The JCPOA Withdrawal

International & National Security Law Practice Group Teleforum

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In 2015, the United States, along with China, France, Germany, Russia, the United Kingdom, and the European Union, reached a Joint Comprehensive Plan of Action (JCPOA) with Iran. The terms of the deal called for Iran to take various steps to ensure its nuclear capacity would be exclusively peaceful. Aspects of Iran’s nuclear development program were subject to restrictions for varying lengths of time between 10 and 15 years. In exchange for Iran agreeing to these terms, Iran received relief from U.S., EU, and UN nuclear-related sanctions. Supporters of the JCPOA argued this pushed Iran from the brink of possessing a nuclear weapon and it opened the door for engaging Iran in a more constructive way than in the past. Critics of the deal, including President Trump, contended the time limits were insufficient and the deal failed to address issues such as Iran’s ballistic missile program, its sponsorship of terrorist groups such as Hamas and Hezbollah, and its malign influence in the Middle East. In May 2018, President Trump withdrew the United States from the JCPOA. Our experts will discuss the consequences of this decision as it relates to the role of the U.S. in international agreements and treaties, the impact of the sanctions regime, and what we can expect going forward.


David S. Cohen, Partner, WilmerHale

Lester Munson, Principal, Government Affairs, BGR Group

Moderator: Matthew Heiman, Visiting Fellow, National Security Institute, Antonin Scalia Law School, George Mason University


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Event Transcript


Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's International & National Security Law Practice Group, was recorded on Tuesday, July 10, 2018 during a live teleforum conference call held exclusively for Federalist Society members.     


Name:  Welcome to the Practice Group teleforum conference call as today we discuss the status of the Joint Comprehensive Plan of Action with Iran. I'm Dean Reuter, Vice President, General Counsel, and Director of Practice Groups here at The Federalist Society.


      Please note that all expressions of opinion are those of the experts on today's call. Also, this call is being recorded for use as a podcast in the future and will likely be transcribed as well.


      We're very pleased to welcome three guests today, one of whom will be our moderator and that is Matthew Heiman. He's a Visiting Fellow at the National Security Institute at the Antonin Scalia Law School at the George Mason University right here in the Washington D.C. area. He's going to moderate for us today and introduce our other two panelists. But as always, we'll be looking to the audience for questions so please have those in mind for when we get to that portion of the program, probably about 40 or 45 minutes into the program. With that, Matthew Heiman, the floor is yours.


Matthew Heiman:  Thanks, Dean. And I'm delighted to be joined today by David Cohen and Lester Munson. You can see their full bios if you go to The Federalist Society website. I'm just going to give a brief thumbnail sketch of their background and we'll get right into the discussion.


      So in alphabetical order, we'll start with David Cohen, who's a Partner at the WilmerHale law firm where he is part of the Financial and Business Integrity Group. His practice focuses on anti-money laundering, trade sanctions, CFIUS compliance, and internal investigations. Prior to David coming to the WilmerHale law firm, he spent many years in government service, in particular at the CIA and the Treasury Department. At the CIA from 2015 to 2017 during the Obama administration, he was the Deputy Director, and then prior to his tenure at CIA, he was the Under Secretary for Terrorism and Financial Intelligence at the U.S. Treasury.


      Lester Munson is a Principal as part of the International Group at BGR, which is a government relation's firm. And his work there focuses on consulting with foreign governments, corporations, and advocacy groups. He's also a Visiting Fellow at the National Security Institute at George Mason University. He's also an adjunct professor at Johns Hopkins University. Prior to coming to BGR, Mr. Munson spent 26 years on the Hill in various positions. Most recently, he was the Staff Director for the Senate Foreign Relations Committee. Prior to that he was the Chief of Staff for Senator Mark Kirk of Illinois.


      So we've got two bona fide experts to talk about the JCPOA and Iran. And I thought to set the table for the discussion, it would be good for us to go back in time, perhaps four or five years, and talk about why did the JCPOA come into existence? What was its purpose? And so I thought for that, we'd start with David, who was part of the Obama administration. And so, David, why did the Obama administration pursue the JPCOA?


David S. Cohen:  Well, first of all, thanks for inviting me. Very happy to do this, happy to do this with my friend, Les Munson, who had a lot of good interaction with during my years, particularly when I was at Treasury.


            So I think the fundamental purpose of the JCPOA was to find a way to peacefully restrain Iran's nuclear weapons program. And when the Obama administration came into office, one of the key initiatives was to find a way to address what was a mounting challenge, which was that Iran was proceeding ahead, relatively rapidly, towards having a testable nuclear device. They had been at that for many years and the intelligence told us that they were getting closer and closer. And as the -- when we reached initially what was the JPOA, the Joint Plan of Action, which was the sort of interim deal, Iran was probably a month or two away from being able to breakout, which is to have enough enriched uranium -- high, enriched uranium to have a testable, nuclear device.


