"If efforts prove unproductive and European parties prove to be lacking the required will, or having the will but being practically unable to meet their commitments, the Islamic Republic will take its third step," Abbas Mousavi was quoted as saying by IRNA.
The plan for scaling back nuclear deal commitments was adopted by Iran in May—a year after the United States unilaterally pulled out of the agreement and reimposed sanctions on Tehran.
It involves exceeding some of the limits set in the accord every 60 days. The first two phases have already been carried out and the third is due on Thursday, according to Financial Tribune.
"The third step … will be stronger than the first and second ones to balance Iran's entitlements and obligations under JCPOA," Mousavi said.
Iranian officials have repeatedly stressed that adherence to the nuclear deal, known as the Joint Comprehensive Plan of Action, is unreasonable for Iran, as long as it cannot enjoy its envisioned benefits that allowed Iran to conduct free trade with the world.
Meanwhile, consultations are underway with European parties, led by France, to resolve the issue by protecting mutual interests.
France has proposed to prepare a compensation mechanism in return for Tehran's full compliance with the pact and Iran has offered its own alternatives that are currently being reviewed by Iranian and European experts.
Foreign Minister Mohammad Javad Zarif had earlier said that Europe has until Thursday to take the required steps.
"Otherwise … we will write a letter to Europeans to announce the initiation of the third step," he said on the sidelines of a meeting with parliamentarians on Sunday.
He refused to specify the details of the third step, noting that they will be officially announced as soon as decisions are finalized.
Possible Walk-Back
Preparations for the third step have been made "along with the opportunity that Iran has provided for diplomacy, cooperation and dialogue with the aim of enabling the remaining parties to JCPOA to meet their commitments," Mousavi said.
Among Iran's diplomatic efforts to save JCPOA, Mousavi pointed to multiple phone conversations between President Hassan Rouhani and his French counterpart, Emmanuel Macron, over the past month, Zarif's two visits to France last week and Deputy Foreign Minister Abbas Araqchi's current trip to Paris at the head of a delegation of experts.
"Naturally, Iran will refrain from starting the third phase if proposals related to European's fulfillment of their JCPOA commitments are put into action," Mousavi said.
He added that if talks are fruitful and conditions are favorable, "Iran might even reconsider its first and second steps" and return to full compliance like a few months earlier.
According to Zarif, after the US withdrawal, Europe made 11 commitments to shield Iran against American sanctions.
He said the financial mechanism known as INSTEX (Instrument in Support of Trade Exchanges) that aims to facilitate trade with Iran through a non-dollar system is only a prelude to the fulfillment of their pledges.
"China and Russia [other JCPOA parties] have continued their relations with Iran, but Europeans almost cut their trade with Iran and it is essential for them to take the necessary steps," Zarif said.