Saving the Iran Nuclear Deal, Despite Trump’s Decertification

by International Crisis Group

U.S. President Donald J. Trump’s October 13 decision not to certify Iran’s compliance with the Joint Comprehensive Plan of Action (JC POA) based on his assessment that the agreement’s costs outweigh its benefits will not, in and of itself, abrogate the deal. But it seriously, unnecessarily and recklessly undermines it. At best, it injects a level of uncertainty and unpredictability in a region that already has a surfeit of both. At worst, it is the opening salvo in a potential tit-for-tat that ultimately could unravel the deal, resuscitate the specter of military confrontation and significantly compromise any prospect of a diplomatic settlement of the far more acute and perilous North Korean nuclear crisis.

The accord’s fate now primarily rests on the actions of others: Iran, which could wisely display patience and avoid provocative counter-measures; Europe, which is beholden to the deal and would need to stand up to U.S. pressure; and the U.S. Congress, which ought to avoid the trap laid out in plain sight by the president and refuse to restore sanctions on Iran in violation of the deal or unilaterally alter the terms of the multilateral accord in the illusory hope that they can compel Tehran to renegotiate it.

That Iran has been in compliance with its JCPOA obligations is beyond dispute. This repeatedly has been verified by the impartial UN nuclear agency entrusted with monitoring Iran’s actions with the most rigorous inspection regime ever negotiated; by all the JCPOA’s signatories; indeed, by the U.S. itself. Unable to argue non-compliance when its own state department and defence and intelligence community have found otherwise, the president has opted for another path made possible by congressional legislation: refusing to certify the JCPOA on the grounds that the sanctions suspension is not proportionate to Iran’s nuclear steps. For the White House, this has all the makings of a win-win-win scenario: it signals opposition to the deal while removing the burden of periodically certifying it; creates doubt as to its survival without taking responsibility for torpedoing it; and shifts that burden to Congress, which has until 14 December to decide whether to restore, through an expedited process by a simple majority, the sanctions waived under the JCPOA.

Such dramatic congressional action seems unlikely. The administration and key lawmakers are disinclined to take this step, which would be tantamount to a unilateral U.S. exit from the deal – and thus a recipe for U.S. isolation and condemnation by its allies. Instead, their preference has gravitated toward a more subtle but potentially equally destructive route: to codify a threat to automatically snapback sanctions Congress previously suspended if, among other things, Iran no longer abides by restraints on its nuclear program after they elapse. In other words, legislation that would reimpose sanctions even if Iran continues to scrupulously abide by the deal. Needless to say, such a unilateral alteration of the JCPOA would constitute a violation of the accord.

Worse, President Trump warned that he would walk away from the deal if Congress were not to pass such legislation, or if other JCPOA signatories did not agree to “fix” the deal’s alleged flaws (notably that some of its provisions expire within 10, 15, 20, or 25 years, that Iran can conduct limited research and development, and that the International Atomic Energy Agency does not have unhindered access to Iran’s military facilities). In other words, Trump’s message to U.S. partners is: violate the deal with me, or I’ll violate it alone.

The idea of a renegotiation is a chimera, and dangerous to boot. Iran’s leaders have made it plain they will not renegotiate a just-concluded deal under pressure from a co-signatory that is threatening to walk away and whose compliance with the agreement’s provisions they already doubt. Besides, any renegotiation inevitably would include reciprocal demands from Tehran that, at this point, it seems utterly implausible the U.S. would entertain.

The White House might have other ideas in mind. It may be aiming not so much to achieve an unrealistic renegotiation, but rather either to ensure Iran complies with the agreement’s nuclear provisions without enjoying its economic benefits, or to push Iran to exit the deal. Whatever the case, the administration’s logic is both flawed and pernicious: it simultaneously claims that preventing Iran from developing a nuclear weapon is their most important priority; acknowledges that Iran is complying with a deal that achieves precisely that goal; and announces steps that potentially jeopardize it.