            And so the most important purpose behind the JCPOA—the ultimate Iran nuclear deal—was to push back the breakout timeline for Iran to be able to have a workable nuclear weapon to over a year. And it accomplished that. And I'd say there're probably two other subsidiary, but still important, reasons that I'd cite. The second being -- it's either the first of the second reasons being that it was thought—and I think rightly, but I'm sure we'll debate this—that their taking the nuclear issue off the table for some period of time would create the foundation to be able to address Iran's other maligned activities. Whether it's their support for terrorist organizations like Hezbollah or Hamas, their retail adventurism, their atrocious human race practices, their malicious cyber activity, all of that would be easier to address if we were able to have an Iran that is not a nuclear-weapons power. And so that JCPOA, I think was a step on a journey of effort with respect to Iran. It was not intended to be the end, in itself, of our efforts with respect to Iran.


            And in the last point, which I think is also quite important, is that it reinforced the importance of the nuclear non-proliferation efforts that the United States has been a leader in for many years. And there is no question that there're others in the region, the Saudi's and others, that are eying developing a nuclear weapon. And if Iran were able to proceed ahead and have a workable nuclear weapon, I think we would see a fair amount of proliferation in the region and perhaps elsewhere in the world.


            And so using the leverage that we developed through sanctions and through a, sort of, worldwide-diplomatic effort, combined with, I think, what was a credible threat of military action, we reinforced the importance of nuclear non-proliferation and made clear to others that any effort to develop a nuclear weapons program would be met with sort of worldwide response that would make it very, very difficult for them, if not possible for them to achieve it.


            So I think those are the three principle-driving forces behind the effort.


Matthew Heiman:  Thanks, David. Les, I know not everyone took the view of the JCPOA that the Obama administration took. Can you sort of articulate what some of its critics would say about the agreement?


Lester Munson:  Sure. Let me first say I totally agree with David about great interactions a few years ago when everyone was working on this. He's one of the best public servants the U.S. has ever had. Did a great job in a number of tough positions. And it was a pleasure to interact with him and frankly other folks in the administration.


            And I think we shouldn’t -- before I get to the -- I made a list of eight objections to the JCPOA. I had to stop -- I figured I'd stop at eight; a fairly arbitrary cutoff. But I think we should say before we get -- before I get to that part—and I'll try to go fast—that the Obama administration, in its first term in particular, did an amazing job of implementing economic sanctions on Iran to get them to the negotiating table, and I think you would find if you -- and maybe some Republicans you'd have to talk to off the record, kind of a universal acknowledgement that the administration—and David was a big part of this—did a terrific job in putting the squeeze onto Iran to get them to a place where you could have constructive conversation. So let me give that as a preliminary note.


            So in terms of criticisms, some of these -- I made a list of eight. Some of them have survived to this day, some of them have not, and I'll go quickly through them. The first one: this largely came from kind of tea-party-ish Republicans. I'm remembering Senator Ron Johnson, in particular, being very upset that the JCPOA was not a treaty and that manifested itself in calls in the Senate to treat it as if it were a treaty, which is perhaps physically impossible. But nevertheless, was a common theme with some senators that because it was only an Executive agreement, that was offensive to the nature of the Senate. I'm a little bit sympathetic to this argument, by the way, but the lack of stature as a treaty was an immediate strike against the deal.


            Secondly, there were complaints from U.S. allies in the Middle East about the JCPOA, particularly Israel most vociferously, but also just as vigorously but more behind the scenes Saudi Arabia; both making their voices known on the Hill and elsewhere that they were very concerned about the particulars of the deal.  And the fact that there was a nuclear agreement at all with Iran I think was concerning.


            Third, very broadly there was a sense among a lot of critics—and it wasn't just Republicans. There were some Democrats as well who would say this, including Senator Menendez, Senator Cardin, Senator Schumer—that the deal, the JCPOA, on its merits wasn't good enough. And this included everything from the inspection regime, which largely relied on, at least, initial inspections by the Iranians themselves on the amount of the Iranian nuclear infrastructure that was dismantled, which was not quite as much as people were expecting; about the fact that in the deal, Iran was allowed to continue researching specific kind of centrifuge, and it was the most advanced centrifuges. So you could imagine that they were going to exploit this peace deal -- this nuclear deal to continue research on the most dangerous parts of their program, these centrifuges that actually enrich the uranium much more quickly than what they had.


            Another merit-based criticism was the sunset provisions. They were much too early. For example, I think, the earliest ones begin to expire in about six years. There was an eight-and-a-half year limit on certain kinds of activity, particularly really the centrifuges again. That was a concern. The breakout time, as David said, was -- I think there was neutral observers who said this, they've gone from one-month breakout to a year-long breakout. For some folks who thought a year was not sufficient, that it should be longer, there were -- the letting go of the "no-enrichment rule," which had been articulated in various U.N. Security Council Resolutions for Iran, the JCPOA explicitly allows Iran to enrich to a certain percentage, which was a break from previous policy. So those merits kind of -- those criticisms on merit I kind of put in one bucket.


