Financial Crime World

Sanctions Relief for Iran Hinges on Nuclear Deal

The path to lifting terrorism-related sanctions against Iran is fraught with complexities as talks between world powers near a conclusion. To understand the process, it’s essential to distinguish between nuclear and non-nuclear sanctions.

Non-Nuclear Sanctions

According to experts, President Trump would need to delist Iran as a state sponsor of terrorism, while simultaneously removing individuals and entities from sanctions lists. This requires Congressional approval, making it a more challenging process than lifting nuclear sanctions.

Nuclear Sanctions

In contrast, nuclear sanctions can be waived by the executive branch without congressional approval. The White House has argued that if Iran were to violate the agreement, the president could “snap back” sanctions without facing legislative hurdles.

Congressional Oversight

However, Congress still holds significant sway over the process through provisions signed into law by President Obama in May 2015. Under these regulations:

  • The House and Senate foreign relations committees have 60 days to review any deal.
  • During this time, the president cannot loosen the sanctions regime.
  • To derail an agreement, Congress would need to vote it down and muster a two-thirds majority to override a presidential veto.

International Sanctions Regime

The United Nations Security Council has progressively built up an international sanctions regime against Iran since 2005. Each subsequent resolution has tightened measures to restrict Tehran’s nuclear and ballistic missile programs. The European Union has also imposed its own set of sanctions, which are “nearly as extensive” as those of the United States.

Impact on the Iranian Economy

These sanctions have taken a devastating toll on the Iranian economy:

  • Iran’s GDP is 15-20% smaller than it would be without sanctions.
  • The country has lost $160 billion in oil revenue.
  • Its currency has declined by 56% between January 2012 and January 2014.

Sanctions Relief

If a comprehensive agreement is reached, the EU has agreed to terminate all nuclear-related sanctions on implementation day. This will require unanimous consent from the bloc’s 28 member states. Additionally, the UN Security Council will pass a resolution nullifying previous resolutions on the Iranian nuclear issue.

Timing of Sanctions Relief

The timing of sanctions relief remains unclear. Iran is set to regain access to international energy markets and the global financial system once:

  • The IAEA verifies that it has granted inspectors sufficient access to its nuclear facilities.
  • Tehran takes agreed-upon steps to restrict its nuclear program.