Iran Ready to Walk Away from Nuclear Deal with Its Own ‘Nuclear Snapback,’ New Study Finds

Iran has effectively neutralized America’s economic sanctions against the Islamic Republic’s non-nuclear malign activity by threatening to walk away from the Joint Comprehensive Plan of Action (JCPOA) if any sanctions are imposed, according to a report from the Foundation for Defense of Democracies issued today.

Released on the one-year mark of the signing of the JCPOA, “The Iran Deal’s Fatal Flaws After One Year: Emboldened Iran and Diminished American Deterrence” comes as Congress is debating legislation that would impose new sanctions on Iran for sponsoring terrorist activities, testing nuclear-capable ballistic missiles, and violating human rights and prohibit Tehran’s access to the U.S. financial system and the U.S. dollar overseas.

“Iran’s ‘nuclear snapback,’ is a concerted effort to blackmail the United States and its allies to turn their backs on the Iranian regime’s nefarious activities throughout the region and at home,” said Mark Dubowitz, FDD executive director and co-author of the report. “Congress must resist this blatant effort to steamroll attempts to hold Iran accountable for its nuclear commitments and other obligations under international law.”

The FDD report finds that Iran is expanding its efforts to secure economic benefits while cheating on the deal, including the regime’s attempts to illegally procure nuclear and missile technology. Earlier this week, The Wall Street Journal reported that German intelligence agencies said Iran tried to illegally purchase nuclear equipment from Germany even after the JCPOA was announced.

The authors note that Iran remains the world’s leading state sponsor of terrorism and has grown more aggressive since the nuclear deal, according to the U.S. government. Moreover, Iran’s respect for human rights has deteriorated since last year, according to human rights experts. Meanwhile, Tehran’s illicit financial conduct continues unabated, Dubowitz and co-author Annie Fixler write.

“Yet at the same time, Iran is pressing for additional sanctions relief, demanding the United States cajole foreign businesses to reenter the Iranian market and change its laws to allow Iranian access to the U.S. financial system,” Dubowitz said. “The Obama administration appears to be acquiescing to Iranian demands, but Congress can defend the integrity of the financial system and push back against Iran’s efforts.”

The report recommends 16 specific economic sanctions tools that policymakers can deploy as part of a comprehensive strategy to push back against Iranian illicit conduct, including:

Protect the integrity of the U.S. dollar from Iranian illicit finance by clarifying that it is prohibited for any U.S. financial institution to process any transactions for Iranian entities. Congress should also state that it is prohibited for a U.S. financial institution to provide dollars for offshore clearing facilities if any party to the transaction anywhere in the financial chain is an Iranian entity.

Reauthorize the Iran Sanctions Act, which is an important foundation of the sanctions architecture targeting the full range of Iranian illicit conduct. The law is scheduled to expire later this year. Reauthorizing the Act would not violate the JCPOA because no new sanctions would be imposed.

Resist efforts by Iran to convince global companies and banks that it is a responsible financial actor, and detail the ongoing compliance and business risks involved in transactions with Iran.

Strengthen sanctions against the Islamic Revolutionary Guard Corps, which controls a significant part of Iran’s economy, by targeting its support for terrorism and expanding non-proliferation sanctions and designations.

To arrange an interview with the authors, contact [email protected] or 202.403.2904.

The Foundation for Defense of Democracies (FDD) is a non-profit, non-partisan 501(c)3 policy institute focusing on foreign policy and national security. Founded in 2001, FDD combines policy research, democracy and counterterrorism education, strategic communications and investigative journalism in support of its mission to promote pluralism, defend democratic values and fight the ideologies that drive terrorism. Visit our website at www.defenddemocracy.org and connect with us on Twitter, Facebook and YouTube.

About FDD’s Center on Sanctions and Illicit Finance (CSIF):

FDD’s Center on Sanctions and Illicit Finance is a project designed to illuminate the critical intersection between illicit finance and national security. The Center relies on regional and sanctions expertise within FDD, including a core cadre of financial, economic, and area experts and analysts, to promote a greater understanding of illicit financing and economic threats. The Center also designs creative and effective strategies, doctrines, and uses of financial and economic power to attack and protect against priority threats and vulnerabilities. More information on CSIF is available at http://www.defenddemocracy.org/csif.

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