Do Sanctions Pose an 'Irreversible Knowledge' Problem?

As the deadlock over the future of the Joint Comprehensive Plan of Action (JCPOA) continues, there is growing concern that Iran’s nuclear activities are hollowing out the benefits of the nuclear deal, even if it were to be successfully restored. Western governments believe that Iran’s enrichment activities are allowing Iranian nuclear scientists to gain “irreversible knowledge.” Even if Iran comes back into full compliance with its non-proliferation commitments under the JCPOA, it will have edged closer to becoming a threshold nuclear state.  

Irreversible knowledge is powerful shorthand. A joint statement issued by France, Germany, and the United Kingdom in March 2021 noted that the recent breaches of the JCPOA were “providing Iran with irreversible knowledge gain that it did not possess prior to signing the JCPOA, as well as permanently and significantly enhancing Iran’s enrichment capacity.” In January of this year, Republican lawmakers sent a letter to U.S. Secretary of State Antony Blinken to urge him to abandon the nuclear talks and increase pressure on Iran, in part because Iran was continuing “to gain irreversible knowledge” as it produced more enriched uranium. In May, Israeli Defense Minister Benny Gantz warned that “Iran continues to accumulate irreversible knowledge and experience in the development, research, production, and operation of advanced centrifuges.”

Clearly, the concept of irreversible knowledge is well defined among those parties seeking renewed non-proliferation commitments from Iran, as well as those parties seeking to scupper any deal. According to Kelsey Davenport, the Biden administration will remain committed to the nuclear talks so long as the “the non-proliferation benefits of restoring the JCPOA outweigh the irreversible knowledge that Iran has gained.” Crucially, the nuclear deal prevents Iran from gaining further nuclear knowledge—commitments to cease significant enrichment activities and to dismantle advanced centrifuges reflect concrete measures that prevent the kind of nuclear research and production activities consistent with a weapons programme. By preventing additional knowledge gains, the JCPOA restricts Iran’s inherent nuclear capabilities.

In return for its compliance with these restrictions and strict monitoring, Iran receives significant sanctions relief—this is the basic quid-pro-quo of the JCPOA. Iran continues to place significant value on sanctions relief, especially as its economy languishes, but even so, the terms of the agreement are not as fair as they might seem. 

Countries that apply sanctions (sanctionists) regularly use economic coercion to achieve non-proliferation goals. The Biden administration, like its predecessors, believes that the economic pain of sanctions forces uncooperative countries like Iran to the negotiating table, where non-proliferation agreements can be hammered out. Whether Iran entered into the nuclear negotiations because of economic pressure is up for debate. Notwithstanding, non-proliferation experts have heralded sanctions as a critical part of the arms control toolbox.   

But what if the use of sanctions as part of non-proliferation diplomacy introduces another kind of irreversible knowledge problem, one overlooked by Western policymakers? Afterall, non-proliferation agreements impose no restrictions on the ability of sanctionists to further develop their means of economic coercion. Even after a deal like the JCPOA is adopted and implemented, sanctionists can continue to advance their understanding of how to apply and enforce sanctions with devastating effect. This irreversible knowledge is gained in three ways.

First, sanctionists can continue to study the target’s economy even after the implementation of a non-proliferation agreement. Some Iranian critics of the nuclear deal have complained that re-entering the JCPOA will make Iran more vulnerable to sanctions by increasing economic dependence on the West. But the issue is more subtle than that. Whether or not trade increases with Western companies after the lifting of sanctions, Western governments can continue to study the Iranian economy to understand its composition and its vulnerabilities in ways that will aid the design of future sanctions, whether those are broad sectoral measures or specific designations. Indeed, the U.S. continued to apply sanctions on Iran even after the nuclear deal was agreed, designating additional entities on the basis of terrorism or human rights related authorities. Even if these moves did not amount to a direct violation of the JCPOA, they did reflect how the U.S. was continuing to gain knowledge about how to target Iranian individuals and firms even after the deal’s implementation. 

