The Arduous Path to Restoring the Iran Nuclear Deal

April 2021
By Naysan Rafati

A change in U.S. administrations brought with it something rare in the often-acrimonious relationship between Washington and Tehran: a point of agreement. Nearly three years after President Donald Trump unilaterally exited the 2015 Joint Comprehensive Plan of Action (JCPOA), both sides concur on the need to restore core elements of the deal that have been sorely tested since: strict restrictions on and rigorous monitoring of Iran’s nuclear program in exchange for sanctions relief. Yet, the shared strategic imperative of full mutual compliance remains out of reach so long as a tactical deadlock continues on how to achieve it.

An explanation of the convergence of U.S. and Iranian interest in reviving the 2015 agreement begins with a stocktaking of the state of play inherited by President Joe Biden in January 2021. Under Trump, the United States abandoned the JCPOA in favor of a “maximum pressure” strategy defined by a sweeping deployment of unilateral sanctions and a broad set of accompanying demands on further restricting Iran’s nuclear activity, halting its ballistic missile development, and containing its regional influence.¹ The financial impact on Iran has been substantial, with the World Bank describing U.S. sanctions, along with the more recent global COVID-19 pandemic and its impact on energy markets, as a “triple shock” on the country’s economy.²

If the Trump administration had hoped Tehran would bend to its will, however, it was mistaken. In mid-2019, Tehran launched a counterstrategy, dubbed “maximum resistance.” Rather than concede to the administration’s demands and to demonstrate that what it viewed as tantamount to an economic siege would not go unanswered, Iran retaliated against the United States and its regional allies directly and through local proxies in places such as Iraq and the Persian Gulf. It also methodically breached its own obligations under the JCPOA on the contention that the evaporation of the financial benefits the deal had promised justified a reduction in its own compliance.

The cumulative impact of Iran’s JCPOA violations, which have escalated in line with a law the Iranian Parliament passed in December 2020 after the killing of a top nuclear scientist, allegedly by Israel, has been to substantially erode the agreement’s nonproliferation provisions in three different respects. The first relates to an expansion of uranium enrichment that cuts the timeline for producing one bomb’s worth of fissile material from a year to approximately three months; the most recent International Atomic Energy Agency (IAEA) quarterly report pegs Tehran’s enriched uranium stockpile at 14 times the JCPOA cap of 202.8 kilograms and at an upper enrichment rate of 20 percent uranium-235 instead of the 3.67 percent permitted under the deal.³

The second concerns the verification and monitoring authorities of the IAEA, which under the nuclear deal is afforded JCPOA-specific transparency accesses, as well as access under the additional protocol to Iran’s comprehensive safeguards agreement. Iran suspended these authorities in February, although IAEA Director-General Rafael Grossi negotiated a three-month “bilateral technical understanding” to maintain key oversight capabilities.⁴ The agency is also set to press Iran on outstanding questions relating to past work at undeclared sites during technical discussions scheduled for this month. Finally, although the expansion of uranium enrichment can be undone and IAEA access fully restored, the third area of concern involves ongoing nuclear research and development activities on advanced centrifuges and uranium-metal production that deliver, as the three European JCPOA parties note, “irreversible knowledge gain.”⁵

Much Activity, Little Movement

Biden came into office critical of the maximum-pressure strategy, pointing to Iran’s increased nuclear activity and to heightened regional tensions as evidence of “a dangerous failure” by his predecessor.⁶ His administration took several symbolic steps to put the prospect of diplomatic reengagement on more stable footing, easing Trump-era restrictions on the movement of New York-based Iranian diplomats and withdrawing a 2020 claim to have pre-JCPOA sanctions successfully restored at the United Nations. Senior U.S. diplomats and officials, whose ranks now include several veterans of JCPOA negotiations, engaged early and often in consultations with the deal’s other participants, as well as U.S. regional allies, on how to proceed. Importantly, the administration affirmed that, as a matter of priority, negotiations would focus on restoring the JCPOA as a sine qua non for any wider negotiations with Tehran.

