Sanctions Bar Educational Platform from Servicing Iranians

A nonprofit online education platform, edX, cited a delay in obtaining a U.S. government license as the basis for a recent suspension of services that inadvertently affected Iranian Americans. After sending an open letter to the company, the National Iranian American Council (NIAC) has been working with edX to resolve complications arising from the suspension.

According to a response from edX, its specific license from the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) for Iran expired prior to being granted a renewal. U.S. sanctions targeting Iran prohibit U.S. companies, such as edX, from exporting services to Iran, including educational services to Iranian nationals located in Iran, which impacted the availability of some edX courses. In order to comply with U.S. sanctions absent a specific license for work involving Iran, across a learner base of over 17 million users, edX identified individuals who could be resident in Iran based on self-identified country residence and IP address and barred them from coursework.

This appears to have included at least some individuals who are not currently resident in Iran (but whose last activity on edX indicated an Iran IP address), including at least one U.S. citizen based outside Iran. However, NIAC has found no evidence of discriminatory intent by edX, and NIAC staff has been assured by edX that it is willing to work to resolve any remaining complications for individuals who should be legally permitted to access edX’s online coursework. If you or a friend believe that they have been erroneously barred from edX coursework, please do not hesitate to contact either NIAC staff (info@niacouncil.org) or edX Support (info@edx.org).

NIAC notes that the availability of coursework to Iranian nationals, regardless of their country of residence, ultimately serves U.S. interests by building bridges to and empowering the Iranian people. Unfortunately, by failing to issue broad enough general licenses to permit edX and similar educational platforms to make its coursework available to Iranians, OFAC has once again ensured that sanctions harm the Iranian people but not the regime. We encourage OFAC to issue necessary licenses for platforms like edX and to carve out broad exemptions to enable Iranian nationals the ability to access educational and communications tools.

EdX Response to NIAC

Trump’s Sanctions Will Hurt the Wrong People in Iran

In August 2013, a group of 466 Iranian dissidents, including dozens of political prisoners, wrote a letter to President Barack Obama chastising him for his Iran policy. The unprecedented sanctions Obama had mustered against Iran, they argued, were not only debilitating the Iranian economy but suffocating Iranian civil society and prospects for peaceful democratic change within the country.

“The Iranian people see themselves as victims to tensions between the U.S. and Iranian governments,” the letter proclaimed. “[They] have reached the conclusion that the sanctioning countries don’t care about their human rights and, to compel the Islamic Republic to accept their demands, they target the Iranian people.”

This week, Donald Trump reinstated the first set of those sanctions, which were removed as part of the July 2015 nuclear accord. According to the Congressional Research Service, these sanctions were the “most sweeping sanctions on Iran of virtually any country in the world,” cutting Iran out of most international trade and banking, and slashing its oil exports—the lifeblood of the Iranian economy.

The Obama sanctions plunged the Iranian economy into recession and doubled the rate of Iranian families in poverty. In January 2013, the Guardian wrote that “hundreds of thousands of Iranians with serious illnesses have been put at imminent risk by … sanctions, which have led to dire shortages of life-saving medicines such as chemotherapy drugs for cancer and bloodclotting agents for haemophiliacs.”

The human costs of the sanctions were not only overlooked by many in Washington, but outright defended in some quarters. Congressman Brad Sherman declared at the time: “Critics also argued that these measures will hurt the Iranian people. Quite frankly, we need to do just that.”

Trump may have a similar mindset in re-imposing the sanctions, despite complete Iranian compliance with the nuclear deal that triggered their removal. Despite his expressed desire for talks with Iran, the rhetoric and actions coming from the president and his administration do not reflect an endgame focused on diplomatic compromise.

Rather, they betray an objective to weaken and destabilize Iran. To this end, Trump has embraced the aggressively anti-Iran positions of Israeli, Saudi, and Emirati leaders, who for years have pushed U.S. presidents to bomb Iran. For them, a failed state in Iran is a sufficient objective.

Trump’s “maximum pressure” campaign has been marked by all-out economic warfare, including a stated aim of forcing Iran out of the oil market. Trump and his hawkish officials National Security Advisor John Bolton and Secretary of State Mike Pompeo have also actively tried to sow the flames of unrest in Iran. At a time when economic hardship and political grievances have brought thousands of Iranians to the streets, Pompeo and Bolton have flattered fringe and extremist Iranian opposition groups. According to U.S. officials speaking with Reuters, the Trump administration has “launched an offensive of speeches and online communications meant to foment unrest and help pressure Iran.” The administration has also reportedly teamed up with Israel to form a “joint working group” focused on “internal efforts to encourage protests within Iran.”

The reality is that Trump’s pressure campaign weakens those within Iran who seek more conciliatory foreign relations and a more open political and social domestic landscape. It also empowers Tehran’s most reactionary forces.

The repressive powers in the Islamic Republic are far more threatened by Iran’s integration into the global economy than by a tit-for-tat dispute with the United States. They worry that the lifting of sanctions will undermine the monopolies established by the well connected few who are aligned with the Revolutionary Guards and other government entities. Indeed, after the nuclear deal, the Supreme Leader issued edicts against a broader opening to the United States and hardliners repeatedly warned of “foreign infiltration” in order to obstruct President Hassan Rouhani’s outreach to the West.

The real threats to repressive rule in Iran are a growing middle class, an organized civil society movement, and leaders who have the political capital to push for change against entrenched elements in the system. These trends make a democratic Iran inevitable. But outsiders, often led by the United States, have taken actions to arrest these developments. They have propped up Iran’s repressive rulers with threats of war and invasion, and bailed them out by slapping sanctions and travel bans to isolate Iranians and keep them weak.

Trump’s punishing use of sanctions will wither away Iranian civil society by impoverishing Iran’s middle class. The sanctions will serve to increase control of the Iranian economy by unaccountable and repressive forces. If U.S. policymakers wish to increase room for political dissent and civil society in Iran, they should remove obstacles to improving the standard of living and wellbeing of the Iranian people. Surrounded by advisors who have for years argued for orchestrating a civil war in Iran, Donald Trump unfortunately appears headed in a perilous direction.

