Is the U.S. Caving on Iran Sanctions?

Richard Goldberg and Mark Dubowitz

As the Iran-backed Hamas and Islamic Jihad terrorist groups fired rockets against Israel earlier this month, President Joe Biden’s envoys were busy offering Iranian banks and companies blanket immunity from U.S. terrorism and missile sanctions in exchange for Iran rejoining the 2015 nuclear deal. Tehran will use such immunity to increase funding for terror attacks against Israel. Now is a time for Biden to stand with America’s democratic ally—not the state sponsor of terrorism against that ally—by overruling his chief negotiator and maintaining terrorism and missile sanctions on Iran no matter what.

The Joint Comprehensive Plan of Action (JCPOA) is a fatally flawed deal. The agreement promises hundreds of billions of dollars to the world’s leading sponsor of terrorism in exchange for temporary and narrow limits on its nuclear program. With no limits on the development of nuclear-capable missiles, an allowance for Iran to maintain its enrichment capabilities and a series of expiration dates on key nuclear restrictions, the mullahs would just need to be patient—using massive sanctions relief to grow their economy and take an internationally legitimized path to nuclear weapons.

But for all the flaws of the JCPOA, former President Barack Obama made one important promise: No matter what, the United States would retain the right to impose sanctions on the Islamic Republic to stop the flow of money to its missile program, sponsorship of terrorism, and abuse of human rights.

In 2015, Obama declared “the United States will maintain our own sanctions related to Iran’s support for terrorism, its ballistic missile program, and its human rights violations.” Then-Vice President Biden vowed that “every sanction in place against any entity or individual in Iran for the support and encouragement of terrorism stays in place.”

In testimony before the Senate Foreign Relations Committee, then-Secretary of State John Kerry was even more explicit: “We will not violate the JCPOA if we use our authorities to impose sanctions on Iran for terrorism, human rights, missiles, or any other nonnuclear reason.” Then-Treasury Secretary Jack Lew told the House Foreign Affairs Committee, “We are going to continue to prosecute our unilateral sanctions on things like terrorism, on things like regional destabilization and human rights.”

That was the understanding that led Ambassador Dennis Ross, one of Obama’s top Middle East envoys, to write that if “a person or entity is found to be connected to the Revolutionary Guard, terrorism, missile proliferation and human rights abuses, it most certainly can and should be subject to sanctions—even if sanctions for that person or entity were initially suspended by the JCPOA.”

That was also the understanding that led Congress in 2017—while the United States remained a participant in the JCPOA—to mandate new sanctions on all entities affiliated with the IRGC and Iran’s missile program under the Countering America’s Adversaries Through Sanctions Act. The legislation, co-authored by Sen. Robert Menendez, the current Democratic chairman of the Senate Foreign Relations Committee, passed almost unanimously.

But Biden’s top Iran envoy, Rob Malley, upended that understanding this month when he explained why the Biden administration would agree to lift terrorism, missile, and human rights sanctions on Iran as part of the ongoing negotiations to rejoin the JCPOA.

“We’re not questioning the—sort of the evidentiary basis of some of the sanctions that may have been imposed by the Trump administration,” Malley said, according to the State Department transcript (backing off from an earlier statement where he did exactly that). “What we’re questioning is whether those are consistent with a return to the JCPOA.”

With the expiration dates of the JCPOA already taking effect and accelerating after 2023, the Biden administration’s policy of rejoining the 2015 nuclear pact already made little sense. After all, Iran concealed undeclared nuclear activities throughout the agreement and in violation of its obligations. But Malley’s statement that terrorism, missile, or human right sanctions can be inconsistent with the JCPOA turns a foolish policy into a dangerous one.

According to Malley’s interpretation of the JCPOA, the entities provided sanctions relief under the 2015 deal did not just receive “nuclear sanctions” relief. They were given blanket immunity to finance terrorism, proliferation, and human rights abuses in perpetuity. Any attempt to impose terrorism sanctions on an Iranian bank that is actively financing terrorism, for example, would be a violation of the JCPOA, according to Malley, if that terror bank was initially granted nuclear sanctions relief in 2015.

That is most certainly a shift in U.S. policy—toward Tehran. It contradicts statements and commitments made by Malley’s boss, Secretary of State Tony Blinken, who told the Senate Foreign Relations Committee in January that terrorism sanctions on the Central Bank of Iran and the National Iranian Oil Company were not inconsistent with the JCPOA. Blinken had also vowed that even if Biden suspended nuclear-related sanctions, it would “continue non-nuclear sanctions as a strong hedge against Iranian misbehavior in other areas.”

The danger of a policy that grants Tehran’s largest banks and companies full immunity from terrorism and missile sanctions is on full display today in Israel. Giving a green light to terror and missile finance will vastly expand the terror budget for terrorist groups in Gaza and Lebanon—putting Israel in even greater danger.

If the president was unaware of what his envoy was giving away, now is an opportune moment to instruct Malley to reverse course. If Biden doesn’t, he will own the consequences.

Richard Goldberg is a senior advisor at the Foundation for Defense of Democracies, where Mark Dubowitz is chief executive. Both are sanctioned by the Islamic Republic of Iran for architecting U.S. sanctions on the regime.