Iran Pressuring US on Sanctions Ahead of Rejoining Nuclear Agreement

The decision to discuss sanctions relief for Iran before getting hard commitments on its nuclear weapons program showed American weakness at the wrong moment, experts say

The Iranian government is placing its own maximum pressure campaign on the United States.

The Biden administration made the re-entry of the US to the multi-party Iranian nuclear accord a focus of its foreign policy. But, after six rounds of indirect negotiations in Vienna between Tehran and Washington, the sides appear to have reached a stalemate, with no signs of a seventh round on the horizon.

One of the main issues left to be resolved is an agreement on which of the over 1,500 sanctions imposed on the Iranian regime will be lifted by Washington in order to entice Iran back into a deal.

According to a report that Iranian Foreign Minister Mohammad Javad Zarif gave to Iran’s parliament on Monday, the Biden administration has offered up a host of sanctions relief, including the removal of the foreign terrorist organization designation from the Iran Revolutionary Guard Corps, and the removal of sanctions on the office of the Supreme Leader and of all related sanctions on Iran’s economy. In addition, all but one Iranian bank, including the Central Bank of Iran, will be removed from the sanctions list. Zarif also claims Washington has agreed to annul a number of executive orders related to sanctions, and to suspend the National Defense Authorization Act (NDAA) of 2012, the Iran Threat Reduction and Syria Human Rights Act (TRA), the Iran Freedom and Counter-Proliferation Act (IFCA) and the Iran Sanctions Act (ISA), as well as to rescind a pair of 2018 Financial Crimes Enforcement Network (FinCEN) advisories.

Zarif says the Biden administration will keep most of its primary sanctions (or sanctions that are applied by blocking or freezing the assets of a “specially designated national” and that prevent US citizens from doing business with those individuals or entities) in place – with the exception of airplanes and carpets, along with human rights, terrorism and missile sanctions. However, Zarif claims that if the US returns to the Joint Comprehensive Plan of Action (JCPOA), the official name for the nuclear deal, all sanctions mentioned in the original agreement, together with later sanctions that prevent Iran from enjoying the benefits of the JCPOA, will be lifted.

None of Zarif’s claims have yet been verified or corroborated by Washington.

What they’ve already done has gone too far. There have been well-documented Iranian violations in every area: the nuclear deal, terrorism, human rights – you should begin from a negotiating position of strength

Some hawkish analysts say that even broaching the topic of sanctions relief before getting hard commitments from Tehran on its nuclear and ballistic missile programs and its malign activities throughout the Middle East – what US Secretary of State Antony Blinken claimed at the outset of the Biden administration would be part of a “longer and stronger deal,” showed American weakness at the wrong moment.

“What they’ve already done has gone too far. There have been well-documented Iranian violations in every area: the nuclear deal, terrorism, human rights – you should begin from a negotiating position of strength,” Irina Tsukerman, a US-based national security and geopolitical analyst, told The Media Line.

“The entire trajectory of negotiations has been filled with American concessions, and the more it concedes the worse the situation gets. We’ve seen more aggression against the Saudis, more US targets hit in Iraq, more violence from the Houthis (an Iran-backed militia in Yemen) since the Biden administration removed the FTO (foreign terrorist organization) designation from them. After the 2015 experience of negotiating the original nuclear deal, it should be clear that Iran is not interested in anything except concessions from the other side,” said Tsukerman.

Many of the sanctions imposed by the administration of then-President Donald Trump after the 2018 US withdrawal from the JCPOA hobbled the Iranian economy, punishing the regime even before the COVID-19 pandemic struck. The harshest restriction was the effective ban on the legal sale of oil abroad, once Tehran’s biggest source of external revenue.

But in the three years since, Iran’s government has managed to weather the toll of those sanctions while making technological advances that can’t be reversed and coming closer to the production of a nuclear bomb than ever before, according to experts.

“Iran managed to create sources of income even outside of the Trump sanctions – shadow income, organized crime. It simply wasn’t enough,” said Tsukerman.

Iran is still interested in some kinds of sanctions relief, say experts.