Piece originally published in Lobe Log.

Risks Rise As US Reimposes Sanctions on Iran

Several undesirable consequences are becoming more likely.

This week, a set of Iran sanctions previously lifted under the Iran nuclear deal will snap back into effect as part of President Trump’s complete violation of the accord. Thus far, Iran has avoided rash action, instead seeking to secure concessions from Europe, Russia, and China that could reduce the sanctions’ impact. The cautious response may have lulled the Trump administration into thinking its approach is working, but several potential consequences loom on the horizon.

Renewed proliferation: Before the nuclear deal was signed in 2015, Iran’s heavy-water reactor at Arak was close to going online; it could have produced weapons-grade plutonium for several nuclear weapons per year. Moreover, the deeply buried Fordow facility was already being used to enrich uranium. However, under the nuclear accord Iran destroyed the core of the Arak reactor and agreed to redesign it with international partners so that it would not produce significant amounts of weapons-grade plutonium. Similarly, international partners in collaboration with the Atomic Energy Organization of Iran, or AEOI, are working to turn Fordow into a research-and-development facility, ensuring that Iran experiments with zinc or other benign materials instead of uranium at the site.

Read More at Defense One

Experts Weigh in on Iran ‘Snapback’ Sanctions Going Into Effect Today

WASHINGTON, D.C. — Tonight, sanctions that were lifted under the Iran nuclear deal will begin to go into effect. This includes extraterritorial sanctions on the purchase of U.S. dollar banknotes by Iran; Iran’s trade in gold or precious metals; Significant transactions in the Iranian rial; Iran’s civil aviation sector; and Iran’s automotive sector. The decision to violate the Iran nuclear deal and reinstate sanctions has already had a big impact as major European companies that entered the Iranian market – like Peugeot and Total – have already begun pulling out in anticipation of the “snapback.”

Jamal Abdi, President of the National Iranian American Council, issued the following statement on the reimposition of Iran sanctions:

“Today, the United States again violated a successful nuclear nonproliferation agreement endorsed by the UN Security Council that it helped negotiate, doing grievous harm to American leadership abroad and our ability to resolve challenges diplomatically rather than militarily. This weakens the Transatlantic alliance and pushes Iran further into the hands of Russia and China, undermining the security of the United States and its allies.

“These sanctions will threaten Iran’s compliance with the nuclear accord, while also undercutting hopes for Iranian moderation, harming the Iranian middle class and empowering Iranian hardliners and extremists. This is not an erratic tweet, but a collective punishment of 80 million people who are being plunged into economic misery and denied basic necessities such as life-saving medicine and safe civilian aircraft.

“Making matters worse, the Trump administration does not have a viable diplomatic plan to secure additional concessions from Iran. Instead, the administration appears to be joining with Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammad bin-Salman in pushing to destabilize Iran and create another failed state in the region.

“Make no mistake, with Trump listening to warmongers like John Bolton and Mike Pompeo, this puts the United States on the path to yet another costly and dangerous Middle East conflict.”

On November 4, the remaining sanctions that were lifted under the accord will be reinstated into full effect, including those targeting Iran’s energy sector; Purchases of petroleum and related products; Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions; and Persons removed from the Specially Designated Nationals (SDN) list, including most Iranian financial institutions.

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Memo: Consequences of Sanctions Snapback on Iran

Not satisfied with withdrawing from the Iran nuclear accord, or Joint Comprehensive Plan of Action (“JCPOA”), the Trump administration intends to start sanctioning foreign parties that seek to comply with the terms of the international agreement. As outlined by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the Trump administration will begin re-imposing those sanctions lifted pursuant to the JCPOA on August 7, 2018 and continuing up until November 4, 2018, at which time all formerly lifted sanctions will be re-imposed on Iran.

Because such U.S. sanctions primarily target foreign parties transacting or otherwise dealing with Iran, the Trump administration will be actively undermining efforts by the international community to act consistent with the JCPOA and ensure its survivability. This includes, most dramatically, undermining efforts by foreign countries and entities to take those measures identified in the JCPOA to reduce or eliminate the risk of nuclear proliferation in Iran. This move is a dangerous gambit that pits the U.S. in opposition to the rest of the world—including the U.S.’s closest partners and allies—and risks re-invigorating nuclear proliferation efforts in Iran.

Considering the dramatic consequences for U.S. national security and foreign policy interests, the Trump administration should not be given free reign to plunge the United States into a confrontation with its closest allies and partners — such as those in Europe — and risk a new war in the Middle East. Congress should assert its own constitutional prerogatives and ensure that the Trump administration acts consistent with long-standing U.S. policy objectives, including those related to nuclear non-proliferation. This could include, for instance, legislative measures to restrain the Trump administration from abrogating the JCPOA or sanctioning foreign parties seeking to comply with the terms of the nuclear accord. At the very least, Congress should hold hearings to adjudicate the potential negative consequences of the Trump administration’s decision to withdraw from the JCPOA and undo the global consensus in favor of the diplomatic agreement aimed at restraining Iran’s nuclear program.

Re-Imposition of U.S. Sanctions Lifted Under the JCPOA

Beginning August 7, 2018, the Trump administration will take steps to re-impose those U.S. sanctions lifted pursuant to the JCPOA. In its initial phase, this will include the immediate re-imposition of sanctions on:

  • The purchase or acquisition of U.S. dollar banknotes by the Government of Iran;
  • Iran’s trade in gold or precious metals;
  • The direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes;
  • Significant transactions related to the purchase or sale of Iranian rials or the maintenance of significant funds or accounts outside the territory of Iran denominated in the rial;
  • The purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
  • Iran’s automotive sector.

