At the second Iranian Trade conference in London, the UK trade envoy to Tehran made a seemingly innocuous remark that should raise eyebrows. Lord Lamont said Iran has been extremely patient and statesman-like under the Iran nuclear deal regarding the process of easing sanctions. This does not jibe with the remarks of multiple senior American officials who have repeatedly claimed that Washington has fulfilled its sanctions relief commitments under the Iran deal.
Many policymakers and pundits in Washington assert that Iran’s self-inflicted economic mistakes (of which there are many) are preventing Tehran from deriving the full benefit of sanctions relief. This rhetoric does not match reality. Since the Iran deal was sealed in July 2015, I have traveled the world to meet with countless foreign governments and blue-chip multinational corporations on Iran-related issues. From DC to Dublin to Tehran to Tokyo, everyone I’ve met with acknowledges Iran’s economic policies as a problem, but no one has pointed to it as THE problem.
Every single person – without fail – has pointed to American sanctions as the primary obstacle. This begs the question: Why isn’t Washington fulfilling its commitments? In my personal assessment, I see three potential explanations:
1) The U.S. is intentionally squeezing Iran – because it knows it can.
In Section 24 of the Joint Comprehensive Plan of Action (JCOPA), it says that if Iran fails to receive the practical benefit of sanctions relief outlined in the JCPOA as a result of U.S. sanctions still on the books, Tehran can raise the issue with Washington (it has) with the aim of finding a resolution (so far, no such luck). Here’s the kicker: Any potential resolution can involve the lifting of any particular sanctions that happen to stand in the way of Iran receiving the aforementioned practical benefit of sanctions relief. If the U.S. and Iran are unable to find a solution through bilateral consultation, Iran can turn to the dispute-resolution procedures outlined in the JCPOA (it has, still no luck).
Currently, Washington and Tehran are working to find a solution to one problem above all else: Major international banks will not facilitate legitimate business transactions with potential Iranian counterparts. Why? Because existing U.S. sanctions law prohibits non-American, non-Iranian banks from providing dollar-clearing services for Iran. Translation: No Iran-related transactions can pass through the U.S. financial system. Not even for a millisecond. Furthermore, Section 36 of the JCPOA covers dispute resolution and makes crystal clear: The U.S. unilaterally determines what constitutes non-compliance on all sanctions-related issues, including UN and EU sanctions. No consent from any other party to the JCPOA – including Iran – is needed. So, is Washington playing dirty? Perhaps. But does the JCPOA allow Washington to play dirty? Yes.