Second, sanctionists can continue to apply sanctions on other countries in ways that advance knowledge about how to make sanctions hurt. Were the JCPOA restored in full today, the United States and Europe would still be applying sanctions on a wide range of countries, most notably Russia. The application of sanctions in Russia, for example, provides practical experience that can inform how future sanctions on Iran might be made more harmful. Were Iran to gain irreversible nuclear knowledge in an analogous manner, Iranian nuclear scientists would be enriching uranium outside their borders, while ceasing the problematic research in Iran. In this way, even if sanctionists were to completely abstain from applying sanctions on Iran after the implementation of the JCPOA, they would still retain the ability to use sanctions in other countries in ways that expand capabilities.

Third, sanctionists can continue to strengthen the institutions responsible for designing and imposing sanctions. Whereas Iran could not install more centrifuges were it to re-join the nuclear deal, the U.S. can continue to increase staff within key offices such as the U.S. Treasury Department’s Office of Foreign Assets Control. As a result, the JCPOA actually exacerbates the escalation dominance of the U.S. over Iran. Sanctionists are inherently better prepared for the breakdown—whether wilful or accidental—of any non-proliferation agreement in which sanctions relief has been traded for non-proliferation commitments.

In this way, the irreversible knowledge gained by sanctionists represents a serious challenge to non-proliferation efforts. Conceptually, as U.S. and European officials increasingly conceive of sanctions as “economic weapons” and describe themselves as “nerd warriors” it is appropriate to apply to sanctions the concept of irreversible knowledge that has so far been only been invoked in the context of Iran’s nuclear programme.

The threat posed by the irreversible knowledge of sanctionists has weighed on Iran’s participation the nuclear negotiations. It is not merely the possibility of Trump’s re-election in 2024 that has cast a shadow over the talks, but also the fact that any administration that might wish to reimpose sanctions on Iran in the future will have a much deeper understanding of Iran’s economic responses to maximum pressure. For example, when the Trump administration sought to drive Iran’s oil exports down to “zero,” they did not expect that Iran would end up maintaining exports above 1 million barrels per day, with oil passing through the UAE and Malaysia, before heading to China. The role of intermediation in sustaining oil exports under sanctions is now a known feature of Iran’s economic resilience strategy. This datapoint can be incorporated into future sanctions design. There are countless other examples of where real and actionable knowledge has been gained by the U.S. and Europe that can be used to hammer Iran’s economy. As demonstrated by the circumstances of Trump’s withdrawal, Iran’s compliance with its commitments under the nuclear deal offers no guarantee that it will avoid the return of sanctions. 

Western negotiators have tried to account for Iran’s fears about another U.S. withdrawal from the JCPOA by engaging in a dialogue on possible political or technical guarantees that might serve to make the nuclear deal robust. But the discussion over guarantees is focused on reducing the probability of sanctions “snapback.” No solutions have been offered to try and curtail the impact of snapback. Theoretically, the impact of snapback gets worse as the U.S. and Europe gain more knowledge about how to deploy sanctions for maximum effect. Truly mitigating the risks for Iran means addressing both probability and magnitude.  

Western diplomats will no doubt continue to use sanctions to advance their non-proliferation agenda and the JCPOA is a good deal that ought to be restored. But Iran’s bitter experience under the nuclear deal makes clear that to create more durable and equitable non-proliferation agreements, Western officials must find ways to account for the fact that there is a fundamental asymmetry in the manner in which non-proliferation agreements deal with the issue of irreversible knowledge. Sanctions work by weaponising normal economic interdependencies. This makes it difficult to imagine that the knowledge gains of sanctionists can be curtailed. At best, these knowledge gains must be compensated for, either by limiting the non-proliferation demands made of countries like Iran, for example by granting them more leeway to undertake certain kinds of research, or by devising other more complex mechanisms, such as some kind financial annuity for non-proliferation agreements that kicks-in irrespective of the fault for the deal’s demise. 