By November 4, 2018, the United States will re-impose all remaining sanctions targeting Iran that had been lifted pursuant to U.S. commitments under the JCPOA. This will include the re-imposition of sanctions on:

  • Iran’s port operators and shipping and shipbuilding sectors;
  • Petroleum-related transactions with the National Iranian Oil Company, Naftiran Intertrade Company, and the National Iranian Tanker Company, including the purchase of petroleum, petroleum products, and petrochemical products from Iran;
  • Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions;
  • The provision of specialized financial messaging services to the Central Bank of Iran and certain Iranian financial institutions;
  • The provision of underwriting services, insurance, or reinsurance; and
  • Iran’s energy sector.

In addition, the Trump administration intends to re-impose those sanctions that applied to persons removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”) and other U.S. sanctions lists pursuant to U.S. commitments under the JCPOA. This includes, for instance, the re-imposition of sanctions on most of Iran’s financial institutions, including the Central Bank of Iran.

Undermining International Compliance with a Successful Nonproliferation Agreement

The re-imposition of U.S. sanctions will pose immense difficulties for other major world powers’ compliance with the terms of the JCPOA.  Failure by the remaining JCPOA participants to fulfill the terms of the nuclear accord will prompt Iran to abandon some or all of the JCPOA’s limitations on its nuclear program, thus risking renewed proliferation efforts in Iran and threatening a new war in the Middle East.   

Pursuant to the JCPOA, major world powers — including Europe, Russia, and China — agreed to take steps to ensure effectiveness relating to the lifting of national and international sanctions. These commitments were geared towards ensuring that Iran received practical economic benefit from its agreement to maintain long-term restrictions on its own nuclear program. The JCPOA obligated all parties to take adequate measures “to ensure . . . effectiveness with respect to the lifting of sanctions under th[e] JCPOA” and committed JCPOA participants to “agree on steps to ensure Iran’s access in areas of trade, technology, finance, and energy.” The JCPOA was envisioned as an effective quid pro quo, whereby Iran agreed to long-term limitations on its nuclear program in return for practical economic benefits — including the lifting of nuclear-related sanctions — from major world powers.  

The re-imposition of U.S. sanctions, however, will risk the compliance of remaining JCPOA participants, as Europe and other JCPOA parties will have grave difficulties ensuring “effectiveness” with respect to the lifting of sanctions under the JCPOA. For instance, while the European Union and its respective states intend to continue the lifting of national and Union-wide sanctions targeting Iran–consistent with the JCPOA–European companies and persons will nonetheless remain subject to U.S. secondary sanctions targeting their own transactions or dealings with Iran.

The most notable consequences in this respect will be oil and banking transactions. To the extent that Iran is unable to export its oil and repatriate its oil revenues, the JCPOA will become a moot agreement, as Iran is highly unlikely to continue its adherence to limitations on its nuclear program while deriving no practical economic benefit from the nuclear accord. Re-imposed U.S. sanctions expressly target foreign banks — including foreign central banks — and foreign parties engaged in transactions related to the import of Iranian-origin oil. The Trump administration has sent conflicting signals as to whether it will grant exemptions to foreign countries importing Iranian-origin oil — including China, Europe, India, Japan, and South Korea. Similarly, to the extent that Iran’s financial institutions are isolated from the global financial system and unable to reconnect to foreign banks to process trade-related and other transactions, the Iran nuclear deal will not survive. Re-imposed U.S. sanctions will re-designate most Iranian financial institutions for sanctions and render foreign bank dealings with such Iranian financial institutions as sanctionable, thus expressly targeting foreign countries’ compliance with the nuclear accord.

Sanctioning Beneficial Work at Arak and Fordow

Pursuant to the JCPOA, Iran agreed to convert its enrichment facility at Fordow into a research center absent of proliferation risk. To do so, however, Iran required international collaboration, including in the form of scientific joint partnerships in agreed areas of research. In addition, the JCPOA required Iran — as part of an international partnership — to redesign and rebuild a modernized heavy-water reactor in Arak that would drastically reduce its potential output of plutonium.

However, these measures aimed at reducing the risk of nuclear proliferation in Iran are under serious threat, as re-imposed U.S. sanctions render sanctionable conduct by foreign parties with respect to Iran’s nuclear program. For instance, the Trump administration has stated that it will re-impose those sanctions that applied to persons removed from OFAC’s SDN List pursuant to the JCPOA. This appears to include the re-designation of the Atomic Energy Organization of Iran (“AEOI”) — the body responsible for Iran’s nuclear program — pursuant to Executive Order 13382. By designating the AEOI pursuant to E.O. 13382, entities that provide or attempt to provide financial, material, technological, or other support for, or goods or services in support of, the AEOI would be exposed to U.S. sanctions and risk designation under E.O. 13382 themselves. Foreign parties participating in an international partnership with the AEOI — consistent with the JCPOA — to convert the Arak nuclear reactor into a reactor absent of proliferation risk would thus be engaged in sanctionable conduct, as such parties would be prima facie engaged in the provision of material support to the AEOI  — thus meeting the criteria for designation under E.O. 13382.  

In addition, the U.S.’s re-designation of the AEOI pursuant to E.O. 13382 will render foreign financial institutions that facilitate significant transactions for or on behalf of the AEOI — including transactions consistent with the terms of the JCPOA — exposed to U.S. sanctions under § 104(c)(2)(E) of the Comprehensive Iran Sanctions Accountability and Divestment Act (“CISADA”) and § 1247 of the Iran Freedom and Counter-proliferation Act (“IFCA”). Such financial institutions would risk being cut off from the U.S. financial system and would thus be unlikely to facilitate transactions involving the AEOI, even if such transactions are consistent with the JCPOA and reduce the risk of proliferation in Iran.  

In the Trump administration’s zeal to kill the Iran nuclear deal, the administration will perhaps fatally undermine efforts to ensure the conversion of Iran’s nuclear facilities into facilities absent of proliferation risk, thus gravely undermining U.S. and regional security.

The Need for Congressional Intervention

The Trump administration’s withdrawal from the JCPOA and its re-imposition of U.S. sanctions targeting Iran risks splitting the United States irrevocably from its historical allies and partners, including those in Europe; threatens to undermine the future use of economic sanctions to secure national security and foreign policy objectives; and encourages the reinvigoration of nuclear proliferation risks in Iran. Such consequences implicate critical U.S. national security and foreign policy interests and warrant increased oversight over the administration’s actions.

