Choices await world with Iran nuclear deal

WASHINGTON — It’s not as simple as just saying “we’re out” of the Iran nuclear deal.

If President Donald Trump follows through on his threat to pull the U.S. out of the Iran nuclear deal on May 12, the rest of the world will be thrust into uncharted territory, forced to navigate a complex web of U.S. sanctions that were lifted under the landmark accord but would ostensibly be put back in place.

Would Trump reimpose sanctions on those who do business with Iran? How quickly? And would Europe follow suit? How would Iran respond? And what happens to Iran’s pre-existing obligations to allow nuclear inspections?

“It’s going to be very complicated,” said Ama Adams, who advises clients on international sanctions compliance at the law firm Ropes & Gray. “There are lots of opportunities to trip up and make mistakes. It’s going to be a period of a lot of activity and flurry.”

U.S. sanctions

Under the 2015 deal, the United States issued waivers to longstanding sanctions punishing Iran for its nuclear program. Iran, in turn, restricted its program and allowed more inspections.

Trump has essentially two options for re-imposing sanctions.

On May 12, he faces a deadline on whether to renew the waivers that eased one basket of sanctions: those on Iran’s central bank, intended to hit Iranian oil exports. Another basket of sanctions waivers are up for renewal on July 11, focusing on more than 400 specific Iranian companies, individuals and business sectors.

One of Trump’s options, being called “the nuclear option” by some experts, would re-impose all the sanctions at once — even those not scheduled for renewal until July. That would put the U.S. in immediate violation of the deal’s terms, which say sanctions remain lifted as long as Iran is complying with its terms. So far, the International Atomic Energy Agency, the U.N.’s nuclear monitoring agency, has said Iran is complying, and Secretary of State Mike Pompeo agrees.

A second option: reimposing only the central bank sanctions. That would start a 180-day clock in which companies or countries would be expected to reduce their purchases of oil from Iran. Those that don’t would ultimately be penalized by Washington.