            Other criticisms of the deal included its impact on other issues, that by coming to agreement with Iran on its nuclear program and combining that with relief of economic sanctions you kind of unleashed Iran's bad acts in other areas, whether it was support for terrorism or support for its proxies in the region. And you did see, I think, a larger -- an increase in Iran's malign acts in the region in conjunction with the deal, and that's certainly a topic of debate ongoing right now.


            Another point of criticism was the amount of money that Iran got upfront for coming to an agreement. The release of all of their funds and other assets that were being held by other countries as a result of this deal. Some reports said $150 billion, others were less than that. That infusion of capital back to Iran was seen as too much, as way too much by a lot of people on the Hill.


            Others criticized the deal for essentially facilitating a legitimate path to a nuclear weapons program over time. Yes, it would've taken years, but you're essentially endorsing years from now a legitimate nuclear program for Iran. There's reasons to quibble with that interpretation, but that was a criticism.


            And, I think, two more esoteric criticisms. One, was that there were -- the administration asserted—and I'm not talking about David here, other leading figures in the administration, Secretary of State and others—implied that the nuclear deal could enable better behavior from Iran across the board; that welcoming them into the world community in a way that didn't describe them as a rogue nation would perhaps lead to better behavior. I think there was a lot of skepticism of that assertion and not a lot of people believed that that would be an outcome of the deal, and people were concerned that that's in fact why the administration was pursing this. That was not a good thing.


            And, finally, more esoterically, I think there was a concern that the administration was making decisions on overall Middle East policy based on its impact on the success of the deal. So U.S. policy in Syria, the humanitarian crisis there, the civil war, decisions were made about U.S. policy in Syria, also in Iraq, based on how Iran would respond in the nuclear agreement or the negotiations leading up to the agreement. So there was a -- there became a sense that the administration was kind of pushing all of its chips into the Iran nuclear deal and letting some other U.S. concerns go by the wayside.


            So that's my list of concerns about the deal. All of them are subject to debate and happy to talk about them.


Matthew Heiman:  Well, one point—thanks, Les—one point that you picked up on and I think it was at the top of your list, and David, you sort of touched on it very briefly, is this idea of the nature of the deal itself, that we know it wasn't a treaty given that this is an international law issue. I'm just wondering what was it from an international law perspective? It wasn't a treaty. How would we describe what the agreement was? And I'm happy for Les or David to take that.


David S. Cohen:  Yeah. And I'll take a shot at it, but then I do want to have the opportunity to give some brief responses to some of the criticisms there. On not being a treaty, I actually think that was a strange criticism because it allowed, obviously, the subsequent administration to not have to go through all of the process you would need to back out of a treaty. But it was an Executive agreement and I think that for better or for worse—and I think there is a fair argument that it is for worse—the tradition in the last 40, 50 years has been for important international agreements to be done by Executive agreement. Not exclusively, there are some arms-controlled treaties, obviously, that have been done and other treaties. But there's through Democratic and Republican administrations going back now many, many decades using Executive agreements to establish new protocols, new understandings in foreign affairs has become something of the norm.


            I think in this instance there was not a chance in the world that Congress was going to -- the Senate was going to give two-thirds approval to make this into a treaty. But at the same time, I will say—and I'll try to [indiscernible 17:31] less—that there was a clear majority in Congress who were in favor of the deal at the time that it was struck. They may not have said so publicly, but I can tell you from the perspective of those in the administration who were talking to folks on the hill, there were some vociferous critics, but there was, by and large, basic support for that principle objective that I citied, which was to peacefully resolve this issue, at least for the time being.


            And I think that carried through the Trump administration's decision to withdraw from the deal. I think there was still a pretty strong bipartisan interest in not having the administration back out of the deal because for reasons that you can go into, I think its decidedly in the U.S. interest to remain in this deal and more importantly to keep Iran restrained by the various restraints, some of which are permanent, some of which, as Lester noted, are sunsetted over time. But I think all together significantly reduced the risk of Iran developing a nuclear weapon.


Lester Munson:  Yeah, let me jump in on the treaty question. I think there's a couple of thoughts, and I'm also skeptical of the idea of making a treaty. But there was a genuine concern among Republicans, and I can testify to this under oath if necessary, that the initial -- when news of the discussions broke and we saw that the JPOA, the initial agreement, the tentative agreement before the JCPOA, there was a real concern that the administration would have a deal that they would bring to the Hill for endorsement by the Senate. And as a Republican, you're a little concerned that this administration, which was not at all popular with the Republican base, was going to have a nuclear agreement with Iran that it would be very tough to vote against.  That a deal that actually restrained Iran's nuclear ambitions over time, over a considerable period of time, without sacrificing too much would be very tempting to vote for. And a lot of Republicans saw themselves as being in a potentially tough spot where they would have to endorse an Obama initiative that they actually thought was good on the merits.


