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Iran Sanctions under the Trump Administration
Iran Sanctions under the Trump Administration

Taking the Lead

Originally published in Berlin Policy Journal

Much remains uncertain about President-elect Donald Trump’s foreign policy. But the future of the multilateral nuclear accord with Iran is in grave doubt given his campaign rhetoric and the enthusiasm of his first appointees for regime change in Tehran. It might now be up to the co-signatories – China, France, Germany, Russia, and the United Kingdom – to take action to save it.

The agreement has been a success so far. More than a year after going into force, the 2015 Joint Comprehensive Plan of Action (JCPOA), negotiated between Iran and the E3+3 (France, Germany, and the UK, plus China, Russia, and the United States) has effectively and verifiably blocked all potential pathways for Tehran to race toward nuclear weapons. In return, it has opened the door to the country’s international and economic rehabilitation, even if the pace of recovery in the aftermath of sanctions relief has been more sluggish than anticipated. All the E3+3 members are highly satisfied with the agreement’s implementation so far, and have no appetite for re-designating Iran as a threat to international peace and security.

As will be argued below, they have several mechanisms to shape the incoming US administration’s thinking, and should prepare contingency plans for the worst if the US pulls out.

Unambiguous Condemnation

The newly elected US president has been unambiguous in his condemnation of the JCPOA

The newly elected US president has been unambiguous in his condemnation of the JCPOA as fundamentally flawed. Opposition to the JCPOA appears to stem less from its implementation record than from its narrow nature: an arms-control agreement that allows an arch-adversary to come in from the cold without altering its policies more broadly. For such critics, the question of whether derailing the accord would actually strengthen the US’s ability to press for such policy changes appears to be merely an afterthought.

As president, Trump will have a number of options to scuttle the JCPOA. At the extreme, he can repudiate it as a whole or reject key parts of it, like the waivers that suspend nuclear-related US sanctions on Iran. The agreement is designed in a way that allows one party to unilaterally snapback the UN sanctions, notwithstanding the JCPOA’s dispute resolution mechanism.

But the next occupant of the White House could undermine the deal with a lighter touch, or even with no touch at all, since lackluster implementation would doom it as well. Sustaining the JCPOA requires Washington’s constant good-faith management: the president must grant licenses in a timely fashion to allow legitimate business with Iran, issue guidelines to clarify sanctions-relief ambiguities, and shield the accord from political pressures, particularly attempts by Congress to obstruct implementation.

It is entirely too early to predict the consequences of subverting the JCPOA through any of these means. Still, several observations can be made.

Iran would almost certainly retaliate by resuscitating its nuclear program

First, scuttling the agreement – while Iran complies with it – will almost certainly erode, if not unravel, the international coalition that was critical in enforcing the sanctions that provided leverage during years of negotiations. This implies that the US will be in a weaker, not stronger, position to renegotiate a more favorable deal and/or reshape Iran’s regional or domestic policies.

Second, in such a case, Iran would almost certainly retaliate by resuscitating its nuclear program. The Iranian parliament has mandated its government to rapidly ramp up its uranium enrichment and ratchet down its cooperation with UN inspectors should the US renege on its end of the bargain.

Third, exacerbating tensions could push Iran to double down on policies it presents as essential to its national security, including a ballistic missile program as conventional deterrence and its “forward defense policy” of bolstering regional partners and proxies beyond its borders in the Middle East, in Baghdad, Damascus, Beirut, and elsewhere.

By destabilizing the JCPOA, the incoming US administration could thus usher in what it purportedly seeks to prevent: greater Iranian assertiveness, more regional instability, and lower odds of resolving the conflicts in Syria, Iraq, and Yemen – places where Iran is part of the problem and thus must be part of the solution.

Salvaging the Agreement

While the new Trump administration determines its eventual policy, the other E3+3 members have an opportunity to discourage and even deter it from undermining the JCPOA. They should also prepare contingency plans for salvaging the agreement if the E3+3 loses its first among equals.

The EU should go beyond expressing its strong support for the JCPOA and revive its so-called “Blocking Regulation” that forbids compliance with US extraterritorial sanctions that lack the consent of the JCPOA’s Joint Commission (comprising the seven negotiating parties and coordinated by the EU). The establishment of this pre-emptive measure would send a strong signal to Washington that if it walks away from the deal, it will do so alone.

The EU should go beyond expressing its strong support for the JCPOA

China, Russia, France, Germany, and the UK should formally announce that new unilateral US sanctions they deem unjustified by Iran’s behavior and interfere with its full realization of the benefits of promised sanctions relief will be taken as cause to initiate disputes against the US at the World Trade Organization (WTO) and other international courts and institutions. In the late 1990s, the EU successfully challenged US sanctions with a similar approach. At the same time, these countries should continue to support Iran’s admission to the WTO.

The above initiatives should be conditioned on Iran continuing to honor its JCPOA obligations, as well as refraining from any non-nuclear provocations. Reinvigorating its nuclear activities and severing the International Atomic Energy Agency’s access in retaliation for Washington’s efforts at gutting the deal will make it difficult for others to stand up to the US. By the same token, a firm commitment by other world powers to stand by Iran as long as it upholds the deal could bolster those in Tehran who would advocate continuing to do so.

