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.  

Expert Briefing Sounds Alarm on Trump’s Iran Policy

“Career U.S. officials have told me there’s no policy coherence, no strategy. They’re throwing Jello at the wall to see what will stick,” said Reza Marashi, Research Director at the National Iranian American Council, discussing the Trump administration’s Iran policy. Marashi spoke on a panel hosted on Capitol Hill last week by NIAC regarding the future of the Iran nuclear deal – also known as the Joint Comprehensive Plan of Action (JCPOA). He was joined in dialogue by Kelsey Davenport, Director of Non Proliferation at the Arms Control Association, and John Glaser, Director of Foreign Policy at the CATO Institute.

Jamal Abdi––the panel moderator as well as NIAC’s current Vice President of Policy––kicked off the discussion, asking “There seems to be the open question of: Is America’s policy towards Iran regime change?”

“They want capitulation, they want regime change––plain and simple,” answered Marashi. Throughout the panel, speakers agreed that if the United States is actively seeking regime collapse, its motivations aren’t fueled by an urge to “spread democracy” as they claim. If that was the case, destabilization efforts would not be fueled by Saudi Arabia, who are even less democratic than their Iranian counterpart. Instead, Marashi speculated, “The metric for [invasion and sanctions] is: Do you accept American hegemony?” Since the fall of the Shah, Iran has been one of the only regional power that doesn’t, and as such, tensions have only grown.

Glaser noted on the decision to withdraw from the nuclear deal, “I think [Trump] has an intense hate for the (JCPOA) because it was a success of his predecessor. I’m sure, to this day, he has never read it.” The snapback of sanctions––which according to Glaser will “hurt the Iranian people far more than the government”––can be used as political leverage towards a set objective. As Marashi put it, “What people don’t tell you in this town is you’re either on the path to war or diplomacy––everything else is leverage.” Given that the administration walked away from the diplomatic path, it stands to reason that they’re on the path to war.

While American sanctions are bad enough, panelists were skeptical that the Trump administration could create a sanctions coalition as broad as that which existed under the Obama administration. Davenport expressed that without global support for sanctions, it seems unlikely that Iran will come back to the bargaining table for a better deal. And as such, “The Europeans are going to be more creative––as well as the Russians and the Chinese––to find more secure banking channels, so that transactions can be facilitated without touching American financial systems.”

No matter the amount of economic cushioning Europeans can provide, however, Iran has lost substantial benefits envisioned under the deal. As such, hardliner officials––who were largely skeptical of the deal in the first place––are going to push for retaliation. According to Davenport, if the deal falls apart, Iran will likely build more centrifuge facilities, ramp up research, and even potentially enrich uranium up to 20%––but still short of the threshold where it could be used for a weapon.

Even if he wanted, there is very little Trump can do to remedy the situation. He has effectively scared off investment in the country through both threats and his at-times erratic behavior. “If the Trump administration said tomorrow that they would be back in compliance with the Iran deal, who would believe them?” asked Davenport. “Given his long history of broken promises in the foreign policy space, I just don’t think you would have business entities that would be willing to trust that the Trump administration would stay the course.”

When asked for best and worst case scenarios, the panelists had very similar answers. At best, Iran will have just enough incentive to let the agreement “limp through” in the months ahead. At worst, our nations could go to war, spurring another decades-long conflict where we have nothing to gain but everything to lose.

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: Trump’s Reckless Decision Puts US on Path to War with Iran

Washington, DC – NIAC President Trita Parsi issued the following statement in response to reports that President Trump declared he would snap back all nuclear-related sanctions under the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, and impose new sanctions:

“Donald Trump has committed what will go down as one of the greatest acts of self-sabotage in America’s modern history. He has put the United States on a path towards war with Iran and may trigger a wider regional war and nuclear arms race.

“This is a crisis of choice. Trump has taken a functioning arms control deal that prevented an Iranian nuclear bomb and turned it into a crisis that can lead to war.

