U.S. will maintain strong sanctions and vigilance against Iranian foreign policy under the nuclear deal
The U.S. is committed to reducing the destabilizing impact of Iran's foreign policy in the region even after the nuclear deal. Existing sanctions and financial instruments against Iran's support for terrorist groups will remain in effect under the nuclear deal and the U.S. is reaching out to its GCC partners to further cooperate to contain Iran.
The United States has tools to combat Iranian regional adventurism and need not jettison the nuclear deal to preserve sanctions, which is just one of them. Regardless of the conflicting views of the nuclear deal itself, there is near-universal agreement that it will benefit Iran economically. And there is a convincing body of information and analysis to support the position of President Barack Obama’s administration that Tehran will use sanctions relief to generate economic stability at home, and that it can successfully counter any part of Iran’s newfound wealth that it delivers to bad actors.
Opponents can always point to a history of Iranian support for nefarious actors to justify their skepticism of the deal. But all this suggests is that Iran may continue to engage in this policy after a deal, not that it will ignore its domestic needs in this pursuit. In fact, an Iran with the political will and monetary resources to rebuild its economy and restore stability at home will have fewer incentives to shore up its alliances with those who oppose the United States and the international system. It’ll have too much to do at home and potentially too much to risk. Far from being a giveaway to a terrorism-supporting regime, then, sanctions relief may be the key to creating an Iran with a real stake in the international order.
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The United States will also maintain powerful sanctions targeting Iran’s support for terrorist groups such as Hizballah and its sponsors in Iran’s Islamic Revolutionary Guard Corps–Quds Force; its destabilizing support to the Houthis in Yemen; its backing of Assad’s brutal regime; its missile program; and its human rights abuses at home. Just this week, Treasury sanctioned several Hizballah leaders, building on designations last month that targeted the group’s front companies and facilitators. We will not be providing any sanctions relief to any of these lines of activity and will not be delisting from sanctions the IRGC, the Quds Force, or any of their subsidiaries or senior officials.
I also want to emphasize that secondary sanctions imposed by Congress will continue to attach to these designations, providing additional deterrence internationally. For example, a foreign bank that conducts or facilitates a significant financial transaction with Iran’s Mahan Air or Bank Saderat will risk losing its access to the U.S. financial system. These sanctions will continue to be in place and enforced; they are not covered by the JCPOA.
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Even as the United States and Iran look for areas of common interest, the United States should signifi- cantly increase its efforts to counter Iran’s regional surrogates and proxies. Such an approach is intended to deter Iranian meddling in the region by signaling to Iran’s leadership, particularly some of the hard- liners and leaders of the IRGC-QF, that Iran is not ascendant in the region and that if it pushes too far it risks a direct conflict with the United States. These actions would also signal to America’s Arab partners, especially Saudi Arabia, that the United States is not abandoning the region to Iran or pursuing the feared “Persian Pivot.”
This means making clear to Iran that even though it might receive sanctions relief through a nuclear deal, it will not be fully welcomed back into the community of nations or receive relief from terrorism-related sanctions until it stops playing a destructive role in Syria, Iraq, Yemen, and Lebanon. The United States might also consider increasing interdictions of Iranian weapons ship- ments, improving intelligence cooperation with its partners, pursuing more aggressive joint covert actions against Iranian supported terrorism, and finding ways to expose Iranian operatives and embarrass Iran when it pursues irresponsible destabilizing policies in the Middle East. The United States has already started to increase its support for such efforts by backing Saudi military operations against the Houthis in Yemen, provid- ing intelligence to enable air strikes, and increasing naval presence to deter Iranian arms shipments.
Once the United States and its partners are able to clearly communicate their determination to Iran, over time they may be able to shift Iran’s calculus and bring it into a political negotiation on how to stabilize the region. But this is not possible as long as Iran’s leaders continue to miscalculate their own strength and perceive themselves as ascendant in the region.
