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Congressional Testimony by Richard Nephew | Task Force to Investigate Terrorism Financing

On July 22, Richard Nephew, Director of the Economic Statecraft, Sanctions and Energy Markets program at the Center on GLobal Energy Policy, testified before the Congressional Task Force to Investigate Terrorism Financing on the topic of the Iran nuclear deal and its impact on terrorism financing. His conclusion is below and his full written testimony is available here (PDF).



I believe that the nuclear deal reached by the United States, its P5+1 partners, and Iran is a good deal. It is not a perfect deal. There are things that, in a perfect world, would be changed, starting with the fact that — ideally — Iran would not be permitted to engage in enrichment, reprocessing or heavy water activities in perpetuity. And, such an Iran would also be forced to change into a better actor in the region and beyond.

But, we do not have the luxury of that world. Instead, we face two options. We can either accept the deal that has been negotiated. Or, we can turn our backs on it. To do so is to go in an ill- defined alternative scenario. Some argue that in this scenario, sanctions can be intensified in order to achieve a better deal. Still others argue that military action could be undertaken. But, each of these courses of action would require taking significant risks that either they would not be successful and, in the attempt, that we would lose the support of the international community. An Iran strategy based on “going it alone” is not a recipe for success.

Moreover, while pursuing such an alternative, Iran would either wait expectantly for the sucker punch to be delivered that would complete the job of undoing global support for U.S. efforts, or march forward on its nuclear program, beginning the operations of thousands of new centrifuges and constructing the Arak reactor in its original, bomb-factory design.

For, at this point, there is no magical middle ground to be occupied. If the United States rejects the deal now, it will not be possible to negotiate a new one and certainly not before Iran undertakes a potentially dramatic expansion of its nuclear program. This is because of both the politics that will be associated with doing so in Iran — whose leaders would convincingly argue “if the United States is not going to fulfill this deal, what is to say they would fulfill a future one?” — and because the JPOA would collapse at the same time as the Joint Comprehensive Plan of Action. Some argue that Iran could continue to observe its JPOA commitments and so could the United States. But, U.S. law now makes that impossible. Under the terms of the Iran Nuclear Agreement Review Act (INARA), if a joint resolution of disapproval is passed by Congress, the JPOA can no longer be observed by the United States as a legal matter. The law states that the President is no longer permitted to provide relief from sanctions established by Congressional action. So, waivers could not be extended under the statutory authorities in place.

As such, the Executive Branch would have to restart efforts to reduce Iranian oil exports — paused under the JPOA — and impose sanctions for the movement of Central Bank of Iran funds. It is inconceivable that, even if Iran wished to keep the JPOA afloat, Iran would accept U.S. efforts to reduce Iran’s oil exports by holding steady on the nuclear program. So, even if new laws are not adopted by Congress or the Executive Branch, U.S. sanctions under the JPOA would again be active and in need of enforcement.

Would international partners join us in this effort? It is highly doubtful. And, as such, the United States would be brought into confrontation with key trading partners.

So, Congress must make the choice that it asserted was essential in the passage of INARA and decide if the alternative to the JCPOA is worth it. Leadership and vision from Congress, as the President has shown in pursuing this deal, is now needed. I urge Congress to make the right choice, and to support this deal. 



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Congressional Testimony by Richard Nephew | Task Force to Investigate Terrorism Financing