Negotiators announced today that the P5+1 and Iran have reached a historic agreement that, if implemented, would impose restrictions on Iran’s nuclear program in return for the removal of economic sanctions. The agreement, entitled the Joint Comprehensive Plan of Action (JCPOA), could produce the comprehensive lifting of all U.N. Security Council sanctions as well as multilateral and some national sanctions related to trade, technology, finance and energy sectors. Sanctions would be lifted until the International Atomic Energy Agency (IAEA) verifies that Iran has met its commitments outlined in the JCPOA.
The U.N. Security Council will immediately vote on the agreement. The U.S. cannot approve the JCPOA until after the U.S. Congress reviews it, which could take up to 60 days. President Barack Obama endorsed the deal today, meaning that Congress will ultimately need a two-thirds vote in both the House of Representatives and Senate to reject the agreement.
The agreement outlines several details regarding how Iran will receive sanctions relief:
- Working Group on Implementation of Sanctions Relief. The JCPOA creates a working group to review and consult with Iran and other countries on issues related to sanctions lifting. For instance, Iran can consult the working group if it believes a country has not fully lifted sanctions in accordance with the JCPOA.
- Phases of Sanctions Relief. The agreement will lift U.N., U.S. and E.U. sanctions in phases based on certain benchmarks and sequences:
- Finalization Day (today): The JCPOA does not lift sanctions immediately. Instead, the agreement requires the U.N. Security Council’s approval, which is expected within a matter of days. The 2013 Joint Plan of Action framework and its freeze on certain sanctions will remain in place until January 14, 2016.
- Adoption Day (90-days after approval by U.N. Security Council): The JCPOA will be adopted only after approval from the U.N. Security Council and the U.S. Congress, which will have the opportunity to reject the deal with a two-thirds vote. U.S. law allows Congress 60 days to review the deal.
- Implementation Day (after Iran meets compliance benchmarks): Sanctions relief will only occur after the IAEA verifies that Iran has met its JCPOA commitments. Once the IAEA has submitted its report, the U.S., E.U., and U.N. will cease application of virtually all economic sanctions involving non-U.S. persons and entities except for sanctions related to the shipment and development of conventional weapons.
- Transition Day (8 years after Adoption Day). The U.S., U.N., and E.U. will terminate all remaining sanctions involving non-U.S. entities if the IAEA finds that in eight years, Iran’s nuclear activity remains peaceful. The U.N. Security Council resolution will expire two years after Transition Day if Iran continues to demonstrate compliance with the JCPOA.
- Sanctions Still Apply to U.S. Persons and Entities. The JCPOA specifies that sanctions relief does not apply to transactions involving U.S. persons and entities, or entities owned or controlled by U.S. companies. Thus, U.S. companies and their subsidiaries will still need to obtain specific approval from OFAC to do business with Iran.
- Snapping Back Sanctions. The P5+1 can reimpose sanctions on Iran within 65 days if it violates any part of the JCPOA. First, a complaint must be filed alleging that Iran has broken part of the agreement. A joint commission will then investigate the claim for 30 days and attempt to resolve the dispute. If, after 30 days, allegations persist and the dispute is not resolved, the U.N. Security Council will vote to continue sanctions relief. A veto by even one permanent member would mean the reimposition of sanctions.
- Restrictions on Trade in Conventional Weapons. The U.N. arms embargo, which restricts trade to and from Iran involving conventional weapons, will last another five years. Sanctions involving ballistic missile technology, however, will last another eight years.
In turn, Iran will take several steps to modify its nuclear program, including: (1) reducing its enrichment capacity by two-thirds; (2) reducing its low enriched uranium amount by 96%; (3) allowing U.N. inspectors to enter sites, including military sites; (3) removing heavy water reactors in Arak; and (4) ceasing use of underground facilities at Fordow for enriching uranium.