“This is not America first, this is Trump leasing out America’s foreign policy interests to the highest bidder. The only parties applauding this move are Benjamin Netanyahu and Mohammed Bin Salman, who have consistently chosen to undermine regional security to advance their own short-sighted political fortunes. Trump’s reckless decision is a betrayal of the national interests of the United States of America that could haunt us for generations.

“Not only has Trump opened a pandora’s box of consequences in the region, we now know the administration hired the private Israeli intelligence firm Black Cube to target former U.S. officials who supported the agreement. This Nixonian campaign was likely an illegal attempt to discredit the Iran deal. Anything short of a full investigation by Congress and the Justice Department of Trump’s efforts with Black Cube would be an affront to our democratic system.

“Perhaps the most absurd aspect of President Trump’s Iran policy is his attempt to claim solidarity with the Iranian people, even as he bans Iranians from the U.S. and his top advisors openly support the MEK terrorist group that is universally reviled by Iranians. The Iranian people overwhelmingly supported the nuclear deal, at least until the sanctions relief that was promised failed to materialize, and will be the party most impacted by Trump’s decision.

“Many were hopeful that the nuclear deal would facilitate broader change in Iranian society over time by empowering moderate forces in their demand for social and economic justice. By diminishing the excuse of sanctions and raising expectations for economic improvement, the nuclear deal appears to have added pressure on Iran’s leaders to meet the public’s political expectations. However, a potential opening for accelerated progress in Iran has now been slammed shut by Trump, an action that will redirect attention from the Iranian government to the United States. This will not just empower hardliners, it will force Iran’s political elite to paper over fissures on key social and political issues while cracking down further on any dissent. This is potentially the biggest crime of Trump’s decision – limiting the agency of Iran’s own people to choose peaceful political evolution in order to address their grievances.

“It is our profound hope that the Europeans, Russians and Chinese are able to sustain the nuclear accord in spite of Trump’s decision – though we recognize that this is a tall task given the effect of U.S. sanctions. We also hope that Congress will shake off the politicization of Iran policy and move to restrict Trump’s nuclear sabotage. However, given that Senate Republicans and even a handful of Democrats voted for Iran-hawk Mike Pompeo to join John Bolton on Trump’s war cabinet, this may not be possible until a new Congress is sworn in.

“Iran has remained compliant with the nuclear deal as verified by the IAEA in 11 reports since January 2016, and its people want more economic relief – not less. Under the JCPOA, Iran’s commitment never to pursue a nuclear weapon never expires, while other far-reaching constraints stretch out for decades. After Trump’s breach of the accord, the U.S. – not Iran – is now the outlier when it comes to Iran’s nuclear program. If the deal dies as is highly likely, the U.S. will find little to no support in addressing Iran’s soon to be expanding nuclear program.

“For decades, Washington has insisted that the Iranian leadership is addicted to enmity with the United States. Now it may become fact for the world that the opposite is true and it is America that is addicted to enmity with Iran.

“For those in and outside of the Iranian-American community who worked for years to prevent war with Iran, and then succeeded in protecting the nuclear deal from sabotage until today, this move comes as a bitter blow. Unfortunately, we must now redouble our efforts to prevent Trump from leading us to war with Iran.”

MEDIA AVAILABILITY: Experts Available to Discuss Trump Waiver Decision

FOR IMMEDIATE RELEASE
Contact: Trita Parsi, President – 202.386.2303, tparsi@niacouncil.org
Reza Marashi, Research Director – 202.379.1639, rmarashi@niacouncil.org
Jamal Abdi, Vice President for Policy– 202.386.6408, jabdi@niacouncil.org

Washington, D.C. – Experts from the National Iranian American Council (NIAC) will be available to media to offer analysis of President Trump’s decision whether or not to waive sanctions necessary under the Iran nuclear deal also known as the JCPOA. President Trump tweeted that he will announce his decision at 2 PM EST on May 8.