             I frankly think once the actual JCPOA came out, it became much easier for Republicans to vote, in particular to vote against it, and a lot of moderate to conservative Democrats -- or not a lot, but several key folks including the current minority leader ended up voting essentially against the deal, mostly based on the merits of what's inside the actual terms of the agreement itself.


            So you could've imagined back in 2013 or so a treaty -- the administration bringing a treaty to the Senate. That would be very difficult to vote against for a lot of Republicans. Maybe not all of them, but for a significant number, they would be tempted to vote for it.


            The other quick thought on the merits of bringing it up as a treaty, it makes it a little bit harder to get out of it on the mechanics, but you can still -- the administration can still, on its own, get out of a treaty. What makes it hard to do is to get out of the treaty politically. And I go back to—and this is a little in the distant mists of memory—but the Taiwan Defense Treaty from the Cold War was something that the administration had to let go of in order to start diplomatic relations with Beijing back in Nixon/Carter years. The fact that the Senate had ratified the defense -- the Mutual Defense Treaty with Taiwan changed the policy of the administration. So even though they were going to cancel the treaty, the fact that the Senate had endorsed it gave the Senate a real stakeholder role in the policy.


            The same -- you can imagine the same thing on an Iran policy. If the administration had actually brought a treaty, an Iran nuclear agreement treaty, to the Senate and gotten an endorsement, the President, this President, could've still gotten out of it, but it would've been at cost. There would've been a role, a specific role for the Senate in saying, "Yes. You can get out, but only under these terms." It's happened in the past, and I don't think it's totally unimaginable that that could've happened this time.


Matthew Heiman:  David, any thoughts on that?


David S. Cohen:  Yeah, just one thought and then I want to just address a couple of the litany of criticisms that Lester ran though. And the thought -- just the last thought on this treaty question is there was legislation that Congress enacted—the Iran Nuclear Agreement Review Act, I think it was called—that gave Congress a role in sort of adopting the deal essentially and putting it to the Executive to come back and certify to Congress on a periodic basis that Iran was complying with its obligations under the deal, which I think as we all know Iran has been complying with its obligations under the deal. It's been certified by the IAEA director Pompeo, Secretary of State-designate Pompeo testified that that was the case. DNI Coats has testified to the same effect. So there was something of a congressional imprimatur given to the deal. It wasn't obviously the same as if it had been a treaty, but there was some congressional buy-in on the notion that if Iran was continuing to comply, that it was something that we ought to remain in.


            But, okay, let me just very quickly address a couple of the points that Lester raised as critiques. On the complaint by allies, again, I think it's important to distinguish between what is fed for domestic political consumption or even perhaps for political consumption here, and what others in these countries actually -- who are in the national security positions in particular, felt. And I can tell you, so if you're talking about the Israelis, I think the very strongly held view of people in the national security establishment and the intelligence community there and elsewhere that this deal was a good deal and one that was in Israel's interest to restrain Iran's nuclear program. And some of that was said publicly, particularly by former heads of Mossad and elsewhere, and IDI as well. So it was not a uniform criticism in Israel. And likewise the same in Saudi. It was both, I think, a -- for public consumption and a more privately expressed view. And often that privately expressed view was much more supportive.


            On reaching Iran's bad acts in the Middle East and elsewhere, I think the historic record is that Iran when it was developing a nuclear program, when it was negotiating the JCPOA and after the JCPOA has taken the opportunity to express its sort of revolutionary ideals in the region. And it is -- I just think it's not accurate to say that Iran became a problem for its neighbors, whether it's in Syria or Yemen, Lebanon, elsewhere in the region after the JCPOA was adopted. They have always been a problem and I think the JCPOA on that sort of dimension is somewhat of a non-event.


            Then there are just two other quick things. I cannot prove this but I will tell you that with respect to the Obama administration policy on -- whether with Syria, Iraq, Yemen, Lebanon, anywhere in the region where we did see Iran engaging in bad behavior, I never once—not once—saw any, even suggestion, let alone a decision taken, that said, "Gee, we should do X, but we're not going to do it because we are prioritizing the nuclear deal." I never saw it. I was fortunate enough to be in the situation room for many, many discussions. So I suspect I would have encountered that line of thinking if that were something that were motivating the policymakers in the administration. And I never saw it. Now, you can criticize the Obama administration policy in those areas, but I just don’t think it's accurate to say that there was a -- that there were decisions taken to ease off on Iran in other theaters because we were trying to curry favor to get the deal done.


