GeoLegal Weekly #14: Iran / Israel - Law and Risk
Did you doubt geopolitics is on the agenda of legal leaders? You probably don't any more. Did Iran or Israel violate the law? Does it matter? Here's how the conflict may impact your business.
Missiles are flying across the Middle East as regional tensions threaten to bubble over into full blown war between Israel and Iran. There are both geopolitical and geolegal consequences of events of the last 20 days. This week I’ll go over thoughts on how the conflict got to this place, where it goes from here, and what it means for ensnared businesses. I’ll also look at the rules and laws that typically govern warfare and diplomatic missions - as these erode, a feeling of perpetual conflict risk will ultimately shift businesses into a more proactive risk management posture over time.
What happened since 1 April
Here’s what we know. Warplanes dropped bombs on Iran’s consulate in Syria on 1 April, killing a number of senior military leaders. Israel has not directly confirmed it, though the New York Times cited a number of Israeli officials confirming it was the source of the attack. While Israel strikes frequently in Syria, this is the first time it had targeted an embassy or consulate, which countries generally consider the sovereign territory of its owner. Thus, it can be construed that Israel directly attacked Iran.
Why did Israel do this in the first place? A number of explanations are available. Some think Israel did it in an attempt at deterrence: By showing that it’s not afraid of responding to threats by Iran even as it wages war in Gaza, Israel was trying to encourage Iran not to escalate or to dial-back activation of military proxies. Others argue that Israel was taking a tactical opportunity basically “because it can.” Still others think Israel did it presupposing an overreaction from Iran, in an attempt to get the US more invested in Israel, to swing global public opinion back to supporting Israel, which has waned in the wake of Israel’s counter-attack in Gaza, and, perhaps, so the Israeli government could show that it can protect its people by shooting down incoming attacks and such.
For the next two weeks, Iran choreographed and telegraphed its response. There seems to have been been efforts to send warnings to the US and other countries about the time and scale of the attack through third party diplomatic channels. This is critical for the analysis the follows because it demonstrates that Iran was not attempting to inflict maximum damage in its response but rather to show that it will not be pushed around and has military might that Israel should fear. Over the weekend, Iran sent 170 drones and 120 ballistic missiles toward Israel from locations in a number of countries including from Iran directly. Most of the projectiles were aimed at Israeli military sites; 99% of them were shot down by Israel’s defense system (with some allied help) and they seem to have caused minimal injury or loss of life. Iran also seized a container ship from an Israeli-owned carrier near the Strait of Hormuz.
Understanding the legal context
Has either side violated the law? If I say “it depends,” you might mistake me for a lawyer. But…it depends.
Generally speaking, force can only be used in self-defense and in a proportional way. As Sir Thomas Bingham writes in The Rule of Law, digesting the UN Charter:
“There must be an armed attack on the state or a threat of imminent attack; the use of force must be necessary and other means of meeting or averting the attack unavailable; the response must be proportionate and strictly limited to defence against the attack or threatened attack.”
Israel can plausibly argue that Iran has been directing attacks by its proxies in Syria, Lebanon and Yemen and thus it has cover to respond in a proportional way. Killing a number of military leaders, with limited civilian casualties, might be considered proportional and self-defense. If the attack hadn’t happened at a consulate, that may have been the end of the story even though there’s a debate to be had about whether this is a targeted assassination rather than the killing of armed forces to stop an imminent threat.
The problem is that it did happen at a consulate. In order for countries to conduct orderly international relations with each other, they have all agreed to treat each others’ embassies and consulates as sovereign territory of the foreign country and to treat each other’s diplomats as having immunity. This is why political exile seekers may flee to a foreign embassy to seek refuge (like Julian Assange) and why ambassadors owe millions of dollars of parking tickets to the cities they live in (see here). Article 22 of the Vienna Convention On Diplomatic Relations basically says that host countries can’t barge into foreign embassies and also establishes a burden on a host country to protect foreign embassies from harm.
In this case, Israel can basically argue that it didn’t disrespect an consulate that it had host responsibilities for because it wasn’t in Israel. Israel could argue also that the consulate loses its protections by being militarized as well, though that’s a slippery slope to no embassy every being safe.
But it’s not really the letter of the law that matters - customarily, countries don’t attack embassies or consulates, and in this case Israel did. It’s worth noting that ten days ago Ecuadorian police burst into Mexico’s embassy in Quito to arrest the former Vice President of Ecuador who had sought refuge there. Taken together, this underscores a sense that rules and norms only matter so much and can be ignored or set aside when politically convenient. That’s a pretty dangerous precedent. And one that diverges from norms of the past, for instance in 1999, when the US agreed to pay China $28 million for accidentally bombing its embassy in Belgrade and when China agreed to pay the US ten percent of that amount for damage to the US embassy in Beijing during anti-American protests in response.