NIAC analysts available in Washington, DC:

Trita Parsi, is the author of the 2017 book Losing an Enemy: Obama, Iran, and the Triumph of Diplomacy. He is the 2010 recipient of the Grawemeyer Award for Ideas Improving World Order. He is the founder and president of the National Iranian American Council and an expert on civil rights and US-Iranian relations. He is also the author of Treacherous Alliance: The Secret Dealings of Iran, Israel and the United States (Yale University Press 2007) and A Single Roll of the Dice – Obama’s Diplomacy with Iran (Yale University Press 2012). Parsi’s articles have been published in the Wall Street Journal, New York Times, Los Angeles Times, Financial Times, Jane’s Intelligence Review, the Nation,The American Conservative, the Jerusalem Post, The Forward, and others. He is a frequent guest on CNN, PBS’s Newshour with Jim Lehrer, NPR, the BBC, and Al Jazeera. Follow Trita on Twitter: @tparsi

Reza Marshi joined NIAC in 2010 as the organization’s first Research Director. He came to NIAC after four years in the Office of Iranian Affairs at the U.S. Department of State. Prior to his tenure at the State Department, he was an analyst at the Institute for National Strategic Studies (INSS) covering China-Middle East issues, and a Tehran-based private strategic consultant on Iranian political and economic risk. Marashi is frequently consulted by Western governments on Iran-related matters. His articles have appeared in The New York Times, Foreign Affairs, Foreign Policy, and The Atlantic, among other publications. He has been a guest contributor to CNN, NPR, the BBC, TIME Magazine, The Washington Post, and the Financial Times, among other broadcast outlets.

Jamal Abdi is the Vice President for Policy for the National Iranian American Council (NIAC) and the Executive Director of NIAC Action. He leads NIAC’s advocacy and education on civil rights and immigration issues, as well as diplomacy with Iran. He formerly served as Policy Advisor on foreign affairs, immigration, and defense issues in the U.S. Congress. Abdi has written for The New York Times, CNN, Foreign Policy, and blogs at The Huffington Post.  He is a frequent guest contributor in print, radio, and television, including appearances on Al Jazeera, NPR, and BBC News. Follow Jamal on Twitter: @jabdi

Recent NIAC publications and media appearances:

Critics: Nothing new in Netanyahu’s Iran case, CNN (Interview), May 1, 2018

Trump’s Ineptitude on Iran, The Cairo Review, May 7, 2018

Blame Trump When Iran Races for the Bomb, Foreign Policy, Mar. 29, 2018

About NIAC

The National Iranian American Council (NIAC) is a 501(c)(3) nonpartisan, nonprofit organization dedicated to advancing the interests of the Iranian-American community. NIAC’s mission is focused on promoting an active and engaged Iranian-American community, supporting aspirations for human rights and democracy in Iran, opposing war between the US and Iran, and celebrating our community’s deep cultural heritage. NIAC accomplishes its mission by supplying the resources, knowledge and tools to enable greater civic participation by Iranian Americans and informed decision-making by policymakers.

For more information, please visit www.niacouncil.org.

 

Kicking the Hornet’s Nest: Consequences of Trump’s May 12 Iran Deal Decision

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President Trump has threatened to put the U.S. into material breach of the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), by failing to renew nuclear sanctions waivers by the May 12 deadline. As a result, it is necessary for policymakers to think clearly regarding the consequences of a U.S. material breach of the accord, including the collapse of the JCPOA, Iranian nuclear expansion, diminished U.S. influence with its allies, and a growing threat of war under Trump and his hawkish advisors.

Immediate Breach of the Accord

If the President refuses to waive sanctions on May 12, nuclear-related sanctions on the Central Bank of Iran passed via Section 1245 of the FY2012 National Defense Authorization Act (NDAA) would snap back into place, resulting in an immediate material breach of the JCPOA. Under this provision, countries must reduce their oil purchases from Iran or the U.S. will cut off that country’s financial institutions that transact with Iranian banks from the American economy. This would not reimpose all of the sanctions that the U.S. is obligated to waive – the next sanctions waiver deadline is 60 days later and pertains to the vast majority of nuclear-related sanctions. But by targeting both oil sales and banking, driving down oil sales and forcing companies to withdraw from the Iranian market, the U.S. would not just violate the agreement but would be unravelling the core of Iran’s incentives to remain compliant with the terms of the JCPOA.