            And then, finally, just on the point that Lester made that there's a view that this somehow created a legitimate path to a nuclear weapon. I think it is important to recognize that the JCPOA begins with a commitment by Iran never to develop a nuclear weapon. And then, the deal itself puts in place a series of restrictions that are permanent including, I think most importantly, an inspection regime that is a forever inspection regime so that if Iran, as it is released from some of the other obligations under the JCPOA and developed what would be useful in a civilian nuclear power production effort, if that were transformed in some fashion into a program to develop a nuclear weapon, the inspection regime, frankly augmented by some pretty outstanding intelligence collection that we and our allies are able to do, would detect that. And that would then set off a series of events, least importantly snap-back of the sanctions, but then a whole host of other consequences for Iran. But there is a permanent and enduring commitment by Iran never to develop a nuclear weapon with the deal putting the world community, and the United States in particular in a position to know whether Iran was adhering to that commitment.


      Lester Munson:  Real quick, I think on the last point in particular, all true on the merits. However, statements from Iran about turning its systems back on and immediately starting to enrich more uranium in the last few months as the Trump administration has pulled out of the deal, are what caused people to still be concerned that they have so much infrastructure left in place, even after the implementation of JCPOA, that it is, in fact, an easy thing—it's potentially a very easy thing—for Iran to say, "Okay, never mind on our previous commitments. We're a couple weeks away from breakout," and there they are. Yes, there is language in the deal that says this is permanent. Part of the criticism is a very deep skepticism of the legitimacy of that Iranian statement.


            And then on the Israeli thing, yes, totally agree, and we certainly heard different messages coming out of Israel. But when the Prime Minister makes such a vigorous case, I think it is notable, and it certainly had an impact on critics on the Hill. And I largely agree with David on the question of Iran's bad acts in the region. The JCPOA didn't start them; the argument is it made them worse, and it may have limited the administration's options.


            I do think our policy in Yemen might have been different, but for the Iran nuclear deal. I think the previous administration had to look for ways to cooperate with the Saudi's that they otherwise might not have had to find. And there's certainly been a lot of press about our -- and I'm not at all, by the way, disagreeing with anything David said about what he saw in meetings. I take him at his word totally. There's been a lot of criticism in the media about Syria policy and about decisions by the administration regarding the redline comments and other things that were, in fact, related to the importance that the Iran deal -- the potential Iran deal played for the administration. And to be frank, I've heard that from—at least privately—from senior members of the administration that that's not necessarily a bad criticism of the administration. They did place a very high priority on getting a deal with Iran and other things may have fallen by the wayside to get there.


            By the way, it may have been worth it. But you do have to sacrifice -- you got to break some eggs to make an omelet, I suppose is the metaphor. But that's, I think, a criticism that is going to require analysis over time and a look back at the historical record.


David S. Cohen:  Sorry, Matt, can I just -- one sur-reply?


Matthew Heiman:  Yes.


David S. Cohen:  Just on Iran's commitment to never develop a nuclear weapon, I am by no means suggesting that we take them at their word or that we trust them on that. My point is that the inspection regime that was put in place, which none other than Secretary Mattis recently commented, was a very impressive inspection regime and one of the most powerful that he'd ever seen. That puts the U.S. and our allies in a position to know whether Iran is adhering to that commitment. And even if they do, as Lester said, start to try to regenerate their program, they are not weeks away from having enough HEU—highly enriched uranium—to test a nuclear device. They are more than a year away. And that's -- you can take issue the extent to which their nuclear infrastructure was dismantled, both their centrifuges and the amount of enriched uranium that they had. But I think there's -- and I think Lester acknowledges this earlier -- there's I think no debate that what Iran has been left with means that they are at least a year away from being able to have enough highly enriched uranium to use in a test device.


              And so the combination of that timeline plus the unprecedented intrusive inspection regime that was put in place—and that is permanent—gives us a fair amount of comfort that we would detect Iran violating the fundamental commitment of never developing a nuclear weapon.


Lester Munson:  Let me just say one other thought, which I'd be interested in David's reaction to this, I thought the best criticism, ultimately, could be boiled down to
It's the centrifuges, stupid." There is a huge loophole in the deal, I think, that allows Iran to continue doing research on the most advanced centrifuges, even under the terms of the deal immediately. There's not even a deadline on this. They're allowed to do research on these advanced IR-6 and IR-8 centrifuges that are many times faster than the IR-1's that actually got them to the high level of enriched uranium that they had that we were concerned about.


              So when I say like they're weeks away, it's potentially you look at the loophole for research on advanced centrifuges and the fact that they're allowed to start building them en masse in as little as six years, yes, they're not -- they're a year away now. But in six years from now, they're potentially weeks away because they would have a completely modernized system for enriching uranium under the terms of the deal itself. I mean, that I think is the most concrete scientific concern about the deal and its merits ultimately is the combination of way-too-early sunsets and these loopholes on the centrifuges, that you could imagine that the concern about Iran turning to a legit or relatively -- a much more legitimized nuclear weapons program than it was previously fair quickly, it has some merit.