Despite these actions, Tehran demurred on a EU offer in February to convene an informal meeting of JCPOA parties and the United States, to which Washington had already agreed. Iran’s rejection was rooted not in what steps the Biden administration has taken, but those which it had not and, in its view, should as a precondition for talks, namely, facilitating significant sanctions reprieve, such as easing conditions for the release of billions in Iranian assets frozen abroad or implicit assent to an International Monetary Fund emergency loan Tehran requested at the outset of the pandemic. From Iran’s perspective, the onus of a meaningful opening concession falls on the United States for having left the JCPOA in the first place. No talks, even informal ones, can ensue so long as the architecture of maximum pressure remains intact, despite Biden’s denigration of it.

Yet, Washington is reluctant to make such a substantial move, likely for several reasons. A unilateral step allowing Iranian access to funds would be seen as akin to making a down payment toward negotiations and, although all but certain to invite attack from domestic critics who regard the JCPOA as irredeemable, would also risk the ire of those who may be persuaded to give engaging Tehran a chance so long as it prompts tangible Iranian concessions. Moreover, Washington views an uptick in regional tensions, including a spate of rocket attacks against U.S. and allied facilities in Iraq, and increased drone and missile strikes against Saudi Arabia by Iran’s Houthi allies in Yemen as suggesting that Tehran is not restraining its local partners at best and orchestrating violent provocations by them at worst.

As a result, Washington and Tehran are in a peculiar position of agreeing to the end point of a diplomatic process—mutual JCPOA compliance—but they are in a stalemate at the start of it. Discreet bilateral contacts or mediation efforts from a third party such as the European Union could prove crucial in breaking the impasse.

Triage, Then Surgery

If neither the United States nor Iran is willing to make the first substantive move, one potential solution would be to identify initial steps that each can take in parallel, thereby sidestepping the question of unilateral concessions in favor of mutual, reciprocal action. For example, the United States could work with South Korea on the partial release of frozen Iranian assets, which might in turn be earmarked for purchases of COVID vaccines and other medical goods through the Swiss humanitarian channel set up in coordination with the Trump administration to allow satisfactory due diligence on disbursement.⁷ Such a step would not require the formal revocation of existing U.S. sanctions and would ensure a degree of transparency on where the funds land. In return, Tehran could end one of its more worrisome nuclear breaches, such as the recently initiated production of uranium metal or uranium enrichment to 20 percent U-235.⁸ In turn, such an initial understanding would lay the groundwork for informally convening the United States, Iran, and other JCPOA participants for negotiations to stop further escalations and develop a timetable that sees Tehran and Washington unwind their nuclear breaches and sanctions, respectively, on the path toward mutual compliance.⁹

Even if such a sequence finds traction, it is likely to encounter a number of obstacles. Iran holds presidential elections in June, which President Hassan Rouhani, whose administration negotiated the JCPOA and has put considerable political capital into efforts to salvage it, cannot contest, having served the legally permissible two terms. Rouhani has already hinted that election dynamics are limiting his room for maneuver, referring to a “minority who seek to obstruct” the lifting of sanctions.¹⁰ If true, it could be an indication that other elements within the Iranian system are reluctant to hand the departing administration a political victory that could bolster the centrist camp’s electoral prospects.

Looking further ahead, Western officials hold divergent views on how significant the outcome of the presidential race will prove for nuclear talks. One school of thought posits that whereas Iran’s decision-making ultimately resides with Supreme Leader Ayatollah Ali Khamenei, not the executive branch, a change in its elected leadership will not meaningfully alter Tehran’s strategic calculus. As a logical extension, the election should not be viewed as a hard deadline for a diplomatic breakthrough.

An alternative view is that although the supreme leader and the circle around him provide a degree of continuity in the Iranian system, who sits at the table does matter in complex negotiations. It is better then at least to initiate the diplomatic process and give it momentum with Rouhani and his team still in place, rather than start from scratch with a successor hailing from a more conservative or even hard-line camp, which have been consistently critical of the JCPOA. Both arguments are reasonable and not necessarily in contradiction; it could well be the case that an agreement on JCPOA compliance would be easier to strike with the Rouhani administration and that failure do so would not necessarily shut the door on Rouhani’s successor pursuing a similar deal. As the election season begins in earnest in coming weeks, the contours of the importance of the nuclear negotiations will become more apparent.