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The basic outlines of such a strategy are clear. The urgency of the situations in Iraq and Syria demands active American involvement in those conflicts, not necessarily through the deployment of US combat troops, but certainly through the deployment of advisers, support elements, enablers (including air power), and intelligence to assist the majorities in both countries who seek to reject both al Qaeda and Iranian domination. Hezbollah’s invasion of Syria has exacerbated rifts within Lebanon and opened the possibility of driving a wedge between Hezbollah and other parts of Lebanese society. Aggressive diplomacy and well-targeted assistance could help weaken Hezbollah’s control over its vital base, forcing it to refocus on Lebanon and away from supporting Assad. The US must also work seriously—and not through speeches—to regain the confidence of our Arab allies, particularly Saudi Arabia and Turkey. America’s retreat from the region has increased the costs of implementing such a strategy, but we must keep in mind that things are not going terribly well for Iran either, despite the current euphoria in Tehran. A strategy that combines continued sanctions with meaningful efforts to displace and disrupt Iran’s proxies and Iran’s strategies in the region is essential to creating any prospect of long-term change in Tehran’s attitudes and of regional stability.
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President Obama has already taken the first step in this effort through the Camp David summit he hosted with our Gulf Arab allies last month. That was an important first step in providing them with the necessary strategic reassurance in the face of the uncertain consequences of the nuclear deal on Iran’s behavior in their neighborhood. In the joint communiqué, the President reiterated a U.S. “unequivocal” commitment to “deter and confront external aggression against our allies and partners in the Gulf.” The two sides also agreed on a new strategic partnership that would “fast-track” arms transfers, enhance cooperation on counterterrorism, maritime security, cybersecurity, and ballistic missile defense, and develop rapid response capabilities to regional threats. The communiqué and its annex provide all the understandings necessary for laying the foundations of an effective regional security architecture. However, those words will need to be translated into concrete actions at a time when the regional turmoil is generating competing priorities and interests. The GCC states are not united in their approach to the region’s problems and they will continue to fear an American-Iranian rapprochement at their expense no matter how reassuring the President’s words. Nevertheless, the combination of the nuclear deal, a potentially more potent Iranian adversary, and rising instability on their borders, should concentrate their minds and therefore could create the necessary conditions for an effective strategic partnership with the United States that was called forth at Camp David. If they are willing to get their acts together, we should certainly be willing to respond with a determined effort.
Moreover, the negotiated end of nuclear-related sanctions against Iran does not mean the United States will stop monitoring where Iran spends its money. Even if negotiations produce a deal, U.S. terrorism-related sanctions against Iran will remain in place. Some of these sanctions bar certain identified individuals and entities from accessing the U.S. financial system, while others deny Iran wholesale access to the U.S. economy. Some specific Iranian banks and entities will remain sanctioned, and new ones can be added if their conduct violates the terms of U.S. sanctions, such as Executive Order 13224, under which Iran’s state-owned Bank Saderat was sanctioned in 2007.
Moreover, since 9/11, the international banking system has adopted new standards and helped create intergovernmental groups like the Financial Action Task Force to crack down on money laundering and terrorism financing. Banks monitor their business far more aggressively now than ever before to detect and prevent such activities, in part by using the best practices and guidelines developed by FATF. Banks are also under greater scrutiny by their national regulators — and, in fact, by the U.S. Treasury Department — to keep their systems from being used by terrorists and their financiers for illicit acts.
If need be, Washington and its partners can always augment sanctions to deal with specific Iranian threats, such as Iran’s conventional arms market. These could be modeled on an existing authority, like sanctions covering the manufacture, shipping, and financing of weapons of mass destruction. Rather than completely abandoning sanctions as part of the nuclear deal, the United States could use them as an effective deterrent in this regional context. Care, however, will have to be taken to avoid giving Iran a pretext to argue that the United States is undermining the very sanctions relief that made a nuclear deal possible in the first place.