Donald Trump imposed more than 1,000 sanctions on Iran as president, but one of them could prove to be a “poison pill” that derails an effort by his successor to revive the 2015 nuclear deal designed to prevent Iran from building an atomic bomb.
Trump withdrew the U.S. from the deal in 2018 and blacklisted Iran’s Revolutionary Guards, a powerful arm of the Iranian military, as a foreign terrorist organization in 2019. Now negotiations aimed at renewing the nuclear deal are at an impasse over the sanction, with Iran demanding the Biden administration lift the U.S. terrorism designation, according to a current official and three sources familiar with the discussions.
The discussions between Iran and world powers came tantalizingly close to clinching an agreement in late February but became bogged down after Russia raised fresh concerns and as Iranian officials pushed for the lifting of the terrorism designation on the Islamic Revolutionary Guard Corps, or IRGC, the sources said.
The Biden administration offered a proposal to lift the designation in return for assurances from Iran not to retaliate against U.S. officials for the 2020 killing of a top Iranian general, Qassem Soleimani, who died in a U.S. drone strike in Baghdad, the sources told NBC News. Iran rejected the proposal and responded about two weeks ago with a counterproposal, the details of which remain unclear.
The Biden administration has yet to respond formally to the Iranian counterproposal, the sources said.
“The ball is in Biden’s court,” said one source briefed on the discussions.
Now administration officials are debating how to proceed, knowing that lifting the terrorism label would spark a scathing reaction in Congress and among Middle East allies.
“There’s no doubt that this is a Trump trap for Biden,” said Ali Vaez, of the International Crisis Group, a think tank.
“The irony is the current stalemate was deliberately pre-manufactured by the Trump administration to put their successor exactly where they are right now,” said Vaez, a strong supporter of the 2015 Iran deal.
A senior Biden administration official suggested it was up to Iran to resolve the impasse.
“We are not going to negotiate in public. The president has made clear he’ll do what’s in the best interest of U.S. security — and the onus here is really on Iran at this stage, particularly on this issue.”
Iran’s U.N. mission did not respond to a request for comment.
The 2015 deal, known as the Joint Comprehensive Plan of Action or JCPOA, imposed strict limits on Iran’s nuclear program in return for an easing of economic sanctions, including releasing Iranian funds blocked in foreign banks. In 2018, Trump pulled the U.S. out of the JCPOA and reimposed U.S. sanctions while adding new sanctions as well.
Critics accused the Trump administration of intentionally introducing “poison pill” sanctions that would make it difficult for the next president to restore the accord. But officials at the time said the sanctions were designed to hammer Iran as part of a “maximum pressure” campaign to force more concessions from Tehran and to weaken the regime.
Richard Goldberg, who served in the Trump White House national security council and strongly opposes reviving the JCPOA, said the impetus for imposing additional sanctions against the Revolutionary Guards and other entities initially came from Congress, before the Trump administration pulled the U.S. out of the nuclear deal.
In 2015, when President Barack Obama’s administration made the case for the deal, officials said the U.S. would retain the authority to impose sanctions on Iran unrelated to its nuclear program, including targeting organizations allegedly supporting terrorism. In 2017, lawmakers from both parties backed legislation that introduced new sanctions on Iran and laid the foundation for a U.S. president to sanction the Revolutionary Guards. Former Obama administration officials at the time argued against the legislation, warning it could undermine the formula underpinning the 2015 nuclear deal.
“The broader problem here is the Obama administration was adamant that nothing could prevent the U.S. from imposing terrorism, missile and human rights sanctions,” said Goldberg, now a senior adviser at the Foundation for Defense of Democracies, a think tank. Congress decided to “test the proposition,” he said, and now the Biden administration is grappling with the aftermath.
After nearly a year of negotiations, Iran and the U.S., Britain, France, Germany, Russia and China managed to mostly resolve the question of which sanctions would be lifted in accordance with the original deal — except for the blacklisting of the IRGC.
The U.S. government has accused the Revolutionary Guards of killing hundreds of U.S. troops in Iraq and supplying weapons and training to proxy forces in Syria, Lebanon and Yemen. Over the past two decades, the U.S. has introduced an array of sanctions against the IRGC and individuals in the force over its ballistic missile program and alleged terrorism and human rights violations.
Most former officials and regional analysts say lifting the terrorism designation on the IRGC would have little practical effect as the organization would remain under a myriad of other U.S. sanctions.
But the move carries potent political symbolism, for Iran, for the United States and for Iran’s foes in the Middle East.
As for possible domestic political reaction in the United States, the Biden administration recognizes “they would get creamed” if the terrorism designation was lifted without conditions, one former U.S. official said.
Jettisoning the designation presents a “messaging problem” at a difficult moment, according to Matthew Levitt of the Washington Institute for Near East Policy think tank.