There is an estimated $90 billion in sanctions relief through foreign exchange assets, currencies and other mechanisms available as soon as an agreement is signed, plus an estimated $50 billion a year in increased oil and petrochemical sales, with no restrictions on that money going to terror groups or on weapons going to proxies, and no terms and conditions outside of nuclear activity.

“What Iran wants most and what it thinks it can get is all the oil, petrochemical and economic sanctions that are purely for economic reasons – focused on inflicting economic damage – pulled. I don’t think the US will fight that if it means getting to a deal,” Gabriel Noronha, former State Department special advisor on Iran, told The Media Line.

The more difficult sanctions to unwind are the banking sanctions and economic sanctions with a terrorism nexus, which means those entities were shown to be supporting terrorist activities. Sanctions experts point to the Trump administration’s deliberate strategy of intertwining a terrorism component into the original sanctions, making it harder for a subsequent administration to detangle them for the purpose of re-entering the JCPOA. It’s estimated that around one-third of the 1,500-plus sanctions were designated under multiple authorities.

“Trump sanctioned Iran’s central bank for supporting and funding terrorism. In order to remove a sanction like that, you have to prove to OFAC (Office of Foreign Assets Control), Treasury Department and Justice Department lawyers that they are no longer supporting terrorism – that the statutory basis for imposing these penalties is no longer active. Those sanctions went through a rigorous, lengthy inter-agency process with career professionals – not political appointees. It’s not supposed to be a political decision,” said Noronha, now the executive director of the Forum for American Leadership.

The Americans caved early on when it came to applying strings or producing a so-called longer and stronger agreement. There’s definitely no chance now.

With Iran’s central bank involved in so many transactions, there is little point for Iran to re-enter the nuclear accord if it can’t get that terrorism designation and, subsequently, the original sanction removed.

And that means that there aren’t just negotiations between the teams in Vienna, but internal negotiations within the US government.

“My understanding is that, a few months ago, the US negotiators were going to the lawyers and asking which sanctions we can give up. Some are on board with the administration, but there are holdouts and power struggles. If the US and Iran do reach a deal, the treasury secretary or attorney general could say ‘I am in charge, I am the head lawyer and I am overriding the lawyers’ findings,’ but the system isn’t built to work like that,” said Noronha.

There are also individuals and companies sanctioned under conduct-based or status-based authorities. Zarif himself is under status-based sanctions based on his job title. The Iranians feel those types of sanctions are purely political and want to see them go.

“Some of those people are really unsavory – among them are human rights abusers under conduct-based sanctions. The question is whether the Biden administration, which has put such a focus on human rights, is willing to politically do this,” said Noronha.

Visa bans are also up for discussion, though they are much less of a deal breaker.

A completely different discussion would entail whether it is even advantageous for the Biden administration to re-enter the JCPOA, given the doubts that it would still be sufficient to constrain the country’s nuclear ambitions. Last Tuesday, the International Atomic Energy Agency reported that Iran has taken steps to make metal fuel plates with uranium it has enriched to 20% purity. That is banned by the JCPOA and marks a significant step toward production of a nuclear bomb, with knowledge that cannot be put back in the proverbial box.

The JCPOA was built so that Iran would always be at least a year away from being able to assemble a nuclear bomb should it choose to leave the deal. The State Department has said publicly that the breakout time now is down to a few months, and some experts say it may never get pushed back to a year again. This is in part because Iran today is in possession of nuclear weapons-grade material and advanced centrifuges.

“They have been committed to their ideology for 40 years and draw the line when they have to compromise on it. There is no reason to believe they are going to change. The Iranians are independent actors with their own agenda and they have shown they don’t need to operate on anyone else’s terms,” said Tsukerman.

Ebrahim Raisi, Iran’s newly elected hard-line president who will soon take office, has made clear he has no interest in even holding discussions on anything beyond the original parameters of the 2015 nuclear accord.

“The Americans caved early on when it came to applying strings or producing a so-called longer and stronger agreement. There’s definitely no chance now,” Noronha concluded.