Congress should be involved in any decision implicating U.S. national security and foreign policy interests. In this case, Congress should assert its own prerogatives in the realm of foreign policy and resume U.S. compliance with the JCPOA, including, but not limited to, the continued lifting of U.S. sanctions as obligated under the nuclear accord. Absent such a dramatic measure, however, Congress should seek to restrain the President from re-imposing those U.S. sanctions lifted under the JCPOA and should at least limit the damage re-imposed U.S. sanctions could cause to the transatlantic alliance between the United States and Europe. If the U.S.’s historical allies and partners in Europe believe that their own national security interests demand their continued compliance with the JCPOA, then the Trump administration should be restricted from imposing sanctions on European companies engaged in commercial trade with Iran that is permissible under European law.

Shockingly, Congress — which held numerous hearings on the U.S.’s assent to the JCPOA — has proven unwilling to conduct significant oversight regarding the potential consequences inherent in the Trump administration’s withdrawal from the JCPOA and its re-imposition of U.S. sanctions targeting Iran. In failing to assess the risks and dangers associated with the Trump administration’s actions, Congress has rendered itself incapacitated on an issue of critical import to U.S. national security. Following midterm elections, Congress should reassert its prerogatives in the field of national security and ensure that the Trump administration is not able to undermine long-standing U.S. foreign policy objectives — including the objective of nuclear non-proliferation — through its rash decision to withdraw from the Iran nuclear accord and re-impose those U.S. sanctions lifted under the JCPOA.


¹ Other U.S. sanctions may be applicable to transactions involving the AEOI and incident to the fulfillment of the terms of the JCPOA, including, for instance, menu-based sanctions on foreign parties that sell, supply, or transfer to Iran graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes, if the material is sold, supplied, or transferred for use in connection with Iran’s nuclear program. Section 1245(a)(1)(C) of IFCA does not distinguish between those transactions aimed at converting Iran’s nuclear facilities into facilities absent of nuclear proliferation risk and is thus likely to counteract international efforts to reduce the risk of nuclear proliferation in Iran.  

Pompeo and Trump Plan to Exploit and Silence Iranian Americans

FOR IMMEDIATE RELEASE
Contact: Jamal Abdi
Phone: 202-386-6408
Email: jabdi@niacouncil.org

Washington, D.C. – Jamal Abdi, the Vice President for Policy of the National Iranian American Council, issued the following statement in response to Secretary of State Mike Pompeo’s announcement that he will address Iranian Americans in Simi Valley later this month:

“The quest for human rights and democracy in Iran can only be owned by the Iranian people. It cannot be owned by the U.S., Israel, or Saudi Arabia. It cannot be decided by Iran’s government or even Iranian exiles.

“What President Trump and Secretary Pompeo want is to exploit Iranian Americans and co-opt the Iranian people to provide legitimacy for the Trump Administration’s Iraq War redux for Iran. Just as the Bush Administration cultivated a few Iraqi exiles and talked about human rights to provide legitimacy for a disastrous invasion of Iraq, the Trump Administration appears intent on using Iranian exiles to advance dangerous policies that will leave the Iranian people as its primary victims.

“If Sec. Pompeo really wants the Iranian-American community to embrace the Trump agenda, he must start with a sincere apology and rescind Trump’s ban that is dividing Iranian Americans from their friends and loved ones in Iran. He should apologize for the Administration’s move to banish the most prominent Iranian-American national security official from policymaking decisions due to her heritage. Moreover, he should apologize for the decision to strip the Iranian people of their hope for relief from sanctions and greater connections with the outside world, instead ensuring they will be crushed between U.S. sanctions and resurgent hardline forces in Iran’s government that have benefited from Trump’s withdrawal from the nuclear accord.

“It should be abundantly clear that Secretary Pompeo, who called for bombing Iran instead of negotiations, is no friend of the Iranian people. Similarly, Trump – whose national security advisor and lawyer have elevated the voices of an undemocratic, human rights abusing cult, the MEK, to become the next leadership of Iran – does not have the Iranian people’s best interests at heart. The Trump Administration’s close coordination with Benjamin Netanyahu and Mohammad Bin Salman, who are motivated by their own political gain and regional power dynamics rather than any love for democracy or the Iranian people, should dispel any notion this campaign is about helping ordinary Iranians.

“As Americans, we have a vital role to play in ensuring our democratically elected government does not start wars on false pretenses or destroy lives in our names. As Iranian Americans, our voices are particularly vital when it comes to the U.S. government’s efforts regarding our ancestral homeland. We will not be exploited or silenced at this critical moment in history.”

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Dollar-Clearing Battle: First Step to Killing Iran Nuclear Deal

Lawmakers and advocacy groups undertook many steps to weaken the Iran nuclear deal during the Obama era to set up President Trump’s unilateral termination. Last week, Republicans on the Permanent Subcommittee on Investigations released a 50-page report delving into the Obama administration’s efforts in early 2016 to ensure that Iran was able to repatriate its own frozen assets held at Bank Muscat in Oman.

Lead author Senator Rob Portman (R-OH) and others, including President Trump, have spun this arrangement as a nefarious side deal aimed at permitting Iran access to the U.S. financial system. However, the report offers key insight into how deal opponents succeeded in hobbling Iran’s relief by securitizing the debate over sanctions relief for Iran, ensuring that any relief for Iran was falsely viewed as a negative for regional and global security and a political liability. 

That the U.S. was obligated to take affirmative steps to ensure effective sanctions relief under the Joint Comprehensive Plan of Action (JCPOA) has been greatly under-appreciated and often ignored in Washington. Yet, the text of the agreement is clear that the U.S. and other parties would “agree on steps to ensure Iran’s access in areas of trade, technology, finance, and energy.” This goes beyond U.S. commitments to prevent the re-imposition of sanctions or “interference with the realization of the full benefit by Iran of the sanctions lifting,” which were also commitments under the JCPOA. Instead, it entails affirmative steps that had not been decided to ensure that Iran reconnects with the global economy.

