Iran achieved a major economic objective in the nuclear deal
Not every aspect of the sanctions regime is equally painful for Iran, something that gave the US and its partners a certain flexibility during negotiations.
UN sanctions authorizations have been superseded by the Security Council's endorsement of the deal on Monday. But US sanctions, which have global reach and far more intense legal sting, won't be lifted until Implementation Day, the agreement's phrasing for the point at which Iran is deemed to be in compliance with its requirements under the agreement.
But the most important part of the sanctions regime offers no such leeway. As Mark Dubowitz and Jonathan Schanzer of the Foundation for Defense of Democracies explained in a piece published Sunday in Foreign Policy, Iran's main sanctions-related negotiating objective wasn't the ability to transfer its $150 billion in frozen assets into convertible currencies, or even access to lucrative European and Asian markets. Instead, it's the ability to use the global financial transfer mechanisms established and maintained in the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.
In 2012, the US successfully pushed for 15 Iranian banks to be barred from using SWIFT. This was a big deal: According to Dubowitz and Schanzer, "Iranian financial institutions used SWIFT more than 2 million times in 2010," transactions worth some $35 billion in Europe alone.
Being barred from SWIFT is tantamount to exclusion from the international financial system. SWIFT was important enough to warrant specific mention in the Iran agreement, in Section 19 of the deal's main text.
As Schanzer told Business Insider the day that the deal was announced, SWIFT access "was the brass ring for the Iranians. They're in financial pain that they can't rectify if they're cut off from the formal financial sector."
Dubowitz and Schanzer are concerned that SWIFT access - the key to reintegrating Iran into the global economy - is enabled on the front-end of the deal's lifetime. Iran would would become eligible for using the system on Implementation Day, at the same time most other nuclear-related sanctions are suspended.
This is a critical asymmetry in the nuclear deal's implementation: Iran will immediately achieve its top sanctions-relief priority. Meanwhile, the US and its partners may have to wait for decades in order to know whether the deal's provisions are enough to prevent Iran from going nuclear.
Front-end SWIFT access also gives added power to Iran over the life of the deal. As Schanzer and Dubowitz note, the nuclear deal gives Iran free reign to pull out of the agreement if the US or EU ever re-impose sanctions. A single sanctions "snapback" will be enough to eviscerate more than a decade of careful diplomacy, meaning the US and its partners must be judicious about deciding which Iranian violations actually warrant a re-imposition of the sanctions regime.