David S. Cohen:  So I think the answer to that, as I understand it, is that the -- there would -- all of the work on the advanced centrifuges, the IR-6 and 8's, would be under the supervision of the IAEA. They would -- Iran is not permitted to have any centrifuge facilities at all that are not subject to constant inspection and monitoring.  And so the product coming out of whatever R&D facilities they have on these centrifuges itself would be trapped by the IAEA. And the caps on the amount of enriched uranium that Iran's allowed to have in its stock pile remain in place. And so, yes, they are -- that is one of the tradeoffs in the deal. They are permitted now, and somewhat in the future, to do additional R&D on centrifuges. But there are guardrails put around that to ensure that it's not used for a nuclear weapons program. It could be used for a civilian nuclear program.


              Now, that was -- just to sort of follow out that thought, one of the things that Iran was arguing was that like any other nation, it wanted to have the capacity to generate power from nuclear reactors. And it's -- there's obviously some similarity between the technology and the science in a civilian nuclear program and a weapons program. But it's not exactly the same. And if you have, sort of, guardrails put around the program so that it can only turn towards a civilian program and not towards a weapons program and any deviation from those guardrails gets detected quickly by those who care, then you can have some assurance. But that was one of the sort of fundamental positions of Iran in all of this is that they ought to be able, like any other nation, have a civilian nuclear program.


Matthew Heiman:  Well, let me --


Lester Munson:  And I think the -- sorry, go ahead.


Matthew Heiman:  No, Les, do you want to have the last word? I just want to change gears with one last question.


Lester Munson:  I think we can keep on going trying to get the last word so please change the topic.


David S. Cohen:  And I promise not to take the last word on the next one.


Lester Munson:  Fair.


Matthew Heiman:  I just want to change gears. Obviously, now President Trump has made the decision to withdraw U.S. participation from the JCPOA and we've seen the concerns expressed by European allies and many companies around sanctions, and in particular secondary sanctions, meaning if you're trading with Iran you can't do business with the U.S. I'm just wondering, what happens now? The U.S. has left the JCPOA. In addition to those secondary sanctions, what else is out there if Iran decides to ramp up development of a nuclear program? Are they still under U.N. strictures?  Are there any other aspects of international law that create some break on their -- if they were to make the decision to resume an aggressive path towards developing nuclear weapons? I don't know if that's a question Les or David wants to try and tackle first.


Lester Munson:  Well, I think there's some triggers in the U.N. Security Council Resolution that passed immediately after the deal was signed that would be implicated by Iranian behavior. So I would take a look at that Security Council Resolution immediately. I think they still are in a bit of a box. And, frankly, there is -- and then the larger question is on will the new sanctions coming out of Washington be effective? I defer to David. I mean, he was at the controls of this for a while. Third countries are going to face very tough decisions about whether they're going to continue to do business with Iran or comply with U.S. sanctions, regulations. And that -- I suspect they're going to do the latter, which is comply with U.S. policy, although grumbly so. And Iran will be more and more isolated and they're going to have very tough decisions to make about what they're going to do with their program while they're being isolated here and then worrying about triggering some of these other aspects from multilateral understandings. So Iran's in a hell-of-a-spot right now.


David S. Cohen:  So I think, yeah, I think Les is right. The withdrawal from the JCPOA by the Trump administration does, as in any other contract, if your counterparty is not performing you are not held to perform. So at least as these sanctions come back into effect, which some will come into effect in August, some will come into effect in November—at least the U.S. sanctions—Iran would have a pretty good argument that it is no longer bound by the restrictions on its program that agree to -- in the JCPOA.


            There is this U.N. Security Council Resolution that essentially codified the JCPOA as a matter of international law. But that, too, with the U.S. withdrawing and not adhering to -- or intending not to adhere to its commitments which is to provide sanctions relief—I don’t pretend to be an international lawyer, much less a U.N. lawyer—I suspect that Iran would have a good argument that it is no longer obligated to comply with the restrictions on its program.


            That doesn't mean it's free and clear. There are preexisting U.N. Security Council Resolutions, which remained in place, that prohibit Iran from developing a nuclear weapon. That remains a matter of international law, and, frankly, they're going to continue to face other potential consequences if they go ahead and regenerate their program including the potential that they would face a military strike. So as Lester said, Iran's got some hard choices to make here.


            On the sanctions question, I think it's very complicated and there's I think a little bit of wishful thinking going on in the administration that they are going to be able to reinstitute a sanctions regime that will put as much pressure on Iran as we have been able to do back in the Obama administration that led to the negotiation. I think there're a couple of problems here. I think Lester's right. The major multinationals, in Europe in particular, are not going to continue to do business with Iran. You've seen that already with Total's saying that it's pulling out; you seen some of the major carriers, CMG and others, who are the big shipping lines saying that they're not going to continue to work with Iran.


            But I think one important thing to know about sanctions is that it's not a dial that you can turn up to eight or turn down to three and then turn back up to nine. It is a very complicated interaction of U.S. legal requirements, diplomatic efforts to get others to amplify what we're doing, work at the U.N. to provide, essentially, cover for other countries to take action that is contrary to their economic interest and contrary to the interests of their companies.


