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Iran agreement: Why you should read Paragraph 36

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Last Tuesday, a 159-page PDF of the Iran nuclear agreement dropped into my inbox. Scrolling down to page 19, I checked out Paragraph 36. I suggest you do the same. Plenty of provisions in the Vienna agreement will get attention in the coming weeks, but Paragraph 36 may be the most important of all.

Paragraph 36 tells us when and how the agreement might end. Both friend and foe have touted this deal as “historic” and promised (or moaned) that its provisions will stay in place for the long term. But in practice, this is not a ten-year agreement or a fifteen-year agreement or an eternal agreement. Paragraph 36 tells us the truth: Any party—be it Iran or a future U.S. president—can essentially ditch the Iran nuclear deal with 35 days’ notice.

{mosads}Iran might need to wait a little longer—an extra 30 working days—to check a box buried in Annex IV. But, after that, under Paragraph 36, Iran can claim that any of the P5+1 is “not meeting its commitments” under the agreement. That triggers a 35-day set of meetings. Once that clock runs, Iran can claim the issue “has not been resolved to [its] satisfaction” and that it “deems” that the issue “constitutes significant non-performance.” Iran can then “cease performing its commitments under this JCPOA in whole or in part.” The agreement is done.

Once Iran has received its $150 billion and locked in long-term business contracts with the West, this quick exit could be an attractive option. So, too, could Iran bolt later on, removing the restrictions that remain after years ten and fifteen, or it could bolt under some scenario hard to foresee now.

The Paragraph 36 exit ramp could also be attractive for a Republican running for the White House. On January 21, 2017, a new U.S. president could point to an Iranian breach and, on February 25, 2017, pull the United States out of the agreement. He could also have diplomats sit through the five weeks of meetings and then exit at some later date; Paragraph 36 sets no deadline.

Remember U.S. Sen. Tom Cotton’s (R-Ark.) 47-signatory letter that kicked up a storm? In retrospect, the hoopla was a waste. A future U.S. president does not need to renounce the agreement; he can simply exit the agreement under the agreement’s own terms. Expect this to be an issue in the 2016 campaign.

Paragraph 36 purports to be a dispute resolution clause. Underneath the costume, this is really a termination clause. Those who disagree will likely point to three arguments. First, they will say, moving along the exit ramp depends on making the case that someone else has violated the deal. If the P5+1 is keeping its end of the bargain, they will argue, then Iran would have no grounds to cut and run.

Yet in a complex deal such as this one, a party will likely be able to point to some plausible story of breach. Iran has a ready candidate. Paragraph 25 says that if any U.S. state or local government “is preventing the implementation of the sanctions lifting,” then the federal government must “take appropriate steps, taking into account all available authorities.”

“All” authorities? If the New York State Assembly slaps sanctions on Iran, does D.C. need to cut all money for New York’s highways? Stop funding New York’s Medicaid? Play Germany to New York’s Greece? Even then, Iran could point to some “authority” not used. The United States would not be “meeting its commitments,” Iran would say. Iran would “deem” the breach significant—note the subjective standard—permitting Iran to jump ship. This type of brainstorming is not limited to Iran. For a future U.S. president wanting to exit the deal, effective lawyering—or real Iranian breach—could supply the plausible story needed.

Second, some would argue that whimsically ditching the agreement would violate the parties’ Preamble promise to “implement this JCPOA in good faith and in a constructive atmosphere.” But good faith is not easy to define, and bad faith not easy to prove. A Republican presidential hopeful, for example, could help his case by avoiding crowd-pleasing promises to ditch the deal and instead just pound the podium vowing to play tough on implementation.

In any case, the goal in this situation, unlike in most contracts, is not to convince a judge who has enforcement power. The goal is to have a plausible story to tell supporters and to win at least a slice of global public opinion. Even if not all are convinced that a party is acting in good faith, some will be convinced, and that could be enough.

Third, some might fall back on the argument that in the dog-eat-dog world of international relations, Iran (or a future U.S. president) does not need Paragraph 36 or any other high-falutin’ legal theory. The party could just walk away. Fair enough, but the two routes to the exit do not supply the same legitimacy. Un-signing an agreement is gauche and stains a country’s credibility. Using an agreement’s own terms to exit has a different patina. The country would not be breaking its word, but, rather, following an agreement as it sees fit. This makes the exit easier.

One final note: For lawyers, Paragraph 36 packs other goodies. Scroll down in your PDF, and you’ll find an imaginary creature, the “Advisory Board.” The agreement provides for a non-binding, arbitration-style “Advisory Board,” a laudable idea. But how is the panel’s third member picked? The drafters don’t tell us. So the Advisory Board might never be able to convene.

That, by the way, shortens the exit period to 30 days. Read Paragraph 36 to understand why.

Alterman is a research fellow at the Institute for National Security Studies Tel Aviv, Israel.

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