Waive it Goodbye? How the Trump Administration Might Attack the JCPOA

February 4, 2017
By Anthony Rapa*

President Trump has made no effort to conceal his disdain for the Joint Comprehensive Plan of Action (JCPOA) agreement regarding Iran’s nuclear program, which he frequently has described as a “disaster” ranking among the worst deals in U.S. history. However, heated rhetoric notwithstanding, he often spoke on the campaign trail of improving the deal, rather than tearing it up. While the Administration has not yet advanced any specific policy regarding the JCPOA, and while future developments remain difficult to predict, the President may seek to ramp up pressure on Iran within the framework of the existing agreement, rather than repudiate the deal altogether. As the President himself explained when he was a candidate: “We have a horrible contract, but we do have a contract.”

This post focuses on how the Trump Administration may go about exerting pressure on Iran without pulling out of the JCPOA. However, it should be noted that on February 1, National Security Advisor Michael Flynn, in response to Iran’s recent ballistic missile launch and an attack on a Saudi vessel by Iran-backed Houthi rebels, stated: “Instead of being thankful to the United States for [its] agreements [with the Obama Administration], Iran is now feeling emboldened. As of today, we are officially putting Iran on notice.”  President Trump followed this up with a series of tweets, including one remarking that Iran is “playing with fire.”  And just today, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) added 25 individuals and entities to the list of Specially Designated Nationals (SDNs) in response to the missile test, although notably none of them appear to be persons who were removed from the SDN List pursuant to the JCPOA—which likely would have been a violation of the agreement.

Thus, the situation remains as fluid as ever, and a more confrontational approach may yet be in the offing.

So how might President Trump ramp up pressure on Iran? One possible approach would be to engage in brinksmanship related to the statutory sanctions waivers President Obama issued in implementing the JCPOA, as well as the certifications required under the Iran Nuclear Agreement Review Act (INARA). Either approach, in particular the latter, would shift the initiative to Congress, where Iran hawks might take up the cause.

The first potential pressure point would be the statutory waivers the Obama Administration issued on “Adoption Day” on October 18, 2015, which became effective on “Implementation Day” on January 16, 2016. Under authority delegated by President Obama, Secretary of State John Kerry issued waivers under the Iran Freedom and Counter-Proliferation Act (IFCA), the National Defense Authorization Act for FY 2012 (NDAA 2012), the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHRA), and the Iran Sanctions Act (ISA), as amended. Pursuant to those waivers, President Obama ceased enforcement of certain congressionally mandated “nuclear-related” sanctions targeting various sectors of Iran’s economy, a measure specifically required under the JCPOA and essential to the sanctions relief accorded to Iran thereunder.

Notably, the above statutes plainly provide that waivers thereunder are not permanent, but rather must be renewed periodically by the President. Specifically, according to the various provisions at issue, the IFCA waivers are effective for a renewable period of 180 days, the NDAA 2012 waivers for a period of 120 days, and the ITRSHRA and ISA waivers for a period of six months.

While the Obama Administration did not publish any renewals of the waivers after Implementation Day—although it is entirely possible (and perhaps likely that it provided them to Congress without much fanfare—Secretary Kerry announced in December 2016 that he was renewing the waivers. On December 15, following a statement by President Obama that he would allow an extension of the ISA passed by Congress to become law, Secretary Kerry announced that:

I have communicated to Iranian Foreign Minister Zarif and to our P5+1 counterparts that while the existing waivers are unaffected by the extension of ISA’s sunset and do not need to be renewed at this time, I have done so today to ensure maximum clarity and convey to all stakeholders that the United States will continue to uphold our commitments under the JCPOA.

Counting forward from this date, it appears the NDAA 2012 waiver would be up for renewal in April 2017, while the other waivers would be up for renewal in June 2017.  Of course, if Secretary Kerry issued the waivers at a later date before January 20, then the waivers could be up for renewal a bit later.

The Trump Administration could allow the waivers to lapse, and depending on the state of U.S.-Iran relations at the time, could opt to do so loudly and publicly. This by itself arguably would not be a repudiation of the JCPOA, although Iran may claim (perhaps correctly) that this is a violation of the agreement. In any event, if the Administration were to allow the waivers to lapse, then technically the statutes described above would again be in effect, and the President would be required to impose certain sanctions targeting Iran’s energy, shipping, shipbuilding, and financial sectors. At that point, Iran hawks in Congress may call on the Administration to resume enforcement of the statutes. Of course, Iran certainly would treat any announcement regarding enforcement as a violation of the JCPOA.

Another potential pressure point is the requirement under the INARA that the President periodically certify that Iran is in compliance with its nuclear-related obligations under the JCPOA. Specifically, the law requires the President to make such a certification to Congress every 90 days. If the President fails to make the certification or advises Congress that Iran has materially breached its obligations and has not cured the breach, then the INARA provides for expedited congressional consideration (i.e., within 60 calendar days) of any legislation re-imposing sanctions that may be introduced in Congress.

Similar to the potential approach regarding the waivers, President Trump could omit to make the certification required by INARA, or could notify Congress that Iran is in material breach. At that point, it would be up to Congress to take the initiative. It should be noted that it is not clear whether and when President Obama made certifications under the INARA—although, as with the waivers described above, it is possible (and perhaps likely) he quietly provided the certifications to Congress during 2016—so it is not clear when the next certification would be due. Again, Iran could treat any gamesmanship in this area as a violation.

Although it is not at all clear what the next steps will be, President Trump may find the above options in keeping with what seems to be his preferred approach—being “tough” on Iran without breaking the deal.  Members of Congress have  expressed interest in supporting this effort, with Senate leaders calling on the President to “hold Iran accountable,” House Speaker Paul Ryan communicating support for new sanctions, and sanctions legislation pending in Congress.  Future posts on this blog will explore what additional measures the Trump Administration may take, and how Congress may become involved.

Overall, repudiating the JCPOA outright, while by no means impossible, seems less likely at this point in time. As the President himself said: “I would love to tell you that I’m going to rip up this contract, I’m going to be the toughest guy in the world. But you know what? Life doesn’t work that way.”

*Article reprinted with permission from its original posting on February 3, 2017 at Steptoe International Compliance Blog. Read the Blog at: http://www.steptoeinternationalcomplianceblog.com. Mr. Rapa is Of Counsel at Steptoe and Johnson LLP. He can be reached at arapa@steptoe.com.




Recent Articles