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July 29, 2015

In Depth: The Iran Nuclear Deal and Sanctions Relief

Frederick W. Kagan
Dismantling the Iran Sanctions Regime

The agreement regarding Iran's nuclear program concluded on July 14, 2015 commits the United States and the European Union to suspend and/or eliminate many but not all of the sanctions that have been imposed on Iran over several decades.  Iran's commitments under the agreement are narrowly confined to its nuclear program.  However, the agreement requires the US and the EU to lift non-nuclear sanctions on some individuals and organizations that were sanctioned for supporting regional and global terrorism, violating the human rights of Iranians, and participating in Iran's ballistic missile program.

The U.S. Administration has asserted that non-nuclear sanctions will remain in place and that relevant secondary sanctions will continue to be enforced.  It is possible to read the language of the JCPOA as supporting that interpretation, although it is far from clear how Iran would react to a vigorous effort to impose secondary sanctions.  The extent of the sanctions regime that will remain after the deal goes into effect will continue to be unclear until the Treasury Department releases new guidance about sanctions, which it is expected to do in the early Fall.

This mini-site offers a glimpse of what such a secondary sanctions regime might look like, however, based on the legal authorities cited by the U.S. Treasury Department and the E.U. for restrictions on currently-listed entities and individuals.

Understanding Sanctions Relief

The agreement recently concluded by Iran and the P5+1, endorsed by U.N. Security Council Resolution 2231, requires the U.S. and the European Union to lift sanctions imposed on Iran in a complex and phased manner.  The Joint Comprehensive Plan of Action (JCPOA) includes a lengthy section (Annex II) describing which sanctions will be lifted and a briefer one (Annex V), laying out the sanctions relief plan over time.  Annex II further includes four attachments, two of which are broken into two parts each, for a total of six lists of individuals and entities.  The language of the agreement is deliberately opaque and contains numerous circular references to its various component parts as well as to various EU resolutions.

The JCPOA appears to require the US and the EU to eliminate non-nuclear sanctions (with some caveats) on a total of 148 individuals and 693 organizations of various sorts. It also requires them to lift sanctions on 76 aircraft and 217 ships.

Important Changes to This Assessment

August 13, 2015 

The interpretation of the JCPOA originally presented on these pages suggested that non-nuclear sanctions and secondary sanctions would no longer apply to entities listed in the attachments of Annex II of the JCPOA.  Further close examination of the text based in part on the testimony of Administration officials before Congress has caused a revision of this assessment.  The pages now reflect the current assessment of a possible reading of the agreement that is most generous to the U.S. and the West.

The site consists of three major sections, some with multiple sub-components:

• Timeline and key dates in the nuclear agreement

• Business deals with Western companies announced by the Iranian media

• Explanation of how the deal changes the sanctions regime

The continuation of non-nuclear-related sanctions

List of entities affected by non-nuclear sanctions

The continuation of secondary sanctions

Sanctions against IRGC-related entities

List of component companies of Bonyad Taavon Sepah