The Oman Connection

At the outset of the JCPOA, Iran was granted access to billions of dollars of its own assets that had been frozen in accounts around the globe. Yet, the repatriation of those assets became a major complication, as detailed by the subcommittee report. In January 2016, Iran sought to convert its assets at Bank Muscat in Oman into euros for future purchases. However, there was a hang-up, as Bank Muscat notified the Treasury Department’s Office of Foreign Assets Control (OFAC) that it would need a U.S. bank to first convert the funds into dollars before they could be converted into euros. Given that the dollar is the world’s reserve currency, dollar-clearing transactions that briefly transit through the U.S. financial system are common. However, dollar clearing through the U.S. financial system for transactions involving Iran had been barred since November 2008 and was not formally lifted by the JCPOA. Absent a license from the Treasury Department to permit the dollar clearing, the conversion of the assets would be far more complicated.

Starting in January 2016, the Iranians asserted that the JCPOA was clear that Iran would have the right to convert its assets “without any qualifications and conditions.” Treasury officials then looked into what sections of the JCPOA would obligate the U.S. to authorize the dollar conversion. They found many—to the apparent surprise of at least one Treasury official.

There was a great deal riding on the JCPOA’s successful implementation. Iran had rolled back its nuclear program and subjected it to intrusive inspections, forestalling the twin threats of both a nuclear-armed Iran and war with Iran over its nuclear program. As Secretary Lew detailed in a speech in March 2016, “to pressure bad actors to change their policy, we must be prepared to provide relief from sanctions when we succeed. If we fail to follow through, we undermine our own credibility and damage our ability to use sanctions to drive policy change.” Thus, not only was the nuclear deal at stake, but also the U.S. ability to trade in the extensive sanctions that remained on the books for further concessions from Iran.

The Obama administration wanted to ensure that it was complying with both the letter and spirit of the JCPOA. It therefore decided to issue a license to Bank Muscat to enable dollar clearing, provided a U.S. bank was willing to engage in the transaction. Despite assurances from the administration, two banks rejected the proposal in February and March 2016 due to reputational risks and fears of being tangled up in ongoing litigation against Iran.

Rising Opposition

Amid these efforts to enable Iran to repatriate the funds as envisioned under the JCPOA, deal opponents began to put pressure on the administration’s plans. In March, leading Congressional Republicans Ed Royce and Jeb Hensarling pressed Secretary of the Treasury Jack Lew on whether Iran would have access to the U.S. financial system, to which he responded “[p]art of the agreement was to give Iran access to money that it has a right to. We will work on making that happen.” Then the Foundation for Defense of Democracies (FDD)—the epicenter of nongovernmental efforts to dismantle the Iran nuclear deal—jumped into the fray. It issued a warning in the Wall Street Journal that Obama was “dollarizing the Ayatollahs” and hinted that Congress would block the administration’s plans. Much more pushback from FDD and congressional Republicans followed.

Sanctions relief for Iran had been effectively securitized. A brief transit from third-party banks to the U.S. and back again involving Iranian assets had been exaggerated as “the ultimate prize” for Iran, generating significant congressional opposition. Such indirect access posed neither a threat nor a cost to the U.S., though it represented a key choke point where deal opponents could limit Iran’s relief under the accord.

With rising domestic opposition and without a U.S. bank willing to engage in the exchange, the Obama administration appears to have backed down from both efforts involving the Bank Muscat assets and additional plans to put forward a general license to permit dollar clearing. The administration continued to insist publicly that Iran would not have access to the U.S. financial system, while discussions aimed at resolving the issue with both the Federal Reserve Bank and German Central Bank in April 2016 “faded with no resolution.” That same month, Secretary Kerry boasted that predictions of an Iranian windfall were inaccurate since Iran had only received roughly $3 billion of its frozen assets abroad to date. This, of course, angered the Iranians who were still trying to get their assets repatriated. According to the subcommittee report, by January 2017—a full year later—the assets were still sitting in Bank Muscat. The report indicates that Bank Muscat may have “eventually found a way to make small fund transfers without the use of the U.S. financial system,” a far more painstaking approach that apparently took some time to arrange.

Disincentive for Business

The subcommittee report details how important the dollar-clearing issue was for many banks and businesses considering transactions involving Iran. In the hundreds of “roadshows” the Obama administration engaged in to clarify U.S. sanctions policy between August 2015 and July 2016, “one of the most asked questions at these meetings concerned details about access to the U.S. dollar,” according to the report. Licensing banks to clear dollars through the U.S. financial system would have provided substantial reassurance to foreign firms considering reentry into the Iranian market as permitted by the JCPOA. Given the tremendous complication of engaging in any substantial trade with Iran while avoiding the U.S. financial system, combined with a murky political situation in both Tehran and Washington, many businesses chose to stay out of the Iranian market entirely. A May 2016 survey of companies interested in doing business in Iran showed that more than half were wary of reengaging in the Iranian market out of fear of running afoul of U.S. sanctions.

The end result was many deals inked, including the sale of U.S. manufactured Boeing aircraft to Iran, but few realized. With less ongoing business in Iran, Trump’s decision to snap back sanctions and kill the deal despite Iran’s compliance with its nonproliferation obligations was made all the easier. Congressional Republicans, and JCPOA opponents like FDD that sought to stifle Iran’s benefits under the accord, deserve a tremendous share of the blame for the agreement’s ultimate collapse.

Likely the greatest tragedy to this episode is that the Iranian people have been denied the sanctions relief that they made possible by pushing, against the odds, for greater moderation from their government. Sanctions empower authoritarian regimes, as they did previously in Iran by expanding the political and commercial power of the Islamic Revolutionary Guard Corps (IRGC). Now, rather than incentivize moderation by effective implementation of sanctions relief under the JCPOA, the U.S. has empowered the hardliners in Iran who warned that the U.S. could never be trusted to lift sanctions.