Even if the administration seeks to dull the initial impact by delaying enforcement, as some have suggested may be its plan, the failure to waive will result in a material breach of the agreement. The text of the JCPOA also makes clear that a failure to waive sanctions on May 12 would result in an immediate breach. The U.S. is obligated to “cease the application” of  nuclear-related sanctions including the Central Bank sanctions contained in Section 1245 of the FY12 NDAA. Moreover, the U.S. has committed to “refrain from re-introducing or re-imposing the sanctions” lifted under the deal, while the JCPOA indicates Iran will treat such re-imposition “as grounds to cease performing its commitments under this JCPOA in whole or in part.” As former administration officials Rob Malley and Colin Kahl recently wrote, “in the absence of Iranian violations of the deal, the United States would be in material breach of the agreement the moment Trump refuses to waive U.S. sanctions, even as the deal’s other signatories remain party to it.”

The Trump administration has already violated the JCPOA repeatedly by any objective measure, including by actively warning foreign companies against doing any business in Iran, refusing to issue licenses for the sale of aircraft to Iran and holding U.S. implementation of the accord in doubt. While these violations have been serious, they have not struck directly at the core of the bargain. Reinstating oil sanctions would be a direct attack on the core benefit and put the U.S. in material breach.

Death of the Deal

Iranian Foreign Minister Javad Zarif has indicated that if the U.S. withdraws from the accord, Iran will do the same. The JCPOA includes a dispute resolution mechanism wherein Iran would be able to file an official complaint regarding U.S. failure to meet its sanctions-lifting obligations, a forum where the U.S. would be isolated following a U.S. breach. If Trump refused to correct the breach, Iran “could treat the unresolved issue as grounds to cease performing its commitments, in whole or in part, and/or notify the UN Security Council that it believes the issue constitutes significant non-performance,” according to the text of the agreement. In other words, Iran would have sufficient grounds to orchestrate a withdrawal from its JCPOA obligations while pinning the blame on the United States.

Other Iranian officials have suggested that Iran will resume many of its nuclear activities that deeply concerned the international community prior to the JCPOA. While it is unclear precisely how far Iran would go, Iran could:

  • Bring advanced centrifuges online or resume enrichment at the deeply-buried Fordow nuclear site;
  • Begin enriching uranium beyond 3.67%, potentially up to 20% or higher;
  • Expand beyond 300 kg of enriched uranium to sufficient quantities for multiple nuclear weapons with further enrichment;
  • Limit International Atomic Energy Agency (IAEA) inspector access, including access to suspect undeclared sites, uranium mines and mills and centrifuge production facilities.

Iranian officials have also suggested that their commitment to the Non-Proliferation Treaty – the foundation of the non-proliferation regime – could be jeopardized by a JCPOA withdrawal. While that would be an extreme measure that could ratchet up tensions significantly, the possibility cannot be ruled out in the event of a shocking unilateral U.S. rupture of a carefully-crafted diplomatic agreement that was narrowly secured against the opposition of many hardline interests in Tehran..

Isolated from Allies

It is no coincidence that both French President Emmanuel Macron and German Chancellor Angela Merkel traveled to Washington the same week, shortly before the May 12 deadline, to speak with Trump about the JCPOA. America’s European allies are extremely concerned that Trump will follow through and terminate a deal that is in the best interests of the transatlantic relationship, global security and the nonproliferation regime, with devastating results.

Macron has made clear that he is willing to work with Trump to address issues outside the scope of the JCPOA, including Iran’s missile program and regional security issues such as Syria, as part of a “grand bargain.” There are numerous uncertainties regarding Macron’s approach – after all, Iran would likely be unwilling to engage on a new deal when the U.S. has failed to implement the JCPOA. However, it is also clear that the U.S. would forfeit such coordination with its allies if the foundation of the JCPOA is terminated by a unilateral U.S. withdrawal, as Macron warned is still the most likely outcome.

