Is Trump a Death Sentence for the Iran Deal?
The election of Donald Trump has prompted a flood of commentary on the future of the Joint Comprehensive Plan of Action (JCPOA), President Barack Obama’s signature achievement. Trump repeatedly described the JCPOA with Iran as the “worst agreement ever” and promised to “dismantle” it. As is well known, the JCPOA, as a multinational agreement, cannot be abrogated by the United States alone. It is not even clear whether Trump, who, in his customary contradictory manner, also complained that sanctions hurt American chances of doing business with the regime, would attempt to kill it. Vice President–elect Mike Pence, a Tea Party supporter and an evangelical Christian, has been more consistent, vowing numerous times to rip up the accord.
Overlooked in the speculations about Trump’s future decisions is the dominant role that Congress would play in shaping American policy toward the JCPOA. In 2015, in conjunction with the government of Israel and the Israel lobby in Washington, congressional Republicans mounted an unprecedented but ultimately an unsuccessful campaign to derail the deal. Still, the lobby and its congressional patrons have not abandoned their effort to limit the economic benefits of the deal to Iran. One effective tool is new sanctions-generating legislation. Lawmakers from the House Republican Israel Caucus introduced several bills which would, among others provisions, extend the Iran Sanctions Act due to expire in December 2016, block the sale of eighty Boeing planes to Iran and prohibit the Export-Import Bank from financing business with Iran. Unlike President Obama, President-elect Trump is not expected to veto the anti-Iran legislation, setting a relatively low bar for its passage.
Another tactic is to discourage international companies from doing business with Iran, an effort coordinated by the Iran Project of the Foundation for Defense of Democracies (FDD), a premier anti-JCPOA lobbying center supported by Sheldon Adelson, a prominent donor to the Republicans and Trump. For instance, the FDD took a lead in denouncing the Treasury Department’s Office of Foreign Assets Control (OFAC) for easing controls on dollar transactions between Iran and foreign banks and companies. After initially banning all dollar-denominated transactions, OFAC reversed itself authorizing such dealings provided they are not processed by the American financial system. In yet another effort to spur international business with Iran, OFAC declared that foreign companies could transact business with non-sanctioned Iranian companies even if a sanctioned entity held a minority share of its assets. The Treasury also relaxed the requirement that foreign companies contracting with Iranian counterparts do automatic due intelligence. Since the Revolutionary Guards have operated numerous ventures with legitimate entities, the FDD decried this step as “green-lighting” business with the Guards.
The identity of the incoming Secretary of the Treasury is yet unknown, but it seems unlikely that OFAC would be allowed to continue its relatively lenient policy toward Iran. John Bolton and Newt Gingrich, rumored to be on the short list of key positions in the new administration, have been strong critics of the JCPOA. Bolton, who was in charge of arms control in the State Department and acting ambassador to the United Nations in the George W. Bush administration, has publicly advocating bombing Iranian facilities. In a possible preview of things to come, Mark Dubowitz, the executive director of FDD, has already taken to warning foreign companies about the risks incurred in doing business with Iran.
With so much at stake, Iranians followed the American election with great interest. The Hezb-e Etedal va Toseh (Moderation and Development Party) of President Hassan Rouhani and Ayatollah Akbar Hashemi Rafsanjani has the most to lose from the Trump presidency. Rouhani came to power in 2013 with a promise to fix the Iranian economy broken by years of mismanagement and sanctions. He managed to push through the JCPOA with assurances that the economic benefits would outweigh the cost of giving up the nuclear project—so much so that the Moderation and Development Party gained a majority in the 2016 parliamentary election. There is little doubt that a serious reduction of the economic benefits accruing from the deal would hurt Rouhani’s chances in the 2017 presidential election. Even a cursory perusal of the Rouhani-affiliated media, such as Iran, Etemad and Arman newspapers, among others, indicates more than a passing level of anxiety about his chances in the wake of Trump’s election.
There is even more apprehension about the moderates’ vision to normalize Iran’s existence as a country and bring it into the community of nations. In a little-noticed move, Rouhani prevailed upon the parliament to pass a resolution allowing Iran to join the Terrorist Financing Convention. Membership in the convention and its regional auditing groups is mandatory for countries seeking direct foreign investment, but requires their banks to ban all support for terror. Indeed, the Rouhani government ordered two leading banks to close accounts belonging to the Revolutionary Guards.