The Biden administration is on the verge of a nuclear crisis with Iran. Negotiations aimed at reviving the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA), are at an impasse. Iran’s efforts to gain leverage in the negotiations have put it within days of acquiring sufficient highly enriched uranium for a bomb while international monitoring of its program has diminished. In response, the Biden administration is considering alternative, “plan B” options should the talks fail, including expanding sanctions, strengthening defense cooperation with regional allies, and preparing for possible military action.
All of these proposals mask a stark reality: plan B increases the risk of war, and the United States is sliding into it. But this outcome is not inevitable. The United States can reinvigorate diplomacy aimed at breaking the current impasse over non-nuclear issues in order to avert the worst-case scenario of a nuclear-armed Iran.
Extensive Trump-era sanctions demonstrated that the United States cannot simply force Iran to capitulate to its demands – the U.S. “maximum pressure” campaign led only to Iran’s “maximum resistance” and a spiral of escalation. Moreover, the unilateral U.S. withdrawal from the JCPOA in 2018 – despite Tehran’s full compliance with the accord – has greatly diminished the diplomatic leverage the United States once had to mount an effective multilateral sanctions regime. And the success of the Obama-era sanctions effort hinged in no small part on the existence of a viable off-ramp for Iran and, accordingly, an end in sight for international partners eager to resume importing Iranian oil, which seems unlikely under a plan B scenario. Soaring energy prices as a result of Russia’s invasion of Ukraine, meanwhile, have only emboldened Tehran, reducing the potential impact of renewed oil and gas sanctions. In short, the United States has less leverage to compel Iran to return to the deal, even while the nuclear clock is ticking away.
Bold action is needed now to walk Iran back from the nuclear brink. Returning to the JCPOA represents the best means of resolving the crisis and verifiably limiting Iran’s nuclear program. In order to achieve this aim, the Biden administration should address non-nuclear issues that are stumbling blocks to restoring the deal.
The Current Impasse: A Non-Nuclear Poison Pill
The current breakdown in negotiations stems more from a lack of political will than from technical disagreements. Both sides were close to a nuclear deal in March until negotiations stalled over non-nuclear issues, principally Iran’s demand to remove its Islamic Revolutionary Guard Corps (IRGC) from the U.S. State Department’s list of Foreign Terrorist Organizations (FTOs) – a move the Trump team may have made as a poison pill against the JCPOA’s resumption in a future administration, and one that had a huge political effect in Tehran. Delisting the group would be largely a symbolic move, since it would have few legal implications and the IRGC still would be subject to extensive U.S. sanctions. Iran would remain on the State Sponsors of Terrorism list, the IRGC as such would remain sanctioned under E.O. 13224 (which is remarkably similar to an FTO designation in its legal effect), and biting secondary sanctions would continue to apply as well.
There is no discussion, in either Washington or Tehran, of removing any of these extensive sanctions on the IRGC (and essentially any person or entity that would do business with them). Nevertheless, the Biden administration bent to Israeli and domestic congressional pressure in refusing to find a compromise to accommodate Iran’s demand to remove the FTO designation.
The IRGC FTO designation was never part of the nuclear deal, but it was a key element of the Trump-era pressure campaign against Iran. Removing the designation would give Iranian leaders a face-saving means of selling the deal domestically after suffering the perceived humiliation of the U.S. withdrawal and sanctions re-imposition despite its (at the time) good faith compliance. It could also be a step toward halting the escalatory cycle of attacks that have occurred between Iran’s regional proxies and U.S. forces in Iraq and Syria since the Trump administration’s assassination of IRGC Qods Force Commander Qassem Soleimani in January 2020.
The U.S. position has been that Iran must address broader regional security concerns before the terror designation can be lifted. In a Senate Foreign Relations Committee hearing last month, Special Envoy for Iran Robert Malley emphasized that the United States “made clear to Iran that if they wanted any concession on something that was unrelated to the JCPOA, like the FTO designation, we need something reciprocal from them that would address our concerns.”
Addressing these concerns, however, is no easy task. Iran has been unwilling to alter its military strategy – which is based on a multi-layered defense system involving regional proxies and a robust ballistic missile program – to decrease the perceived threat to U.S. allies in the region. Reaching a grand bargain on regional issues, including on Iran’s activities in Iraq, Syria, Lebanon, and Yemen, is unattainable within the rapidly closing window for preventing Iran from crossing the nuclear threshold. Ironically, it may become somewhat more attainable if the nuclear issue is resolved diplomatically through a return to the JCPOA, at least as an interim measure.
As prospects for reviving the JCPOA grow dim, there is a high risk that a breakdown in talks will lead to escalation and potential military confrontation. In the absence of a nuclear deal, Iran is likely to engage in increasingly provocative actions on both the nuclear and non-nuclear fronts. Plan B policies – particularly new sanctions and defense pacts with Israel and key Gulf Arab states – will likely accelerate Iran’s nuclear work, while provoking increased ballistic missile testing, Shia militant proxy attacks, cyber operations, and tense encounters in the strategic Strait of Hormuz. Indeed, this escalatory cycle has already begun, as evidenced by the recent near miss encounter between IRGC Navy and U.S. vessels in the Strait.
There are no good options besides mutual resumption of compliance with the JCPOA. By refusing to symbolically delist the IRGC until Iran changes its regional behavior, the United States may well end up fueling the very threats it seeks to counter.
Choosing an Alternative Path
To prevent the worst-case scenario of a nuclear-armed Iran, and avoid “plan B” options that could trigger direct military confrontation, the Biden administration should propose a list of non-nuclear concessions to surmount political stumbling blocks to achieving a final deal.
