Thursday, July 16, 2015

"SnapBack" Sanctions: The Fatal Flaw In The Iran Nuke Deal

Once the deal is officially sanctioned by the U.N., U.S, European, and U.N. sanctions -- other than those imposed on the importation of conventional weapons and ballistic missile parts - will be lifted, in stages over 6 months, in return for good behavior.  As a result, Iran will have access to $100 billion in frozen assets in Europe and the United States and can start exporting an estimated $40-50 billion in oil per year.  In addition, there are numerous, less-sexy, sanctions that will also be lifted.  Of course, the deal also insures that there is the possibility of the re-institution of sanctions (referred to as snapbacks); should Iran violate any of its agreed upon restrictions over the next 15 years.  Sanctions that have been severely hurting Iran's economy.

Now, here's the flaw.

According to an excellent article written by Robert Satloff for the "The Washington Institute for Near East Policy" (link below), the snapback of sanctions is not applicable to any existing state-to-state or private international trading contracts that are in effect at the time when snapback's are to be applied.  Thus Iran will be able to repatriate those $100 billion in assets and protect them.  Or, it could set up very long term contracts with entities outside of its borders for the management of those assets and they would, under the deal, also be protected.  The same with oil.  They could set up 30-year deals with countries to buy their oil.  Thus, again, sidestepping snapback sanctions.  So, in effect, the snapback clause of this agreement gives Iran a means of avoiding future sanctions by merely setting up contracts that are long enough in their terms to allow it to resume its nuke program and bring it to fruition.

Any remaining snapbacks will also fail because the deal requires a unanimous vote in the United Nations Security Council to reinstate sanctions.  This is another problem.  Two permanent members of the Security Council, Russia and China, are very friendly with Iran -- they have already created a military pact with each other to fight Western sanctions -- and they are not necessarily friends with either the U.S. or Europe.  It only takes one of those two countries to use their veto power and sanctions won't be reimposed.  A fact that Iran has probably been counting on throughout the negotiation process.

If I'm right, my guess is that Iran will have protected itself against the snapback of most, if not all, sanctions in as little as two years.  At least the major ones.  At that point, they will be free to violate the deal and resume their nuke program with more money than they had before.  Money that will only accelerate their bomb making capabilities and, per the deal, there is nothing  Europe and the U.S. can legally do about it.


Robert Satloff: What's Really Wrong with the Iran Nuclear Deal:

Before the economic sanctions are lifted, the IAEA will have to confirm that Iran has fulfilled certain technical steps and reported them to the UN Security Council:

Iran deal announced, gets over $100 billion in sanctioned assets:

Iran nuclear deal: world powers reach historic agreement to lift sanctions:

Members of United Nations Security Council:

Iran-Russia-China Axis to Fight Western Sanctions:

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