“If there is a nuclear deal, one of the key obstacles could be the U.S. Congress that prevents the implementation [of sanctions relief] from happening successfully,” said Ellie Geranmayeh, European Council on Foreign Relations Policy Fellow, speaking at a NIAC briefing for Congressional staffers. “This is an issue that Iranians are thinking about; Europeans are increasingly starting thinking about it.”
“It is an ugly scenario,” said Dr. Cornelius Adebahr, Associate Fellow, German Council on Foreign Relations. “If everything is in place except a continuation of sanctions waivers or a permanent agreement on the U.S. side, it will be very hard for Europeans to side with the Americans.” Adebahr outlined how Europe could unwind sanctions in a recent report, and noted the difficulties that Europe would face if Congress blocked relief on the U.S. side.
Geranmayeh, who recently authored a report on how Europe can maximize the chances of a nuclear deal, suggested that Europe would have to consider standing up to new Congressional action, as it did in 1990s when Congress passed the Iran Sanctions Act. “[I]f Europeans do not take a more active approach in the scenario where the U.S President is on board with a deal with Iran but the U.S. legislation is not,” she said, “are they going be setting a precedent going forward with the Congress that they can deal with Europe in this manner?”
Adebahr said that “the E.U. will most likely lift sanctions” if there is a deal. “The E.U. imposes and lifts sanctions by the council decision … it takes as much as 10 days to prepare a legal decision on sanction relief.”
However, many expect that the U.S. would issue temporary waivers for sanctions at the Administration level, rather than lifting sanctions permanently – which would require an act of Congress. This prospect could create uncertainty for private companies to take advantage of any relief.
“If there is further hesitation [after a final agreement],” said Adebahr, “then the Western partners must deal with it, because ultimately Iran, in return for their positive actions, would count on economic activity.”
Private companies, said Adebahr, “need political, if not legal, certainty that they will not be sanctioned in future.” Private firms have hesitated to take advantage of the sanctions relief of the interim nuclear agreement with Iran, he said, because they are still afraid of harsh potential consequences.
According to Geranmayeh, “[W]e need to give our European companies the certainty that they can actually trade with Iranian companies without having the U.S. treasury on their case the entire time.”
“[T]here is real thinking that Iran for the European business sector is by far the most lucrative potential in the whole Middle East and North Africa region,” said Ms. Geranmayeh. “However in the last six months they faced the U.S. treasury threatening to come down like a ton of breaks on them.”
If Congress prevents the U.S. from providing promised sanctions relief, Adebahr said it would undermine the entire case for the sanctions. “The logic of sanctions is not only in imposing them but… what you get when you lift them,” he said. “Lifting sanctions at a given moment is part of the rationale of imposing sanctions.”