The very same day that the Obama administration lifted the UN sanctions imposed on Iran and designed to inhibit the development of its nuclear weapons program, it implemented new, targeted sanctions intended to prevent 11 Iranian companies and individuals implicated in the recent Iranian missile tests (undertaken before the original sanctions had been lifted) from using the U.S. banking system. This is not much of a penalty, considering the gravity of the offense. Rather than indicating that Iran is finally joining the global family of nations as a citizen intending to honor its standards and norms, the missile launch demonstrates that the Deal is now Iran’s trump card.
Supreme Leader Ali Khameini has stated that if the U.S. imposes any new sanctions on Iran, the Deal will be null and void. However, given that the new sanctions have been imposed and the Deal remains in effect, he must have meant new sanctions that prevent Iran from doing what it wants to do.
It appears that, as long as future sanctions are targeted and limited in scope, the Deal will remain in effect from the Iranian government’s perspective.
This raises the question what Iran must do to ‘cross the line’ and trigger new comprehensive sanctions from the UN. The Iranian government must have carefully considered this question and arrived at the conclusion that unless it acts in a particularly egregious manner, broad and damaging sanctions will not be re-imposed, and that it may test and retest the line it may cross without a meaningful penalty. By crossing the line and effectively averting the punishment it should be receiving, Iran is essentially establishing a new definition of what constitutes ‘acceptable’ behavior, and the West is looking the other way.
In short, the West is now being held hostage to the Nuclear Deal, for there is too much on the line to actually cancel the deal and re-impose comprehensive sanctions. Apart from being seen by the Obama administration as its signature achievement in foreign policy, the credibility of the UN sanctions regime and the very negotiation process that achieved the Deal are at stake – and Iran knows it.
Backtracking would not be good for Iran, but it would be even worse for every other affected party – and Iran knows it. Iran is unlikely to brazenly flaunt the Deal’s most significant terms, but, as it has already demonstrated, it will not hesitate to nibble around the edges.
The stakes are also high for Iran, and it is being held hostage in a different way – not politically, but economically. Iranians have highly anticipated economic engagement with the rest of the world for many years, but given that for Iran’s budget to be balanced the price of oil would need to be $145 per barrel, there is not even the most remote chance that the government will be in a position to meet the expectations of Iranians – now or perhaps ever. In that regard, the Deal may end up proving to be the undoing of Iran’s politically conservative faction. It is not hard to imagine a new “Spring” movement emerging when Iranians realize their lives are likely to be little changed by the Deal. Perhaps this was part of the West’s incentive to proceed with the Deal in the first place.
Those who believe that Iran will be incapable of operating another clandestine nuclear program – even with the new inspection regime in place – are naïve. Remember that much of the Iranian nuclear program that is now being dismantled was created clandestinely and while the sanctions regime was actually in place, as was the entire multi-country AQ Khan nuclear network of the 1980s and 1990s – right under the nose of the West and UN. While it may be more difficult to do so now, it is certainly not impossible.
The old adage that one must be careful for what one wishes for was never more apt than this past weekend, when the comprehensive sanctions against Iran were lifted. Once global businesses are again operating in and trading with Iran, and once the price of oil makes an inevitable rebound (even if it may be many years from now), Iran will be well positioned to negotiate the next nuclear agreement from a position of strength. In addition, by giving Iran the ability to bankroll with greater ease its proxy forces in Iraq, Yemen, Syria and Lebanon, the West may have created a bigger problem than it originally had with Iran. Both the West and Iran are now hostages to the Iran Nuclear Deal.