“America’s partners and allies in the region, especially the Gulf states and Israel, are extremely concerned that a renewed nuclear deal will empower Iran at a time when the United States is perceived to be stepping back from the region,” Leavitt wrote recently.
Lifting the designation also amounts to an attempt by the Iranians to renegotiate the 2015 nuclear deal, as the Revolutionary Guards' status is unrelated to the agreement, according to Eric Brewer, a former senior U.S. official and now senior director at the Nuclear Threat Initiative, a think tank.
The real issue is not the practical value of the terrorism designation but “the domestic political ramifications of its removal, the negative signals it would send to Gulf partners when relations are already strained, and, perhaps most importantly, that doing so would pull us squarely into territory that is outside the scope of the original deal,” Brewer said.
A current U.S. official and two sources familiar with the issue say the administration is not ready to lift the terrorism designation without Iran offering something of equivalent value in return. Previously, Iran has rejected U.S. proposals to hold talks on Iran’s missile program or its actions in the Middle East.
From Washington’s point of view, the Revolutionary Guards' status is unrelated to the nuclear agreement and therefore would require Iran to grant concessions on other issues.
A State Department spokesperson said if Iran wants sanctions lifted that are “beyond the JCPOA, they will need to address concerns of ours beyond the JCPOA.”
Asked this month if the Revolutionary Guards’ was a terrorist organization, Secretary of State Antony Blinken told NBC’s Andrea Mitchell: “They are.”
The debate over the terrorism designation coincides with growing concern over threats of vengeance from Iran over the U.S. killing of Soleimani, who led the Revolutionary Guards’ Quds force, the guards' overseas arm.
On the second anniversary of the assassination of Soleimani, Iranian President Ebrahim Raisi and the Soleimani’s successor, Gen. Esmail Ghaani, vowed revenge against Trump and other former officials for targeting the Iranian general.
Iran also imposed “sanctions” against more than 50 Americans it said were associated with Soleimani’s killing, which it called an act of “terrorism.” The list included former senior officials in the Trump administration and top military officers, including the chairman of the U.S. Joint Chiefs of Staff, Gen. Mark Milley, and the former head of U.S. Central Command, Gen. Frank McKenzie.
Jake Sullivan, Biden’s national security adviser, responded with an unusual statement, saying the United States would protect all Americans facing threats from Iran and warned Tehran that it would face “severe consequences” if it attacked any Americans.
The Biden administration has ordered 24-hour security for Mike Pompeo, Trump’s former secretary of state, and former Iran envoy Brian Hook, due to what it deems credible threats against the two former officials, who helped shape Trump’s Iran policy. The security details cost about $2 million a month, according to the State Department.
In its annual threat assessment issued last month, U.S. intelligence agencies said that Iran will continue to pose a threat to Americans, to plot terrorist attacks and that Tehran remains committed to cultivating networks inside the United States.
Supporters of reviving the 2015 nuclear deal say it would be a grave mistake to allow the issue of blacklisting the Revolutionary Guards to torpedo an arms control agreement designed to prevent Iran from developing a nuclear arsenal.
The consequences of allowing the nuclear deal to collapse would be “catastrophic,” said Sen. Chris Murphy, D-Conn.
“It would be political malpractice for that to be a sticking point,” said Murphy, referring to the designation of the guards' as a foreign terrorist organization (FTO).
“I understand Republicans are going to over-hype the significance of the FTO designation. And we’re going to have to be prepared to explain to the American people what the stakes are of not getting a deal and how practically insignificant that designation is,” Murphy said.
For several months, the Biden administration has warned that time is running out to wrap up the nuclear negotiations and that the United States was not ready to take part in the discussions indefinitely.
In contrast to U.S. officials’ public comments about the risk of the nuclear talks collapsing, Iran’s supreme leader, Ayatollah Ali Khamenei, said on Tuesday the nuclear negotiations “are progressing well.”
Iran appears confident that it has a strong negotiating hand and that it can extract more concessions from the West, according to Henry Rome, deputy head of research and an Iran analyst at the Eurasia Group, a political risk analysis and consulting firm.
“Their economy has stabilized in a big way. They have a new president who is pursuing a lot of the hardline wish lists. Their nuclear program continues to race ahead unabated.” Rome said. “So I think they’re quite clear they’re not desperate at this point. And I think it’s likely that they’re trying to use that to their advantage to see what they can get, especially in light of a war in Europe and high energy prices.”
Despite U.S. warnings that the negotiations are at a make-or-break point, the administration has not issued warnings that it will increase economic pressure on Iran if the talks fail or consider military force if necessary to stop Iran from acquiring the bomb.
As a result, Iran does not appear to feel pressure to make more compromises, said Karim Sadjadpour, a senior fellow at the Carnegie Endowment for International Peace, a think tank. “They have no reason to believe we’re serious,” he said.
The State Department spokesperson said “the administration is preparing equally for scenarios with and without a mutual return to full implementation of the JCPOA.”