Obama’s Sanctions Flip-Flop

Now that President Obama is assured that Congress cannot block his Iran deal, the focus of policymakers is rightly shifting from the question of whether Obama will get his nuclear deal to whether Obama will embed the nuclear deal in a larger regional strategy to address the remainder of the issues that have divided the United States and Iran over the years. So far, despite strenuous assurances from the administration that they are working on such a strategy — and despite the equally earnest insistence from former Secretary of State Hillary Clinton that the nuclear deal requires such a strategy — the administration has not yet presented a coherent and compelling account of it. One reason is that developing such a strategy is harder to do in the face of a basic contradiction at the heart of Obama’s case for the nuclear deal.

In the lead up to the agreement — and in selling it to Congress — the president and his deputies repeatedly noted that international support for the robust sanctions regime on Iran was waning and that — absent a deal — the concerted pressure that brought the Islamic Republic to the negotiating table would fall apart. Further, the administration noted that — without the backing of an international coalition — it would not be able to unilaterally bring enough pressure to bear on Iran over its nuclear program.

Now that the deal has been signed, however the administration has adopted a very different and logically contrary claim in selling the agreement to a skeptical Congress and the public: that it can, through strictly enforcing remaining sanctions on Iran related to terrorism and human rights abuses, deter, dissuade, and effectively limit Iran’s destabilizing activities. Further, many of these sanctions could be imposed without the cooperation of our allies. For example, the United States can, post-deal, still penalize European and Asian financial institutions that do business with Iran under many circumstances, even if so-called “secondary sanctions” are no longer in force.

The contradiction is clear. Pre-deal, the administration argued that the sanctions regime was so brittle that we had to strike the deal, any deal, before the regime fell apart. Post-deal, the administration is arguing that we need not fear that Iran will use its newfound wealth to further its destabilizing agenda because the United States can deter and dissuade Iran through the pressure of sanctions regime.

Put another way, the Obama case for the Iran deal reduced to this: multilateral sanctions were not strong enough to produce a better deal in the face of determined Iranian defiance, but unilateral sanctions will be strong enough to hold Iran’s defiance in all of the other matters in check.

Proponents of the deal could attempt to explain away the contradiction along the following lines: The aspect of the sanctions regime that was most brittle involved multilateral enforcement. The willingness of our P5+1 partners and the other states with extensive trade with Iran to go along with sanctions had played itself out. However, the United States has at its disposal a variety of economic sanctions that it can impose — or threaten to impose — unilaterally and economic sticks could keep Iran in line on the myriad other issues, including its support for terrorism, human rights abuses, destabilization of Iraq, fomenting sectarian conflict throughout the Gulf, bankrolling Assad’s murderous regime, and so on, that constitute the “rest of the Iranian file.”

Yet the unilateral tools are likely to be less effective than multilateral sanctions — and markedly less effective if the administration implements them in a reluctant fashion, which is the most likely course of action if the administration is left to its own devices. While officials at the Treasury Department — including acting Undersecretary of the Treasury for Terrorism and Financial Intelligence Adam Szubin — have been instrumental in turning the vice on Iran in recent years, many in the White House have been less enthusiastic about imposing costs on Iran; since the passage of the Comprehensive Iran Sanctions Accountability, and Divestment Act of 2010 (CISADA), the administration has often discouraged congressional initiatives to pressure Iran, arguing that such actions limit its flexibility. Given that the language of the Joint Comprehensive Plan of Action specifies that the United States and the European Union should refrain from imposing new nuclear-related sanctions — and that Iran has asserted that any additional sanctions, nuclear-related or otherwise, may scuttle the deal — the administration may be unlikely to continue its aggressive enforcement campaign for fear of derailing what it considers to be its signature foreign policy achievement.

The administration’s reluctance to turn the screws on Iran — and Congress’s more assertive approach — is but a reprise of the pre-deal situation. While the administration later boasted about how tough the sanctions were, in fact the White House tried to stop Congress from ratcheting up the pressure on Iran. Congress defied Obama and gave him a sanctions regime far more robust than what he asked for: CISADA, Section 1245 of the National Defense Authorization Act of 2012, the Iran Threat Reduction and Syria Humans Rights Act of 2012 (TRA), and the Iran Freedom and Counter Proliferation Act (IFCA).

Congress may be in the process of doing that again. Legislation that would prohibit U.S. and some European companies from doing business with any entities in which terrorist-related organizations such as the IRGC have even a small stake would keep the pressure up on those Iranian entities engaged in destabilizing activities. Likewise, Congress should request regular classified briefings from the Treasury and Justice Departments on the status of enforcement actions to ensure that the administration is continuing to keep up the pressure on companies violating remaining U.S. sanctions on Iran. Sanctions experts Juan Zarate and Chip Poncy have also suggested a number of other ways to keep the pressure up on Iran for its support of terrorism while not scuttling the nuclear agreement, such as establishing a worldwide monitoring program for suspicious Iranian transactions that would help ferret out illicit activity.

Such legislative and oversight actions should be narrowly targeted to keep the pressure up on Iranian entities supporting terrorism and human rights abuses; if Republicans in Congress attempt to re-impose essentially the same sanctions on Iranian companies but labels the new prohibitions “non-nuclear,” such proposals are likely not be non-starters across the aisle, with the administration, and with U.S. allies and partners. However, if the basis for new legislation is clear — and Congress clearly documents the non-nuclear-related reasons for targeting specific Iranian entities, members of Congress and the administration would be hard pressed to derail it.

Critics of the Iran deal have repeatedly bemoaned the Obama administration’s failure to embed the deal within the context of a larger, robust strategy for dealing with all of the other points of conflict with Iran. In recent weeks, developments such as the travel of Iranian Quds Force commander Qasam Soleimani’s to Moscow followed by Russia’s dramatic, ramped up military support for Syria’s Assad, has underscored the possibility that Iran’s regional strategy is more robust and more assertively implemented than Obama’s. Part of the reason Obama’s approach vis-à-vis Iran has thus far disappointed may be because the administration was trapped by its own contradictory Iran deal arguments. If so, then well-designed Congressional sanctions could help address some of the contradictions and thereby pave the way for a better regional strategy.

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