Thus far, alternatives to delisting the IRGC floated during the negotiations appear to have been non-starters for the Biden administration. For example, Iran reportedly proposed lifting U.S. sanctions on certain IRGC-related entities, notably Khatam al-Anbiya Construction Headquarters. As the engineering arm of the IRGC, Khatam al-Anbiya generates significant income for the organization, providing a large share of funding for Iran’s regional activities. Unlike the FTO designation, removing sanctions on Khatam al-Anbiya would be far from symbolic, and the company is already subject to E.U. and U.K. sanctions for its support to Iran’s nuclear and ballistic missile programs.
But negotiations need not end there. The following policy options could reopen the space for negotiations based on mutual respect, while preventing the brewing nuclear crisis from boiling over.
Reconsider the FTO designation decision. The most expedient course of action would be for the Biden administration to reverse its decision and delist the IRGC. But this option may be politically infeasible at this point, given mounting domestic pressures and the need to appease regional partners such as Israel and Saudi Arabia. The administration could try, however, to package such a move along with other measures and diplomatic initiatives, such as an Iranian commitment to engage in regional talks designed to address perceived mutual threats.
Alternatively, the administration could commit to removing the designation by April 2024 at the latest, when it is next up for routine review as required by the Immigration and Nationality Act. Pushing the FTO conversation to the future would give space for regional diplomatic initiatives to bear fruit and for Washington to work with Middle Eastern states to de-escalate regional tensions. Downsides to this approach, though, would be that Iran is unlikely to trust a U.S. commitment for future action, and in Washington the politics of making such a forward-looking commitment may be no better than an announcement to delist now.
Replace the IRGC FTO listing with a narrower designation. Another option would be for the Biden administration to replace the designation of the entire IRGC – an official branch of the Iranian government that encompasses many conventional aspects of Iran’s military activities – with a narrower designation against Iranian entities that are directly involved in terrorist activities, such as Unit 840 of the IRGC Qods Force, a covert group allegedly responsible for conducting attacks against western and Israeli targets. Such a move would allow both sides to claim victory insofar as Iran could announce that the United States removed key Trump-era sanctions, while the United States could make clear that it continues to sanction Iran for its terrorist-related activities in the region (and as noted above, the broader IRGC would remain subject to non-FTO sanctions in any event).
Expand on existing exemptions within the FTO designation. If removing or modifying the IRGC FTO designation proves unworkable, one final option would be for the administration to expand on carve-outs that were introduced during the Trump administration, such as a partial exemption that ensures foreign governments, businesses, and non-governmental organizations that have relationships with the IRGC generally would not be prevented from entering the United States on terrorism-related inadmissibility grounds. The administration should consider issuing a waiver to ensure that the FTO designation does not target individuals from exempted groups except in cases where there is significant and direct material support to the IRGC. While such a gesture may be insufficient to convince Iran to drop its demand to delist the group, it could foster a more productive negotiating environment for other measures on this list.
Foster meaningful regional dialogue. In the meantime, the United States should devote greater resources to fostering regional dialogue between Iran and its neighbors, building on the Baghdad model of negotiations between Riyadh and Tehran. Rather than focusing on Iranian threats, U.S. President Joe Biden should leverage his trip to the Middle East next month to focus on mechanisms for defusing regional tensions, ensuring that the ceasefire in Yemen holds, and strengthening nonproliferation norms throughout the region. On its own merits, this initiative should be undertaken regardless of progress on JCPOA-related talks, but it potentially could be packaged as part of a series of compromises to get the nuclear issue back on track.
Remove symbolic sanctions irritants. Additionally, the Biden administration should reconsider removing sanctions against high-ranking Iranian officials imposed during the Trump administration, such as those against Iranian Supreme Leader Ayatollah Ali Khamenei and his inner circle. Like the FTO designation, these sanctions are largely symbolic since Khamenei does not travel abroad and has no significant assets in the United States. Removing these designations would have no impact on Iran’s nuclear program, but would constitute a gesture of goodwill at a critical juncture in the negotiations.
In exchange for the delisting of senior Iranian officials, Tehran also should make a symbolic gesture that might help appease critics of the deal. One such gesture would be to codify the existing, self-imposed 2,000 km ballistic missile range limit – which Khamenei and other Iranian officials repeatedly have affirmed – as an initial step toward broader dialogue on regional issues once a nuclear deal has been concluded.
Propose de-escalation mechanisms. Given the current nuclear impasse and growing regional tensions, Washington should refloat the idea of establishing a military hotline or deconfliction mechanism between the two countries to prevent missed signaling and escalation. The purported lack of direct interaction between senior U.S. and Iranian officials – a factor that was critical for de-escalation during the Obama administration – suggests that political obstacles remain to establishing such a mechanism. These challenges potentially could be surmounted, however, if a third-party intermediary such as Oman set up an indirect channel for military-to-military communications.
Such non-nuclear concessions would provide an opening for engaging in more constructive nuclear negotiations, without trying to tackle complex and longstanding regional issues. Unless the United States presents a face-saving way for Iran to accept a new deal, one that acknowledges the misguided logic of the “maximum pressure” approach, Tehran will continue to delay progress toward a new accord.
It’s not too late to salvage the deal.
With the nuclear clock ticking, time is running out for the Biden administration to restore the JCPOA. If these efforts fail, it will not only be the Trump administration that is to blame. Regardless of how we got here, the Biden team is now responsible for doing all it can to walk Tehran back from the nuclear brink. The dither and delay approach of the past year cannot continue; what is needed now are bold gestures and the courage to forge a path toward peace.