The Iran Deal, One Year In: Economic, Nuclear, and Regional Implications

The Iran nuclear deal posed a simple trade: In exchange for Tehran agreeing to limit its nuclear capabilities, economic sanctions would be lifted. But the devil is in the details concerning, for example, a role for missiles on the nuclear side of the equation and state sponsorship of terrorism on the sanctions relief side.

Britain, China, France, Germany, Russia, and the United States formed a political comittment with Iran in Geneva on July 14, 2015. The first anniversary of the this Joint Comprehensive Plan of Action, known as the Iran deal, is coming up — a good opportunity to reflect on its economic, nuclear, and regional implications, as the debate in Washington between the executive and legislative branches rages on.

In the United States, support is growing for the notion that the Barack Obama administration has failed to hold Tehran accountable for nuclear violations, downplayed Iran’s economic windfall from sanctions relief, and ignored the deal’s negative regional implications for state sponsorship of terrorism.

Critics hoped in vain that the nuclear deal would place explicit limits on ballistic missiles. The burden, however, was left to the United Nations rather than the parties to the deal.

The third paragraph of Annex B of resolution 2231 (2015) calls upon Iran not to undertake any activity related to ballistic missiles capable of delivering nuclear weapons, including launches using such ballistic missile technology. Because the nuclear deal did nothing to address the full range of Iran’s ballistic missile development, weak missile language in this resolution compounded the problem.

On March 31, 2016, GOP Representatives Mike Pompeo of Kansas, Peter Roskam of Illinois, and Lee Zeldin of New York reminded Secretary of State John Kerry that in selling the nuclear deal he assured Congress that the administration would provide a robust diplomatic response to Tehran’s missile launches. Sadly, such was not the case.

Before the July 2015 nuclear deal, Iran was expressly prohibited by U.N. resolutions from launching ballistic missiles capable of carrying nuclear weapons. Security Council Resolution 1929 stated that the Council “decides that Iran shall not undertake any activity related to ballistic missiles capable of delivering nuclear weapons.” The term “decides” placed a strict legal obligation on all states to comply.

In exchange for Tehran’s agreement to the nuclear deal, the Obama administration unwisely granted Iran flexibility for ballistic missile testing. Security Council Resolution 2231 certified the deal, replacing the prohibition with accommodating language: “Iran is called upon not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons.”

As Foreign Policy’s Colum Lynch wrote on March 16:

“The updated measures are neither legally binding nor as restrictive as the measures in place at the time of the nuclear pact. In essence, resolution 2231 provides Iran with a loophole big enough to develop medium- and long-range missiles without the risk of running afoul of Security Council dictates. It also complicates efforts to define what kinds of missiles are capable of carrying a nuclear warhead.”

Lynch was spot on. The Obama administration failed to hold Tehran accountable for nuclear violations. But the appeasement of Iran is also tied to state sponsorship of terrorism. In selling the nuclear deal, the administration expressed a hope and implied an expectation that Tehran would moderate its participation in terrorism, for which it has quite a history.

The U.S. State Department’s 2013 Country Report on Terrorism called Iran the top state sponsor of terrorist activities. The report released in 2014 said the same thing, as did the report for 2015, released on June 2, 2016. Tehran supported conflicts in Syria and Iraq, and was implicated in violent Shia opposition raids in Bahrain. So Iran continues as a state sponsor of terror, irrespective of the nuclear deal.

In an interview with NPR’s Steve Inskeep, Obama said it was possible that as a consequence of the United States engaging Iran via the nuclear deal, Iran would start “making different decisions that are less offensive to its neighbors.” And the Atlantic‘s Jeffrey Goldberg mused: “[Obama] has bet global security and his own legacy that one of the world’s leading state sponsors of terrorism will adhere to an agreement to curtail its nuclear program.”

More to the point, Obama told Goldberg: “Iran, since 1979, has been an enemy of the United States, and has engaged in state-sponsored terrorism, is a genuine threat to Israel and many of our allies, and engages in all kinds of destructive behavior.” That acknowledgement is insufficient to absolve Obama of his tolerance for Tehran’s business-as-usual practice of terrorism, while accepting Tehran as a suitable partner with which to cut the deal.

The NPR and Atlantic interviews laid bare the president’s faith that Iran’s terrorism can be moderated, which has not been borne out by the facts.

In summarizing the arguments of critics of the Iran deal’s sanctions relief provisions, Robert Einhorn, a former high-level negotiator for the Obama administration who helped to develop what became the 2015 deal, described concerns that a “windfall” of released funds would “enable Iran to devote substantial additional resources to destabilizing its neighbors and expanding its regional influence.”

Einhorn detailed efforts to “minimize the potential adverse effects of the released funds.” Nonetheless, the money has likely helped Tehran to increase its assistance to proxies and allies in Lebanon, Syria, Iraq, Bahrain, Gaza, and Yemen. In addition, Iran has continued to strengthen the military capabilities of the Revolutionary Guards’ Quds Force, which operates in many of these countries.

Even more troubling is the Obama administration’s continued support for sanctions relief, irrespective of Iran’s behavior, as describedby John Hannah, a senior counselor at the Foundation for Defense of Democracies, in his testimony before the House Committee on Oversight and Government Reform on May 17.

Mark Dubowitz, executive director of FDD and also a critic of sanctions relief divorced from Iran’s behavior, told the Senate Committee on Banking, Housing, and Urban Affairs: “Iran is engaged in a robust effort to legitimize its financial sector despite a decades-long rap sheet of… illicit financial activities that it shows no sign of curbing.”

In other words, since the conclusion of the nuclear deal, the Obama administration missed several opportunities to push back against Iran’s successful efforts to gain sanctions relief and legitimize its financial sector to the international community, despite state sponsorship of terrorism.

The Way Forward for a New President

Regardless of who is in the Oval Office, she or he could work with our partners to counter Tehran’s provocations. Such actions might include the interdiction of illicit arms shipments and sanctioning terrorism financing by the Iranian regime. There also is a need to fix the gap in the nuclear deal — which offers no agreed-upon penalties for Iranian violations of the deal’s terms, short of the last-resort punishment of a “snapback” of U.N. sanctions against Iran — as Rob Satloff, executive director of the Washington Institute, proposed in August of 2015.

Also, members of Congress from both parties have called for renewal of the Iran Sanctions Act (ISA). Two Democratic senators, Tim Kaine of Virginia and Chris Murphy Connecticut, both of whom supported the nuclear deal with Iran, introduced legislation to extend the ISA, which is set to expire at the end of 2016.

A spokeswoman for Senator Kaine said, “This is to prevent a non-compliant Iran having a sanctions expiration date in its sights.” The ISA imposed sanctions on Iran over its nuclear program and support for terrorism. When the nuclear deal was implemented on January 16, 2016, the Treasury announced that the United States was lifting nuclear-related sanctions on Iran because it had met verifiably its nuclear commitments.

As reported by the Hill, Senators Robert Menendez, Democrat of New Jersey, and Mark Kirk, Republican of Illinois, introduced legislation in 2015 that would extend the sanctions law for 10 years. Senator Kelly Ayotte, Republican of New Hampshire, backed by 18 other GOP senators, introduced a separate bill to extend the law through 2031 and require new sanctions tied to Iran’s ballistic missile program.

As the anniversary of the Iran deal approaches in mid-July, the above steps would address holes in the missile technology side of the nuclear deal equation, and on the sanctions side, they would prohibit relief in the event of Iran’s continued participation in state-sponsored terrorism.

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