Transition 2016

Can President-Elect Trump “Dismantle” the JCPOA? It’s Complicated

By Jimmy Chalk
Thursday, November 17, 2016, 3:23 PM

“Sometimes it pays to be a little wild,” wrote Donald J. Trump, President-elect of the United States, in his 1987 bestseller The Art of the Deal. The outcome of last week’s Presidential election proved him right. But after the victorious conclusion of Trump’s unpredictable campaign, many are left wondering what to expect from the President-elect once he takes office, particularly with regard to the Iran nuclear deal.

One of the more predictable features of Trump’s campaign was his criticism of the deal, known formally as the Joint Comprehensive Plan of Action. The JCPOA is an agreement between the Islamic Republic of Iran and the P5+1 group (the U.S., Russia, China, the U.K., France, and Germany) under which Iran promises to never seek to acquire nuclear weapons and to slow its development of “peaceful” nuclear energy technology for several years, in exchange for a promise from Western powers to relieve sanctions imposed on Iran for years of noncompliance with its safeguards obligations under the Non-Proliferation Treaty.

To date, parties to the JCPOA have largely complied with their obligations under the new deal. Iran has severely restricted its nuclear program and has submitted to a strict IAEA inspections regime. The UN and the EU have lifted their sanctions under the deal and EU businesses have begun to enter the Iranian market. President Obama has used his waiver authority to lift certain sanctions tied to Iran’s nuclear program as per the JCPOA and Iran was permitted to access to somewhere between $50 billion and $100 billion USD of Iranian assets frozen abroad.

Even so, all is not well. What brought Iran to the bargaining table in 2014 was the prospect of meaningful economic relief from the sanctions that wreaked havoc on Iran’s economy, in large part by restricting Iranian access to international financial markets. But while the JCPOA provides relief from all U.N. sanctions on the nuclear issue, and virtually all EU sanctions that affect Iran’s economy, it does not lift all U.S. sanctions. Rather, it only provides relief from certain U.S. secondary sanctions, whose purpose is “to discourage non-U.S. parties from doing business with Iran under threat of being denied access to the United States market.” The United States’ primary sanctions, which prohibit U.S. entities from engaging in economic activity, continue to apply, with limited exceptions. And the Iranians believe these primary sanctions are discouraging international banks from entering the Iranian market for fear of being barred from the U.S. market. The country’s leaders have expressed frustration with the slow pace of Iran’s economic recovery and have suggested that to the extent that the primary sanctions have discouraged growth in Iran, they could constitute a violation of the JCPOA. Iran’s moderate President Hassan Rouhani, who faces reelection next year, even accused the U.S. of “illegal actions” and a “lack of compliance with the JCPOA.” And Iranian Revolutionary Guard Corps’ Brigadier General Hossein Salami promised that the “JCPOA will become a thing of the past” should the U.S. fail to hold up its end of the bargain.

Enter President-elect Trump. Throughout his campaign Trump strongly criticized the JCPOA—though not always with consistency. In a speech before AIPAC in March, he stated that his “number-one priority is to dismantle the disastrous deal with Iran,” yet followed that up with a promise to “enforce it like you’ve never seen a contract enforced before.” Earlier, Trump promised to “renegotiate” the deal by “forcing the Iranians back to the bargaining table.”

Today, it’s difficult to predict how President-elect Trump will approach the JCPOA. But should he seek to dismantle it, could he? And if so, what would be the consequences?

First, it's important to note that whatever President Trump does to reimpose sanctions within his authority, those sanctions probably wouldn’t have the same bite that they did before the JCPOA. That’s because the pre-JCPOA sanctions regime owed much of its strength to the fact that the sanctions were multilateral.  But convincing the EU and U.N. to impose new sanctions won’t be easy: European and Chinese businesses, among others, are already enjoying the benefits of sanctions relief to the tune of billions of euros.

However, President-elect Trump could probably unilaterally reimpose the U.N. sanctions rolled back pursuant to the JCPOA. Under the “snapback” mechanism set forth in operative paragraphs 11-13 of UN Security Council Resolution 2231, the United States could trigger the reimposition (i.e. “snapback”) of U.N. sanctions by notifying the Security Council of “an issue that [the United States] believes constitutes significant non-performance of commitments under the JCPOA.” This finding is subject to a good faith obligation to resolve the issue pursuant to the JCPOA’s dispute resolution mechanism. (Notably, however, the efficacy of the snapback mechanism has been debated: see here and here.)

Trump could also decide to unilaterally reimpose the U.S. sanctions withdrawn by President Obama. If he does, he’ll likely face little difficulty under international law. The JCPOA is a non-binding political commitment, and as such, is no more binding on the parties than a handshake. While some have argued that U.N. Security Council Resolution 2231 would make the JCPOA binding on future administrations, John Bellinger notes that the “calls upon” language in the resolution’s operative paragraph 2 lacks the binding force of a UNSC “decision” and thus does not stand in the way of the United States reimposing its domestic sanctions.

Nor would domestic law present much of an obstacle. To fulfill U.S. obligations under the JCPOA, President Obama lifted two types of U.S. secondary sanctions: sanctions imposed by executive order and sanctions imposed by congressional statute. President-elect Trump could dispose of the first as soon as he takes office—executive orders may be withdrawn at the will of the President who signed them or by a subsequent President. Trump would also be able to dispose of the statutory sanctions, though it’s not certain how quickly. Each sanctions-imposing statute grants the President the authority to waive sanctions, and the waiver remains in effect between 120 days and 12 months, depending on the statute (see here, here, here, and here). As President Obama first exercised his waiver authority on January 16, 2016 (JCPOA’s Implementation Day) and can be expected to renew the waivers just before Trump takes office, they will come up for renewal during the first four to twelve months of President Trump’s term. It is unclear from the sanctions statutes whether President Trump could lift President Obama's waivers and reinstate the pre-existing sanctions prior to the waivers’ scheduled expiration.

Even if President-elect Trump does wish to “dismantle” the deal by reimposing the U.S.’s secondary sanctions regime, the consequences of doing so are less than certain. First, there’s the previously-discussed challenge of rebuilding the coalition of states willing to impose sanctions. Second, campaign promises more central to Trump’s “Make America Great Again” message, such as stoking U.S. manufacturing and exports, may counsel against such a move: notably, the U.S. Department of the Treasury recently approved the sale of 80 Boeing aircraft to Iran. Finally, any attempt to walk back the Iran deal would likely empower Iran’s hardliners just before next year’s elections, bringing to a resounding close what many perceived as Iran’s opening to the West. As the Trump team begins the process of turning promises into policy, even some the JCPOA’s harshest American critics aren’t convinced that “dismantling” is the ideal solution.

Last week, President Rouhani said Iran’s “policies of engagement with the world and the breaking of nuclear sanctions have put Iran’s relations with other countries on an irreversible path of growth.” But while Iranian leaders express confidence that Iran’s gains post-JCPOA will not be erased no matter which approach President-elect Trump ultimately takes, one thing is certain: Trump isn’t tipping his hand. As he told The Washington Post, “I always say we have to be unpredictable.”

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