Fact Check: The President’s Misleading Charge About Sanctions Relief

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The administration’s claim that it would provide $6 – $7 billion in relief only accounted for the direct relief provided by the relaxing of sanctions, rather than other forms of indirect relief. According to an analysis (.pdf) published by the Foundation for Defense of Democracies (FDD), increased oil sales and access to foreign exchange reserves led to a total relief amount of $11.2 billion.

In addition to the direct relief, the loosening of sanctions led to higher employment, strengthening of the rial, deescalation of sanctions pressure and allowed Iranian authorities to build up reserves against future sanctions should they be reimposed or strengthened in the future. And as Iran’s economy recovers and commerce increases, loopholes that were previously ignored will increasingly be exploited.

The relaxing of sanctions, which actually pre-dated the JPOA, has led to a dynamic that makes Iran less likely to compromise. The FDD paper explained:

“The gradual economic improvement, even at well below the current growth trends, provides breathing space for Iran’s leadership to accumulate more reserves and savings via maintaining fiscal spending patterns, thus increasing resilience to withstand future sanctions. This reduces the leverage held by the P5+1 in current and future negotiations. So, while economic conditions may still feel very depressed to many Iranians due to tighter monetary policy and little government stimulus, these overarching trends could influence the calculus of Iran’s leaders to become even more inflexible in negotiations over their nuclear program as the sanctions pressure on Iran’s economy diminishes.”
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