this issue. Even when it comes to lifting the embargo (the US does not recognize), Washington will call on unilateral sanctions. Therefore, Russia and China will not engender their interest by committing to Iran and confronting the US. Something they will probably do is signing armament agreements with Iran and delay the delivery.

Other elements, like the reaction of Iran’s regional competitors and the equilibrium in the Middle East are crucial for Moscow and Beijing. Russia and China have political, economic and military connections with the Arab countries and with Israel. Selling weapons to Iran would endanger these relations.

Iran will be extremely careful in terms of buying armament, most likely avoiding large acquisitions, seeing the embargo’s end as a turning point in easing the sanctions and delegitimize the US policy, aware that a radical behavior will turn the international community against itself. And the budget for the weapons acquisitions will be difficult to get due to the decrease of oil incomes.

However, it should not be neglected Iran’s experience in evading sanctions and advancing its military plans while being under pressure…

Translated by Andreea Soare