For now, the solutions are unclear. But if they are to be found, policymakers and experts committed to global non-proliferation must recognise their one-sided approach to irreversible knowledge within the context of non-proliferation regimes. Under the JCPOA, Iran’s ability to gain nuclear knowledge is constrained, but the U.S. and Europe can continue to hone their sanctions. This asymmetry is emblematic of a significant flaw in all agreements that trade sanctions relief benefits for nuclear restrictions and monitoring commitments.

Photo: state.gov

Putting Iranian People Before Non-Proliferation

This article was originally published on LobeLog.

With such a vibrant economy and society, it is hard to be anything but optimistic about Iran in the long term, even in the recent dark days. Iran’s challenges have always been about prospects in the short term, lurching as it has between domestic and foreign crises. Concerns about the short term have shaped the thinking of foreign stakeholders, who have held off on investments or engagements because of fears of political or economic turmoil. Similar doubts have also crowded the thinking of Iranians themselves, who respond to turmoil by making self-serving decisions, which often prove costly for society down the line. In this way, Iran’s circumstances have been about opportunities delayed, about a widening gulf between short-term pain and the promise of long-term prosperity.

As they look back at the 2015 nuclear deal (the Joint Comprehensive Plan of Action or JCPOA), many Iranians see that its promise was wrapped up in the expectation that such a “grand bargain” would help Iran bridge the gulf between the circumstances of today and the prosperity of tomorrow. Iran, by both making and receiving careful concessions in the course of multilateral negotiations with the world powers had in effect brought forward the time horizon for its own bright future.

Today, the gulf is widening again. In a rare instance of transparency, Trump administration officials openly refer to their Iran policy as an “economic war.” Sanctions are no longer being used as tools of coercive diplomacy, but of economic destruction. Worse still, the operative logic of the most recent sanctions is to create a “sanctions wall.” For the first time, the United States is applying sanctions for the express purpose of making previous sanctions more difficult to lift. This was declared intention of designating the Revolutionary Guards a foreign terrorist organization.

The recent decision to revoke the oil waivers—which does nothing more than remove what proponents of the “significant reduction exemptions” had themselves described as a “humanitarian channel” in which oil revenues flowed into escrow accounts—will place unprecedented economic pressure on Iran, just as intended. The effects of such mounting pressure have been plain to see.

In the last few days, I have spoken to several friends and colleagues in Iran. With each call, the individuals on the other end of the line feel so much farther away than they did even just a few weeks ago. On Tuesday, I was discussing the ramifications of the oil waiver issue with an Iranian journalist. He asked me what Iran’s government could do in response. I instantly felt the responsibility to offer an answer, a ray of hope. But my answer was so obviously unconvincing, with even my Persian falling short as I tried to formulate the pitiful sentences, that I felt embarrassed. Not because of the answer itself, but because suddenly the fiction of shared experiences was made clear.

For the last few years, those of us who deal with Iranian interlocutors on a regular basis could find some joy and motivation in the idea that our lived experiences were converging. More outsiders could engage Iran and more Iranians could engage the wider world. But the reality of political and economic isolation is just that—a deep and pervading separation that makes it clear that although all sides were poised to share the dividends of the JCPOA, only one side will truly bear the costs of its collapse.

Power and the People

Iran’s halting push for nuclear and ballistic missile technology has generally been understood in the context of a regional-security dilemma. Facing huge asymmetries in military power, Iran has sought to develop the means for its own defense.

But it is unclear if the security dilemma is a salient formulation in a period in which a historic non-proliferation agreement has become something of a political curse for its Iranian stewards and a source of abject disappointment for the voters who brought those political leaders to office.

In many respects, the political prospects for the JCPOA were always going to be judged by a simple formula—would Iran appear more powerful with the agreement or without it? In this sense, the state visits, foreign investment, cultural exchanges, and other dividends of diplomacy were meant to provide a spectacle of power, a font of pride, that would displace those grainy images of centrifuges in their neat rows or the footage of missiles emblazoned with political slogans.

