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What If the Deal Is Rejected?

August 10, 2015

Many thoughtful observers have asked, quite reasonably: What will happen if Congress votes down the nuclear deal with Iran—or if the Iranian parliament rejects it? As we debate the merits and flaws of the deal, we must consider the alternatives and potential outcomes, if it does not go through.

We have repeatedly heard that “no deal is better than a bad deal” and “the alternative to funding and arming Iran is not to fund and arm Iran.” But these platitudes do not satisfy those looking for realistic options, those truly torn about whether to support or oppose the agreement—including Members of Congress facing this grave choice.

In fact, we cannot roll the clock back. The world will not simply return to the state of affairs on July 13, 2015—the day before the announcement of the Joint Comprehensive Plan of Action (JCPOA). It will not revert to before the November 2013 interim “Joint Plan of Action” (JCPA), 15 months ago. We do not have such a time machine, and can’t rewrite history.

We also cannot pretend that if the U.S. Congress rejects this deal—formally, votes for a “resolution of disapproval,” with a subsequent vote to override a presidential veto—we can send the negotiators back to Vienna to pick up where they left off. We cannot say to Iran, “So sorry, that didn’t work, let’s try again” and hope to negotiate “a better deal.” In the real world, there are consequences for action, for inaction, and for reneging on agreements. Other players, including the Islamic Republic and our P5+1 negotiating partners, will make decisions and take actions. “The status is still quo,” one commentator pithily noted. But no, it is not; this genie isn’t about to go back into the bottle.

In the real world, it is clear that some things will change, and we must make informed assumptions as to what these changes will be. There are some things we know will happen, while others are subject to speculation. But there’s no justification—besides political posturing and fear-mongering—for doomsday scenarios, on either side of the debate. The sky will not fall if the deal falls through, or if it doesn’t. We will not face nuclear Armageddon tomorrow if the JCPOA were to be abrogated (or enacted). Nobody will be sending bombers to Tehran any time soon; a resolution to disapprove of the deal is not a congressional authorization (or requirement!) for the use of military force. Iran will not declare war on the U.S. or on Israel; it will simply continue its state-sanctioned chants of “death to America” and threats to annihilate Israel. Hezbollah will not suddenly decide to pellet Tel Aviv with rockets—not because of Iran or the JCPOA, but because of its own strategic considerations, including anticipating Israel’s response and being embroiled in the Syrian quagmire.

So what will happen if the agreement is voted down, or canceled before taking effect?

