FPI Bulletin: Preventing Iran from Exploiting the Nuclear Deal

September 30, 2015

The debate over the nuclear deal hardly ended when President Obama held together enough Senate Democrats to filibuster a resolution of disapproval. Rather, the debate will now focus on preventing Iran from extracting further concessions and exploiting the deal’s many loopholes. Both the opponents of the deal and its many reluctant supporters can now continue together the unfinished work of preventing Iran from developing a nuclear weapon.

The Nuclear Deal’s Skeptical Supporters

Even upon announcing their support for the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), many Democrats also expressed deep concern about the flaws of the agreement’s most important provisions. As such, they pledged to support the unstinting and vigorous efforts necessary to block Iran’s path to the bomb while confronting its support for terrorism and aggression.

“This agreement,” said House Democratic Whip Steny Hoyer (D-MD), “is not one which I would have negotiated, nor one I think should have been agreed to, given the collective strength of the P5+1 compared to that of Iran.” Sen. Ron Wyden (D-OR) stated, “This agreement with the duplicitous and untrustworthy Iranian regime falls short of what I had envisioned.” According to Sen. Richard Blumenthal (D-CT), “This is not the agreement I would have accepted at the negotiating table.”

The lesson to be drawn is that Congress should now work to compensate for the deal’s flaws. As Sen. Chris Coons (D-DE) observed, “Congressional approval is not the end of the process of deterring and containing Iran’s nuclear weapons program, but rather a renewed beginning.” In a similar vein, Sen. Cory Booker (D-NJ) commented, “The United States must recognize that to make this deal work, we must be more vigilant than ever in fighting Iranian aggression.”

Renewing the Iran Sanctions Act

The JCPOA relies almost exclusively on its “snapback” provision to ensure accountability in the event of Iranian cheating. If the Iran Sanctions Act expires in 2016, however, there will be no legal basis to impose American sanctions. According to Sen. Gary Peters (D-MI), another skeptical supporter of the deal, “Congress should ensure that the Iran Sanctions Act is not allowed to expire, so that the sanctions architecture remains as a backstop if snapback sanctions are implemented.”

First passed in 1996 as the Iran and Libya Sanctions Act, the legislation authorizes sanctions against Tehran for its nuclear and ballistic missile development and for its support for terrorism. In June 2015, Sens. Robert Menendez (D-NJ) and Mark Kirk (R-IL) introduced bipartisan legislation that would renew the law for an additional 10 years when it expires in 2016.

“Absent renewal,” Menendez and Kirk noted in a statement, “we would be unilaterally lifting sanctions on Iran and hence unilaterally disarming.”

An extension of the Iran Sanctions Act should also clarify that the deal contains no grandfather clause to protect new investments in Iran from the threat of snapback. Observers have widely assumed the presence of such a clause, since the JCPOA states that the reimposition of sanctions “would not apply with retroactive effect to contracts signed between any party and Iran or Iranian individuals and entities prior to the date of application” (Paragraph 37). However, Undersecretary of the Treasury Adam Szubin stated otherwise. “There is no grandfather clause in the JCPOA,” he said, “that would protect preexisting contracts against snap-back.” Szubin further asserted that a snapback would also apply to European Union contracts.

Congress can therefore make clear to the Obama administration and to European allies that it expects them to adhere to this interpretation of the clause, and that it will impose additional sanctions should they deviate from it.

Preventing Incremental Violations

Skeptical supporters also fear that the JCPOA’s snapback provision cannot prevent constant, low-level violations that would allow Iran to gradually undermine the deal without provoking a strong reaction. As Mark Dubowitz of the Foundation for Defense of Democracies has noted, “The Iranian regime cheats incrementally, not egregiously, even though the sum total of its incremental cheating is egregious.” Snapback cannot deter such incremental violations, because Iran states explicitly in the deal that it would treat any reimposition of sanctions “as grounds to cease performing its commitments under this JCPOA in whole or in part” (Paragraph 37). In effect, snapback may doom the deal rather than enforce it.

For this reason, Sen. Coons argued, “marginal cheating and ambiguous evasions of the deal” should elicit a strong response. “Iran must not be left with any doubt that it will feel the pain of sanctions from the entire global community the moment it violates the agreement,” Coons said. Sen. Booker explained, “There can be no room for interpretation when it comes to holding Iran accountable for even the smallest violations. The United States must make consequences for Iranian transgressions clear and measurable in public statements of policy, and pursue those consequences relentlessly when warranted.”

The challenge now facing Congress lies in establishing a mechanism for monitoring incremental violations along with an “escalatory ladder” of penalties it can impose if the transgressions persist. Broad bipartisan support will prove essential, since the executive branch may otherwise resist such oversight.

Preserving and Extending Sanctions for Terrorism and Human Rights Violations

When President Obama announced that Iran and the P5+1 had reached the JCPOA, he promised, “we will maintain our own sanctions related to Iran’s support for terrorism, its ballistic missile program, and its human rights violations.” He made the same pledge again the next day. Nonetheless, pivotal actors responsible for both nuclear proliferation and terrorism, including the Central Bank of Iran and the Islamic Revolutionary Guard Corps (IRGC), will receive complete or substantial relief under the JCPOA.

