Following the first round of nuclear talks with Iran in Geneva, a proposal is circulating to allow Iran conditional access to some of its sanctioned cash. The proposal, reported by Jeffrey Goldberg and apparently originating with Mark Dubowitz at Foundation for Defense of Democracies (FDD), would provide sanctions relief without formally lifting the sanctions. The basic idea is to pay Iran for concessions on its nuclear program to prevent it from advancing toward a nuclear weapons capability.
There is impetus for this approach from the U.S. and Iran. The Obama Administration wants to give Iran an incentive to reduce its nuclear activities, and “put some time on the clock” according to one anonymous official, while maintaining sanctions in case Iran backslides. The Iranian regime may also welcome this suggestion. The Iranian economy is suffering, which has forced the regime to negotiate. Iran has more than $50 billion in oil revenues in overseas banks that it cannot get its hands on. Dubowitz therefore suggests putting a price on Iranian nuclear concessions, letting Iran earn some of the money currently out of reach because of sanctions.
This sounds like a deal, except that the proposal could turn the nuclear talks into a ransom negotiation. By pricing apparent nuclear concessions, the proposal would encourage Iran to dress up minor alterations as significant moves and financially exploit its flouting of international non-proliferation norms.
Such an approach has been tried before. During the Cold War, the West Germans used to pay the East Germans to release political prisoners and allow them to emigrate. The East Germans may have been communists, but they understood a business opportunity. The West Germans ended up ransoming East Germans whose dissident activity was minor to non-existent.
The other problem with Dubowitz’s idea is that it obviates a core principle of sanctions: denying Iran access to liquidity. The U.S. and its allies have imposed the most stringent set of international financial measures ever because the Iranian regime cannot be trusted with cash. Instead, the Dubowitz proposal allows access to cash, which is easily abused, in return for cheating less, which Iran should not be doing in the first place.
This creates potential for a rift in the P5+1, (the five permanent members of the UN Security Council and Germany), which Iran is encouraging. What will the reaction be if cash released for “improved” nuclear behavior is misused? Iran will argue, and some in the P5+1 will agree, that the diversion of a few million dollars should not derail the process of negotiation.
Yet the whole strength of sanctions has been that they have been relentless and uncompromising. The Iranian regime’s constant maneuvering has had little effect on slowing the sanctions juggernaut. Except now Iran is being offered sanctions relief in return for sending the same old diplomats to Geneva, but this time smiling, and offering the same old proposals, but this time in a PowerPoint presentation. This is a bad deal that the U.S. should not accept.