CONTENT PREVIEW
Country Risk

US president’s refusal to certify Iranian compliance with nuclear deal would increase risk of US reimposing sanctions

15 September 2017

Key Points

  • Although Trump has begrudgingly certified Iran’s nuclear compliance in April and July 2017, he has indicated that he would not declare Iran compliant in October.
  • A potential Trump de-certification of Iranian compliance does not automatically or necessarily result in the collapse of the JCPOA . Instead, it gives the US Congress the authority to spearhead US policy on the JCPOA if it so chooses.
  • Such a de-certification, if forthcoming, would increase the risk of US reimposing its secondary nuclear sanctions on Iran, affecting non-US companies conducting business with Iran across most sectors. A kinetic Iran-US incident would further increase this risk.

Event

On 14 September, the State Department announced that it would continue to suspend various oil-related sanctions against Iran, but that the US Treasury would issue new targeted sanctions against 11 individuals and entities.US President Donald Trump, during his presidential candidacy, participates in a rally against the Iran nuclear deal at the US Capitol on 9 September 2015, in Washington, DC. (Chip Somodevilla/Getty Images)US President Donald Trump, during his presidential candidacy, participates in a rally against the Iran nuclear deal at the US Capitol on 9 September 2015, in Washington, DC. (Chip Somodevilla/Getty Images)

The sanctions waivers are related to the 2012 National Defense Authorization Act, which allows the US to place secondary sanctions on a country’s financial institutions if they do not curtail buying oil from Iran. Congress allows the White House to waive these sanctions every 120 days, which has been the course of action since the law was enacted during the administration of former US President Barack Obama. Nevertheless, although the US “waived” the sanctions, it targeted new sanctions against Iran, specifying seven Iranian citizens, two Iranian entities, and two Ukrainian organisations. Specifically, the Treasury implicated them in a variety of activities, such as cyber-attacks in 2011-2012 that were directed towards US financial entities, assisting Iran’s Islamic Revolution Guards Corps (IRGC) missile programme, or offering support to airlines associated with the IRGC-Qods force, which the US has deemed a terrorist organisation.

Despite waiving some sanctions, on 14 September, US President Donald Trump on Air Force One told reporters that he was still unhappy about the Joint Comprehensive Plan of Action (JCPOA), signed in 2015, which provided significant sanctions relief in exchange for Iran curtailing much of its nuclear power programme, which the US believed Iran was utilizing to develop a nuclear weapon.

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