Nuclear Issues

A key foreign affairs issue for the Trump administration will be its policy on Iran, as was the case also for the Obama administration. But we have no idea what approach it will take, an uncertainty amplified by the fact that Trump has no experience whatsoever in foreign policy, and no idea whose input he will accept in shaping it. It’s not as if we have no information about his attitude – during the election campaign, Trump made his intention on Iran very clear – but, as with other topics, it is unclear how he will act when once he is forced to translate his intentions into action and realizes that reality is far more complicated than he imagined.

With the successful implementation of the historic nuclear agreement between Iran and the P5+1, a new chapter has opened between Iran and the international community, including the United States. Nevertheless, the future path of bilateral relations between the United States and Iran is uncertain and many challenges exist as the two countries attempt to formulate new terms of engagement. What should U.S. policy be towards Iran after the nuclear agreement? Can the agree­ment open the door to effective collaboration on areas of mutual interest, especially given the rising security challenges and rapidly changing dynamics of the Middle East? Or, will strategic rivalries between Iran and the United States con­tinue to shape and impede cooperation?

An audio recording of a public talk by Brian Katulis, Senior Fellow, Center for American Progress, Washington, DC.

Aaron Arnold, Associate of the Project on Managing the Atom at the Belfer Center for Science and International Affairs, writes that while Iran may receive sanctions relief as part of a final nuclear deal, it needs to take actions to strengthen its financial laws and regulations in order for it to truly be integrated into the global economy. He argues that Iranian financial laws, specifically those relating to money-laundering, terrorism financing, and proliferation financing, remain weak and do not meet the standard of the international financial community. These legal weaknesses have caused Iran to remain designated by the U.S. Treasury as a "jurisdiction of primary money-laundering concern," making it much harder for the Iranian financial sector to operate using American currency or the American financial system, which, despite recent developments such as the launch of the Asian Infrastructure Investment Bank, maintains the dominant role in global finance. He concludes that without these reforms to Iran's banking sector, its benefits from the ending of sanctions will be much smaller than desired by Iranian policymakers.

Aaron Arnold, Associate with the Project on Managing the Atom at the Belfer Center, and Nikos Passas, Professor of Criminal Justice at Northeastern University, argue in The Bulletin of the Atomic Scientists that an important, and generally overlooked, aspect of any deal with Iran is the role of banks and financial institutions in monitoring proliferation related transactions and keeping Iran from cheating on the agreement. They point out that banks are necessary for the monitoring and verification of a nuclear agreement because they provide the information used by sanctions enforcers to track illicit proliferation financing. At this point, several holes exist in detecting proliferation financing, including the lack of a clear template for banks and regulatory agencies to be searching for, and the lack of binding regulations for all forms of financial institutions, such as money remitters. They suggest that the Iranian nuclear deal offers a chance for these systematic holes to be plugged by centralizing analysis of data for proliferation financing and seeking reforms in the Iranian financial system.

Having finalized details of the interim deal to freeze Iran's nuclear program for six months in exchange for limited relief from sanctions, Graham Allison notes that attention is turning to the question of "end states" for a comprehensive agreement. In these negotiations, he asks, "what can the United States realistically hope to achieve?"