January 21, 2014

TSG IntelBrief: Congressional Opposition & Challenges to Iran Nuclear Deal

• Congressional legislation to impose new sanctions on Iran will likely not be enacted into law, in large part because supporters of President Obama do not want to undermine a key Administration policy achievement

• In the event new sanctions legislations pass while the interim nuclear deal is implemented, Iran will likely cease implementation and walk away from negotiations on a final nuclear settlement

• US domestic challenges to the interim agreement will likely cause a resurgence of hardline Iranian leaders who question President Hassan Rouhani’s willingness to compromise with the international community.

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The interim nuclear deal between Iran and the P5+1 (US, UK, France, Russia, China, plus Germany) remains intact. After nearly two months of technical talks, the two sides reached agreement on details of implementation and agreement entered into force on January 20 (ironically, the anniversary of Iran’s 1981 release of US hostages from the 1979 embassy seizure). The duration of the agreement runs to July 20, 2014, although there is provision to extend it “by mutual agreement,” if additional negotiations do not reach a final settlement of the nuclear issue.

The implementation plan front loads Iran’s obligations, including full dilution of its stockpile of 20% enriched uranium (where resides most of the effort to produce weapons grade uranium enriched to about 90%) within the first half of the agreement period. The first day of implementation required Iran to dismantle certain technical connections that enable uranium enrichment to the 20% level, from about 3.5%. The implementation plan provides Iran access to the agreed $4.2 billion in hard currency assets held abroad, in eight installments, with the first tranche of $550 million accessible on February 1.

On 20 January, the first day on implementation, the P5+1 and EU countries suspended sanctions on Iran’s exports of petrochemicals, on imports of components for automotive manufacturing sector, and trading in gold and other precious metals.


Obama Administration Eyes Success

The Obama Administration views the start of the interim nuclear deal as a signature foreign policy success in a region replete with recent setbacks. When the implementation plan was agreed to, President Obama issued a statement hailing it as an unprecedented breakthrough that freezes most aspects of Iran’s nuclear program and rolls back those aspects considered most threatening—production of 20% enriched uranium and development of the Arak heavy water reactor that could potentially produce plutonium (which can be used as fissile material for a nuclear weapon).

The deterioration of the security situation in Iraq, in which over 4000 US personnel died in stabilization operations, provided context and broader implications for implementation of the agreement, along with: US policy setbacks and continuing challenges with the nearly three year old civil war in Syria; expansion of al-Qaeda inspired extremists groups; lack of progress in Secretary of State Kerry’s initiative to revive the Israeli-Palestinian peace process; and deteriorating relations with Afghan President Hamid Karzai and rendering uncertain US plans to firm up a post-2014 residual force.

The Administration views the nuclear deal affirmation of the policy it has implemented since the failed uprising in Iran in 2009. The policy, conducted in lock step with the US Congress, increased worldwide sanctions with the goal of forcing Iran to change calculation on its nuclear program and bargain on the most worrisome aspects. The Administration believes the interim nuclear deal represents the precise outcome long sought, and paves the way for increased stability in the region. The Administration has been sufficiently committed to the success of the Iran deal that it has, to some extent, accepted criticism from strategic allies Israel and Saudi Arabia. Both see Iran as untrustworthy and favored ever stricter sanctions to collapse Iran’s economy outright.


Congressional Views and Differences with the Administration

Some in Congress have taken steps the Obama Administration asserts would potentially place them on a collision course on Iran, for the first time since President Obama took office. 

The interim nuclear deal commits the US and its negotiating partners not to impose any new nuclear-related sanctions. However, in mid-December, senators of both parties introduced legislation that would increase US sanctions—most notably by compelling Iran’s five remaining oil buyers (China, Japan, South Korea, Turkey, and India) to cut their oil purchases to zero within one year of the legislation’s enactment. The bill contains a provision that sanctions would become effective only if Iran failed to implement interim requirements, or, no final settlement reached to replace it.

Whether the Senate legislation would—or not—legally violate the interim agreement, the Administration forcefully criticized the bill and directly threatened to veto, if passed by both chambers. The Administration argues the bill plays directly into the hands of hardline skeptics in Iran who want the deal to fail in order to marginalize President Rouhani. The Administration says it would fracture the international coalition that has successfully brought Iran to the bargaining table, and would cause Iran to abrogate the interim agreement. Iran’s Foreign Minister and chief negotiator Mohammad Javad Zarif, bluntly said new US sanctions, no matter when implemented, would kill the interim agreement.

Despite President Obama’s opposition, supporters of the legislation are trying to move forward, collecting co-sponsors from both parties. The legislation sponsors apparently seek to demonstrate strength to override a presidential veto of the legislation—and the number of co-sponsors in the Senate is approaching that level. Supporters of the bill argue it will not kill the interim deal because Iran needs sanctions relief and will not walk away even if it passes, and the legislation would further leverage US pressure to reach final settlement. Supporters of the Administration’s position say the bill seeks to impose unattainable conditions on a final settlement—complete dismantlement of Iran’s nuclear program—and therefore would not strengthen the US negotiating position. The Administration also counters that additional sanctions could be enacted at any time if Iran abrogates the interim deal or a permanent deal is not reached, and there is no imperative to enact new sanctions now. Still, it is unclear whether Senate Majority Leader Harry Reid will agree to bring the bill to the Senate floor. Senator Reid appears to agree with the Administration's view that the bill could derail a major Administration achievement.


• The Senate bill, S.1881, is unlikely to be brought to a vote

• If it is voted on, there will likely not be enough Democratic votes to reach the two-thirds majority needed to override a veto by President Obama   • Because enacting the Senate bill is unlikely, the interim nuclear deal is likely to be implemented as agreed, and all sides will move closer to a final status agreement during 2014

• That agreement, if reached, will sharply reduce, but not end, Iran’s enrichment of uranium   • The consideration of new congressional sanctions will embolden hardline opponents of Iranian President Rouhani, looking for opportunities to justify distrust of US intentions

• However, the likelihood that no new sanctions are enacted will mean Iran’s hardliners will be unable to marginalize Rouhani or block his policies.


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