The deal’s skeptical supporters recognize that an agreement on the nuclear front should not insulate Tehran from accountability for its support of terrorism and human rights violations. To that end, the United States must be “willing to ratchet up non-nuclear sanctions on Iran when their non-nuclear activities call for it,” said Sen. Booker. According to Sen. Peters, “The JCPOA is not the end of our multilateral efforts against Iran and its illicit behavior. America must continue working with our allies to initiate multilateral sanctions against Iran for its terrorist activities, especially for its funding of Hezbollah and Hamas.”

The problem is that Paragraph 26 of the JCPOA directs the United States to “refrain from reintroducing or reimposing the sanctions specified in Annex II that it has ceased applying under this JCPOA.” Although this passage would prevent the reimposition of prior sanctions related to terrorism or human rights violations, it does not prohibit the imposition of new terrorism or human rights sanctions. Thus, Congress should clarify in law that new sanctions are permitted; then it must actually penalize Iranian organizations and individuals that persist with their criminal behavior. Bipartisan support for such initiatives will remain critical, since the enforcement of sanctions depends on the cooperation of the executive branch.

In recent House testimony, Emanuele Ottolenghi of the Foundation for Defense of Democracies recommended the passage of legislation that would require the State Department to designate the IRGC as a Foreign Terrorist Organization (FTO), which would help deter foreign companies from doing business with Iran. He also recommended, among other provisions, increasing the number of designations of individuals and companies affiliated with the IRGC; expediting the designation process; and limiting the IRGC’s ability to operate in Europe as part of future trade agreements.

Congress may also wish to ensure that the JCPOA does not serve as a pretext for preemption of state or local laws designed to hold Iran accountable. This possibility has become a subject of concern because Paragraph 25 of the JCPOA directs the executive branch to ensure that “no law at the state or local level in the United States is preventing the implementation of the sanctions lifting.”

Possible Military Dimensions (PMD) of Iran’s Nuclear Program

A fourth subject that deserves immediate attention concerns Iran’s obligation to come clean about its nuclear program’s “possible military dimensions” (PMD) — diplomatic parlance for the regime's past efforts to weaponize nuclear material and develop related military hardware. According to the JCPOA, Iran must fully implement an agreement with the International Atomic Energy Agency (IAEA) known as the Roadmap for Clarification of Past and Present Outstanding Issues, a reference to PMD. A major flaw of the JCPOA is that it does not explicitly mention the consequences of an Iranian failure to implement the IAEA Roadmap. Furthermore, the Roadmap itself remains vague on what compliance entails. Therefore, Congress may want to clarify and establish in law the American understanding that the nuclear deal cannot go forward unless Iran discloses all information required to resolve concerns about PMD.

Skeptical supporters of the nuclear deal possess ample concerns about PMD because it is the subject of the confidential agreements between Iran and the IAEA often described as secret side deals. Along with other concerns, stated Sen. Coons, “I also stand with my colleagues who have raised real questions about the details of the IAEA’s agreement with Iran over the assessment of past nuclear weaponization activities at Parchin and the integrity of future inspections and enforcement as a result.” Disconcertingly, one of the confidential agreements authorizes Iran to conduct its own inspections of the Parchin military complex.

Initially, the Obama administration stood firmly behind the requirement that Iran must completely resolve concerns about PMD before the nuclear deal be implemented and sanctions lifted. In April, Secretary Kerry insisted, “They have to do it. It will be done. If there’s going to be a deal; it will be done. … It will be part of a final agreement. It has to be.” Subsequently, the administration has wavered on this requirement— hence the importance of congressional action.

The IAEA Roadmap imposes an October 15 deadline for resolving issues pertaining to PMD. By December 15, the head of the IAEA will submit his final assessment of the issue to the IAEA Board of Governors, of which the United States and its P5+1 negotiating partners are all members. At that point, according to Paragraph 14 of the JCPOA, America and the other members of the P5+1 “will submit a resolution to the Board of Governors for taking necessary action, with a view to closing the issue.” This cryptic phrasing suggests that something less than a full resolution of PMD concerns would be sufficient. Congress should hold the administration to its prior commitment that the nuclear deal cannot go forward short of a full resolution.

In the interim, Congress can pursue access to the full text of the deals between Iran and the IAEA, consistent with the requirement of the Iran Nuclear Agreement Review Act that the administration provide lawmakers with the full contents of any nuclear deal — “including annexes, appendices, codicils, side agreements” and other supplementary documents.

Conclusion

While Congress can limit the negative consequences of the nuclear deal, such mitigation efforts cannot correct the JCPOA’s fundamental shortcomings. As Sen. Booker lamented, “this deal has clear flaws and substantial risks even beyond the obvious and disturbing short duration of its term. With this deal, we are legitimizing a vast and expanding nuclear program in Iran. We are in effect rewarding years of their deception, deceit, and wanton disregard for international law.” Booker and other skeptical supporters still believe that such a deal is better than none at all. Yet the only way for the deal to meet even that low standard is for a bipartisan coalition of critics and skeptical supporters to pass corrective measures that prevent Tehran’s wholesale exploitation of the JCPOA’s many ambiguities and loopholes.

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Authors’ note: This publication misstates the legal contours and significance of the Iran Sanctions Act. For an updated analysis of ISA, please click here.

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