  • American sanctions will remain in effect—and be strengthened. The JCPOA and corresponding UN Resolution endorsing it are not a binding international treaty, and thus have no legal effect in the U.S. If Congress does not approve the JCPOA, American “statutory sanctions”—the ones enacted by Congress—remain on the books. These include economic restrictions on aid, trade, shipping, banking, insurance, underwriting, and international financial support. The most “biting” sanctions were those imposed by the 2010 Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), including restrictions on Iran’s Central Bank and on international funds transfers using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. Moreover, under the terms of the Iran Nuclear Agreement Review Act (p. 33), the President will lose the authority to waive, suspend, or reduce these sanctions, so they will be more rigorously enforced and have fewer exceptions. (American state-level restrictions on investments in Iran remain in effect regardless of the JCPOA’s implementation.) Iran will return to the situation it faced between 1996 and 2010, when the U.S. led the world by imposing unilateral sanctions—but it will do so with a much weaker economy, less able to withstand the dual pressures of American sanctions and low oil prices. And aside from the nuclear issue, Iran also remains a U.S.-designated State Sponsor of Terrorism, imposing limits on foreign assistance and arms trade.
  • European and international sanctions may be lifted, but businesses will proceed with caution. The American sanctions, still in effect, will provide a check on the ensuing gold rush. International companies will have to make a choice between investing in Iran—no longer restricted by their own countries’ laws—and doing business with the U.S. Some Russian and Chinese companies may choose the former; most European companies will probably prefer to work with the U.S., whose economy is over 30 times larger than Iran’s. Other countries may decide to follow the American lead and keep their sanctions in effect; Canada announced that it will maintain its sanctions in any case. A senior adviser to the French president told American lawmakers that “if U.S. sanctions were kept in place, it would effectively prevent the West from doing extensive business in Iran.” The official added that he “didn’t see an entity or a country going against them [the U.S. sanctions], that the risk was too high.” (For the record, the French Embassy in the U.S. later denied the comment, but did not respond to a follow-up question asking to clarify whether they were disavowing the remarks or denying that the official did in fact make them.)
  • Iran will not receive its $100+ billion in frozen assets and other short- and long-term sanctions relief. Its capacity—not necessarily its motivation—to make a dash to a nuclear weapon will be diminished compared to the JCPOA scenario, though not as much as the pre-JCPOA situation. Iran will not have additional resources available to fund rogue regimes and insurgencies throughout the Middle East, or terrorism around the world. The mullahs will not get the domestic political boost or the financial windfall that would allow them to strengthen its grip on the Iranian people.
  • Iran will remain subject to the Nuclear Non-Proliferation Treaty (NPT). Iran ratified the NPT in 1970 as a non-nuclear-weapons State. Under the terms of the treaty, Iran committed “not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices” (Article II). Iran is also obligated to cooperate with International Atomic Energy Agency (IAEA) on safeguarding “peaceful nuclear activities” (preamble), and to submit to IAEA verification of the fulfillment of its obligations “with a view to preventing diversion of nuclear energy from peaceful uses to nuclear weapons or other nuclear explosive devices” (Article III.1). The Islamic Republic has repeatedly violated these obligations, but they are in no way abrogated or mitigated by subsequent UN Security Council resolutions or their termination. If the JCPOA is rejected, continued violations will provide grounds for re-imposing international sanctions on Iran, or imposing new ones.

These, then, are the things we know: American sanctions remain in place; Europeans may or may not follow suit, but will be subject to U.S. sanctions if they don’t. Iran will not receive its much-anticipated economic windfall and diplomatic coup. It will not have the huge bonanza with which to stifle domestic dissent, pursue its hegemonic ambitions and empire-building in the region, and support terrorism worldwide. The NPT and its restrictions on nuclear activities will remain in effect and binding on Iran, even if the JCPOA and related UN Security Council resolutions do not.

Then there are many things we don’t know, and are subject to considerable speculation. How will the leaders of the Islamic Republic respond? Will they withdraw from the agreement? Will they accelerate their nuclear program and break out to a bomb? Or will they hold it back due to economic constraints, political pressure, or security considerations? What effect, if any, will the remaining sanctions have on the Iranian economy, the regime, and its behavior? At what point, if ever, will the Islamic Republic decide to resume negotiations on easing or lifting the sanctions, and under what terms? What will Russia and China do? How far will the Europeans go in relaxing their sanctions, knowing that the American ones remain in effect? What will the Saudis and the Israelis do? Will the Iranian people rise up against their repressive rulers, as they tried to do in 2009, and will the result be any different from the last round? What will a future U.S. Congress or administration do?

These questions are subject to informed debate among reasonable, rational observers. We don’t have a crystal ball and can’t know the future, so we have to assign probabilities to different potential events and outcomes. Hypothetical scenarios must be grounded in some rational process, based on past behavior of the respective players (or others that may provide reasonable proxies), their interests, and their statements. And we should consider not only the relative likelihood of each proposed course of action, but also its relative benefits and risks.

I hope we can have this discussion without fear-mongering and inflammatory rhetoric. Those—on either side of the debate—who distort the other side’s arguments; impugn the other’s motives, character, or loyalties; or belittle those who disagree with them—are weakening rather than supporting their case. This discussion is too important; let us focus on its very grave substance and not resort to name-calling, patronizing, and trivializing.


This article was also published on the Times of Israel, August 10, 2015

As always, I look forward to your feedback: Thoughts, additions, and rebuttals are welcome and actively solicited. If you have answers to any or all of the questions above, please let me know!

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