As more than 500 members of the United Kingdom, French and German parliaments recently warned in an unprecedented letter to the U.S. Congress, “if the deal breaks down, it will well-nigh be impossible to assemble another grand coalition built around sanctions against Iran. We must preserve what took us a decade to achieve and has proven to be effective.” Absent the leverage provided by close cooperation with our allies, there is no chance for a “better deal,” and serious risks that there would be no deal after the JCPOA whatsoever.

If Trump follows through and terminates the JCPOA, the U.S. will be put in the difficult position of threatening sanctions on the foremost companies of many friendly countries – including those in Europe, South Korea, India and beyond. This could result in a trade war if those countries take actions to protect their companies from U.S. sanctions enforcement. Moreover, as former Treasury Secretary Jacob Lew warned in 2016, “if foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons—secondary sanctions in particular—we should not be surprised if they look for ways to avoid doing business in the United States or in U.S. dollars.”

Another War of Choice    

The elevation of John Bolton to National Security Advisor and Mike Pompeo to Secretary of State ensures that at least two individuals who prefer an Iran war to Iran diplomacy will be advising Trump on the JCPOA and broader Iran policy. Moreover, Trump himself has previewed his hawkish inclinations, warning that if Iran restarts their nuclear program “they will have bigger problems than they ever had before” and “if Iran threatens us in any way, they will pay a price like few countries have ever paid.” In unraveling the nuclear accord and freeing Iran to resume their nuclear activities, Trump would be triggering the very situation where he strongly hinted that he would use military force.

Amid an already ruinous regional proxy war in the Middle East, a war against Iran could be even more disastrous for global security than the 2003 invasion of Iraq. Iran is nearly four times the size of Iraq, with influence in military conflicts from Syria to Yemen and with missiles capable of striking U.S. ships and bases in the region. Bombing cannot erase Iran’s nuclear know-how and would only empower those in Iran eager to obtain a nuclear deterrent. Moreover, it would set the region aflame and draw the U.S. into a prolonged quagmire that would cost American blood and treasure and set U.S. security back decades.

Congress can intervene to check Trump, including by clarifying that the administration does not have authorization to launch a war against Iran. Yet, the clock is quickly running out to save the JCPOA and prevent an escalation to war.

 

Democracy Now!: Trump Decries Iran Nuclear Deal as He Fills Cabinet with Advocates Pushing Regime Change in Tehran

ABC: Macron Steps Up His Bid to Save the Iran Deal

NIAC Statement on Trump’s Iran Threat

FOR IMMEDIATE RELEASE
Contact: Trita Parsi
Phone: 202-386-6325
Email: tparsi@niacouncil.org

Washington, D.C – NIAC President Trita Parsi issued the following statement following Donald Trump’s comments on Iran today:

“Donald Trump is setting up a dangerous catch-22 with Iran. Trump is threatening war if Iran restarts nuclear activities on one hand while he unravels the very agreement that prevents a nuclear-armed Iran on the other. This is more than a war of words, Donald Trump is setting us up for a very real military conflict.

“Macron and Europe seem willing to bend over backwards to save the nuclear deal and prevent catastrophe. When our closest allies express alarm in unison, we should listen. Trump should quit while he is ahead and reaffirm the U.S. commitment to the JCPOA before it is too late. The alternative would be an isolated America, an unchecked Iranian nuclear program, and an escalation towards war.”

###

 

FDD Scholar: War with Iran ‘Is On’

“The war is on”, declared Michael Ledeen, a “Freedom Scholar” with the anti-Iran deal Foundation for Defense of Democracies, at an event to discuss Iran policy following President Trump’s appointment of John Bolton and nomination of Mike Pompeo. “We’re in the war now. So all these people who keep on saying, ‘well if we sign, or if we don’t re-sign, or if we renew or we don’t renew (the Iran nuclear deal) then war,’ that’s all crazy. The war — we are in the war.”