This piece originally appears in Lobe Log.

Iran Hawk Accuses Lawmaker of Supporting Iranian Repression During Hearing

WASHINGTON, DC – “It’s imperative that the administration change its direction and work with Congress, along with our European partners, to mitigate the very destabilizing consequences of our withdrawal from the Iran nuclear agreement,” declared Ranking Congressman Peter Welch (D-VT). On June 6, 2018, the Subcommittee of National Security of the Committee on Oversight and Government Reform met to discuss the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA). Rep. Welch put hawkish witnesses on the defensive regarding U.S. options after the collapse of the JCPOA, noting the increased risk that the U.S. will be backed into supporting war and regime change. This led to a shocking moment where one panelist accused him of acquiescing in the repression and torture of citizens by the Islamic Republic of Iran.

When pressed by the Chairman of the subcommittee, Rep. Ron DeSantis (R-FL), on whether the US was pushing toward war with its goal of regime change, Senior Advisor at the Foundation for Defense of Democracies Richard Goldberg dismissed the notion. He claimed that no official “on this panel and certainly in the administration…is coming anywhere near such a policy [of direct military engagement].”

Congressman Welch then asked if statements made by National Security Advisor John Bolton and President Trump’s attorney Rudy Giuliani, who have both been clear in their desire for U.S.-backed regime change in Iran, should be dismissed. He asked Goldberg, “[John Bolton]’s the national security adviser for the president, he said to the American people that our goal should be regime change in Iran. Now you just want to blow him away and say that he didn’t mean it?”

Goldberg pushed on and suddenly accused the congressman of condoning the Iranian regime’s violations of human rights, asking Rep. Welch, “Congressman, are you for repression of the Iranian people, yes or no?” In an incredibly disparaging action towards the congressman, he immediately charged, “Are you for the repression and torture of [Iranians]?”

“There is no one in this Congress, no one in this country, that condones repression anywhere by any dictator in any country, and you know that. I’m asking the questions here,” Welch replied, taken aback by the wild accusation.

Congressman Welch pressed on in questioning the panelists on the Trump Administration’s policy if Iran were to aggressively ramp up its nuclear activities. He posited, “Let me ask this question, what’s the option for the United States, should Iran aggressively restart its activities towards building a nuclear weapon? Who on the panel would favor the use of military action at that point? Just raise your hands.”

David Albright, President for the Institute for Science and International Security, replied “Absolutely,” and Michael Pregent, Senior Fellow at the Hudson Institute, proceeded to raise his hand in favor of future military force against Iran. Dr. Michael Rubin, resident scholar at the American Enterprise Institute who pushed for the 2003 invasion of Iraq and military action against Iran in the past, said: “There’s episodes of overwhelming pressure that has caused Iran to back down…I’ll let history be the precedent on this, Mr. Ranking Member.”

When Congressman Welch pressed the panelists on post-JCPOA policy recommendations, the sole JCPOA supporter on the panel – Jim Walsh, Senior Research Associate in the Massachusetts Institute of Technology Security Studies Program – declared, “We don’t have a strategy and that this puts on a path to war, either by design – regime change – or we back into it as we respond to them a bit – beginning to reinstall their nuclear program.”

The ‘support for the Iranian people’ that Secretary of State Pompeo claims is the Trump Administration’s position was critiqued by Walsh, who stated: “On this issue of the Iranians whom everyone professes such great concern for…the Iranian people are not happy with us – Muslim ban, number one.”

Any military confrontation with Iran will not only embolden hardliners within the country, but will inevitably result in Iranian civilians actively resisting any foreign military aggression, Walsh continued. “A [private] poll came out last month that…asked the Iranian people… ‘How should we respond to the U.S pulling out?’” Walsh noted. “67 percent of Iranians said that Iran should retaliate. Why? Because they’re rallying around their flag.”

Walsh reiterated the fact that if Iran is attacked militarily by the United States, such an attack would damage U.S credibility in the eyes of Iranians. Any direct military strike by the Trump Administration is counterproductive to U.S. interests and only further alienates the Iranian people from any favorable view of America’s agenda in the region. As Dr. Walsh explained, “They may not like the corruption. They may not like the economy. But if you threaten to attack their country, we’re going to help the hardliners. We’re not going to strike a blow for democracy.”

NIAC Calls on Bank of America to End Discriminatory Practices Against Iranian Americans

FOR IMMEDIATE RELEASE
Contact: Jamal Abdi
Phone: 202-386-6408
Email: jabdi@niacouncil.org

Washington, DC – The National Iranian American Council is calling on Bank of America to immediately end discriminatory practices against Iranians and Iranian Americans and to conduct a full review of its procedures related to the suspension bank accounts held by individuals of Iranian descendant.

“Closing bank accounts on the basis of national origin or heritage is discriminatory,” said Jamal Abdi, NIAC Vice President for Policy. “If Bank of America is unable to comply with the myriad of U.S. sanctions on Iran without discriminating against persons of Iranian heritage, it needs to take that up with the U.S. government instead of passing the burden onto ordinary people.”

NIAC has received numerous inquiries and complaints from Iranian visa holders and permanent residents, as well U.S. citizens of Iranian descent, regarding closures of their bank accounts by Bank of America. In one case, and individual was unable to access their own funds when they needed to pay for medical expenses for their pregnant spouse. In other cases, Bank of America has closed accounts and sent reimbursement checks that have been lost in the mail.

“As tensions rise between the U.S. and Iran, we are concerned that ordinary Iranians and Iranian Americans will be caught in the middle,” said Abdi. “ We cannot allow entities like Bank of America to protect themselves at the expense of the rights and protections of their customers.”

Following the discriminatory measures taken by Bank of America in the wrongful closing and seizure of bank accounts belonging to Iranian Americans, NIAC delivered a letter to Bank of America CEO, Brian T. Moynihan, voicing the concerns of the Iranian-American community. NIAC had previously been in contact with Bank of America over related concerns in 2014 and received only perfunctory responses and no willingness by Bank of America to review or adjust its policies.