The E3+3 and Iran should convene another meeting of the Joint Commission before the US transition occurs to draw lessons from the deal’s implementation so far and clarify remaining ambiguities, especially in areas where the accord’s language is insufficient specific (for example, determining what forms of low-enriched uranium should or should not be counted towards the 300-kilogram cap).

The UN’s second report on the implementation of UN Security Council resolution 2231, which endorsed the JCPOA in 2015, provides a timely opportunity for the incoming UN secretary-general to reinforce the message to the US and the world that the agreement plays a key role in global peace and security by reinforcing international nonproliferation norms.

The same calculus that brought Iran and the E3+3 to compromise after thirteen years of standoff and two years of negotiations still holds: the alternatives to an agreement – a sanctions-versus-centrifuges race that could culminate in Iran obtaining the bomb or being bombed – would be much worse. Regardless of whether the incoming US administration arrives at this conclusion, the countries that negotiated the deal should do their utmost to preserve it.

Iran Sanctions under the Trump Administration

Since 1979, Iran has been subjected to a steady stream of sanctions. Under the Trump administration, their depth and breadth have dramatically increased in the U.S. campaign of "maximum pressure". This interactive infographic illustrates all the major unilateral U.S. sanctions imposed on Iran since 2017 by year, type and location.

Click here to access Crisis Group's interactive on U.S. sanctions imposed (or reimposed) on Iran since 2017.

U.S. Sanctions from 2017 to Today

President Trump ended U.S. participation in the 2015 nuclear deal with Iran in May 2018, and promised to snap back U.S. nuclear sanctions, which were suspended in January 2016 after the agreement went into effect. Scores of international companies announced that they would end or suspend their operations in Iran even before U.S. sanctions were formally re-imposed. These came in two major tranches: an initial set of non-oil sanctions on 7 August 2018, and a second more significant batch on 5 November 2018 against over 700 persons and entities, including around 300 new targets. Since then, Washington has steadily added new designations against Iran and Iran-linked individuals and companies.

Our interactive illustrates all the individuals and entities so far designated under the major unilateral U.S. sanctions imposed (or re-imposed) on Iran since 2017 and breaks them down by year, type and location.

All Sanctions

All sanctions imposed on Iran under the Trump Administration categorised by year - 2017 in blue, 2018 in green, 2019 in red, and 2020 in yellow. 

Sanctions by Year

This graphic divides all sanctions imposed on Iran under the Trump Administration by year - 2017 in blue, 2018 in green, 2019 in red, and 2020 in yellow.

Sanctions Timeline

A timeline from February 2017 to January 2020, showing all sanctions imposed on Iran under the Trump Administration and the dates on which they were implemented.

Type of Designee

All sanctions imposed on Iran under the Trump Administration categorised by designee and year (2017 in blue, 2018 in green, 2019 in red, 2020 in yellow). Designees include individuals (left), entities (2nd from left), aircraft (2nd from right) and vessels (right) linked respectively to sanctioned Iranian airlines and shipping firms.

Kind of Sanctions

The following categories break down sanctions under the Trump administration according to whether they were new designations (left), designations reimposed after having been previously suspended (2nd from left), designations reimposed and designated under additional sanctions programs (“tags”[fn]The U.S. Department of the Treasury “tags” sanctions designation targets depending on the appropriate sanctions program(s). For example, the IRAN-HR tag refers to designees under Executive Order 13553 (2010) on human rights. Hide Footnote ) (2nd from right), or existing designations targeted under additional sanctions programs (right).

Nationality/Location

All sanctions imposed on Iran under the Trump administration categorised by whether they are an Iranian Individual/Iran-based Entity (left), or not (right), and the year the sanction was implemented (2017 in blue, 2018 in green, 2019 in red, and 2020 in yellow).

Sanctions Program

All Iran sanctions under the Trump Administration categorised by “tags” - terrorism, human rights, WMD Proliferation and IRGC - and the year the sanction was implemented (2017 in blue, 2018 in green, 2019 in red and 2020 in yellow).

Sanctions Map

A map showing the location of the entities (purple), individuals (orange), aircraft (green) and vessels (red) designated under the U.S. sanctions imposed (or re-imposed) on Iran since 2017.

Since 2017, the Trump administration has continuously tightened the noose of sanctions on Iran, targeting more than 80 per cent of the country’s economy. There can be little doubt that this “maximum pressure” policy is inflicting considerable economic harm on Iran. Economic growth that followed the lifting of sanctions in 2016 has given way to an inflationary recession. The Iranian currency has lost two-thirds of its value, and oil exports, which are a crucial source of government revenue, have dropped from 2.5 million barrels/day to less than 0.5 million barrels/day. Despite exemptions for humanitarian trade, human rights groups and international aid organisations operating in Iran report the adverse impact of sanctions in areas such as medical imports, emergency relief and refugee assistance programs.

To date, however, there is no sign that either Iran’s regional policies are shifting, or that its leaders are willing to submit to the Trump administration’s demands. In the absence of any visible shift in Tehran’s political calculus, Washington is presenting the sanctions’ impact by no metric other than their quantity and severity.