Given the conditionalities involved, both US President Donald Trump and the Islamic leadership of Iran can claim “partial victory” over the temporary cease-fire of two weeks.
While Trump can be happy that the ceasefire is contingent on Iran’s “Complete, Immediate, and Safe Opening of the Strait of Hormuz,” the latter can boast that the former is willing to discuss “the ten-point peace proposal” conveyed through Pakistan.
Though the conditions on both sides are interlinked, it is difficult to guess whether all the 10 (ten) conditions of Iran can be agreed to by Trump, or, for that matter, any President of the United States.
Of course, Trump has written on his social platform that Iran has proposed a “workable” 10-point peace plan that includes what he described as “points of past contention,” which “have been agreed to between the United States and Iran.” The extra time (of two weeks), he said, will allow the agreement to be finalized. In his words, “a two-week period will allow the agreement to be finalized and consummated.”
While no official joint text has been released, reports from Iranian state media and the Supreme National Security Council outline the following demands:
-
Non-Aggression Commitment: A formal U.S. commitment to end all acts of aggression against Iran and its sovereignty.
-
Strait of Hormuz Control: Recognition of continued Iranian control and coordination over the Strait, potentially including an expanded presence.
-
Nuclear Rights: Formal U.S. acceptance of Iran’s right to maintain a uranium enrichment program.
-
Sanctions Relief: The lifting of all primary and secondary U.S. economic sanctions.
-
Termination of Resolutions: Ending all UN Security Council and IAEA Board of Governors resolutions directed at Iran.
-
Military Withdrawal: The total withdrawal of U.S. combat forces from regional bases and deployments.
-
Financial Reparations: Payment of compensation to Iran for damages incurred during the war.
-
Asset Release: The release of all Iranian funds and property currently frozen by the United States.
-
Regional De-escalation: A permanent end to hostilities across all fronts, including an end to attacks on the “Axis of Resistance” in Lebanon, Iraq, and Yemen.
-
Binding Resolution: The adoption of a UN Security Council resolution to make any final agreement legally binding under international law.
Though each of the above is tricky, three of them seem highly contentious given their global implications.
One concerns Iran’s nuclear program. The second is the demand that America must remove its military bases and installations from the Gulf. As already explained by Eurasian Times earlier, this is easier said than done.
However, the most worrisome seems to be the demand to recognize Iran’s control over the Strait of Hormuz, which seemingly includes the right that Tehran previously mentioned: collecting tolls from vessels that transit Hormuz, revenue that might be shared with Oman.
There are reports that Iran’s Revolutionary Guard (IRGC) collects up to $2 million for a vessel’s “safe passage,” often settled in Chinese Yuan or stablecoins.
Not only most of its Gulf neighbors but also the rest of the world may see this as nothing other than extortion. Because, under international law, such extortions are strictly prohibited.
However, it may be noted that tolls or transit fees are legitimate only in passages that are artificial, not natural, like the Strait of Hormuz. The distinction is important, indeed!
Artificial waterways like the Suez and Panama canals charge transit fees. Egypt fully owns, operates, and manages the Suez Canal through the state-owned Suez Canal Authority (SCA). Egypt charges mandatory, significant transit tolls for ships passing through, which are based on vessel size, type, and cargo, generating billions of dollars in annual revenue for the country.
According to a 2023 estimate, it earned $10.25 billion in transit fees.
It may be noted that the construction of the Suez Canal, which connects the Red Sea and Mediterranean Sea, reducing the travel distance between Europe and Asia by thousands of miles, was completed and opened on November 17, 1869.
Subsequently, however, there came the Convention of Constantinople in 1888, the foundational international treaty that ensured the Suez Canal remained a free, neutral, and open waterway for all commercial and war vessels, regardless of flag, in both peace and war. It prohibits blockades, forbids fortifications, and guarantees access for all nations. Egypt is obligated to ensure all this.
Similarly, the Panama Canal Authority (ACP), which connects the Pacific and Atlantic Oceans, imposes tolls on all vessels transiting the canal. The costs vary depending on vessel type, size, cargo weight, and capacity.
However, the Strait of Hormuz, like any other Strait, is a natural international waterway of 21 nautical miles wide, even though it falls within the overlapping territorial waters of Iran and Oman.
