UN Court Orders US to Lift Iran Sanctions on Humanitarian Goods

Members of the U.S. delegation, rear, as Mohammed Zahedin Labbaf, of Iran, front second left, waits for court to begin. Photo: PETER DEJONG/ASSOCIATED PRESS

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Laurence Norman

Oct. 3, 2018 8:44 a.m. ET

A United Nations court Wednesday ordered the U.S. to suspend sanctions affecting trade in humanitarian goods and civil aviation with Iran, a decision Tehran claimed as victory in its battle with the Trump administration.

It isn’t clear if Washington will abide by the International Court of Justice ruling, which would complicate its efforts to ratchet up economic pressure against Iran.

Washington argues the court has no jurisdiction over its sanctions measures. There was no immediate comment from the State Department.

Wednesday’s decision was an interim ruling on a broader case in which Iran has challenged the legality of the U.S. sanctions. That main case could take years to resolve.

While Washington has said its sanctions won’t target humanitarian aid, the ruling could undermine its sanctions strategy, if implemented.

Washington is reimposing wide-ranging sanctions on Tehran following U.S. President Trump’s decision in May to withdraw the U.S. from the 2015 Iranian nuclear agreement.

The court said that payment channels needed to carry out humanitarian and aviation commerce should be available, meaning powerful U.S. financial sanctions might need relaxing. The U.S. threat to cut foreign firms and banks’ access to the dollar market and the U.S. financial system is the key financial tool that has allowed Washington to crimp international trade with U.S. foes such as Iran and North Korea.

At U.N., Trump Defends His Administration’s Hard-Line Trade Policies (Sept. 25, 2018)
U.S. to Reimpose Sanctions Targeting Iranian Economy (August 6, 2018)
Iran and Its Oil Buyers Prepare for Return of U.S. Sanctions (Aug. 6, 2018)
How Trump Is Tightening His Squeeze on Iran (July 1, 2018)
(June 26, 2018)U.S. Toughens Stance on Future Iran Oil Exports

The ruling also would require the U.S. to suspend the revocation of licenses for the sale of commercial aircraft and parts to Iran. That move was part of a first round of renewed sanctions that went into effect in August.

The court said the U.S. should take no further steps to aggravate the dispute, which could mean refraining from imposing further financial and energy sanctions that Washington plans to enact in November.

Those measures, which can hit foreign companies with sanctions for trading with Iran, have seen many large overseas companies withdraw from Iran and cut economic ties.

In its ruling, the ICJ said that the fresh financial and economic sanctions were already damaging humanitarian trade with Iran and crimping trade in aviation and spare parts.

The ICJ’s decisions are theoretically binding but the court has no means of enforcing them. The court rules on disputes between U.N. members.

Trump administration officials have been dismissive of other international courts, with national security adviser John Bolton recently threatening sanctions against judges on the International Criminal Court who pursue charges against U.S. citizens.

Iranian Foreign Minister Javad Zarif tweeted that the ruling was a “victory for rule of law” and called upon the international community to “collectively counter malign U.S. unilateralism.”

Iran’s claim to the court rests on a 1955 bilateral agreement between the U.S. and Iran which pledged to maintain economic ties. Diplomatic ties between Washington and Tehran were severed following the 1979 Iranian revolution, but the treaty hasn’t been rescinded.

Iran had asked the court for a provisional decision to suspend U.S. measures ahead of the full re-imposition of U.S. sanctions next month.

Washington says its restrictions are allowed in the 1955 treaty in cases of national security.

For Tehran, the case was a way of showcasing at home the international standing of the 2015 nuclear accord while building its case that Washington’s withdrawal from the agreement has isolated the U.S.

The nuclear agreement is supported by Europe, Russia and China. Those countries are seeking to maintain some of the economic benefits of the agreement for Iran in the face of escalating U.S. sanctions.

The agreement saw most international sanctions on Iran lifted in exchange for strict but temporary limits on Tehran’s nuclear program.

—Asa Fitch contributed to this article.

Write to Laurence Norman at laurence.norman@wsj.com

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