The Iran Sanctions Act 1996 (ISA) was set to expire on December 31, 2016, as the Joint Comprehensive Plan of Action (JCPOA, in Farsi Barjam), more commonly known as the Iran nuclear deal, was to complete its first year of implementation. However, earlier this month, the ISA was extended for another 10 years by an overwhelming majority of the United States Congress. The bill passed the House 419-1, with Representative Tom Massie (Republican from Kentucky.) being the lone dissenting vote. It passed the Senate 99-0 with Senator Bernie Sanders (Independent from Vermont) abstaining from the vote.
Prior to Senate approval, Iran’s leader, Ayatollah Ali Khamenei, in a furious speech, said, “The current United States government has breached the nuclear deal on many occasions. The latest breach is the extension of sanctions for ten years, which if happens, would surely be against Barjam and the Islamic republic would definitely react to it.”
The Ayatollah’s words left no room for Iran’s moderate president, Hassan Rouhani, or his administration, including the Foreign Minister Javad Zarif, to take a different position. As such, the group of Iranian top brass, who are members of the Council for Monitoring the JCPOA, led by Rouhani, announced that Washington’s move “is a blatant violation of the JCPOA.”
The US government disagreed with Iran’s stance. On December 15, Secretary of State John Kerry said in a statement that although an extension of the Iran Sanctions Act was not necessary, it “is entirely consistent with... [the US] commitments in the JCPOA.”
The Americans are right and the Iranians are wrong.
* What is the Iran Sanctions Act?
The Iran Sanctions Act was the first significant extraterritorial US sanction imposed on Iran. The law was originally passed as the Iran and Libya Sanctions Act of 1996 during the presidency of Bill Clinton. The ISA authorised the US administration to sanction foreign entities for investing in Iran’s oil and gas industries. Originally, it was crafted with the aim of preventing Iran from acquiring the financial capability to develop weapons of mass destruction. Many experts questioned the logic behind the law, given that poor countries such as Pakistan and North Korea were able to build a nuclear arsenal.
When the Iran nuclear issue and the Syrian crisis emerged, the ISA was expanded with new legislations Those laws authorised the US administration to sanction entities involved in the sale of WMD-related technology, advanced conventional weaponry and gasoline to Iran. It also opened entities that participated in Iran’s gas, oil, petrochemical or uranium mining sectors as well as the transportation of Iranian crude oil to possible American sanctions.
On December 15, the White House said in a statement that President Barack Obama was allowing the ISA extension to become law without his signature. Under the US Constitution, if the president takes no action 10 days after Congress passes a bill, the bill becomes law without the president’s signature.
* Why the Iran Sanctions Extension Act does not violate the nuclear deal
When the JCPOA was concluded, every party, including the Iranian negotiators, was aware of the sanctions stipulated under the ISA. As such, they discussed the issue extensively and based on Annex II of the JCPOA, Iran agreed that the US administration would waive the enforcement of many ISA provisions that prevented Iran from conducting business with the world.
Upon confirmation of Iran’s full implementation of its initial nuclear-related obligations on January 16, 2016, the Obama administration waived the right to implement sanctions for investment and involvement in Iran’s gas, oil, and petrochemical industries. Sanctions were also waived to allow for the sale of gasoline to Iran and associated services to Iran’s energy sector, such as transportation of Iranian crude oil.
In other words, the situation remains the same today as it did when the nuclear accord was signed. The extension of the ISA still grants authority to the US administration to waive the sanctions under the ISA and the JCPOA commits the US to waiving the enforcement of those sanctions. Nothing has changed.
As Kerry rightly said in his statement, “Extension of the Iran Sanctions Act does not affect in any way the scope of the sanctions relief Iran is receiving under the deal or the ability of companies to do business in Iran consistent with the JCPOA. The Iran Sanctions Act was in place at the time the JCPOA was negotiated and has remained so throughout the deal’s implementation.”
* The US does not actually need the ISA to snap back all sanctions
Moreover, the expiration of the ISA would not help Iran (if this is what Iran was hoping to achieve) in the sense that it would not negate the US administration’s ability to reinstate sanctions were Iran found to be in violation of the JCPOA. The Iranian leadership ignores the fact that even if the ISA was not extended, the US president still retains full authority to re-impose ISA sanctions in the face of an Iranian violation of the JCPOA by utilising the powers granted to him via the International Emergency Economic Powers Act (IEEPA).
All American presidents since 1995 have issued Executive Orders recognising Iran as a national emergency concern under IEEPA. President Obama extended this state of emergency with respect to Iran for one more year in March 2016.
Stephen Mull, the State Department’s lead for overseeing the implementation of the JCPOA, stated before the Senate Banking Committee that “having the ISA in place or not is not necessary for snapping-back [the sanctions]. We have sufficient authority through various executive orders.”
In other words, the administration’s ability to snap back sanctions would have been unaffected by the termination of the ISA. As such, Congress’ move was, in fact, largely a symbolic display to demonstrate their resolve to stand firm in dealings with Iran.
Simply put, as long as the US administration issues waivers, no sanction is re-imposed on Iran. Consequently, the JCPOA is not violated. The accord will only be violated, if, for instance, President-elect Trump, after taking office, refuses to renew waivers.
This renewal of waivers should continue for seven more years. According to the JCPOA, the US is obligated to seek legislative action to terminate all US nuclear-related sanctions, including those provisions stipulated by the ISA, on October 18, 2023 or upon the IAEA’s approval that all nuclear activities in Iran are of a peaceful nature — whichever is earlier.
* Iran retaliates
In a retaliatory move, Rouhani ordered the country’s Atomic Energy Organisation to begin working on the design and production of nuclear-powered marine vessels. Contrary to Iran’s expectation, the US did not display any sign of concern over the move. The White House noted that the Iranian development of nuclear vessels “does not run counter to the JCPOA.” This benign, cold-blooded US stance must have disappointed the Iranians who had hoped their move would send a strong message to the US in response to Congress’ extension of the ISA.
Shahir Shahidsaless is an Iranian-Canadian political analyst and freelance journalist writing about Iranian domestic and foreign affairs, the Middle East and the US foreign policy in the region. He is the co-author of Iran and the United States: An Insider’s View on the Failed Past and the Road to Peace. You can reach him at firstname.lastname@example.org or follow him on Twitter at www.twitter.com/@SShahidSaless.