Now onto Iran’s counter attack. On some level, the attack was a major escalation and, thus, not proportionate. Just to make the case: Israel had conducted a targeted small-scale attack on military actors in a third country and to get back Iran rained missiles down in its first direct attack on Israel. But Iran, for a country that has at various points in time conducted international relations through fiery threatening rhetoric, went through pains to make clear what it was doing and even insists it told the US through a third party when the attack would happen (which the US denies). So in thinking about norms of retaliation, Iran can argue it was justified to fight back and that it was proportionate in the amount of damage inflicted.
Now about that container ship Iran seized? Iran claims it was responding to a violation of maritime law. Other countries say Iran violated maritime law by doing so.
Who’s justified across all these actions? The overarching concept here is not to notch points for which side has a better legal case. The point here is to recognize that we live in a world that is retreating from a rules-based order. The law is increasingly a tool that is invoked when it suits and undermined when it doesn’t.
Implications for legal leaders
I’ve written about a “rule of law recession,” which I apply at both an international and national level to indicate that the legal guardrails of international relations and domestic politics are falling off. The reality is that regardless of which country is justified, the Middle East has just moved onto a new plateau of risk, much of which will manifest for companies in the legal channel.
From a strict warfare perspective, the chance that Israel retaliates against Iran’s retaliation is high. But there is a question of how it does so. Iran has claimed that it’s actions settle the score but Israel ultimately will judge whether to avenge a direct attack on its country - and Iran will judge whether to again respond or escalate. The US is trying to get Israel to hold back, but also US credibility is at stake with respect to its promises to defend its allies. Taiwan, Japan and South Korea are all watching, trying to understand if the US will follow through on defense promises. For now, the answer is yes. But is the US comfortable taking military casualties from Iran for doing so - for instance, if Iran attacks US troops in the region? The answer could lead to another round of escalation.
So, as a legal leader, what should you be most concerned about in coming days?
First, I’d be concerned about cybersecurity risk. Both Israel and Iran are highly capable at cyber sabotage and there’s no reason to believe that either would hold back now that they’ve entered a more kinetic phase of conflict. This presents serious risk to companies operating in either place or perceived to be critical to the military supply chain of either. Of particular interest would be companies that are involved in critical infrastructure in any way for either country, or regional actors who become ensnared in the conflict. Sabotage is one level but data and IP theft or simple snooping and collection are all in play. And companies are takers if a cyber attack were to shut down the electric grid or internet of the other company, for instance.
Second, there will be attempts to tighten and impose new sanctions in coming days; indeed, Israel is making this case to ramp up pressure on Iran and the US has said it is likely to do so. The UK government is trying to resist calls to sanction Iran’s Revolutionary Guards out of fear that Iran will cut of diplomatic relations. I don’t think that pressure will cease. Big a bigger piece of this is that we should expect enhanced regulatory scrutiny of sanctions that are in place already. Companies active in the region will bear enhanced compliance and due diligence costs as a result.
Third, companies need to assess whether they are providing adequate security for their staff lest they are found to be negligent or breach employment law. A conflict that now involves many countries in the Middle East - Jordan, for instance, shot down incoming Iranian projectiles - is one that can put employees across the region in harm’s way, even those who aren’t in an active theater.
Fourth, while oil markets don’t seem too concerned, clearly shipping lanes are coming under pressure. This can very quickly turn into supply chain disruptions that lead to breach of supply contracts and the like. The commandeering of the Israeli ship underscores this. If you haven’t rerouted your shipments, will you do so now? (As a side note, air travel is a secondary consideration as many flights to and from the region are grounded for an indeterminate amount of time and others are re-routed, adding time and expense to journeys.)
Fifth, any time things explode, companies break contracts, and ships get seized, insurance companies can get stuck with the bill. The Middle East has never been Disneyland but did insurers properly price these contracts? As insurers foot the bill, premiums will go up and cover may become harder to come by. Proactively working with your insurers to anticipate this will leave companies in a better place.
Sixth, political pressure will be ramped up again on companies that are seen to have allegiance to one side of this conflict. We’ve already seen a round of this play out about Israel’s counterattack on Gaza and the high death toll that followed. As the region lurches into a longer, multifaceted conflict, companies will be increasingly subject to consumer and government pressure to be on the “right” side and to provide help and support where they can. This can get incredibly murky when companies may want to stand with Israel against Iran but not with respect to its conduct in Gaza.
Finally, it’s worth stating that embassies and consulates may increasingly become targeted. That may lead to understaffing by governments for security reasons, which could delay and disrupt services like visas and business services for the foreseeable future in affected jurisdictions.
All of which is to say that it is worth spending serious time on the second order effects of war, as my core theme “War to the Second Power” highlighted in my 2024 Outlook. With proper planning, you can get leverage over a lot of these eventualities.
In Other News
Sam Harden writes a great piece on regulatory uncertainty and the NYSBA Task Force on Artificial Intelligence’s report related to AI and unauthorized practice of law.
Jury selection begins in first criminal trial against former President Donald Trump, this one related to hush money.
Belgium takes action against a Russian influence network meant to manipulate European parliamentary members and elections.
-SW