08 May 2018
AP — It’s not as simple as just saying “we’re out” of the Iran nuclear deal.
If President Donald Trump follows through on his threat to pull the U.S. out of the Iran nuclear deal on May 12, the rest of the world will be thrust into uncharted territory, forced to navigate a complex web of U.S. sanctions that were lifted under the landmark accord but would ostensibly be put back in place.
Would Trump re-impose sanctions on those who do business with Iran? How quickly? And would Europe follow suit? How would Iran respond? And what happens to Iran’s pre-existing obligations to allow nuclear inspections?
“It’s going to be very complicated,” said Ama Adams, who advises clients on international sanctions compliance at the law firm Ropes & Gray. “There are lots of opportunities to trip up and make mistakes. It’s going to be a period of a lot of activity and flurry.”
A look at possible scenarios for what stays and goes if Trump exits the accord:
Under the 2015 deal, the United States issued waivers to longstanding sanctions punishing Iran for its nuclear program. Iran, in turn, restricted its program and allowed more inspections.
Trump has essentially two options for re-imposing sanctions.
On May 12, he faces a deadline on whether to renew the waivers that eased one basket of sanctions: those on Iran’s central bank, intended to hit Iranian oil exports. Another basket of sanctions waivers are up for renewal on July 11, focusing on more than 400 specific Iranian companies, individuals and business sectors.
One of Trump’s options, being called “the nuclear option” by some experts, would re-impose all the sanctions at once — even those not scheduled for renewal until July.
That would put the U.S. in immediate violation of the deal’s terms, which say sanctions remain lifted as long as Iran is complying with its terms. So far, the International Atomic Energy Agency, the U.N.’s nuclear monitoring agency, has said Iran is complying, and Secretary of State Mike Pompeo agrees.
A second option: re-imposing only the central bank sanctions.
That would start a 180-day clock in which companies or countries would be expected to reduce their purchases of oil from Iran. Those that don’t would ultimately be penalized by Washington.
Why not restore all the sanctions at once? Proponents of doing it piece by piece say it would give the U.S. more leverage to bring about a “fix” to the deal so that Trump could stay in after all.
Trump has long said the deal needed to be strengthened or abandoned, but efforts with European allies to strengthen it haven’t yet succeeded.
With sanctions about to kick in again in 180 days, there might be enough pressure on the Iranians, the Europeans and other members of the deal to give in to Trump’s demands, proponents say.
But supporters of the nuclear deal say that’s not a viable option because the U.S., by starting the 180-day clock, would have already breached the deal.
And as soon as Trump announces sanctions will be coming back, companies will immediately start shutting down their business with Iran. That means Iran would suffer from lost business and could decide to walk away from the deal itself.
Adams, the sanctions attorney, said some companies have already started winding down business in anticipation that Trump may re-impose sanctions.
– By Josh Lederman, Matthew Lee, Associated Press
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UPDATE: Trump is now expected to make his announcement on Iran on Tuesday, 8 May, and no longer 12 May.
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