What happened?
On 4 January, the Iranian government's spokesperson said that the country has started enriching uranium up to 20 per cent purity. "The process for producing 20 per cent enriched uranium has started at Shahid Alimohammadi enrichment complex (Fordow)", the statement said. 

Earlier, on 1 January, the IAEA released a statement which said: "Iran has informed the Agency that in order to comply with a legal act recently passed by the country's parliament, the Atomic Energy Organization of Iran intends to produce low-enriched uranium (LEU) up to 20 per cent at the Fordow Fuel Enrichment Plant". 

What is the background?
First, the passing of a law mandating enrichment. In early December, the Iranian parliament passed the Strategic Action to Lift Sanctions law which mandates the government to suspend inspections and enrich uranium to 20 per cent from the current 4.5 per cent level. This came after Iran's top nuclear scientist Mohsen Fakhrizadeh was assassinated, for which Iran blamed Israel. It also gave a month's time to European powers to lift the sanctions, failing to adopt the measures. 

Second, the all-round failure of the JCPOA. The Joint Comprehensive Plan of Action (JCPOA) was signed in 2015 between Iran and the P5 (the US, China, the UK, France and Russia) plus Germany. The deal lifted crippling economic sanctions in return for Iran accepting a set of restrictions on its nuclear programme. The key provisions included: First, limiting the uranium stockpile under 300 kgs with 3.67 per cent enrichment level for 15 years; second, at the Fordow nuclear site, which is in the limelight now, Iran accepted to introduce no uranium for 15 years; third, to remove the core of the Arak reactor which was considered to be capable of producing plutonium. In 2018, the US President Trump withdrew from the deal and re-imposed sanctions as part of "maximum pressure" on Iran. Even as the IAEA certified Iran's compliance with the deal, other signatories, failed to uphold the provisions of the deal and did not help Iran in addressing the US sanctions.  

Third, Iran's breaches of the deal after Trump's withdrawal. In May 2019 Iran announced that it would not observe the 300 kg enriched uranium limit. In July 2019, it announced enriching uranium to 4.5 per cent, overshooting the deal mandated 3.67 per cent. In September 2019 Iran declared starting research on advanced centrifuges. In November 2019 Iran began enriching uranium to 4.5 per cent at Fordow site. In January 2020, Iran said that it is not bound by deal limits, but would maintain with its safeguard applications. The decision to enrich uranium up to 20 per cent purity is the latest breach of the deal.  

Fourth, the Middle East's geopolitics. The Israel-US relationship has grown stronger; Israel has signed the Abraham Accords and improved relations with the Arab countries, altering the strategic landscape of the region. Iran's move comes amid this developing Arab-Israeli partnership which is threatening for the former. 

What does it mean?
First, there is a pattern to Iran's breaches of the nuclear deal. It has gradually upped the ante, giving ample time to the other signatories of the deal to work around the US sanctions. It has not gone about the breaches secretly; rather, has announced all its moves to the world loud and clear. Even though scaling up from 20 per cent to 90 per cent (weapons-grade) is feasible for Iran given its technical capability, it is not the goal. If Iran wanted to build nuclear weapons at this stage, it would have also gone for the immediate revival of its Arak nuclear weapons site. 

Second, by announcing to enrich to 20 per cent, Iran will have a bargaining chip when the Biden administration takes over and renegotiates the deal.

Third, the enrichment announcement is also aimed at satisfying the domestic constituency, which wanted a strong response to the killing of Fakhrizadeh.