The Cable

Obama Could Lift Iran Sanctions Tomorrow, If He Wanted To

Congress has spent the past three years imposing tough sanctions on Iran that are designed to cripple its economy and force Tehran to abandon its nuclear ambitions. In recent weeks, a parade of congressmen and senators have demanded that those sanctions stay in place, never mind the nuclear talks between Washington and Tehran. Lost in the noise is the fact that President Obama can -- and often does -- lift the measures with a stroke of the pen.

The current sanctions have sharply limited overseas investment in Iran's energy sector, locked foreign financial institutions that do oil-related business with Iran's central bank out of the U.S. banking system, and required banks around the globe to freeze more than $50 billion of Iranian money. In July, the House approved new sanctions by a whopping 400-20 vote designed to effectively make it impossible for Iran to sell any oil abroad; similar legislation will likely be introduced in the Senate before the end of the month.

The measures have devastated the Iranian economy and driven the value of its currency to historic lows. The question now is whether they'll remain in place. Congress can draft any sanctions it wants to, but the White House has tremendous leeway to decide how strictly they get enforced. The legislation that imposed tough sanctions on Iran's central bank gives Obama a "national security waiver" he can use to temporarily soften or lift the measures.  The sanctions put in place to punish countries that buy Iranian oil allow the State Department to issue waivers to those that have significantly reduced their purchases.  Key allies like Japan and the ten members of the European Union have been protected from the sanctions since the measures were put in place several years ago. 

"The sanctions give the president maximum leeway," a senior administration official said.  "That's how they were designed from the start."

Congress has tried to make it as hard as possible for the White House to use its waiver powers.  To lift the sanctions on Iran's central bank, for instance, the administration has to certify -- in writing -- that fully enforcing the measures would harm the national security interests of the U.S. The waiver, which the White House has never used, would also have to be renewed every 120 days, a measure lawmakers inserted into the bills to force the White House to face a heated political fight over the sanctions every four months.

At least so far, it's not a fight the administration has been shying away from.  Last month, the State Department gave Japan a six-month waiver on the oil sanctions because of data showing that Tokyo had reduced its purchases of Iranian oil by more than 38 percent compared to a year ago.  The sanctions against Japan had already been waived on three separate occasions.  In December, the administration is likely to renew similar waivers that have been given to India, China and South Korea.

If anything, the White House has shown a willingness to fight the Hill over sanctions that it thinks go too far. The administration initially lobbied against the measures targeting the Iranian central bank, arguing that they threatened the stability of the global financial system. Last week, Wendy Sherman, the State Department's chief nuclear negotiator, asked Congress to hold off on imposing any new sanctions on Iran while the talks with Tehran continued. The bill being crafted together by lawmakers in the Senate would impose punish companies that do business with the Iranian shipping, construction and petrochemical sectors.

For the moment, the administration is focusing its attention on deciding how to respond to Tehran's newfound willingness to engage in direct diplomacy for the first time in decades.  Sherman and other top officials emerged from high-level talks in Geneva last week with guarded optimism that Tehran was willing to engage in serious talks and make concessions that would have been unthinkable even a few months ago. In response, the White House is now weighing confidence-building measures that could involve freeing up all or some of the frozen Iranian money and allowing Iran to purchase spare parts for its aging fleet of commercial airplanes, according to a senior administration official.

The White House says it hasn't made any decisions yet about how to proceed.  On Sunday, Treasury Secretary Jacob Lew told NBC's Meet the Press that it was too soon to talk of possibly softening the sanctions on Iran.

"It is premature to talk about the easing," he said on NBC. "We need to see real, tangible evidence of it. And we will not make moves on the sanctions until we see those kinds of moves [from Iran]."

Still, talk of softening the sanctions, even mildly has already sparked fierce, bipartisan criticism from lawmakers of both parties.

On Friday afternoon, Sens. Kelly Ayotte (R-NH), Lindsey Graham (R-SC) and Mark Kirk (R-IL) sent a letter to Obama arguing that "the U.S. should not suspend new sanctions, nor consider releasing limited frozen assets, before Tehran suspends its nuclear enrichment activities."

Several hawkish Democrats were just as adamant that the current Iran sanctions remain in place and just as hard-hitting and remain as hard-hitting as they were designed to be. 

"If the president were to ask for a lifting of existing sanctions it would be extremely difficult in the House and Senate to support that," Rep. Steve Israel (D-NY), chairman of the Democratic Congressional Campaign Committee, told The Cable last week. "I'm willing to listen but I think that asking Congress to weaken and diminish current sanctions is not hospitable on Capitol Hill."

The president, though, doesn't need to ask lawmakers like Israel for permission to lift or modify the sanctions. At least for the moment, the power to determine the measures' future sits inside the White House, not the halls of Congress.

SAUL LOEB/AFP/Getty Images

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