However, the United Nations Convention on the Law of the Sea (UNCLOS), which guarantees the right of “transit passage” through straits used for international navigation, makes it clear under Articles 37 to 44, ships and aircraft are entitled to continuous and expeditious passage that cannot be impeded or suspended by the coastal state even if the Strait falls under its territorial jurisdiction.
Notably, Article 26 of the UNCLOS prohibits states from levying charges on vessels merely for passage, allowing fees only for specific services rendered. It says, “ No charge may be levied upon foreign ships by reason only of their passage through the territorial sea” and “ Charges may be levied upon a foreign ship passing through the territorial sea as payment only for specific services rendered to the ship. These charges shall be levied without discrimination”.
In other words, the Strait of Hormuz is an international strait, which means all ships have the right of transit passage, free of charge and free of prior approval.
Therefore, the GCC Secretary General Jasem Mohamed al-Budaiwi makes sense when he says that Iran’s fee collection constitutes “an aggression and a violation of the United Nations agreement on the law of the sea”.
Of course, the UNCLOS allows the coastal state to take remedial action if any passage is not “innocent”. And in Article 19, it provides what is “innocent” and what is not :
“1. Passage is innocent so long as it is not prejudicial to the peace, good order, or security of the coastal State. Such passage shall take place in conformity with this Convention and with other rules of international law. 2. Passage of a foreign ship shall be considered to be prejudicial to the peace, good order or security of the coastal State if in the territorial sea it engages in any of the following activities: (a) any threat or use of force against the sovereignty, territorial integrity or political independence of the coastal State, or in any other manner in violation of the principles of international law embodied in the Charter of the United Nations; (b) any exercise or practice with weapons of any kind; (c) any act aimed at collecting information to the prejudice of the defence or security of the coastal State; (d) any act of propaganda aimed at affecting the defence or security of the coastal State; (e) the launching, landing or taking on board of any aircraft; (f) the launching, landing or taking on board of any military device; (g) the loading or unloading of any commodity, currency or person contrary to the customs, fiscal, immigration or sanitary laws and regulations of the coastal State; (h) any act of wilful and serious pollution contrary to this Convention; (i) any fishing activities; (j) the carrying out of research or survey activities; (k) any act aimed at interfering with any systems of communication or any other facilities or installations of the coastal State; (l) any other activity not having a direct bearing on passage”.
Given this, Iran, which has signed UNCLOS (but has yet to ratify it), may have a point against blocking any adversary’s military vessels, particularly during a war. But it cannot impose transit fees against commercial vessels.
Secondly, Iran cannot stretch the argument that the Strait falls under its territorial jurisdiction (nautical miles, or 22 km, out of the total 39km width) beyond a point. Because the Strait also falls within Oman’s territorial waters. Thus, the entire width of the strait consists of the overlapping territorial seas of both Iran and Oman. But, unlike Iran, Oman is not talking of imposing transit fees.
In fact, as “T” Chuah from the City University of London has pointed out, since Iran has no jurisdiction beyond 12 nautical miles from its coast, “it cannot charge a toll if your ship uses the Omani coastline.”
And it so happens that, though it has not been adequately pointed out, the shipping lanes lie mostly within Omani territorial waters, according to the Encyclopedia Britannica.
Considering all this, it is apparent that what Iran is demanding is beyond the law. Its demand reflects what its leaders believe is the best time to weaponize its geography to extract concessions that, if granted, could have far-reaching implications.
As the Economist magazine argued recently, Hormuz is not the only weak spot in global trade; many shipping routes are equally vulnerable, from the Strait of Malacca to the Panama Canal. If countries begin imposing toll systems on strategic waterways, it could fundamentally alter the global trading system.
Thus, ultimately, the question is whether acceding to Iranian demand does not lead to the crippling of the freedom of navigation, a diplomatic principle that has largely prevailed for more than a century.
Over to Trump now.
- Author and veteran journalist Prakash Nanda is Chairman of the Editorial Board of the EurAsian Times and has been commenting on politics, foreign policy, and strategic affairs for nearly three decades. He is a former National Fellow of the Indian Council for Historical Research and a recipient of the Seoul Peace Prize Scholarship.
- CONTACT: prakash.nanda (at) hotmail.com
