Obama Could Lift Iran Sanctions Too Fast — or Too Slow

With a deadline for the Iran nuclear deal just weeks away, the Obama administration is weighing how and when to unwind sanctions on its long-time nemesis.

There are potential pitfalls if it lifts sanctions too fast — or too slow.

Removing sanctions too quickly would give Iran sudden access to cash that some fear it will use to fund nefarious activity. With an accord due by June 30, however, others warn of a different threat: If Iran doesn’t feel relief from sanctions fast enough, it could lose its incentive to stick to the agreement.

The deal is expected to suspend a slew of nuclear-related international sanctions if Iran severely curbs its atomic program, allowing Tehran to access what’s believed to be more than $100 billion in frozen foreign exchange reserves. The Obama administration insists sanctions will be rolled back in phases based on Iran meeting certain benchmarks, and that they will be snapped back in place if Iran violates the deal. But some Iranian officials have indicated they expect many of the main sanctions to be lifted immediately once a deal is reached.

While there is worry that Iran could use a cash influx to covertly resume its nuclear activities, critics also fear Iran will use its renewed access to billions in frozen assets to further interfere in neighboring countries, including Iraq and Syria. U.S. officials have countered that Iran’s regional mischief is already low-cost and low-tech and that it is far more likely to invest the money in its battered economy.

Even if relief from sanctions takes longer than Iranians wish, “there will be enough relief in enough time that it will correct itself,” said Richard Nephew, a former State Department official who served as lead sanctions expert for the U.S. team negotiating with Iran.

He argued that if the U.S. and its international partners stick to their pledges to include a strong “snap-back” mechanism to reimpose sanctions if Iran violates the nuclear deal, one benefit of that is an Iran that is more willing to give the sanctions relief a realistic amount of time to take effect.

Critics of the deal, however, suspect that reimposing sanctions will be much harder than President Barack Obama and his international allies are promising. They also argue that even if Iran gets an immediate and sustained economic boost from sanctions relief, the government there will probably complain it is not enough anyway as a ruse to renege on the deal.

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The Obama administration has not been transparent enough with Congress or the public about how it will lift sanctions or how it would snap them back on, said Mark Dubowitz, executive director of the Foundation for Defense of Democracies and one of the most vocal skeptics of the nuclear talks.

He predicted that the proposed sanctions relief plan could “spark outside efforts to persuade international banks and companies not to go back into Iran as well as lawyers representing victims of Iranian terrorism to do everything possible to collection on the billions of dollars in outstanding judgments.”

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