NIAC has addressed similar concerns with several banks and businesses that have engaged in discriminatory practices in the name of complying with U.S. sanctions on Iran, including other major banks and large corporations like Apple. In some cases, NIAC was able to help facilitate policy changes by the business, in other cases NIAC was able to secure necessary adjustments to U.S. sanctions policies.

NIAC is open to working with Bank of America to ensure that the rights of its customers are protected. NIAC will continue to to protect against violations of civil liberties targeting the Iranian-American community and ensure that all possible avenues for resolving such violations are pursued.

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Why Trump’s Strategy for Iran Is Likely to Lead to War

Iranian protesters burn a US flag in Tehran on May 11, 2018, following President Donald Trump’s decision to end the 2015 nuclear deal. (Reuters / Tasnim News Agency)

Secretary of State Mike Pompeo’s speech on May 21 only reinforced what was already known about Donald Trump’s strategy for Iran: Either the president is ratcheting up the pressure on Tehran to get a “better deal,” which is the official story and the gist of Pompeo’s message, or he is merely pretending to be interested in new negotiations, while putting into place the building blocks for a military assault on Iran. Yet even if Trump genuinely seeks new negotiations, he is more likely to end up in a war, because the very premise of Pompeo’s speech is false. That’s because more pressure on Iran would not have secured a better nuclear deal in 2015—it would only have led to war, or to a nuclear Iran.

A persistent mythology on the right insists that President Obama botched his own Iran strategy because he lacked the backbone to fully squeeze Tehran. Obama had assembled an impressive sanctions regime that was doing significant damage to Iran’s economy. With the value of its currency cut in half, its oil sales reduced to a trickle, and its GDP contracting by roughly 34 percent, Iran was on its knees, this narrative claims. All Obama had to do was to tighten the screws a bit more and give it another six months, and the mullahs in Tehran would have surrendered: No more Iranian nuclear program, no more challenges to US primacy in the Middle East, and no more defiance of Israel.

But, alas, Obama opted for compromise instead of forcing a capitulation. Rather than squeeze the country until it broke, he offered to lift the sanctions if Iran agreed to restrict its nuclear program. Tehran smelled Obama’s weakness, this mythology claims, and happily accepted the undeserved lifeline. The result was the 2015 nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA), which granted Iran relief from nuclear-related sanctions in exchange for a large reduction in its stockpile of enriched uranium and its number of centrifuges, as well as periodic intrusive inspections of every element of its nuclear-fuel cycle by the International Atomic Energy Agency. Iran would still be able to enrich uranium, but only to 3.67 percent—well below what’s needed to produce a nuclear weapon.

Now Trump is seeking to reverse this alleged mistake by reimposing sanctions. Then, once the moment is right, he will go back to the negotiating table—this time not to negotiate, however, but to accept Iran’s capitulation. It all sounds so wonderful, simple, and tidy. What could possibly go wrong?

Everything. Indeed, the very premise of the right-wing narrative is wrong: Iran was not about to capitulate, and US leverage over the country was waning—not growing. When Obama first sought to cripple Iran’s economy to force Tehran to submit, Iran responded by doubling down on its nuclear program. When Obama took office in 2009, Iran operated roughly 8,000 centrifuges; by 2013, it had added another 14,000. Iran had also increased its stockpile of low-enriched uranium eightfold and significantly advanced its nuclear know-how, all of which provided Tehran with counter-leverage. In January 2012, the United States estimated that Iran’s breakout capacity—the time it would take to have enough material for one nuclear bomb—was 12 months. By 2013, that time had shrunk to eight to 12 weeks.

As a result, Iran was outpacing the United States in building leverage. By early 2013, Obama realized that if nothing changed, Washington would soon have only two options: Either accept Iran as a de facto nuclear power, or go to war. Iran would be able to achieve a near-zero breakout capacity before its economy collapsed, so letting the sanctions bite for another six months would only increase the likelihood of war—not the likelihood of Iran’s surrender.

This is why, in March 2013, Obama did the unthinkable. In secret negotiations, he broke with past US policy and offered to accept, given sufficient transparency and limitations, the enrichment of uranium on Iranian soil. This was Iran’s bottom line: It was willing to endure almost any economic hardship before it gave up enrichment. (Most nations, including some involved in the negotiations leading up to the JCPOA, accept Iran’s right to enrich uranium under the Non-Proliferation Treaty, to which it is a signatory, but this had been a sticking point for US and European Union negotiators.)

Obama knew all along that no nuclear deal would be possible unless he conceded this point. But the plan was to play the enrichment card at the end of the negotiations, since it was the United States’ most valuable concession. Instead, Obama had to play it at the outset. It was this move, not the sanctions policy, that ultimately elicited Iranian flexibility and paved the way for a nuclear deal.

Yet the Obama administration also planted the seeds of the right-wing narrative that Trump is now using. Recognizing that domestic political opposition to a deal with Iran might shoot through the roof if the administration admitted the limits of its sanctions policy—as well as the reality that Tehran had outpaced Washington in the leverage department—the Obama team insisted that sanctions had brought Iran to the table.

It was a formulation that falsely credited sanctions, rather than the US concession on enrichment, for the diplomatic breakthrough and gave the impression that the United States had been operating from a position of strength. In fact, the full details of the secret negotiations with Iran, including the intricacies around the enrichment concession, first came to light through the publication of my book Losing an Enemy: Obama, Iran, and the Triumph of Diplomacy.

By using language that insisted the United States was operating from a position of overwhelming strength, the Obama administration helped to give birth to a persistent question: If the sanctions were so successful in forcing Iran to the negotiating table, why didn’t the administration continue the sanctions until Iran capitulated fully? In response, Obama had to gently walk back his claims. “Iran is not going to simply dismantle its program because we demand it to do so,” he admitted on April 2, 2015. “That’s not how the world works, and that’s not what history shows us. Iran has shown no willingness to eliminate those aspects of their program that they maintain are for peaceful purposes, even in the face of unprecedented sanctions.”

