David Cortright is Director of Policy Studies for the Kroc Institute for International Peace Studies at the University of Notre Dame.
The Iran nuclear deal resulted in part from the effective use of multilateral sanctions to apply persuasive pressure on Iran to limit its nuclear program. By combining sanctions with incentives the United States and its partners were able to engage Iran in a bargaining process that led to a diplomatic agreement. If successfully implemented the Iran deal could serve as a model for the use of sanctions in other cases to achieve international policy objectives.
The United States has maintained a wide range of sanctions on Iran since the 1980s, but these unilateral sanctions had little effect on Tehran since the regime was able to find other markets and suppliers. The imposition of multilateral Security Council sanctions in 2006 was more serious and proved decisive in convincing the regime to come to the bargaining table. Especially worrisome for Iran was the vote of Russia and China in favor of targeted UN sanctions. Tehran recognized that it was now isolated diplomatically and that it would face increasing economic pressures to comply with the Council’s nonproliferation demands.
Iran’s worst fears were soon realized as the European Union and the U.S. worked together to impose new and stronger sanctions, including restrictions on Iranian banks and denial of access to international financing. These measures had significant negative impacts on the Iranian economy. The rial spun downward relative to other currencies, domestic goods prices rose, and general trade levels declined. This combined with the global decline in oil export prices to lead Supreme Leader Ayatollah Khamenei to admit that sanctions were causing economic problems all over the country.
These hardships played a role in the surprise electoral victory of Hassan Rouhani as President of Iran in June 2013. Rouhani’s candidacy was based on two pledges: to overcome economic hardships at home and to build constructive relations with the outside world. These goals could not be achieved without relief from sanctions, which would require concessions on the nuclear program.
DEVELOPMENT OF THE DEAL
The framework for the Iranian deal that began to emerge in late 2013 was based on an explicit bargain. Iran would agree to guarantee the peaceful nature of its nuclear program, in return for a pledge from the international community to lift sanctions. The resulting Joint Comprehensive Program of Action (JCPOA) signed on July 14, 2015 embodies that exchange. Iran agrees to strict limitations that block its path to nuclear weapons capability with rigorous international monitoring to confirm compliance; meanwhile the United States, the European Union and the UN Security Council pledge to lift all nonproliferation sanctions.
AN EFFECTIVE COMBINATION
It’s a classic example of the interplay of sanctions and incentives: the imposition of tough sanctions to apply pressure for diplomatic bargaining and the lifting of sanctions as an incentive to seal the deal. Washington and its partners gain assurances against a nuclear-armed Iran, and Tehran gets the economic relief it needs. A win-win solution.
The JCPOA is carefully structured to ensure that the termination of sanctions is tied to specific steps toward the dismantling and limiting Iran’s nuclear capabilities. Before lifting occurs, the International Atomic Energy Agency (IAEA) must certify that Iran has shut down and removed fuel from its plutonium-producing reactor, sharply restricted uranium enrichment and removed most of its low-enriched uranium, and complied with rigorous new inspection protocols. Only when all of these steps are achieved will sanctions be removed.
The JCPOA contains a further innovative procedure: sanctions ‘snap-back’—the automatic re-imposition of sanctions if Iran is found in violation of the agreement. Complaints of noncompliance will be heard by an eight-member Joint Commission in which the U.S. and its partners have the majority and there is no veto. The Commission or its members can report matters of “significant non-performance” to the Security Council, which must re-impose sanctions after 30 days unless it decides otherwise. An affirmative vote of the Council would be needed to prevent renewed sanctions, and the U.S., the U.K. and France would have veto authority. It’s a complicated but clever way of establishing a threat of renewed sanctions as a form of continuing pressure to achieve Iranian compliance. Whether and how this will work in practice remains to be seen.
The Iran nuclear agreement shows that sanctions can play an important role in achieving diplomatic agreement.
The Joint Commission will also have responsibility for managing a “procurement channel” of specific proliferation-sensitive goods and technologies established by the IAEA. Iranian requests to purchase items on the list must be approved by the Commission, which will also have authority to check end-user certificates. This is an effort to limit proliferation risks even after sanctions measures are lifted.
The Iran nuclear agreement shows that sanctions can play an important role in achieving diplomatic agreement and can also serve as a means of enforcing compliance. The explicit exchange of policy concessions for economic inducements confirms the bargaining model of sanctions and shows the potential of sanctions-based diplomacy for upholding international norms.