The Obama administration is trying to fashion a nuclear deal with Iran that would give the United States the flexibility to reimpose limited sanctions without scuttling the entire deal, according to people who attended White House meetings on the matter last week.
The measures would not only “snap back” if Iran engages in a wholesale violation of a nuclear accord, but also inch back if the United States or its allies detect a more minor breach that can be rectified.
White House officials have been testing ideas in meetings with outside experts on nuclear weapons and economic sanctions as the U.S.-led talks on limiting Iran’s nuclear program near a conclusion in the next two weeks. White House officials — including deputy national security adviser Ben Rhodes and Vice President Biden’s national security adviser Colin Kahl — have described the more modest measures as a “Chinese menu” of options.
Figuring out how to reimpose sanctions, or tailoring snap-back sanctions, is as sensitive as figuring out when to lift them. One view is that the United States and its allies do not want to wreck a deal that took so long to negotiate for a relatively minor violation that can be fixed. But at the same time, the administration does not want to construct a deal that signals to Iran that violations are acceptable.
The timing and scale of lifting economic sanctions — as well as reimposing them if violations take place — are key sticking points in the negotiations that Secretary of State John F. Kerry is expected to rejoin this week. Although next Tuesday is the official deadline, the White House has noted that talks could run over. After July 10, however, the amount of time Congress has to consider the agreement will increase from 30 days to 60 days.
Iranian Supreme Leader Ayatollah Ali Khamenei could be an insurmountable obstacle. In a speech broadcast Tuesday, he said that “all financial and economic sanctions imposed by the U.N. Security Council, the U.S. Congress or the U.S. government should be lifted immediately when we sign a nuclear agreement.”
Iran wants foreign investment and is eyeing the more than $100 billion from past sales of Iranian oil that is being held in escrow accounts. Iran has very limited access to that money. It also wants to boost oil exports, which decreased by almost half, to 1.4 million barrels a day, in 2014 because of sanctions, the U.S. Energy Information Administration said Wednesday.
Although Iran wants sanctions lifted quickly, U.S. officials warn that they will be eased over a period of months or longer as Iran meets requirements in the agreement for scaling back its nuclear program. Moreover, U.S. officials say, untangling the variety of sanctions imposed by the United Nations, the European Union and the United States over the past 35 years will be complex and time-consuming. Some, such as those related to human rights or sponsoring terrorism, will not be lifted at all, U.S. officials say.
One way around the gap between U.S. and Iranian positions might be to provide for an “implementation period,” after which Iran could declare that sanctions would be lifted on “day one” after that period, said an expert who has discussed options with senior administration officials.
“Basically there’s a phased approach that we insist upon in which Iranian nuclear steps would be certified by the International Atomic Energy Agency, and there would be commensurate sanctions relief afforded to Iran,” a senior administration official said. “We’re not talking about or putting on the table sanctions with respect to human rights, censorship, support for terrorism, or any of the sanctions that relate to Iran’s malign interventions in regions in Syria, Iraq or Yemen more recently.”
President Obama can waive certain sanctions or issue broad licenses (as was done with Burma) without seeking legislative changes from a Congress skeptical about a nuclear deal with Iran. That will avoid a confrontation now and enable the administration to quickly reimpose sanctions if necessary.
Still, there are limits to what the United States is willing to do. Reaching a deal, the senior administration official said, will be “not a moment for major sanctions relief. It will be a moment for preparatory steps to begin.” He said that in many respects, the speed with which it implements the agreement will dictate the pace of sanctions relief.
The administration is writing language for a new U.N. Security Council resolution in such a way that the United States or its European allies could later reimpose sanctions by exercising an effective veto over suspending sanctions if violations take place rather than giving Russia or China veto power over reimposing sanctions, said sources familiar with the efforts.
The United Nations will continue sanctions for certain Iranian entities to restrict sales of ballistic missiles and certain conventional weapons and will create a procurement channel for sensitive dual-use technologies, the sources said.
A new U.N. resolution could enable Iran to say that sanctions were lifted immediately even if the terms of the resolution do not take effect immediately.
Some experts worry that the administration will not make those partial snap-back measures strong enough.
“The reimposition of sanctions by the U.N., by the U.S. and E.U. must be broad, comprehensive and forceful in order to be a powerful deterrent to Iran,” said Elizabeth Rosenberg, senior fellow at the Center for a New American Security and a former Treasury official dealing with sanctions. “Half measures provide half the incentive to comply — or less,” she said.
“Certainly a good agreement will have layers of consequences for different violations,” said Kelsey Davenport, director of non-proliferation policy at the Arms Control Association, an independent group. “You certainly don’t want to end up in a death-by-paper-cut situation where violations go unpunished. But you shouldn’t go in other directions where you end up reimposing sanctions with severe economic consequences for something relatively minor or a mistake or something resulting from an ambiguity in the agreement.”
Said Joseph Cirincione, president of Ploughshares Fund, a global security foundation: “How do you put in place the ability to escalate the sanctions you’re snapping back? Is it unintentional? Well that still has to be discouraged and punished. Is it really a subterfuge to get around the agreement? Then you punish more severely. If it’s a pattern, then more.”
Davenport added that “it will be important to have the right Chinese menu to align different violations with different responses.” Cooking up that menu of consequences is still under discussion, said Davenport, who attended one of the White House meetings last week.
Negotiators are also still working out how much access the International Atomic Energy Agency needs to detect possible violations.
Iran already is looking beyond sanctions and is trying to lure foreign companies. Iran’s Fars News Agency reported that government officials hoped that French companies such as Airbus would provide spare parts or new planes for Iran’s aging fleet, and assistance in upgrading airports.
Although U.S. companies are still barred from negotiating post-sanctions contracts, Iran is luring oil companies by floating drafts of long-term agreements on better terms than offered in the past. The new contracts would last twice as long, as many as 25 years, and provide for production sharing, rather than the buyback arrangements that resemble service contracts.
Access to oil production in a country such as Iran, which has the world’s fourth largest proved crude oil reserves, is a competitive sphere of business, said Dan Newcomb, a lawyer with Shearman & Sterling. American oil companies “don’t want to see European majors grab all the best territory so that by the time Americans go there will be only the dregs,” he said.