U.S. Mounts All-Out Effort to Save Iran Nuclear Deal

U.S. President Joe Biden is intent on restoring the 2015 nuclear agreement with Iran, and with talks resuming in Vienna on Thursday after a weeklong break, his chief negotiator, Robert Malley, is beginning to develop a road map on how to get there. 

According to sources close to European and U.S. negotiators, Malley is expected to offer Tehran a Goldilocks-style deal: just enough sanctions relief so Iran will return to the pact but not so much that it would leave Biden vulnerable to attacks from hard-liners at home, including those in his own party who oppose any concessions at all to Iran. 

“Until now, no specific sanctions were discussed, only the broad outlines of ways to establish trust,” said Ali Vaez of the International Crisis Group (ICG), who was senior advisor to Malley when the latter was head of the ICG. “What they’re doing this week is to finalize a list of measures on both sides to come back into compliance with the accord. The next step is to sequence these to allow both sides to save face.” 

This involves what a senior U.S. official described as the “painstaking” process of separating out and agreeing to remove or ease some of the sanctions that former U.S. President Donald Trump imposed as “poison pills” to ensure that the 2015 deal, which Trump had repudiated in 2018, could never be restored. These include more than 700 sanctions imposed outside the nuclear pact, known as the Joint Comprehensive Plan of Action (JCPOA), that were levied at the end of Trump’s term to ensure Iran’s isolation and break its economy altogether. 

Under the “maximum pressure” campaign, the Trump administration in particular sanctioned the Central Bank of Iran, the National Iranian Oil Co., and the National Iranian Tanker Co. for financing state-sponsored terrorism. The Trump team knew that even if the JCPOA were resurrected, such new sanctions would invalidate the deal’s effects because these companies would be banned from international commerce. Together, they oversee Iran’s oil industry, and the central bank controls most of Iran’s foreign exchange reserves and revenues from the country’s oil sales. And new energy revenues are what Iran most demands if it is to return to compliance with the 2015 pact.

As the Trump administration well knew, it would be politically risky for Biden to remove these sanctions, since Iran’s central bank “is in fact responsible for allocating the funds for Hezbollah and Hamas” and the other two companies “provide and ship oil for sale by the [Islamic] Revolutionary Guard Corps,” which Trump designated a foreign terrorist organization in April 2019, said Brian O’Toole of the Atlantic Council. 

Shortly before last November’s election, the Trump administration also sanctioned 18 Iranian banks the same way, paralyzing what was virtually Iran’s entire financial sector. Iranian Foreign Minister Mohammad Javad Zarif called the move, coming amid the coronavirus health crisis, a “crime against humanity.”

“The U.S. position is that it is willing to lift two broad categories of sanctions: those outlined in the JCPOA and those that have been relabeled” by Trump, Vaez said. “However, sanctions that are justified and not inconsistent with the JCPOA, like those that targeted human rights violators in Iran or those that penalized Iranians involved in cyberattacks against the U.S., will stay in place.” The sanctions are to be lifted only if Tehran stops breaching the pact by raising its enrichment levels and producing nuclear material that could be used for bombs, as it has done in recent months.

The optimal target date for completing negotiations might be May 21, the expiration deadline for the temporary agreement reached in late February with International Atomic Energy Agency chief Rafael Grossi, under which U.N. nuclear inspection data will be maintained exclusively by Iran for three months. If no return to the deal is negotiated by then, Tehran has said it will destroy the data, very possibly torpedoing the nuclear agreement. 

“It’s all pretty broad brush right now,” said one European diplomat privy to the talks. And for now, all the negotiating is being done indirectly: The main talks are being conducted by the so-called E3—Germany, France, and the United Kingdom—which are shuttling proposals to Malley and the U.S. negotiating team in another room, since Tehran has insisted it will not talk directly with the Americans unless the nuclear deal is restored first. 

Outside forces have also obstructed progress, starting with Israeli Prime Minister Benjamin Netanyahu, who vehemently opposes the 2015 deal and has never shown much willingness to listen to Biden. A decade ago, Netanyahu embarrassed the then-U.S. vice president when his hard-line government announced it was expanding settlements outside Jerusalem just as Biden was visiting to promote talks with the Palestinians, who were outraged by the announcement.