Other officials, speaking privately, put it more bluntly. “The Iranians simply won’t capitulate,” even if faced with war, a senior Obama official said during a closed briefing at the White House that I attended in July 2015. “Because they’re Iranians,” he added after a brief pause.

But the damage had already been done, and the right-wing mythology started to take hold. Today, it constitutes the basis for Pompeo’s speech and Trump’s Plan B. But even if the Trump team manages to rebuild the sanctions coalition against Iran—which remains unlikely, given the strong support for the JCPOA by the European Union as well as by Russia and China, all signatories to the agreement—it is difficult to imagine Trump succeeding where Obama failed: That is, by overwhelming Iran with pressure that would force it to surrender rather than expand its nuclear program.

When Obama realized the limits of sanctions and pressure, he avoided war by going to the negotiating table. There’s little indication that Trump is capable of the same courage and prudence. Indeed, with Mike Pompeo as secretary of state and John Bolton as national-security adviser—both anti-Iran hard-liners—Trump’s strategy seems designed to fail. Instead of a Plan B aimed at securing Iran’s capitulation, it appears designed to pave the way for Plan C: War.

This piece originally appeared in The Nation.

Iran’s Leadership After Trump Abandons The JCPOA

With Donald Trump abandoning the JCPOA, all eyes are now on Tehran. How will Trump’s unilateralism affect the balance of power in Iranian politics? As America seeks to re-impose sanctions, conventional wisdom presumes that Hassan Rouhani and his team are now marginalized. However, declarations of their demise are premature and ignore Iran’s motivations for coming to the negotiating table: maintaining unity among the ruling elite and deflecting responsibility for successful diplomacy onto Washington.

Rouhani and Supreme Leader Ali Khamenei have made a concerted effort to portray unity on policy issues – nuclear deal or not – regardless of their respective disagreements. Neither wants to encourage extremists who created the political and economic mess that plagued Iran prior to Rouhani’s election. To that end, it is widely understood that Rouhani needs Khamenei’s support to govern effectively, but the degree to which Khamenei also needs Rouhani is drastically underestimated.

Extremists controlled the presidency from 2005 to 2013, and the results are clear: Iran isolated on the world stage, and a steady deterioration in state-society relations. Mahmoud Ahmadinejad’s presidency caused massive political and economic damage to Iran, presenting Khamenei with daunting challenges: unemployment, inflation, brain drain, domestic industrial malaise, and scant foreign investment. Sanctions exacerbated these problems but did not cause them. Mismanagement and corruption plagued Iran’s economy before America’s previous economic assault – and will continue to do so after this latest barrage.

Khamenei cannot fix these problems alone because the only alternative to Rouhani’s team is the same motley crew responsible for Iran’s aforementioned strategic ineptitude. Precisely because Khamenei is not suicidal, he will use Rouhani’s consensus-building skills and technocratic team to help stabilize the economy and manage state affairs – especially as Iran is under siege. Iranian politics are fractious, but the same majority of elites who backed Tehran’s nuclear negotiations strategy remains intact today. The people attacking Rouhani now have done so since he entered office.

Rouhani also helped Khamenei achieve an arguably more important strategic objective: Reducing domestic political pressure by shifting the onus of U.S.-Iran conflict onto Washington. During JCPOA negotiations, Khamenei repeatedly reassured Iranian society that the government would only accept a deal that safeguards their rights and interests. His emphasis on Iranian society highlights his concern over who bears responsibility for the conflict: Tehran or Washington. For Iran’s leadership, it is more important to ensure that Iranian society will not blame the government for sanctions than it is to get sanctions lifted.

Rouhani’s team sold negotiations to Khamenei by arguing that proving Tehran’s openness to diplomacy puts the onus on Washington to produce a viable deal and adhere it to. Khamenei then sold the JCPOA to Iran’s state and society by arguing that a deal puts the onus on Washington to compromise and live up to its commitments. With Trump walking away, Khamenei will say “I told you so” – but also support negotiations with everyone not named America to show that Washington, not Tehran, is the intransigent actor.

Both Khamenei and Rouhani have positioned themselves so that they cannot fully lose. If the JCPOA dies, neither Khamenei nor Iranian society will blame Rouhani because they can correctly accuse Trump of killing the deal despite Iranian compliance. Rouhani and Iranian society will not blame Khamenei for the same reason. Political unity will be largely intact, and Iranian officials will also have shifted the blame – at home and abroad – for the failure of diplomacy back onto America.

Not only will Washington fail to coax Tehran into capitulation, it will also help strengthen Iran’s position at home and abroad – at the expense of America’s. Strategic foresight is not the Trump administration’s strong suit. As for Rouhani, he lives to fight another day.

This piece originally appeared in The Progressive Post.

NIAC Statement on Designation of CBI Officials

FOR IMMEDIATE RELEASE
Contact: Jamal Abdi
Phone: 202-386-6408
Email: jabdi@niacouncil.org

Washington, DC – NIAC Vice President for Policy Jamal Abdi issued the following statement regarding the Trump administration’s designation of the governor and a senior official of the Central Bank of Iran:

“Today’s move shows clearly that the Trump administration intends to strong-arm the world into compliance with its march to war and is willing to risk a global financial crisis to do so. Trump is now engaged in an effort to bully the international community into complying with renewed U.S. sanctions rather than sustaining the nuclear agreement that the U.S. helped to negotiate and endorsed through the UN Security Council.

“As European governments are desperately trying to save the Joint Comprehensive Plan of Action, the Trump Administration is attempting to shock European companies to pull out of the Iranian economy. If successful, Trump will fully dismantle the accord – including freeing Iran’s nuclear program from the significant constraints and inspections currently in place.This abuse of the secondary sanctions tool increases the likelihood that Iran will join the U.S. in abandoning the accord, leading to an escalation towards war.

“The Trump administration has made painfully clear to Congress, the Europeans and other international actors that it does not value their cooperation or partnership. It is up to the U.S. Congress, European countries and others to take measures now to preserve the JCPOA and prevent Trump from escalating towards war with Iran.”