What is in the US-Iran Deal?

Photo Credit: Iranian Presidency Office via AP

There was never seemed to be a clear mission statement of why the United States decided to ignite a conflict against Iran. Yes, the Trump Administration claimed that there was a nuclear threat and that the nuclear program was a national security issue, but several experts did not believe that the threat was imminent. There was also the idea that the US needed to support the Iranian people to overthrow the regime, but the results ended up installing a younger unknown leader that is now supported by the same people as the start of the conflict. After months of attacks across the Middle East and the closure of the Strait of Hormuz, the two parties have reached an agreement to sign the “Islamabad Memorandum of Understanding Between the Islamic Republic of Iran and the United States of America” in Switzerland. This preliminary deal is meant to reopen the strait as well as allow time to negotiate other issues. 

The first point of the agreement states the following:

“1 — The United States of America and the Islamic Republic of Iran and their allies in the current war are signing this MOU to declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other, and to refrain from the threat or use of force against each other, and ensuring the territorial integrity and sovereignty of Lebanon. The final deal will confirm the permanent termination of the war on all fronts, including in Lebanon and other provisions of this paragraph.”

This is particularly interesting as the diplomatic talks regarding Lebanon are a major sticking point for both sides. The US has long been an ally to Israel, especially in the post-7 October attack, but this admission to halt military operations in Lebanon has driven a wedge between the Trump Administration and Prime Minister Binyamin Netanyahu. The Wall Street Journal reports that Trump and Netanyahu’s “interests have diverged as Netanyahu seeks to keep up pressure on Iran and Hezbollah, while Trump looks for a way out of the war.” It was also noted that Netanyahu has not said anything to criticise this deal in public but a few members of his cabinet have been outspoken about their disapproval of the agreement. It is also important to note that there is no evidence that Israeli forces have pulled back from their attacks on Lebanon. Vice President JD Vance said in a press conference that “If I was in the cabinet of the Israeli government, I might not be attacking the only powerful ally that I have anywhere left in the entire world.” 

The second and third point of the agreement outlines that sovereignty of each state will be respected by not interfering in each other’s affairs and that a final deal will be completed in sixty days. Both of these points are fairly straightforward but the implication is that each country will not meddle in domestic issues as well as allow a fairly short window to come to a final agreement. The fourth and fifth points are the most pressing issues that concerns several countries globally:

“4 — Immediately upon the signing of this MOU, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran, and will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of pre-war traffic being restored by the Islamic Republic of Iran. The United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal.

5 — Upon the signing of this MOU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge, for 60 days only, from the Persian Gulf to the Sea of Oman and vice versa. The traffic of commercial vessels will immediately start, and considering the need for removing the technical and military obstacles, and demining by the Islamic Republic of Iran will be instated within 30 days. The Islamic Republic of Iran will conduct dialog with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.”

Reopening the Strait of Hormuz is complicated as the body of water is Iran’s geopolitical leverage and reminder of its impact on the global economy. Iran often threatened closure in the past and now government leaders are experiencing exactly what happens when there is food and energy shortages in their home countries. While the agreement text indicates that the strait will reopen and there will be no charge for maritime movement, it leaves open the possibility that regional states can discuss future payments for passage. At the time of this writing, five ships have exited the Strait of Hormuz, while 500 other vessels wait to move out of the chokepoint.

Iran’s nuclear program has been an interest as well as a core cause of this conflict for the US. Two paragraphs of the agreement addresses the issues of nuclear enrichment and development of nuclear weapons:

“8 — The Islamic Republic of Iran reaffirms that it shall not procure or develop nuclear weapons. The United States of America and the Islamic Republic of Iran have agreed to resolve the disposition of stockpiled enriched material pursuant to a mechanism that will be mutually agreed upon in accordance with the schedule mentioned in paragraph seven, with the minimum methodology to be down blended on site under the supervision of the IAEA. The two parties also agreed to discuss the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran’s nuclear needs, based on a satisfactory framework being agreed upon in the final deal. The final deal will confirm the provisions of this paragraph. The United States of America and the Islamic Republic of Iran acknowledge the critical importance of the nuclear issues above mentioned. They express their intention to immediately address these issues in the negotiations in order to achieve mutual agreement on them.