Speaking on a panel at the Hudson Institute last week, Ledeen asserted his belief that the Iranian people had asked the U.S. for help in toppling the regime. His assertion was challenged by an Iranian American supporter of NIAC in the audience who asked Ledeen why he felt Iranians would want the United States’ help. “All they have to do is look at the neighboring countries and see that every country the United States has tried to change the leadership there, it has created a stateless country,” she said. “It’s like asking me to go to a doctor who all of his patients have died in the hospital, and asking ‘could you please operate on me?’ Why would they want the United States to aid them for any sort of help in the regime change?”

Ledeen’s response was to insult and bully rather than to engage in serious debate. Ledeen stated, “the question from this woman right here is not a question, but a provocation. So I am sorry that you’ve wasted your time coming here today to voice the line of your friends in Tehran…The reason why the Iranian people look to us for help, support, guidance in carrying out a revolution against the regime is because they hate the regime.” Ledeen then rudely told her to “sit there quietly” as the moderator moved on to the next question. The tense exchange showed both the stakes of the Iran debate in the months ahead – that Trump’s supporters think “war is on” with Iran – and that so-called “freedom scholars” will go out of their way to stifle debate on the road to confrontation.

Hawkishness and dismissiveness of alternative views was not limited to Ledeen. Richard Goldberg, another FDD adviser who served as a staffer for the hawkish former Senator Mark Kirk (R-IL), predicted that Trump would kill the deal. Goldberg indicated that with negotiations between Trump and the Europeans stalled and Bolton and Pompeo poised to enter the administration, “we have set the stage now for the likely exit of the U.S. from the nuclear deal and the potential for re-imposition of sanctions – at least on the Central Bank on May 12th, and perhaps much more.” Goldberg went on to argue that the reimposition of such sanctions, which he helped to initially pass as a staffer in Congress, would help topple the Iranian regime but avoid harming the Iranian people.

I asked Goldberg how the re-imposition of sanctions on Iran could be designed to be in favor of the Iranian people and avoid causing mass devastation. “With respect to our sanctions policy, the Iranian people are our greatest asset and we do not target the Iranian people, we do not target them, we have no quarrel with them,” Goldberg said. “And so our policy, when it targets the Central Bank of Iran (CBI), when it targets government banks, when it targets the Supreme Leader’s empire, this is about the lifeblood that keeps the Islamic Republic in business of oppressing its people.”

Goldberg’s answer might sound persuasive, yet the reality is that ordinary Iranians themselves are intricately connected to the Iranian economy and banking system – not just the regime. There is absolutely no way a country’s entire banking system can be sanctioned without its people suffering the consequences of the sanctions. We saw this at the height of nuclear sanctions, where the Iranian people suffered from mass unemployment and sanctions while the Islamic Revolutionary Guard Corps (IRGC) expanded its business empire.

Michael Pregent, a fellow with the Hudson Institute, stated that president Trump “has his Iran team in place,” with John Bolton in as National Security Advisor and Mike Pompeo hoping to be confirmed as Secretary of State. If Pompeo and Bolton share the Hudson panelists’ proclivities, it appears that war could be very difficult to avoid.

“Peace is not the opposite of war,” Ledeen ominously concluded. “Peace is the result of war. Peace happens when a war is fought and one side beats the other.”

Clouds Form Over Iran Deal as Trump Deadline Nears

Blame Trump When Iran Races for the Bomb

The nuclear deal with Iran hangs by a thread. The appointment of John Bolton — an unapologetic proponent of war with Iran — as U.S. national security advisor has prompted celebrations among Iran deal detractors. The announcement that nuclear talks with North Korea will be held around the same time that U.S. President Donald Trump must decide whether to keep or kill the Iran deal has further complicated the picture. Yet few in Washington understand how Trump’s gamble with Pyongyang may impact Tehran’s nuclear calculations.