Then, on Sunday, an explosion at Iran’s superfortified Natanz nuclear facility—reportedly a bomb planted by the Israelis—provoked Zarif to vow “revenge on the Zionists.” Iran promptly retaliated by raising its uranium enrichment from 20 percent purity to a potentially deal-busting 60 percent. Biden’s defense secretary, Lloyd Austin, was visiting Jerusalem at the time, and the attack seemed to make mockery of strenuous efforts by Biden’s team to consult with Netanyahu early on.

Nor has the harsh rhetoric coming from Tehran helped matters. On Wednesday, Iran’s supreme leader, Ayatollah Ali Khamenei—who has the final word on negotiations—warned that the talks should not drag on and become “attritional,” and he attacked the United States for seeking “to impose its own wrong wishes” and the Europeans for following the U.S. lead. 

Malley; his boss, National Security Advisor Jake Sullivan; and Secretary of State Antony Blinken have certainly worked hard to get the Europeans on board. At Washington’s urging, the E3 on Wednesday issued a statement condemning Iran’s move to raise enrichment, saying it was “particularly regrettable given they come at a time when all JCPOA participants and the United States have started substantive discussions.” 

In an email, Iranian Ambassador to the U.N. Majid Takht Ravanchi said the fact that the E3 had criticized Iran’s move but not Israel’s will only “cloud the atmosphere” in Vienna. Privately, Iran contends that the Natanz attack has strengthened its position, especially by making Russia and China—two of the parties to the 2015 deal—more eager to push for sanctions relief for Tehran. If Moscow and Beijing press harder for relief out of sympathy for Iran, it could make things more difficult for the United States and the E3.

But other experts say the Israeli attack may actually strengthen the U.S. position—signaling to Tehran that the Iranians had better get back to the deal on U.S. terms or the Israelis will end their nuclear ambitions anyway and they won’t even enjoy sanctions relief.

“Ironically, it stretches out the time it will take the Iranians to get closer to a breakout [nuclear] capability,” said Dennis Ross, a former diplomat and Middle East specialist at the Washington Institute for Near East Policy. “It also makes clear to the Iranians that they can keep investing a lot in their nuclear program, but as they do, their efforts will continue to be disrupted.”

Still, Iran insists it won’t cease its provocations before all JCPOA sanctions are lifted first—arguing that it was Trump, not Tehran, who broke the agreement and therefore it should be the Americans who make the first move.

If and when the Biden administration gets back to the JCPOA, it plans to “expand and strengthen” that pact, covering Iran’s militant activities and missile program so as to satisfy hard-liners from Capitol Hill to Jerusalem. Some in Washington call this “JCPOA 2.0,” but that remains a long way off, with Tehran refusing to consider any talks about a new pact.

The political pitfalls are many. If Biden is perceived as giving up too much too soon to Iran, he will face a backlash from hard-liners in the U.S. Congress, including some powerful Democrats. In late March, a bipartisan group of 43 senators—including Sen. Bob Menendez, the chairman of the Senate Foreign Relations Committee; Sen. Chris Coons; and 11 other Democrats—sent a letter to Biden calling for a broader strategy than the JCPOA that would address Iran’s “destabilizing activity throughout the Middle East and its ballistic missile program.” 

Angering that group could be costly for Biden as he tries to whip votes for his major domestic plans, especially his $2.3 trillion infrastructure proposal. “Biden to some degree is in a bind because between now and July 4 is the vote on the American Jobs Act, his key domestic initiative,” said Aaron David Miller, a Mideast expert at the Carnegie Endowment for International Peace. “He’s going to need every Democratic vote he can get. And some Democrats like Menendez and even Coons oppose simple reentry into the JCPOA.”

On the Iranian side, Tehran may want to string things out until after the national elections in June because Khamenei may not want to affect the electoral odds, Vaez and other experts say.

Malley, an experienced Mideast player, knows this is the most complicated negotiation he has ever had to lead. Vaez, his longtime colleague at the ICG, observed that Malley himself “is never an optimist. He himself has serious concerns about the possibility of progress.” 

FP’s Colum Lynch contributed to this report.