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Biden admin weighs lifting sanctions on Iran's supreme leader, Ayatollah Ali Khamenei

If Biden removes the mostly symbolic sanctions, critics will likely accuse Biden of appeasing the Iranian regime.
Image: Iran's Supreme Leader Khamenei to deliver televised speech
Iran's Supreme Leader Ayatollah Ali Khamenei speaks in Tehran on June 4, 2021.Official Khamenei Website via Reuters

WASHINGTON — The Biden administration is considering lifting sanctions on Iran's supreme leader as part of negotiations aimed at reviving the 2015 nuclear deal, a former U.S. official and two people familiar with the matter told NBC News.

U.S. and Iranian negotiators have discussed the possible move in indirect talks in Vienna, as part of a wider set of compromises that would see the United States return to the 2015 pact and Iran once again abide by restrictions on its nuclear program, the sources said.

"I think that's definitely an Iranian demand," said Vali Nasr, professor of International Affairs and Middle East Studies at the Johns Hopkins University School of Advanced International Studies who worked as a diplomat in the Obama administration. "And I think the U.S. is open to it."

In June 2019, after a U.S. drone was shot down by Iranian forces, former President Donald Trump imposed sanctions on the supreme leader, Ayatollah Ali Khamenei, and officials appointed by him, banning the ayatollah from travel to the United States or any financial transactions with U.S. companies. The sanctions are almost entirely symbolic, as the supreme leader does not travel abroad and he and his inner circle have no assets in the United States, experts and former U.S. officials say.

Although the sanctions have had no material effect on Iran's economy or its nuclear program, officials in Tehran view the measures against the country's most powerful figure as unjustified and as an affront to Iran, two people familiar with the matter said.

Removing the sanctions on the supreme leader might help the Biden administration as it tries to persuade Tehran to accept a number of difficult compromises in the negotiations, according to Ali Vaez of the International Crisis Group think tank.

"At the end of the day, what is a more significant priority — curbing Iran's nuclear program or imposing sanctions that in practice have almost no impact?" Vaez said.

But the sanctions on Iran's supreme leader carry politically charged meaning in Washington as well, and Biden could open himself up to accusations of caving to a dangerous adversary. Republican and other opponents of the 2015 nuclear deal would likely condemn any move to lift the sanctions as a sign of weakness towards a regime that they say is sowing havoc in the Middle East.

Iranian President Rouhani's chief of staff Mahmoud Vaezi was quoted in Iranian media saying the U.S. had already agreed to lift sanctions on some of Iran's senior leadership, but U.S. officials denied that account.

Asked about lifting sanctions on the supreme leader in a briefing with reporters, a senior State Department official on Thursday left the door open to the move but said nothing had been agreed so far.

"We are still working through all these issues, and that includes the issues of sanctions that you mentioned," the official said.

The 2015 nuclear deal between Iran and world powers, known as the Joint Comprehensive Plan of Action (JCPOA), introduced limits on Iran's uranium enrichment and other nuclear work in return for easing economic sanctions. Former President Trump pulled the United States out of the deal in 2018, arguing it was skewed in Iran's favor and imposed an array of sanctions that have severely damaged Iran's economy.

Asked about the option of lifting sanctions on the supreme leader, a State Department spokesperson told NBC News that "the precise nature and sequence of the sanctions-related steps that the United States would need to take to achieve a mutual return to compliance with the JCPOA objectives is a subject of the talks."

The spokesperson added: "Nothing is agreed until everything is agreed."

Since the U.S. pulled out, Iran has increasingly flouted the deal's restrictions on its nuclear activity, blowing past limits on uranium enrichment and reducing the potential "break out" time needed to build a nuclear weapon. The Biden administration says the United States is ready to return to the deal if Iran once again complies with the nuclear restrictions.

After six negotiating rounds in Vienna, the two sides say they have made progress but there are still key issues left to resolve.

"We still have serious differences with Iran with regard to returning to mutual compliance with the JCPOA. Our teams are going back for a seventh round of indirect negotiations in the coming days," Secretary of State Antony Blinken said Friday. "We'll see if we can bridge the differences, but they're real, and we have to be able to bridge them."

The contours of a possible deal have emerged, and it's increasingly clear both sides will have to sacrifice some of their original demands and goals, according to former U.S. officials and Western diplomats.

Despite Iranian appeals, U.S. officials have indicated that some sanctions imposed by the previous administration will remain in place if they are not inconsistent with the JCPOA. Iran has also asked for a guarantee that the deal will not be abandoned by a future U.S. president, but the Americans have indicated no such guarantee is possible under the U.S. political system.

For its part, Biden administration has demanded a commitment to engage in follow-on talks to bolster and expand on the existing JCPOA, but Iran has virtually ruled that out, saying they are only interested in renewing the 2015 accord.

The policy experts negotiating in Vienna have hammered out most of the issues, and now political leaders in Washington and Tehran have to make a decision to take the final step, Nasr said. "It's come down to political issues in both capitals. Not technical issues."

It remains unclear if leaders in both countries are ready to make the necessary compromises to clinch the deal, he added.

With a new hardline president, Ebrahim Raisi, preparing to take office in Iran after elections this month, his allies in the regime will be pushing for a deal now or not at all, so that the outgoing president, Hassan Rouhani, is tied to any concessions made to the Americans, Vaez said.

"I have a strong sense that the Iranian system knows by now what it takes to get this deal done, and knows that it requires painful concessions," Vaez said.

"My sense is the leadership would much prefer Rouhani would be the one making the concessions on his way out of the presidential palace, rather than having Raisi burdened by them upon his arrival."

Abigail Williams contributed.