            If you have a consensus on policy of what you're trying to accomplish, you can get the world to join with you in putting in place, not a perfect sanctions program—you're never going to hermetically seal off a country—but you can have a pretty powerful set of pressures coming from many different angles. The problem that the administration now faces is that it's essentially going it alone and using peer coercion to try to get others to come along. And they will get some benefit out of that. As I said, a lot of the large, multinationals will come along. But I think a purely coercive approach will be less effective in Europe, and I think it will be decidedly less effective with countries that are not as dependent on the U.S. market as most European businesses are.


            So if you look at India, if you look at China, if you look at Russia, all of whom were part of the effort back in the Obama administration, I think you're going to see a pretty significant amount of non-compliance with our sanctions. And I'm concerned that it will sort of overwhelm our enforcement efforts and result in a much less powerful sanctions program all together.


Matthew Heiman:  Well, with being mindful of the time, I want to give our audience an opportunity to ask a couple questions. Dean, are we able to open the floor for audience questions?


Dean Reuter:  Of course. In a moment, we'll all hear an announcement that will say the floor mode is on. After you hear that announcement, if you have a question, push the star button and then the pound button on your telephone.


            Once again, if you have a question, now's the time to ask it. We've got about 12 minutes left. Push the star button and then the pound button on your telephone. I don't see anybody just yet, Matthew, but I will let you know if we get a caller. Again, if you'd like to ask a question, push the star button, then the pound button on your telephone. Back to you, Matthew Heiman.


Matthew Heiman:  Thanks, Dean. Let me ask one more question to both David and Les. After the U.S. pulled out of the JCPOA, Secretary of State Pompeo said we'd be willing to sit down with Iran to negotiate some form of a new deal. It would have to adhere to a number of points he articulated. And then Iran responded by saying, "well, the only way in which we would consider any new deal with the U.S. is if you'd adhere to a number of points that it articulated. And no great surprise, the points that were articulated by both sides were in large measure in conflict with each other. But maybe we'll start with you, Les. Are there any prospects for some sort of a new deal to be struck with Iran or is it just diplomatic chatter?


Lester Munson:  Well, I suspect it's going to be pretty tough to do that. The administration right before they actually pulled out of the deal, I think, were engaged in some pretty vigorous discussions with European allies about an amendment to or replacement for the deal that really didn’t get as far as they wanted. So it seems to me that now when the U.S. in a way has less leverage, where the prospect of us pulling out is not imminent because we've already pulled out, you're probably less likely to see an agreement between the U.S. and European allies. I don't think it's impossible. I just think it's extremely difficult.


            And let me just throw out there, I think it was a mistake by the administration to pull out when it did. It would've been better to wait six years when -- until these restrictions on Iran started to fall by the wayside, as the sunsets hit and Iran was allowed to do more things, that’s the time to pull out. Right now, the deal, given that Iran already has all the benefits of the deal—all of the money has come back; they've got control of their assets; they've essentially reaped the harvest from the deal already—the U.S. pulling out of the deal right now doesn't really impact their behavior as much as it would later. So we kind of pulled out -- we sold low. We should've sold high in about six years is my -- would've been my recommendation.


Matthew Heiman:  David?


David S. Cohen:  That's it. All right. So if anything just to expand a little bit outside of Iran, I think the administration did the exact -- made the exact same mistake in North Korea. I think the Singapore Summit was much too soon. We were seeing the benefit of a, I think, a pretty effective sanctions program in North Korea starting to have some real effect and we had the Chinese on board with us. But by, I think, prematurely agreeing to have a summit with Kim Jong Un we've undermined the effect of our sanctions there, that he's sort of making the same mistake that Lester just identified.


            But anyway, back to Iran. Look, I think the idea that the Iranians are going to negotiate with the Trump administration new terms for the nuclear deal is, I think, completely fanciful. And I think for two reasons. One is just as a matter of domestic politics, I don't think the President Rouhani, much less the Supreme Leader, can be seen as capitulating to the Trump administration having withdrawn from the deal. They just can't do it.


            And secondarily, I think this is a point that is often missed, the reason that the Iranians were prepared to come to the table and negotiate not just with the U.S. but to negotiate with the P5+1—so the five permanent members of the Security Council plus Germany—was because Iran was diplomatically isolated. They were under quite significant sanctions, but they were also completely out on an island on their own. They didn't have basically any allies, including the Chinese and the Russians who were telling them, "You got to negotiate." They're not in that posture now. They're going to have the Chinese and the Russians and Indians and probably the Turks and who knows who else telling them, "Hang tough," basically. "We want you to remain in the deal and we'll do what we can to continue to deliver our side of the bargain here." And I think in that circumstance, the Iranians are not going to feel the need to negotiate. And even if they did, they're not going to do it with this administration.


Lester Munson:  I'll just note that I think it's still possible Mike Pompeo can pull a rabbit out of his hat and maybe get something good with North Korea. That would be my only [CROSSTALK].


