"Although this phased-approach to sanctions relief under the JCPOA ensures that Iran does not receive benefits without first implementing its nuclear commitments, uncertainties remain. The agreement does not affect U.S. and EU non-nuclear sanctions, such as those that target human rights abuses, support for terrorism, and money laundering. One question is whether or not relief from nuclear-related sanctions will affect the usefulness of non-nuclear sanctions."

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.

In this new oped for the Bulletin of the Atomic Scientist, MTA Associate Aaron Arnold and colleague Nikos Passas consider the role of banks in monitoring and verifying proliferation-related transactions. He outlines steps that the P5+1 and Iran can take in a final agreement that will allow them to remain vigilant about proliferation financing.

Aaron Arnold, Research Associate with the Program on Managing the Atom at the Belfer Center, writes in the Bulletin of Atomic Scientists that U.S. lawmakers advocating a continuation and strengthening of the sanctions program against Iran are operating on a series of misperceptions and myths about sanctions. Specifically, he argues that the United States cannot operate under the belief that international partners will automatically a continuation of sanctions, that snap-back sanctions will not be effective in hurting the Iranian economy in the event of a violation of the terms of a nuclear deal, and that the United States will continue to dominate the international financial system. This myths are out of sync with international realities, and domestic politics needs to catch up to this fact, he concludes.

"Speaking from the White House earlier this month, President Obama announced details of a framework agreement between Iran and the P5+1—the United States, Russia, China, France, the United Kingdom, and Germany—that limits Iran’s path to building a nuclear weapon over the next 10 to 15 years. Although negotiators will finalize technical details between now and the June 30 deadline, the parameters provide Iran with sanctions relief in exchange for limits on its uranium enrichment, converting its Arak heavy water reactor, limiting the number and type of centrifuges, and agreeing to intrusive inspections. Should Iran cheat or fail to uphold its end of the bargain, however, the United States and its allies reserve the right to “snap-back” into place tough economic and financial sanctions..."

Aaron Arnold provides a crucial update on the status of the economic sanctions placed on Iran. He argues that in the short term, a lack of sanctions relief will continue to damage the Iranian economy and undercut efforts by the Rouhani Administration to revitalize growth. However, he points out that new developments in the global economy, such as the creation of an alternative to the SWIFT financial messaging system pushed by Russia and China, will possibly degrade the effectiveness of sanctions in the long run.

In this op-ed for Iran Matters, Aaron Arnold provides a crucial update on the status of the economic sanctions placed on Iran. He argues that in the short term, a lack of sanctions relief will continue to damage the Iranian economy and undercut efforts by the Rouhani Administration to revitalize growth. However, he points out that new developments in the global economy, such as the creation of an alternative to the SWIFT financial messaging system pushed by Russia and China, will possibly degrade the effectiveness of sanctions in the long run.

After Professor Nikos Passas (Northeastern University) led an MTA Seminar on February 25, titled "Illicit Flows: What They Hide and How to Counter Them", MTA Associate Aaron Arnold interviewed Pasass on Iran's Verification Regime.

"For US regulators, 2014 was a banner year for collecting fines against sanctions violators, according to The Economist. In June, BNP Paribas—France’s largest bank, and one of the largest in the world—agreed to shell out $9 billion to the US Department of Justice for violating sanctions against Cuba, Iran, and Sudan. This past month, US regulators slapped Germany’s Commerzbank—the country’s second-largest bank, with a similar global presence—with a $1 billion fine, after launching an investigation into its dealings with sanctioned countries. The increases in fines have signaled an aggressive, zero-tolerance policy toward violators, as well as a willingness to use the extraterritorial provisions of sanctions, which allow regulators to punish foreign-based banks..."