The dividends of diplomacy never really materialized. Today, appearing “powerless” is the ultimate political liability for the Iranian state and its leadership. Iran has been made to look weak as trading partners make risible efforts to protect commercial ties in the face of U.S. pressure. The Rouhani government has been made to look weak, out-maneuvered by a shambolic Trump administration. Most troubling, the Iranian people feel powerless as their standard of living is eroded by forces outside of their control, even the forces of Mother Nature herself.

These circumstances give new meaning to the notion of “power hungry.” It is not Iran’s elites who are power hungry. They enjoy ample power. It is the Iranian people who crave power. There seems to be a belief among some in Washington that this hunger—perhaps even literal hunger—will drive the Iranian people to seize power from the elites.

But I foresee a different scenario. Recent surveys have shown a marked increase in the number of Iranians seeking “retaliation” in the face of U.S. violations of the JCPOA. There is genuine anger and frustration among large swaths of the public, directed both at the United States and at the Iranian establishment.

These emotions cannot remain undirected—and Iran’s imperfect democracy offers the channel. Routine elections present Iranian politicians the opportunity to respond to this hunger for power by co-opting it. Just as the disempowered in Eastern Europe, Latin America, Southeast Asia, and the United States have voted for politicians who obsess over expressions of power, so too might Iranians choose to displace their own powerlessness by investing their political capital in a “strongman.”

In such a scenario, the decision to revitalize or expand the nuclear and ballistic missile programs is no longer about calibrating regional security or asserting sovereignty against the West. The centrifuges and missiles themselves become symbols of power, a kind of spectacle around which people can rally. At some level, this is the basic rally-around-the-flag effect that many have been warning about. But this effect has yet to be turned into the sine qua non of domestic politics in Iran. Even under former President Mahmoud Ahmadinejad, there remained a fundamental technocratic orientation of the government.

Rethinking Non-Proliferation

For this reason, non-proliferation must be re-conceived as a political project in the post-JCPOA era. Within the context of the JCPOA, the empowerment of the Iranian people was always seen as a secondary outcome of the agreement’s non-proliferation achievements. In a striking illustration, the Trump administration has been messaging its intention to “support the Iranian people” more vociferously, if disingenuously, than the Obama administration and other parties to the JCPOA ever did.

On one hand it is encouraging to see Democratic Party candidates seek to break with the Trump administration’s “maximum pressure” policy and throw their support behind a multilateral agreement. And yet it is discouraging to see these candidates articulate their intentions towards Iran exclusively within the paradigm of the JCPOA and its ability to curtail Iran’s nuclear program. This fixation on non-proliferation overlooks the fact that in the course of the coming political season in Iran, the JCPOA will likely become too toxic to serve as the crux of a reoriented US policy on Iran, even if the policy of diplomatic engagement with the West remains viable and even if Iran technically remains in compliance.

What if Democrats pointed to their readiness for a deeper reckoning with the failure of the JCPOA? Would it not be so much more meaningful for a Democratic candidate to declare, “We let the Iranian people down when we reimposed sanctions on them while their government was still in compliance with the JCPOA. Our mission should be to restore trust so that Iranians can count on America to honor its obligations.”

Earlier this week, President Hassan Rouhani gave an important speech in which he underlined that he is a “man of negotiation” but emphasized that negotiations are impossible until the United States essentially shows Iran due respect. As American proponents of engagement with Iran look to the future, they must recognize that the failure of the JCPOA was not encompassed in the decision of the Trump administration to withdraw, but rather in the set of cascading institutional failures that allowed the administration to drastically shift the nature of U.S. policy towards Iran, as well as towards the remaining parties of the JCPOA, without paying any real political cost. The Democrats, and all who care about the integrity of American foreign policy, must reckon with these failures. A willingness to do so is far more important than reentering a moribund deal as a matter of political reflex.

Until American policymakers can conceive of relations with Iran as something more than a set of tactical accommodations designed to address threat perceptions, they are unlikely to solve the question of Iranian proliferation decisively. Proponents of engagement must make sure that they are building a bridge to help Iranians cross from short-term turmoil to the long-term prosperity they have been regrettably denied. Non-proliferation is just one pillar of this bridge.

Photo: Depositphoto