Matthew Heiman:  Well, Dean, are there any questions on the line?


Dean Reuter:  Still no questions, but if you're in the audience, if you have a question, push the star button, then the pound button on your telephone, now's the time.


Matthew Heiman:  Yeah, and gents, just on that last point that David made about perhaps the Chinese and the Russians advising Iran, "Hang tough," is there enough meat on the bone without the U.S. participation in the JCPOA for it to still make sense for Iran to engage with the EU, Russia, China, in the confines of this deal? In other words, what is the upside for Iran sticking with the JCPOA absent U.S. participation?


 Lester Munson:  If I were the Iranians, I'd be reading very closely the notes between this administration and its allies in Europe. Is there a real schism happening? Is there a real new approach under Trump to international affairs? Is the U.S. actually going to be pursuing a much more isolationist kind of fortress-America, America-alone policy? I don’t see that yet, but the Iranians may see that, and if they do, then it would make sense for them to try and cobble together some sort of arrangement with the rest of the parties absent the U.S. But I think if they see that in fact there is still a lot of common ground between the U.S. and Europe and other parties, then it's going to be very tough for them to try to go sideways to U.S. policy, particularly when the sanctions start being implemented.




Dean Reuter:  Matthew, we do have one question from the audience if you want to turn to that.


Matthew Heiman:  Yeah, let's get that in before we run out of time.


Dean Reuter:  All right. Go ahead, caller.


Caller 1:  Hey, this is maybe outside the wheelhouse, but from more of the national security intelligence side of the spectrum, if that was to take place and Iran was still going to cooperate with some of the other surrounding nation states, I guess kind of…I don't necessarily want to know if whether or not you think it's a good idea that we're within the Five Eyes and national security surveillance across the spectrum, or if you think that's going to be hindered, or have heard anything about that relationship being affected?  Thank you.


David S. Cohen:  That's a great question. So I think whatever happens with Europe, and I think what Lester just said about, sort of, keeping a watchful eye on the extent to which the administration, sort of, pulls away from our alliances in Europe, I don't think that is going to effect in any material way intelligence cooperation, whether it's with the Five Eyes or other partners that we have who are assisting in the effort to keep close tabs on what the Iranians are doing. One of the things that—I had the opportunity to go over to the agency—that I thought was very interesting and reassuring was the extent to which the intelligence relationships that we have around the world are largely insulated from and immune to the political dimensions because there's the…it's just the nature of the game and a shared interest. So I think we will continue to benefit from our intelligence relationships with our allies in Europe and elsewhere.


Lester Munson:  Let me make a related point, and at a certain point, I really have to defer to David given his work history. We do have robust technical means to monitor what goes on in Iran on the issues we've been talking about. There's no question about that. But I think we should be appropriately humble about the fact that we might be missing something. Iran has a history of a clandestine nuclear weapons program, fits and starts over a long period of time. There's no question that the Iranians are watching what we do and what the IAEA does and thinking about ways that they can get around all of this monitoring and all of the inspection regimes that I don't think are as robust as David thinks, but I'm going to defer to him a little bit. There are these loopholes and delays in inspections that are I think a little concerning. But the Iranians are looking for the way -- there's no doubt that the Iranians are looking for the way to circumvent all of that stuff. We should not make the mistake of thinking they will be totally unsuccessful in doing that. So on the intel side, I think we should avoid some hubris here and realize that the Iranians are still motivated to get a nuclear weapons program and they're going to try to do it if they can around our watchful eyes.


Matthew Heiman:  Well, with that -- David, do you want to comment?


David S. Cohen:  Yeah, I think we've -- there is, I think, no place on earth with more technical and human intelligence resources devoted than Iran, ours and our allies. So Lester's right. Intelligence is never 100% perfect, but the combination of the inspection regime and a pretty extensive and dedicated intel collection effort, I think would make it pretty hard for the Iranians to achieve. But you never know.


Matthew Heiman:  Well, Dean --


Lester Munson:  Oh, look, David had the last word.


David S. Cohen:  But my last word was mostly to agree with you, Lester.


Lester Munson:  Fair enough.


Matthew Heiman:  Dean, are there any other questions on the line?


Dean Reuter:  No further questions, Matthew.


Matthew Heiman:  Well, given that we are almost at the end of the hour, I think it's a good time to halt the conversation for now. But I do want to thank David Cohen and Les Munson for a great conversation about a clearly important topic. And I also want to thank our audience members that either dialed in or that will listen to the podcast in the future. We appreciate your interest in these topics. And, Dean, I'll hand it over to you to close out.


Dean Reuter:  I will just add my thanks and words of appreciation for, not just our two experts, but also our moderator, Matthew Heiman. Thank you all, gentlemen. And thank the audience as well for dialing in. A reminder to check our website and monitor your emails for upcoming teleforum conference calls. But until that next call, we are adjourned. Thank you very much, everyone.