9 — Pending the final deal, the United States of America and the Islamic Republic of Iran agree to maintain the status quo. The Islamic Republic of Iran will maintain the current status quo of its nuclear program, and the United States of America will not impose any new sanctions and will not deploy additional forces in the region.”

The word “affirms” does a lot of work in this text as it is essentially asserting that Iran is not procuring a nuclear weapon as it is a signatory of a ratified Nuclear Non-Proliferation Treaty from 1970. This was also agreed to in the JCPOA in 2015 during the Obama Administration. These are not new points but the US is keen to ensure that the enriched nuclear material that they currently possess is “down blended” or diluted. What happens next with the material seems to be a part of the negotiations that will be held in the next sixty days.

The US-Iran deal has become a subject of considerable debate, as the economic commitments extended to Iran would depend on the involvement of actors other than the United States. The agreement includes the following:

“6 — The United States of America undertakes with regional partners to develop a definitive, mutually agreed plan with at least USD 300 billion for the reconstruction and economic development of the Islamic Republic of Iran. The mechanism for the implementation of this plan will be finalized as part of a final deal within 60 days. All required licenses, waivers and permissions needed for the relevant financial transactions will be granted by the United States of America.

7 — The United States of America undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including the United Nations Security Council resolutions, IAEA Board of Governors resolutions, and all unilateral US sanctions, primary and secondary, in an agreed upon schedule as part of the final deal. The Islamic Republic of Iran and the United States of America acknowledge the critical importance of the sanctions termination issue above mentioned, and expressed their intentions to immediately address these issues in the negotiations in order to achieve mutual agreement on them.

10 — The United States of America undertakes that immediately upon the signing of this MOU and until the termination of sanctions, US Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.

11 — The United States of America undertakes to make fully available for use the frozen or restricted funds and assets of the Islamic Republic of Iran upon the implementation of this MOU. The United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds during negotiations. Such funds, whether retained in the original account or transferred, shall be made fully usable for payment to any ultimate beneficiary designated by the Central Bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorizations accordingly.”

The $300 billion for reconstruction and development is explicit that it will be partnering with Middle East allies. Trump has followed up to clarify by denying reports indicating “that the deal included any U.S. investment in a $300 billion reconstruction fund for Iran,” but other reports have noted that a fund has started to gain interest from companies in the United States, the Middle East, Asia, South America, and Africa. The need for this fund can be traced back to the punishing economic sanctions that Iran has lived under for years. Since the US has used its powerful currency to repress the economy of Iran from doing business with US allies, sanctions relief and unfreezing assets is a major concession. It is estimated that tens of billions of dollars are held overseas in national central banks and at least $12 billion will be released after the deal is signed. The funds could be available in a short amount of time.

The final points of the agreement outline the following:

“12 — The United States of America and the Islamic Republic of Iran agree that an executive mechanism will be established to monitor the successful implementation of this MOU and the future compliance of the final deal.

13 — After signing this MOU, and subject to the beginning of the implementation of paragraphs 1, 4, 5, 10 and 11 of this MOU, and the continuing implementation of these measures, the United States of America and the Islamic Republic of Iran will start negotiations regarding the final deal exclusively on the other paragraphs.

14 — The final deal will be endorsed by a binding UNSC resolution.”

The deal indicates that much of what is agreed to will need to go into effect immediately upon signing. This includes a ceasefire on all fronts, transparency of Iran’s nuclear program, lifting sanctions, releasing frozen assets, and reopening the Strait of Hormuz. At the time of publishing this article, the Strait of Hormuz is closed by the Iranian government. The claim that the strait closure is necessary and:

"accused the United States of breeching its commitments in the agreement by failing to rein in hostilities between Israel and Hezbollah, an Iran-backed militant group, which exchanged fire again on Saturday. The naval arm of Iran’s Islamic Revolutionary Guards Corps warned that ships that approached the strait would put their own security at risk.

The lack of clarity around what constitutes a signed deal has caused considerable confusion, which could be problematic if either party chooses to violate any of the terms. Ambiguity seems to be the only thing that anyone can agree upon.