Is Obama Wobbling on Phased Sanctions Relief for Iran? A “Creative” Deal for $50 bn
Mixed messages coming out of Washington indicate that President Barack Obama may be easing up on his initial insistence on sanctions being lifted in stages that correspond to Iran’s implementation of its commitments. At a news conference Friday, April 17, he used the term “flexible” and urged US negotiators to be “creative” in seeking ways to accommodate both sides – the US-led group of six world powers and Iran.
His main concern, said the US president, was the ability to restore the sanctions quickly if Iran failed to live up to its commitments.
Monday, April 20, White House Press Secretary Josh Earnest suggested that some sanctions relief can be accelerated and start “when Iran begins taking tangible, measurable, verifiable steps” to start “curtailing and limiting their nuclear program.”
That would be the “crux of the next 10 weeks of negotiations for reaching a final nuclear accord by the next deadline of June 30.
But the next day, US Energy Secretary Ernest Moniz talked tough, remarking that “…nuclear inspectors will need unfettered access in Iran as part of a deal to lift economic sanctions.”
Responding to an Iranian general’s insistence on keeping military sites off limits, he stressed, “We expect to have anywhere, anytime access.” Monitz, himself a nuclear physicist who took part in the negotiations calculated that Iran would need at least six months to live up to the terms for warranting relief from sanctions, “so that inspectors can verify Iran’s compliance before relief is given.”
Iran won’t budge on two final points at issue
DEBKA Weekly’s sources note that the Obama administration talks in at least two voices – marking a path toward meeting Iran halfway – in contrast to the consistency of Iran’s position, which demands the immediate lifting of sanctions upon signing the final nuclear accord and stands by the refusal to open its military sites to inspection.
When the nuclear talks resumed in Vienna, Wednesday, April 22, Iran's Deputy Foreign Minister Abbas Araghchi said on Iranian state TV: "Lifting sanctions will be one of the main topics in this round of talks … If the other party shows political good will, we can reach a final agreement,"
Foreign Minister Javad Zarif warned earlier that if sanctions were not removed immediately upon signing the accord, Iran would revert to its full program of enrichment.
The “creativity” in the sanctions dispute President Obama has urged on US negotiators to avoid this breakdown, was hinted at in a Wall Street Journal article last Friday, April 17:
The key is the estimate that Iran has between $100 billion and $140 billion of its oil revenue frozen in offshore accounts as a result of sanctions. “Iran could receive somewhere between $30 billion and $50 billion upon signing the agreement, said congressional officials briefed by the administration.”
Releasing its own (frozen) funds to Iran would count as eased sanctions
The WSJ went on to suggest: “Obama could let Tehran have $50 billion or so upon signing the accord – and still say he is phasing out sanctions … Immediate access to this amount would boost its GDP by 10 percent. This immediate infusion of cash would make all the other sanctions irrelevant.”
Both sides would use these benefits to show they had won a favorable deal.
Administration officials denied this report. That is not to say that a transaction on those lines is not on the table. It may be presented as letting Tehran have its own money to buy nuclear concessions. But this could prove to be a dangerous precedent. Iran might come to realize that it could buy its way out of violations of the nuclear deal and cash in on hefty sums for correcting those violations.
The price is likely to go up rather than down as time goes by.