Conventional wisdom declares that Trump would be foolish to kill the Iran deal (formally known as the Joint Comprehensive Plan of Action, or JCPOA) if he genuinely seeks to reach an agreement with the North Koreans. If Trump shows that he does not honor America’s agreements, why would Pyongyang strike a deal with him?

But Trump is anything but conventional. His logic runs in the opposite direction, and Bolton will be more than happy to enable Trump’s worst instincts. By killing the JCPOA, Trump thinks he’ll signal to the North Koreans that they should have no doubt that he is ready to walk away from the talks if he doesn’t get what he wants. After all, walking away from ongoing negotiations is much easier than killing an existing deal.

Trump may know bluster, be he does not know diplomacy. Strong-arming subcontractors may work in the Manhattan real estate market, but it won’t work in international diplomacy. Sovereign states don’t react like jilted architects and electricians.

How will Iran react if Trump pursues this path? For Tehran, the JCPOA was never just about the nuclear issue. It was a test to see if the West could come to terms with the Islamic Republic and accept Iran as a regional power. By testing this proposition, the talks became a defining showdown between the two dominant schools of thought within the Iranian elite.

The first school, dominated by conservative elements in the government and military, argues that the United States — pressured by Israel and Saudi Arabia — is inherently hostile to Iran and will never recognize the country as a regional power or come to terms with its regime, regardless of Iran’s policies or the compromises it offers. The inclusion Tehran seeks can only be achieved by forcing the United States and its allies to accept the reality of Iran’s power. The hard-liners’ skepticism of diplomacy and resistance to compromise is partly rooted in their belief that no Iranian compromise can change Washington’s hostility to Tehran.

Iran’s second, more moderate group of policy-makers recognizes both that the country’s own actions have contributed to infectious conflict and that the United States has legitimate concerns about Iranian policies. An American acceptance of Iran’s inclusion in the regional security architecture can be obtained, they argue, through diplomacy and a genuine give-and-take. If Iran compromises, so will the West, the logic goes.

Up until the nuclear negotiations began in earnest, the debate between these two schools was theoretical. Though Tehran had made many diplomatic overtures in the past, America’s willingness to come to terms with Iran had never been tested through a mutual compromise that both sides had signed on to.

Until, that is, the JCPOA.

The Iran nuclear deal was the first time the United States and Iran had agreed to a significant exchange of concessions that not only eliminated Iran’s pathways to a bomb and lifted sanctions, but also put an end to almost four decades of American efforts to completely isolate Iran. It signaled that America, 36 years after the Iranian revolution, was coming to terms with Iran.

Both sides agreed to painful concessions, both faced fierce domestic political opposition, and both recognized that the agreement signaled a major break with past policies. America was coming to terms with Iran. And the Islamic Republic was speaking of the United States not as the Great Satan, but as a negotiation partner.

It was a major victory for the second school of thought in Iran — at least for the moment.

But increasingly, the JCPOA has become a victory for the hard-liners. Despite Iran’s concessions and its adherence to the deal (confirmed by 10 reports by the International Atomic Energy Agency), Trump, Saudi Arabia, and Israel have clearly rejected Iran’s regional integration under any circumstance. Changes in Iran’s policies proved insufficient, so nothing short of Iran’s complete capitulation can seemingly satisfy Trump’s allies.

This conclusion will be unavoidable in Tehran if Trump kills the JCPOA to make a deal with Pyongyang. It will strengthen the Iranian hard-line narrative that Tehran’s mistake was that it only obtained enrichment capabilities — but not a bomb — before it agreed to seriously negotiate. Had it built a bomb — like the North Koreans — then the United States would have no choice but to show Iran respect, strike a deal with it — and honor that deal. Trump will essentially incentivize Iran to go nuclear.

Ultimately, Trump’s bluster won’t work. He lacks a properly staffed State Department with the capacity to negotiate, and his new national security advisor ideologically opposes diplomacy. By killing the Iran deal to impress Pyongyang, Trump will destroy one functioning arms deal without securing a new one. And in the process, he will tilt the balance in favor of those in Tehran who have argued all along that America only understands the language of force.

Originally published in Foreign Policy