Obama's New Answers on Iran
May 5, 2015
Top Obama administration
officials have released new details about how they would lift most
sanctions against Iran. Those are unnerving some experts, who doubt
the administration’s claims about the sanctions will hold up.
In speeches last week to a
conference at the Washington Institute for Near East Policy, Treasury Secretary
Jack Lew and Vice President Joe Biden revealed new details about the end of most
sanctions against Iran if a nuclear deal is reached. The officials also claimed
that most of the sanctions, including multilateral sanctions, could be snapped
back into place if Iran cheated, and they argued that giving Iran tens of
billions of dollars in cash won’t dramatically increase Iran’s spending on
terrorism and other nefarious activities.
Lew spoke to a private meeting
of Washington Institute members last Wednesday, after which Treasury posted
his remarks. He said that President Obama planned to use his own
authority to suspend sanctions against Iran’s oil, banking and trade sectors
after Iran complied with the initial parts of the deal and that Congress
wouldn’t actually be asked to lift sanctions during his presidency.
“Only after many years of
compliance would we ask Congress to vote to terminate sanctions, and only
Congress can terminate legislative sanctions,” he said.
Lew said this suspension,
rather than a legislative repeal of sanctions, would allow the administration to
quickly reinstate U.S. sanctions if Iran is caught cheating. He also said that
United Nations sanctions would be able to snap back easily and no single nation
would be able to stop that.
“We have made it abundantly
clear that if Iran breaks its commitment, it will face once again the full force
of the multilateral sanctions regime,” he said. “The snapback would not be
vulnerable to a veto by an individual P5 member, including China and Russia.”
That explanation directly
conflicts with what Iranian Foreign Minister Javad Zarif told
an audience at New York University earlier that day. Zarif said that
UN sanctions would be lifted within days of an agreement being signed and that
all sanctions would be permanently lifted, including Congressional sanctions,
once Iran met its initial obligations.
Treasury officials told me
that Lew’s statements were in line with previous administration explanations
about how sanctions would be suspended and potentially put back into place
later. But the Washington Institute’s Matt Levitt, a former Treasury official
who moderated the April 29 event with Lew, said that once sanctions are
suspended, especially the multilateral sanctions, there’s no easy way to put
them back into place.
“No one should be fooled
into thinking there will be any automaticity here,” he said. “If we thought
Iran was cheating, the debate then moves to whether there was in fact a
violation. You can see a situation where Russia and China will dispute whether
there is in fact a violation.”
Levitt and other experts also
noted that Lew said the sanctions on one specific part of the Iranian regime,
the Quds Force of the Iranian Revolutionary Guard Corps, will stay in place.
Treasury considers it linked to terrorism.
Lew didn’t say anything
about the rest of the Revolutionary Guard, which is sanctioned for both
proliferation and human rights violations and controls as much of a third
of the Iranian economy through shell companies in mining, banking and
oil. It stands accused of directing huge amounts of illicit activity around the
“Lew is signaling that the
administration is planning on delisting IRCG banks, energy companies and
shipping companies, and perhaps the entire IRGC,” said Mark Dubowitz,
executive director of the Foundation for Defense of Democracies.
Hagar Chemali, a Treasury
spokeswoman, told me Lew was not stating directly that the entire IRGC would be
free from sanctions if a nuclear deal were signed.
“As we have stated numerous
times, sanctions related to Iran’s support for terrorism, human rights and
other destabilizing behavior will remain in force,” she said. “It would be a
mistake to pre-judge any other potential future actions.”
Several experts said that in
order for Iran to receive the sanctions relief it seeks as part of a deal, most
if not all of the IRGC sanctions would have to go. That could allow for a
huge expansion of the group’s influence and activities.
“Isolating the Quds force
from the rest of the IRGC ignores the fact that there is a vast IRGC
infrastructure that has been involved in human rights violations, proliferation,
and terrorism,” said Jonathan Schanzer of the Foundation for Defense of
Democracies. “It leaves the IRGC with a great deal of room to
The exact amount of money Iran
would receive after a deal is signed is also in dispute, but Lew said not to
worry about that either: Iran has between $100 billion and $140 billion of oil
in foreign banks. $30 billion to $50 billion could be released to
Iran right after signing a deal, according to Congressional officials who have
been briefed on the negotiations. But Lew said Iran was likely to spend that
cash on domestic needs and not on terrorism or support for violence.
“President Rouhani was
elected on a platform of economic revitalization, and Iranians are demanding
proof that engagement with the international community will produce tangible
economic benefits,” Lew said. “As a result, Iran is expected to use new
revenues chiefly to address those needs, including by shoring up its budget,
building infrastructure, maintaining the stability of the rial, and attracting
Lew also said that Iran has
lost so much money to the sanctions, it would take the Iranian government years
to recoup those losses. Levitt disagreed and said that the Iranian economy
doesn’t have to recoup losses like a business would.
“It’s a cute argument, but
it misses the point,” said Levitt. “I don’t think the argument is going to
sway people in the region, particularly the Gulf states, who are very worried
about the near-term release of significant amounts of money that will empower
Iran to do all sorts of things.”
Dubowitz sees the same risk:
“When you give bad people bad money, they use it for bad things.”
Biden, in his
April 30 speech at the Washington Institute, made a more emotional
argument for the deal, praising the administration’s work to build up
sanctions against Iran and the progress of the negotiations so far.
“It’s true that Iran could
try to cheat, whether there’s a deal or not,” he said. “Now they didn’t
cheat under the interim deal — the Joint Plan of Action — as many were
certain they would.”
That record of good behavior
is debatable. Iran stands
accused of violating the interim deal in a
number of ways and also reportedly violated other parts of the
existing sanctions regime, including by expanding an illicit nuclear procurement
network that operates through two blacklisted firms.
Under the deal being
discussed, Biden said, Iran would allow inspectors to visit “not only declared
nuclear facilities, but undeclared sites where suspicious, clandestine work is
suspected.” He said the the international community would have “the
ability to challenge suspect locations.”
Experts following the talks
say the Iranians have ruled out any access to military sites, which makes
Biden’s pitch a little weak.
“Having the ability to
‘challenge’ suspect sites is not the same thing as getting access to them,
which is the key thing,” particularly when the Iranians have taken military
installations off the table, said Eliot Cohen, who served as State Department
Counselor during the George W. Bush administration.
The speeches by Lew and Biden
constituted the administration’s most assertive effort to date to detail their
thinking about how sanctions will be lifted. The two officials seemed to be
eager to get ahead of any and all the criticisms they are anticipating. But they
did not. Unless the nuclear talks shift significantly before the June 30
deadline, the administration will continue to face questions it can’t answer.