The Politico magazine has proposed three solutions to the US
President, Joe Biden to break the deadlock to restore the 2015 nuclear deal
with Iran. The article is written by founder and CEO of the Bourse and Bazaar
Foundation Esfandyar Batmanghelidj and policy fellow at the European Leadership
Network (ELN) Sahil Shah. Following is the text of the article:
Joe Biden has promised for months to reverse Donald Trump’s
policy on Iran, saying Trump pulled out “recklessly” from the 2015 Joint
Comprehensive Plan of Action (JCPOA)—the Iran nuclear deal—and that the rest of
Trump’s approach was a “dangerous failure.”
The issue is becoming only more urgent. Three reports from
the International Atomic Energy Agency this week highlight dangerous, albeit
reversible, advances in Iran’s nuclear program. Iran will continue to roll back
its implementation of the deal if it does not see economic benefits of the
agreement restored.
But it’s far from obvious how to restart nuclear talks in
the current environment, never mind revive the full deal. In his first press
conference as US Secretary of State last month, Antony
Blinken declared that “if Iran comes back into full compliance with
its obligations under the JCPOA, the US will do the same thing.” However,
Iranian officials have publicly questioned why they should be the
first to move when the US is the country that left. Iran contends that
notwithstanding its moves to increase its capabilities and uranium stockpile,
it remains in full compliance with the deal, interpreting paragraph 36 of
the agreement to mean that Iran can “cease performing its commitments”
should another party do the same.
In the current political context, Iranian rejection of
Blinken’s proposal is understandable. The Trump administration eroded American
diplomatic credibility, not only on the Iran nuclear deal, but across a wide
range of international agreements. Even those Iranian leaders who remain
strongly in favor of the nuclear deal are concerned that the Biden
administration will lack the political will to provide Iran the full range of
sanctions relief it was promised. Conservatives in Tehran continue to mock deal
supporters for being naive.
Iranian President Hassan Rouhani once stated that
the JCPOA would either persist as a “win-win” agreement for all parties or end
up as a “lose-lose.” As the US looks toward reviving it, it’s important to
remember that Iran’s experience of sanctions relief following implementation of
the JCPOA was disappointing. Lifting sanctions proved complex, and Iran’s
economy had been thoroughly stigmatized. The Obama administration struggled to
deliver Iran the economic benefits it had promised. In a nod to this bitter
experience, Iran’s Supreme Leader Ali Khamenei recently stated that
“getting sanctions lifted has failed” and that Iran should instead seek to
“nullify” sanctions pressure.
But if Iran stands pat, the US is unlikely to be the first
to restore its own commitments under the deal. Moving first would go a long way
to restoring American credibility with European allies and the wider
international community and would be consistent with Biden’s vow to restore
multilateral diplomacy. But any such move will worry some US allies
and members of Congress about the Biden administration's willingness
to drive a tough bargain with Iran, both on its current nuclear program and on
future regional security issues such as ballistic missiles.
With neither Washington nor Tehran aiming to be the first to
come back into full compliance with the deal, Biden needs to find a way to do
something artful and difficult: Get both sides to restore compliance at
the same time. This approach may be the most palatable option, but it will
require significant technical discussions between the two sides. Iranian
Foreign Minister Javad Zarif has indicated Iran would be open to such
an approach, stating that it may be possible to “choreograph” the mutual
restoration of commitments with the Biden administration.
“Even those Iranian leaders who remain strongly in favor of
the nuclear deal are concerned that the Biden administration will lack the
political will to provide Iran the full range of sanctions relief it was
promised.”
But Biden must open the door for these direct talks. His
first step must be significant enough to restore belief in the original
“win-win” logic of the deal and offer Iranian officials a credible rationale
for engagement with the US. At the same time, it may be limited enough to keep
the US outside of the deal, offering him political cover with critics and
underscoring the necessity for Iran to also take reciprocal steps.
Taking this kind of first step could, in its way, be a
signal of strength for Biden: He’d be showing domestic opponents of the JCPOA
that he will not be bullied into compromising his Iran policy. The fight over
the appointment of Robert Malley as Iran envoy showed that hawks will
“play dirty” to undermine the credibility of Biden’s outreach to Iran. Biden
ought to nip this kind of cynical politics in the bud.
If Biden goes this route, officials in the US, Europe, and
Iran are currently deliberating what a reasonable first move could be. Our
conversations with officials suggest that there is awareness that breaking out
of the political deadlock may require Biden to be bold. He has a few options.
First, the Biden administration could restore temporary
waivers that enable Iran to sell oil, while US sanctions remain in place.
Iran’s oil production and exports are rising faster than projected despite the
COVID-19 crisis and US sanctions. This trend has reduced the perceived urgency
of restoring the nuclear deal among key political stakeholders in Tehran who
may gain more power after the upcoming Iranian presidential election. The Biden
administration’s efforts to re-enter the JCPOA would be best served by making
already increasing oil sales once again subject to the “win-win” logic of the
nuclear deal. Iran’s earnings from these oil sales would be accrued in escrow
accounts and subject to strict oversight as per the waiver terms. Revenues
would be used by Iran for sanctions-exempt trade with the country in which the
funds are held. Such a step would serve to remove a key piece of tension with
US allies such as South Korea, Japan, and India whose energy security has been
impacted by US sanctions on Iran.
Second, the Biden administration could support Iran’s loan
request for funds from the International Monetary Fund. Iran’s request has
languished despite the IMF’s technical assessment that Iran qualifies for financial
support to address the balance of payments crisis created by the pandemic. Iran
has indicated it is ready for these funds to be disbursed to its accounts
outside of the country to be used for paying for sanctions-exempt imports. The
funds would not flow directly into Iranian government coffers, but rather be
used to address trade deficits. The Biden administration should grant this loan
as part of its commitment to address the humanitarian impact of
sanctions and a wider push to encourage the IMF to use its full financial
capacities to address the ongoing economic crisis brought on by the pandemic.
Finally, a third option could be easing Iran’s access to its
existing foreign exchange reserves. Presently, Iran has free and ready access
to an estimated 10 percent of its reserves, a circumstance that has placed
extraordinary pressure on Iran’s currency and generated high levels of
inflation that harm ordinary Iranians. Iran has been engaged in fraught
negotiations with numerous countries to try and get access to frozen assets,
who continue to look to the US Treasury Department for the final say. The Biden
administration could give these countries, including allies Germany and South
Korea, the approvals and guidance necessary to enable both central and commercial
banks to readily execute payments on behalf of Iranian account holders. As with
the oil waivers and IMF loan, these payments can be restricted to
sanctions-exempt trade, a key outcome of which would be lower rates of
inflation.
Should Biden take any of these three steps, Iran can be
expected to cease ramping up its nuclear program. Neither country would be
fully implementing its commitments under the JCPOA, but an opportunity will
have been created for new talks in the spirit of “win-win” diplomacy. There is
no guarantee that these talks, and the complicated choreography of JCPOA
restoration, will succeed. But Biden needs to give himself a shot. After the
last four years, timid gestures will fail to do that. It’s time to be bold.
