U.S. hardliners seeking to disrupt negotiations that would constrain but not eliminate Iran’s nuclear program are citing Iran’s efforts to evade U.S. oil sanctions as their latest excuse. But Iran has no obligation to submit to U.S. sanctions, notes ex-CIA analyst Paul R. Pillar.
By Paul R. Pillar
There exists, right now, a problem with one side’s obligations not being fulfilled as provided for under the preliminary agreement, known as the Joint Plan of Action, that Iran reached with the United States and its negotiating partners (the P5+1) last November. This lack of fulfillment endangers the process of negotiating a final agreement.
It is an understandable source of consternation to the other side, which will increasingly doubt the first side’s ability and willingness to make good on its commitments, including in any final deal. Hardliners on the second side will pounce on any non-fulfillment of the terms of the JPA as a reason to scuttle the whole process.
So is Iran not living up to its commitments under the JPA? Well, we do have hardliners on our own side eager to pounce. In fact, they are so eager that they are trying to pounce even though there isn’t anything to pounce on.
Senators Robert Menendez, D-New Jersey, and Mark Kirk, R-Illinois, who led the recent unsuccessful effort in Congress to impose additional deal-busting sanctions after conclusion of the JPA, have sent a letter to President Barack Obama that bemoans indications of some increased Iranian oil sales and says “If Iran moves forward with this effort to evade U.S. sanctions and violate the terms of oil sanctions relief provided for in the JPA” the United States should in effect renounce its obligation under the JPA to, this is the wording of the JPA, “pause efforts to further reduce Iran’s crude oil sales.”
The senators make it sound as if Iran has some obligation under the agreement to knuckle under to sanctions, don’t they? Otherwise how could Iran “violate” what they are talking about? But Iran has no such obligation.
All the obligations in the preliminary agreement concerning sanctions are obligations of the P5+1 (including that very mild “pause efforts” clause, which does not entail rolling back the existing oil sanctions). All of Iran’s obligations involve restrictions on its nuclear program. According to the International Atomic Energy Agency, Iran so far is in compliance with those obligations.
No, the current problem in implementing the agreement involves another part of the P5+1’s side of the deal, not Iran’s side. Specifically, it involves the unfreezing in installments of a small portion ($4.2 billion out of an estimated $100 billion) of the Iranian money that already was earned from prior oil sales and is sitting in non-Iranian banks.
Iran has been unable to withdraw much of the money that it was supposed to have gained access to by now. It appears the problem is not direct violation of the agreement by the U.S. Treasury or any of the other governments involved. Instead, the banks that are to handle the funds are so deathly afraid of running afoul, however inadvertently, of any continuing sanctions that Treasury is enforcing that they have not made the money move.
The fear is understandable, given how huge and complex the sanctions regime has become and also how huge have been fines that Treasury has levied on transgressors. The marvelous sanctions machine is so powerful that it continues to exude power and have effects even after a switch has been turned off. Treasury needs to do more than just saying “go,” and more than it has done so far to put banks into their comfort zone, for the JPA to be implemented the way it was supposed to be.
Iranian President Hassan Rouhani had a big enough challenge domestically as it was to sell a preliminary agreement that gave the P5+1 most of what it wanted in restricting the nuclear program while getting only modest sanctions relief in return. His selling task is made all the harder when even that modest relief is not properly implemented. And there certainly are hardliners on his side ready to pounce on any such developments.
This issue is a reminder of how an Iranian belief that the West and especially the United States will come through with positive action if Iran makes desired concessions is just as important as (and given how the issue has evolved, has become even more important than) an Iranian belief that it will be hit with still more negative consequences if it does not concede.
The current problem also underscores how much work, political, not just administrative, on the U.S. side remains to be done to prepare for the undoing of sanctions that will be part of any final agreement, and that necessarily will be substantially greater than the minor sanctions relief in the JPA.
Members of Congress are still talking about piling on more sanctions when they ought to be discussing how to take sanctions off the pile. We have already seen how hard it is to redirect the sanctions machine. Aircraft carriers do not turn around on a dime, and neither do sanctions, especially ones as complicated and extensive as the ones on the Iranian pile.
Even if the more optimistic projections of when a deal will be struck in Vienna do not prove true, it is not too soon for Congress and the administration to be working diligently on this and for it to be a subject of public discussion.
Paul R. Pillar, in his 28 years at the Central Intelligence Agency, rose to be one of the agency’s top analysts. He is now a visiting professor at Georgetown University for security studies. (This article first appeared as a blog post at The National Interest’s Web site. Reprinted with author’s permission.)
There is no nation more critical to America’s long term strategic interests than Iran. A strong alliance with Russia and China will effectively checkmate the US in Central Asia.
Iran is a global pivot point between the civilizations of East and West, as it has been throughout history. The neocon obsession is justified by thousands of years of experience.
Today’s Islamic Republic is a planetary swing state for US influence in Europe, Turkey, the Gulf and India.
Syria and Iraq are today’s equivalent of the Orange Free State and Transvaal. The Levant has broken the American Empire like the Boer War broke the British.
Funny thing: the same gangsters are at it again.
Israel’s relatively neutral stance on Crimea, even voting with the Russians and against the US on a critical UN resolution, suggests they understand how the game has changed. Unlike Americans, Jews do remember their history.
It is not difficult to forsee America turning in on itself after the collapse of US dollar hegemony. At which point Israel would be abandoned. I think the Israeli government is taking this possibility into account.
All while Turkey, Qatar and possibly Egypt consider a turn toward Iran and Russia.
These be heady days for jackboot enthusiasts.
If the monies to be released by the private banks are now being withheld under a false interpretation of the law and its application, why are not the U.S. Treasury and State Departments clarifying and correcting this problem. And, aren’t the banks now liable if they have made a mistake? What’s the old adage? “A mistake in the law is no defense”?
I recall a much smaller and slightly different problem of the Bank of Hawaii overreaching on account of its fear of violating the sanctions. See: http://www.lobelog.com/iran-sanctions-hit-the-aloha-state-via-bank-of-hawaii/
In that case, the bank had closed the accounts of Iranian students legally in the U.S. Ultimately, that one was resolved, after negotiations between all parties, including the regulators.
See: http://www.niacouncil.org/site/News2?page=NewsArticle&id=10563&security=1&news_iv_ctrl=-1 and http://counterjihadreport.com/2014/03/12/bank-of-hawaii-unfreezes-iranian-accounts/ According to the latter report, “President Barack Obamaâ€™s grandmother Madelyn Dunham served as Bank of Hawaiiâ€™s vice president for 16 years until her retirement in 1986.” (A Washington Beacon report on the dispute and its resolution has been removed from the web.)