Risks go beyond the JCPOA’s survival. As Iran’s anger at U.S. actions and doubts regarding its intentions grow, and as growing uncertainty over possible U.S. sanctions risk scaring away potential foreign investors, it might eschew a direct response on the nuclear front. But its restraint could be tested on non-nuclear matters: some of its senior military officials already have threatened to directly or indirectly target U.S forces and assets in the Middle East in retaliation for sanctions aimed at Iran’s Revolutionary Guard Corps, which the White House has announced would be a primary target of its policy.

With tensions rising and no high-level political channel between Tehran and Washington, an incident at sea, escalation by proxy in Yemen or a clash between the two sides or their respective allies in the race for territory once occupied by ISIS rapidly could take a turn for the worse. More generally, in such circumstances, Tehran is likely to double down on policies it views as intrinsic to its national security: its ballistic missile program and alliance with non-state actors and proxies in Iraq, Lebanon, Syria and Yemen. The result would be that, by destabilizing the JCPOA, the Trump administration could provoke precisely the outcome it purportedly seeks to avoid.

All of which explains why the deal’s survival now rests in other hands. First, Iran: its leaders have indicated that as long as other members of the P5+1 (and in particular its European members) remain committed to the accord, they will uphold it. The wiser course is indeed to adhere strictly to the deal, avoiding even technical infringements, refraining from responding to U.S. legislation inconsistent with the deal with reciprocal laws of their own, and eschewing provocative actions that not only would threaten regional security but ­– by prompting more sanctions by the U.S. Congress – plausibly spell the JCPOA’s death knell. Better yet, Iran’s leaders should recognize that the deal will remain vulnerable as long as tensions between the U.S. and its allies on the one hand, and Iran on the other, remain high. Improving ties with neighbors and taking genuine steps to de-escalate regional conflicts would go a long way toward bolstering the nuclear deal.

As senior Iranian officials put it to Crisis Group, Tehran’s ultimate decision regarding the JCPOA will be guided both by political interests, such as the desire to maintain robust relations with Europe and drive a wedge between it and the U.S., and commercial considerations, which include the benefits they expected to flow from the deal. How likely it is that Europe will stand up to U.S. pressure is uncertain. Washington banks on the fact that, notwithstanding European vows to respect the deal, the imposition of U.S. secondary sanctions would place its businesses before the not-so-difficult choice of either scaling back their (relatively modest) Iranian trade and investment or risk jeopardising access to the far larger and more lucrative U.S. market.

Which brings us to the posture of other P5+1 members in general, and Europe in particular. So far, they essentially have spoken in one voice, including up until the eve of Trump’s decision, asserting that they will stick to the JCPOA notwithstanding Washington’s views. Some of the deal’s critics have seized on French President Emmanuel Macron’s stated willingness to supplement the agreement by addressing ballistic missiles and extending the duration of some constraints on Iran’s nuclear program as a sign that Paris is open to a renegotiation. That is a mistaken and self-serving interpretation. Macron, like leaders of all other P5+1 states, repeatedly emphasised the primary importance of preserving the JCPOA. True, France and others wish to address other aspects of Iran’s approach and see pressure and diplomacy as twin tools to that end. But they do not propose to do so – congressional arms twisting and presidential blackmail notwithstanding – by holding the nuclear deal hostage or threatening to violate it in the event such a supplemental agreement cannot be reached.

Now that President Trump has announced his decision, European governments should reiterate their position and communicate publicly and to the U.S. that they will neither renegotiate the deal nor comply with unwarranted unilateral U.S. sanctions on Iran and will continue to abide by their own JCPOA obligations. The EU could go the extra step and revive its “Blocking Regulations”, prohibiting compliance with U.S. extraterritorial sanctions, thereby making clear that they will not give effect to U.S. judgments and administrative determinations pursuant to such sanctions and that companies will be reimbursed for damages incurred for alleged sanctions violations.

