A Nuclear Deal With Iran Managing the Consequences Report of the American Foreign Policy Council Task Force October 2015 C About AFPC For over three decades, AFPC has played an essential role in the U.S. foreign policy debate. Founded in 1982, AFPC is a 501(c)(3) non-proft organization dedicated to bringing information to those who make or infuence the foreign policy of the United States and to assisting world leaders with building democracies and market economies. AFPC is widely recognized as a source of timely, insightful anal- ysis on issues of foreign policy, and works closely with members of Congress, the Executive Branch and the policymaking community. It is stafed by noted specialists in foreign and defense policy, and serves as a valuable resource to ofcials in the highest levels of government. Copyright © 2015 - American Foreign Policy Council 1 IN THIS ISSUE STate of the Debate 3 _ Anticipating the Consequences AFPC Task Force 5 _ Ilan Berman Samantha Ravich Vice President, American Former Deputy National Foreign Policy Council Security Advisor to Vice President Cheney Managing the Jack David Senior Fellow, Hudson Institute Michael Rubin Fallout Former Deputy Assistant Resident Fellow, American Secretary of Defense Enterprise Institute 9 Michael Doran Jonathan Schanzer _ Senior Fellow, Hudson Institute Vice President for Research, Former Senior Director, Foundation for Defense of National Security Council Democracies Former Deputy Assistant Secretary of Defense David Wurmser The Road Ahead Founder, Delphi Global Matthew Kroenig Analysis Group 14 Associate Professor, Georgetown Former senior Middle East University advisor to Vice President Cheney Senior Fellow, Atlantic Council of the United States 2 Te announcement of a nuclear persistent drive toward a nuclear deal with Iran by the P5+1 pow- weapons capability. It is our view State of ers (the U.S., UK, France, Russia, that the Joint Comprehensive Plan China and Germany) on July 14th of Action (JCPOA), as the agree- brought to a close nearly two years ment is formally known, not only the Debate of intensive negotiations, begun in fails to achieve this objective, but secret in 2012 and pursued public- also expands Iran’s ability to pur- ly since November 2013, that were sue its geopolitical objectives in the intended to fully address Iran’s greater Middle East, thereby imper- 3 Citations 1 Obama’s contention of broad public “Support for Iran Nuclear Agree- ment Falls,” Pew Research Center, support for the agreement, the Amer- September 8, 2015, http://www.peo- ican people appear generally opposed ple-press.org/2015/09/08/support- to the deal in its current form. In its for-iran-nuclear-agreement-falls/. September 2015 poll of American pub- 2 lic opinion, the Pew Research Center See, for example, Mark Dubow- itz and Annie Fixler, Improving the found just 21 percent of respondents Joint Comprehensive Plan of Action, polled support the current agreement Foundation for Defense of Democ- – a 12-point drop in approval for the racies Center for Sanctions and Illicit deal since it was unveiled in July.1 Finance, August 2015, http://www.de- fenddemocracy.org/content/uploads/ Nevertheless, because Congress documents/Improving_the_JCPOA. was not able to bring the JCPOA to a pdf. vote in the Senate, much less muster the two-thirds majority in both cham- bers necessary to defeat the agreement pursuant to the terms of the Iran Nu- clear Agreement Review Act of 2015, the White House views the JCPOA as binding upon the United States. More- over, although experts have profered a number of constructive proposals for improving the agreement (including tying sanctions relief to Iranian perfor- mance of its obligations under the deal, as well as a more robust inspections re- gime that includes short-notice visits),2 the Administration has expressed no interest in altering the parameters of the existing deal prior to its implemen- tation. Given the foregoing, we believe that it is necessary for policymakers in Congress to begin thinking about the vulnerabilities that are likely to result from a nuclear agreement with Iran, as well as taking steps to mitigate the vari- ous threats to national security that im- plementation of the JCPOA will gener- ate. iling longstanding U.S. strategic inter- ests in that part of the world. We hope that this report will help in identifying those elevated risks, and propose steps by which the United States can mitigate them. In the United States, the unveil- ing of the JCPOA touched of a heated national debate. Contrary to President 4 to an infusion into the American economy (currently estimated at $16.7 trillion) of roughly $4.2 trillion, ap- proximately fve times the economic stimulus that stabi- Anticipating the lized the U.S. fnancial sector following the 2008 global economic crisis. Moreover, these funds will invariably be augmented by the benefts of post-sanctions trade Consequences between Iran and