The Future of the Iran Nuclear Deal if Biden Wins

U.S. presidential candidate Joe Biden has announced that should he win the November election, he is prepared to immediately look into rejoining the Joint Comprehensive Plan of Action on the condition that Iran once again return to its commitments under the nuclear agreement. But Biden’s condition would require Tehran and Washington to return to negotiations, and this time the U.S. will certainly demand discussions on a wider range of issues. Biden also intends to take a tougher stance on Iran's nuclear program.

It is true that Biden has severely criticized the Trump administration’s approach to Iran. In an article published 20 days ago, he criticized Trump’s decision to leave the JCPOA and wrote that “the United States would rejoin the agreement as a starting point for follow-on negotiations.”

But the current framework of anti-Iranian sanctions is much more complicated than when the JCPOA was signed, and dismantling this framework will be no easy task for Biden. Under its strategy of maximum pressure against Iran, the Trump administration has strongly increased the extent of sanctions against Iran over the last few years, while Trump has announced that he will continue this strategy as long he is president and as long as Iran does not submit to further negotiations. Last week, Bloomberg published a report showing that the Trump administration intends to sanction the entirety of Iran’s financial sector under Executive Order 13902. Such action by the Trump administration would not only blacklist any companies that interact with Iranian banks, it would target all Iranian financial institutions, such as the networks that Iran uses for bank drafts and money transfers. Of course, such a move would have a limited effect on the Iranian economy since the U.S. has already done everything in its power to sanction Iran.

Obviously Iran expects that if Biden wins the election, all the U.S. sanctions applied under Trump will be lifted. Iran also expects that those sanctions that were not stipulated in the JCPOA will be lifted before it returns to the agreement. Even if a future Biden administration suspends sanctions that targeted the Iranian oil industry, Iran will still expect the U.S. to lift those sanctions that paralyzed Iran’s financial sector with titles like “combatting terrorism” and “anti-money laundering.” Even after the JCPOA went into effect, Iran continued to face difficulty in attracting foreign investments because there was still doubt over investing in Iran due to those U.S. sanctions that remained in effect. As long as these sanctions remain, international investment companies and institutions will continue to be cautious about financial transactions and business involving Iran. Biden will have a particularly hard time obtaining Iran’s approval on this issue. Republicans will create obstacles through the U.S. legal and political system to disrupt and block Biden’s ability to remove the sanctions put in place by Trump. For example, among Iran’s top priorities is the removal of sanctions implemented under the Patriot Act, which made Iran’s financial sector inaccessible to foreign investors. But for a future Biden administration to lift these sanctions, it must first prove that Iran is fully in compliance with laws on money laundering and financial support for terrorism according to the Financial Action Task Force. But we all know that Iran resents the need for the FATF’s approval.

At the same time, Republicans in Congress will have no interest in approving laws that would allow Democrats to reach a rapid agreement with Iran. The Republicans' disruptive behavior means the future Biden administration will have a difficult time lifting existing sanctions against the Central Bank of Iran and the Revolutionary Guard. Four years ago, Iran enacted the FATF’s recommendations in order to soothe the institution’s worries about Iran over money laundering and terrorist financing. But the Trump administration’s exit from the JCPOA made the Iranian government’s continued execution of this plan politically untenable. As a result, in February, the FATF reimposed its restrictions on Iran. Additionally, the 2020 Iranian legislative election brought the conservatives to power in Parliament, so the outlook for approval from the FATF is very bleak unless high-ranking officials intervene.

Taking this outlook into account, it seems that an agreement between Iran and the U.S. may not be feasible. Even if such an agreement is reached, it is unlikely to occur in the first year of Biden’s presidency, and even if it does, the agreement would only concern a limited number of issues. Such an agreement might include points such as the removal of enriched uranium from Iranian territory, or Iran’s relinquishing further research and development of new centrifuges. It is possible Iran will negotiate about decreasing the amount of installed centrifuges in exchange for the suspension of some sanctions on Iranian exports, the granting of exemptions for oil sales, and complete support for Iran through humanitarian trade networks.

An increase in the scope of negotiated issues would also cause the U.S. to demand that negotiations involve matters beyond the purview of the JCPOA, since many of the tenets of the agreement, known as the “sunset provisions,” are set to expire between 2023 and 2025. It is unlikely that the U.S. will have recommitted by the time these sunset provisions come into effect. The U.S. would only adhere to these sunset provisions if its relationship with Iran were to see a significant improvement in the coming years. But the real issue is that the Trump administration’s strict sanctions against Tehran have created a bleak outlook for any improvement in relations between the two countries. In addition to this, the approaching expiration of the sunset provisions means the U.S. will demand exactly that which Iran opposes, an extension of many clauses in the JCPOA before any future deal. Such a negotiation process would likely cause Iran to take a firmer position on its nuclear program, forcing Washington to focus on Iran’s main demand: the suspension of sanctions. In any case, in Iran’s view, the nuclear program is powerful leverage for negotiations with the U.S., and Tehran does not intend to relinquish this leverage easily. Therefore, Iran would naturally wish to preserve vital elements of its nuclear program. Elements such as uranium enrichment, preservation of existing stores of uranium and the number of centrifuges will be among Iran’s main demands. Until the U.S. agrees to suspend a large part of its sanctions against Iran, Iran will not be ready to relinquish the basic elements of its nuclear program. The only other option is if Iran agrees to negotiate with Washington on its missile program and strategic goals in the region, which seems extremely unlikely since these two points remain central to Iran’s national defense policy. That is why Iran is attempting to use its nuclear program as leverage to limit the scope of any negotiations with the U.S.