In accordance with the November 2013 interim agreement known as the Joint Plan of Action (JPOA), which is still in effect, Iran was granted some limited relief from sanctions. But ever since then, write Emanuele Ottolenghi and Saeed Ghasseminejad, Iran has been circumventing the remaining sanctions with abandon. This does not augur well for any prospective deal premised on the idea that sanctions will “snap back” if Iran fails to uphold its obligations:
Iran’s [recent] economic windfall . . . goes well beyond the monthly cash transfers and temporary easing on trade stipulated in the JPOA. . . . [Tehran’s] gains are only partly due to sanctions relief: its improved position also results from lax sanctions implementation by its neighbors, reluctance by European authorities to discourage their own economies from trading with the Islamic Republic, and Tehran’s fine-tuning of its talent for bypassing sanctions. As a result, the interim nuclear deal looks increasingly like a slow-motion funeral procession for the sanctions regime. . . .
Direct trade [with Iran] is also getting a push from the new psychological environment that the interim deal has created. Few in Europe believe the sanctions will remain, and many are exploring future commercial opportunities. Meanwhile, Europe’s bilateral trade with Iran is climbing back to pre-sanctions levels—further evidence that banking sanctions are no longer effective. . . .
The Obama administration may still believe it is able to snap sanctions back at any time if Iran cheats on its commitments under a final agreement. Developments thus far under the interim deal suggest otherwise.