\n\n“Biden must open the door for these direct talks. His first step must be significant enough to restore belief in the original \u201cwin-win\u201d logic of the deal and offer Iranian officials a credible rationale for engagement with the U.S. At the same time, it may be limited enough to keep the U.S. outside of the deal, offering him political cover with critics and underscoring the necessity for Iran to also take reciprocal steps.<\/p>\n\n\n\n
Taking this kind of first step could, in its way, be a signal of strength for Biden: He\u2019d be showing domestic opponents of the JCPOA that he will not be bullied into compromising his Iran policy. The fight over the appointment of Robert Malley<\/a> as Iran envoy showed that hawks will \u201cplay dirty\u201d to undermine the credibility of Biden\u2019s outreach to Iran. Biden ought to nip this kind of cynical politics in the bud.<\/p>\n\n\n\n If Biden goes go this route, officials in the U.S., Europe, and Iran are currently deliberating what a reasonable first move could be. Our conversations with officials suggest that there is awareness that breaking out of the political deadlock may require Biden to be bold. He has a few options.<\/p>\n\n\n\n First, the Biden administration could restore temporary waivers that enable Iran to sell oil while U.S. sanctions remain in place. Iran\u2019s oil production and exports are rising faster than projected despite the Covid-19 crisis and U.S. sanctions. This trend has reduced the perceived urgency of restoring the nuclear deal among key political stakeholders in Tehran who may gain more power after the upcoming Iranian presidential election. The Biden administration\u2019s efforts to re-enter the JCPOA would be best served by making already increasing oil sales once again subject to the \u201cwin-win\u201d logic of the nuclear deal. Iran\u2019s earnings from these oil sales would be accrued in escrow accounts and subject to strict oversight as per the waiver terms. Revenues would be used by Iran for sanctions-exempt trade with the country in which the funds are held. Such a step would serve to remove a key piece of tension with U.S. allies such as South Korea, Japan, and India whose energy security has been impacted by U.S. sanctions on Iran.<\/p>\n\n\n\n Second, the Biden administration could support Iran\u2019s loan request for funds from the International Monetary Fund. Iran\u2019s request has languished despite the IMF\u2019s technical assessment that Iran qualifies for financial support to address the balance of payments crisis created by the pandemic. Iran has indicated it is ready for these funds to be disbursed to its accounts outside of the country to be used for paying for sanctions-exempt imports. The funds would not flow directly into Iranian government coffers, but rather be used to address trade deficits. The Biden administration should grant this loan as part of its commitment to address the humanitarian impact of sanctions<\/a> and a wider push to encourage the IMF to use its full financial capacities to address the ongoing economic crisis brought on by the pandemic.<\/p>\n\n\n\n Finally, a third option could be easing Iran\u2019s access to its existing foreign exchange reserves. Presently, Iran has free and ready access to an estimated 10 percent of its reserves, a circumstance that has placed extraordinary pressure on Iran\u2019s currency and generated high levels of inflation that harm ordinary Iranians. Iran has been engaged in fraught negotiations with numerous countries to try and get access to frozen assets, who continue to look to the U.S. Treasury Department for the final say. The Biden administration could give these countries, including allies Germany and South Korea, the approvals and guidance necessary to enable both central and commercial banks to readily execute payments on behalf of Iranian account holders. As with the oil waivers and IMF loan, these payments can be restricted to sanctions-exempt trade, a key outcome of which would be lower rates of inflation.<\/p>\n\n\n\n Should Biden take any of these three steps, Iran can be expected to cease ramping up its nuclear program. Neither country would be fully implementing its commitments under the JCPOA, but an opportunity will have been created for new talks in the spirit of \u201cwin-win\u201d diplomacy. There is no guarantee that these talks, and the complicated choreography of JCPOA restoration, will succeed. But Biden needs to give himself a shot. After the last four years, timid gestures will fail to do that. It\u2019s time to be bold.”<\/p>\n\n\n\n