potential trading partners in Europe and Asia, which now appear eager to expand their eco- Proponents of the agreement negotiated between Iran nomic ties to the Islamic Republic.5 and the P5+1 powers claim a number of positive aspects White House ofcials have expressed their hope if Iran abides by the terms of the JCPOA, including that its unprecedented windfall will be used by the Ira- short-term constraints on Iranian uranium enrichment, nian regime overwhelmingly to improve domestic con- a reduction in the number of centrifuges operated by ditions and strengthen its economy.6 Even if Iran does the Islamic Republic, and a delay of the “plutonium 3 spend the lion’s share of sanctions relief in this fashion, track” of the regime’s nuclear program. Nevertheless, a however, the sheer volume of funds to be unblocked broad spectrum of national security practitioners, mili- means that the Iranian regime will nonetheless be able tary experts, scientists and analysts concur that the deal to signifcantly augment its expenditures on several is woefully defcient in several respects. fronts of concern to U.S. strategic interests. Te list of these defciencies is long. Some, like signifcant shortfalls in verifcation and monitoring, Terrorism fnancing. Te Islamic Republic, which was preclude confdence that Iran will abide by the terms frst formally designated as a state sponsor of terrorism of the agreement in the future, or that the internation- by the Reagan administration in 1984, still maintains al community will know promptly if it does not. Like- its status as the world’s most active backer of terrorist wise of concern is that the JCPOA weakens the global groups. Te scope of this material support is extensive, nonproliferation regime by setting a precedent for what estimated by the U.S. Treasury Department several counts as a “peaceful” nuclear program that will have ef- years ago to be in the billions of dollars annually.7 More fects well beyond the Middle East. Arguably graver still recently, a study by the Congressional Research Ser- is that the JCPOA, upon implementation, will empower vice found Iranian spending on these activities to range a range of Iranian activities deeply inimical to the stra- from $3.5 billion to $16 billion annually.8 Tese expens- tegic interests and security of the United States and its es include, inter alia, between $100 and $200 million per allies and international partners. Tese strategic, politi- annum to Lebanon’s Hezbollah militia; tens of million cal and economic problems will include: of dollars annually to the Palestinian Hamas movement and; the entire annual operating budget of the smaller Expanded Iranian resources Palestinian Islamic Jihad (estimated at some $2 million). Under the parameters of the JCPOA, Iran is poised to Tat these expenditures have continued unabated, de- receive massive sanctions relief and unfrozen assets in spite the growing adverse impact of U.S. and interna- the near term: an estimated $100 billion or more afer tional sanctions on the Iranian economy in recent years, a perfunctory six-month verifcation period. Te scale illustrate that terrorism support – euphemistically of this economic assistance is staggering. It represents termed “export of the revolution” by the Iranian regime a quarter or more of Iran’s total annual GDP, which – represents a cardinal regime priority. With extensive amounted to $415 billion in 2014.4 It likewise matches or sanctions relief now on the horizon, it would be prudent exceeds the entirety of the European Recovery Program for policymakers to expect this support to grow signif- (colloquially known as the Marshall Plan) launched by cantly. Indeed, should Iran allocate a mere 10 percent the Truman administration in 1948 in the afermath of of the sanctions relief it receives under the JCPOA to World War II, an efort that disbursed $13 billion ($120 such activities, it would double or even treble its current billion in today’s dollars) to seventeen countries in Eu- expenditures in this arena. rope over the span of four years. Te proportional im- pact of such relief to the Islamic Republic is comparable 5 Citations 3 Greater regional activism. Over the sive, would doubtless have been For a short summary of these and other stipulations, see Blaise Misztal, past several years, even as it has en- even more so without the economic “Iran Deal: Section-by-Section Anal- gaged in nuclear diplomacy with the constraints imposed on Iran by West- ysis,” Bipartisan Policy Center, July P5+1 powers, the Islamic Republic ern sanctions. Now that sanctions will 14, 2015, http://bipartisanpolicy.org/ has assumed an increasingly asser- be lifed pursuant to the provisions of blog/iran-deal-analysis/. tive foreign policy line throughout the the JCPOA, greater Iranian involve- 4 “Iran GDP,” Trading Economics, greater Middle East. Tis has included ment in the theaters mentioned above, n.d.,http://www.tradingeconomics.