On April 2, 2015, the United States and its partners in the P5 + 1 (China, France, Germany, Russia, and the United Kingdom, coordinated by the European Union’s High Representative) reached an agreement with Iran on a framework for a Joint Comprehensive Plan of Action (“JCPOA”) regarding Iran’s nuclear program. The framework is meant to form the foundation upon which the final text of the JCPOA will be written between now and June 30, 2015. Notwithstanding the issuance of the JCPOA framework, the U.S. government has noted that important implementation details are still subject to negotiation, and nothing is final at this time.
EU, UN and U.S. sanctions targeting Iran will remain in place until at least June 30, 2015. On April 3, 2015, Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury issued guidance relating to the April 2, 2015 announcement of parameters for the JCPOA. OFAC noted that the JCPOA parameters announced on April 2, 2015 do not immediately relieve, suspend, or terminate any sanctions on Iran. The only sanctions relief in force is the relief provided pursuant to the Joint Plan of Action (“JPOA”) reached on November 24, 2013 and extended through June 30, 2015. Until a JCPOA is concluded, all U.S. sanctions remain in place and will continue to be vigorously enforced.
According to the White House, the JCPOA framework offers Iran the following sanctions relief if it verifiably abides by its various nuclear-related commitments:
- U.S. and E.U. nuclear-related sanctions will be suspended after the International Atomic Energy Agency (“IAEA”) has verified that Iran has taken all of its key nuclear-related steps. If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place.
- The architecture of U.S. nuclear-related sanctions on Iran will be retained for much of the duration of the deal and allow for snap-back of sanctions in the event of significant non-performance.
- All past UN Security Council resolutions on the Iran nuclear issue will be lifted simultaneous with the completion, by Iran, of nuclear-related actions addressing all key concerns (e.g., enrichment, reactors and reprocessing, and transparency).
- However, core provisions in the UN Security Council resolutions – those that deal with transfers of sensitive technologies and activities – will be re-established by a new UN Security Council resolution that will endorse the JCPOA and urge its full implementation. It will also create a procurement channel, which will serve as a key transparency measure. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.
- A dispute resolution process will be specified, which enables any JCPOA participant to seek to resolve disagreements about the performance of JCPOA commitments. If an issue of significant non-performance cannot be resolved through that process, then all previous UN sanctions could be re-imposed.
- U.S. sanctions on Iran for terrorism, human rights abuses, and ballistic missiles will remain in place under the deal.
The EU Foreign Minister Federica Mogherini and Iranian Foreign Affairs Minister Javad Zarif have issued a joint statement in which they said that, under the deal, the EU “ will terminate the implementation of all nuclear-related economic and financial sanctions and the US will cease the application of all nuclear-related secondary economic and financial sanctions, simultaneously with the IAEA-verified implementation by Iran of its key nuclear commitments,” while a UN Security Council resolution “will endorse the JCPOA, terminate all previous nuclear-related resolutions and incorporate certain restrictive measures for a mutually agreed period of time.”
Legislation Aimed to Require Congressional Review of the JCPOA: The Iran Nuclear Agreement Review Act of 2015
Many U.S. sanctions restrictions, particularly those that apply to non-U.S. companies, have been codified by Congress, which means that the President has limited authority to relax these sanctions without Congressional notification and, in some cases, approval. At the same time, the Iran Nuclear Agreement Review Act of 2015 (S.615) (“INAR”), a bill that was recently introduced in the U.S. Senate, calls for an amendment to the Atomic Energy Act of 1954 to direct the President, within five days after reaching an agreement with Iran regarding its nuclear program, to transmit to Congress:
- the text of the agreement and all related materials and annexes;
- a related verification assessment report of the Secretary of State;
- a certification that the agreement includes the appropriate terms, conditions, and duration of the agreement's requirements concerning Iran's nuclear activities, and provisions describing any sanctions to be waived, suspended, or otherwise reduced by the United States and any other nation or entity; and
- a certification that the agreement meets U.S. non-proliferation objectives, does not jeopardize the common defense and security, provides a framework to ensure that Iran's nuclear activities will not constitute an unreasonable defense and security risk, and ensures that Iran's permitted nuclear activities will not be used to further any nuclear-related military or nuclear explosive purpose.
The foreign relations committees of the House of Representatives and Senate, during a 60-day period following the transmittal of an agreement by the President, would be required to hold hearings and briefings to review the agreement.
During this review period, the President would not be permitted to waive, suspend, reduce, provide relief from, or otherwise limit the application of statutory sanctions (i.e., sanctions imposed through congressional legislation, including secondary sanctions applicable to non-U.S. persons) with respect to Iran, except for any deferral, waiver, or other suspension of statutory sanctions pursuant to the JPOA.
Senator Bob Corker (R-Tenn.), Chairman of the Senate Foreign Relations Committee and co-sponsor of the INAR, announced earlier this month that the Committee will vote on whether to release the INAR on April 14, 2015. There are 19 members on the committee — 10 Republicans and 9 Democrats. A majority vote would pass the bill out of committee, and Republicans are likely to be joined by at least four Democrats who have expressed support for the bill. However, the White House has notified the Congress that it opposes any legislation passed before June 30, 2015 (i.e., when the JCPOA is to be reached between the P5+1 and Iran) and earlier this week reissued a veto threat against the INAR. Thus, unless the Congress believes that it can override the veto with a two-thirds vote in both the House of Representatives and Senate, it is unlikely that the INAR will be passed before June 30, 2015.