Given the extent of trade growth between the EU and Iran since the deal came into effect – a 94 per cent increase in the first half of 2017 as compared to the same period in 2016, along with several major investment contracts – Europe’s role in protecting the deal will be pivotal. For some European banks and companies, the choice between a $19 trillion U.S. market and a $400 billion Iranian one will be a no-brainer, but others arguably may be more willing to take the risk of dealing with Tehran if they feel shielded by their governments. In that spirit, the EU could signal its intent to facilitate financial transactions with Iran by expediting the process of turning Iran into one of the European Investment Bank’s partners to support private sector and infrastructure development in the country. Overall, Europe’s goal should be to send a political signal to both Tehran and European companies, providing both with reassurance and cover.

Finally, and crucially, the U.S. Congress. The rashest of actions for now also appears the least likely: entirely snapping back the suspended nuclear sanctions. But as seen, there is danger in the so-called “third way”: congressional action that does not immediately re-impose all sanctions but penalizes Iran and threatens to restore some in response either to Iranian actions not covered by the JCPOA or its refusal to modify the accord. Non-certification by Trump creates no obligation on the Congress other than to consider whether to re-impose sanctions. In the absence of an Iranian breach of the nuclear deal, U.S. legislators could simply, and prudently, decide to do nothing, making plain that the administration already possesses all the tools required to sanction Iranian ballistic missile activity, support for militant groups or human rights violations. Alternatively, if they feel the political need, they could pass legislation that clearly connects the prospect of sanctions re-imposition to Iranian violations of the nuclear deal that the JCPOA adjudication mechanism fails to remedy.

What they should not do is become unwitting accomplices in the White House’s all-too transparent effort to undo by stealth a deal that is working, and whose collapse would provoke a wholly unnecessary and dangerous set of crises not limited to the Middle East.

Reprinted, with permission, from the International Crisis Group website.

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  1. The principal crisis now is not the JCPOA, it seems to me, it is the possibility of war with Iran because the US has a policy of killing terrorists and even suspected terrorists, and also those deemed guilty of supporting terrorists (e.g. Taliban). The “war on terror” is a terrible thing and it may be about to get worse regarding Iran.
    The US Congress and State Department have accused the Iranian Revolutionary Guard Corps (IRGC) of supporting terrorism. They have not labeled the IRGC as terrorists. But President Trump has said: “The Revolutionary Guard is the Iranian Supreme Leader’s corrupt personal terror force and militia.” It’s not a formal declaration, but close to it, and the formal declaration may come because the US-supported Syria regime change forces have been defeated by the IRGC and the US seeks revenge.
    Previous to this, IRGC Commander Major General Mohammad Ali Jafari said: “If the scattered news about the stupidity of the U.S. government regarding the IRGC as a terrorist group is correct, the Guards will also consider the American military all over the world, especially the Middle East, as equal to Daesh.” That would mirror the US policy of war on”terrorists,” an imprecise sobriquet that applies to many groups, the principal qualifier being US dislike of the group.
    Iran is saying, in essence, what’s fit for the goose is fit for the gander. You designate terrorists and kill them, and if it’s us then we will counter you. A war is an easy thing to start but difficult to end as we have learned.

  2. The whole US behavior so far, and its bullying threats to punish its alleged allies economically if they do not obey Big Brother, should push the Europeans to find ways to cooperate in helping Iranian trade deals they are already involved in, to do their utmost to reduce the US dollar domination in trade. Russia, China, BRICS members and others are using other currencies. Can the “US allies” who are being maltreated (as they have already lost billions in the Russia sanctions) develop some spine and not kowtow to the extremism of the USA?

  3. @ rosemerry
    Some claim that the US attacks against Iraq and Libya happened because those countries expressed interest in selling oil in something other than dollars, like Euros, which threatened the dollar as the world’s prime reserve currency. (It goes back to Bretton Woods and an agreement with Saudi Arabia.)
    Now there’s this: “I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them,” Carl Weinberg, chief economist and managing director at High Frequency Economics, told CNBC.
    China is promising conversion of Yuan to gold — the gold standard. This would be a sharp blow against the dollar. Hold on! This could get interesting.

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