The dynamics are complicated on the U.S. side as well. Secretary of State Antony Blinken has said that an Iranian return to JCPOA compliance would trigger “some sanctions relief.”¹¹ Much may hinge on what “some” constitutes: the Trump administration levied more than 1,500 designations against Iranian individuals and entities, and Tehran contends that U.S. JCPOA compliance means rolling them back entirely.¹² That is a maximalist demand unlikely to be realized, particularly as it concerns designations related to issues clearly well removed from the nuclear question, such as human rights or electoral interference. Yet, a tricky balancing act may lie in wait regarding cases such as Iran’s central bank and other financial entities, which are subject to multiple layers of U.S. sanctions, including some relating to counterterrorism.¹³

Former Trump administration officials have acknowledged that, technically speaking, “any president has the right to reverse an executive action…. Whether it is politically possible is a different question.”¹⁴ The Biden administration could conceivably make a case for lifting such designations in the context of restoring the JCPOA, but what may be necessary for diplomacy to succeed will almost certainly meet with domestic political blowback.¹⁵ As such, a proposal of sanctions relief sufficient to meet Iran’s minimal threshold of acceptability is likely to encounter deep skepticism or outright opposition, among not just congressional Republicans but some key Democrats as well.

Furthermore, Washington’s Middle Eastern allies already view tentative U.S. steps toward reengagement with Tehran with deep apprehension. Israel and some Gulf Arab states saw the negotiations that culminated in the JCPOA as problematic in form and substance. The perception, right or wrong, lingers that the Obama administration fell short on keeping them abreast of its discussions with Tehran and that the resulting agreement left key concerns such as Iran’s ballistic missile development and support for local allies unaddressed or even exacerbated them by lifting sanctions. It will have been little surprise, therefore, that the main international endorsements of Trump’s maximum-pressure strategy came from countries such as Israel and Saudi Arabia, which would prefer a Biden policy that looks more like a Trump second term than an Obama third term.

Beyond the Nuclear File

The Biden administration’s approach to these concerns is to view the JCPOA as a necessary but insufficient diplomatic initiative. Blinken and other U.S. officials describe a “longer and stronger” nuclear deal, to be constructed on top of a fully reinstated JCPOA. The imperative for such a new deal increases as some of the JCPOA’s restrictions are phased out over the next few years, while concerns about Iran’s ballistic missile development and regional power projection point to the need for follow-on negotiations. It is a list of priorities not too dissimilar to what the Trump administration posited, with the critical distinction that its successor views the JCPOA as a sturdy foundation to be built on rather than razed so that a new structure can take its place.

Indeed, if there is one lesson to be learned from the JCPOA negotiations, it is that although the nuclear file has enough complexities of its own, the success of an agreement cannot be divorced from wider policy considerations if it is to be sustainable and Washington’s regional allies are to come to view it as something other than a zero-sum proposition. An effort at deescalation in the Gulf may be the most feasible starting point. Constructive U.S. and Iranian engagement on Yemen, for example, which is a secondary theater for Tehran but a primary worry for Riyadh, could bolster international efforts to reach a ceasefire and establish a modicum of cooperation.

The Iranians could press their Houthi allies against continued drone and missile strikes into Saudi territory in exchange for a halt in Saudi airstrikes against populated areas in Yemen and support UN-led, U.S.-backed efforts toward a negotiated settlement. In turn, such a move could run parallel to efforts toward a wider, inclusive dialogue between Iran and Gulf Arab states, supported by the UN and Western powers, tackling issues of common interest, such as maritime security and public health, and perhaps broader security issues in due course.

Conclusion

Washington and Tehran have each said they are committed to restoring the JCPOA, but the Biden administration’s early days illustrate the challenge of moving from agreement in principle to practice. With neither side willing to take the first step, each maintains what it sees as leverage and the other views as lack of seriousness in a negotiation: Iran continuing to deepen its JCPOA breaches and flexing its muscles in the Middle East and the United States maintaining the attritional sanctions regime it inherited from Trump.

Even if the stalemate can be broken on an initial exchange of positive gestures, pitfalls abound on the steps toward mutual compliance, let alone the prospects of a follow-on accord. Sequencing and verifying Iran’s nuclear reversals and identifying the suitable parameters of commensurate sanctions relief are themselves no small task, especially against the backdrop of a fluid political situation in Tehran, a skeptical political environment in Washington, and simmering tensions in the region. A sense that the alternative is worse for both sides—a growing nonproliferation headache for the West, worsening penury for Iran—could be the incentive that breaks the deadlock.

 

ENDNOTES

1. “After the Deal: A New Iran Strategy,” The Heritage Foundation, May 21, 2018, https://www.heritage.org/defense/event/after-the-deal-new-iran-strategy.

2. The World Bank, “Iran Economic Monitor: Weathering the Triple-Shock,” Fall 2020, http://documents1.worldbank.org/curated/en/287811608721990695/pdf/Iran-Economic-Monitor-Weathering-the-Triple-Shock.pdf.

3. International Atomic Energy Agency (IAEA) Board of Directors, “Verification and Monitoring in the Islamic Republic of Iran in Light of United Nations Security Council Resolution 2231 (2015): Report by the Director-General,” GOV/2021/10, February 23, 2021.

4. “Joint Statement by the Vice-President of the Islamic Republic of Iran and Head of the AEOI and the Director General of the IAEA,” IAEA, February 21, 2021, https://www.iaea.org/newscenter/pressreleases/joint-statement-by-the-vice-president-of-the-islamic-republic-of-iran-and-head-of-the-aeoi-and-the-director-general-of-the-iaea.

5. For example, see UK Mission to the UN in Vienna, “E3 Statement to the IAEA Board of Governors on Verification and Monitoring in the Islamic Republic of Iran,” March 4, 2021, https://www.gov.uk/government/news/e3-statement-to-the-iaea-board-of-governors-on-verification-and-monitoring-in-the-islamic-republic-of-iran-march-2021.

6. Joe Biden, “There’s a Smarter Way to Be Tough on Iran,” CNN, September 13, 2020, https://www.cnn.com/2020/09/13/opinions/smarter-way-to-be-tough-on-iran-joe-biden/index.html.

7. U.S. Department of the Treasury, “United States and Switzerland Finalize the Swiss Humanitarian Trade Arrangement,” February 27, 2020, https://home.treasury.gov/news/press-releases/sm919.

8. UK Foreign, Commonwealth and Development Office, “Iran’s Production of Uranium Metal in Violation of the JCPOA: E3 Statement,” February 12, 2021, https://www.gov.uk/government/news/e3-statement-on-the-jcpoa-12-february-2021.

9. “Restoring the JCPOA’s Nuclear Limits,” Arms Control Association Fact Sheet, February 2021, https://www.armscontrol.org/sites/default/files/files/Reports/ACA_JCPOA-DealViolations_FactSheet2021.pdf.

10. “Dr. Rouhani After the Cabinet’s Last Meeting of the Year,” President of the Islamic Republic of Iran, March 17, 2021, http://president.ir/en/120219.

11. “Secretary of State Antony Blinken on the Biden Administration’s Foreign Policy Priorities,” PBS, March 3, 2021, https://www.pbs.org/newshour/show/secretary-of-state-antony-blinken-on-the-biden-administrations-foreign-policy-priorities.

12. “What It Will Take to Break the U.S.-Iran Impasse: A Q&A With Iranian Foreign Minister Javad Zarif,” Politico, March 17, 2021, https://www.politico.com/news/magazine/2021/03/17/iran-nuclear-deal-javad-zarif-qa-476588.

13. U.S. Department of the Treasury, “Treasury Sanctions Iran’s Central Bank and National Development Fund,” September 20, 2019, https://home.treasury.gov/news/press-releases/sm780.

14. “Former Special Representative for Iran and Venezuela Elliott Abrams: Media Roundtable With Israeli Journalists,” U.S. Embassy in Israel, November 9, 2020, https://il.usembassy.gov/special-representative-for-iran-and-venezuela-elliott-abrams/.

15. For example, see Kenneth Katzman, “Analyzing Terrorism Sanctions on Iran and the Path Forward,” Atlantic Council, February 11, 2021, https://www.atlanticcouncil.org/blogs/iransource/analyzing-terrorism-sanctions-on-iran-and-the-path-forward/; Matthew Zweig, Alireza Nader, and Richard Goldberg, “Biden Administration Should Not Provide Sanctions Relief for Terrorism,” Foundation for Defense of Democracies, February 22, 2021, https://www.fdd.org/analysis/2021/02/22/biden-should-not-provide-sanctions-relief/.