BY: Adam Kredo
September 16, 2015 3:00 pm
The United States has provided secret assurances to Europe, China, and Russia that it will protect companies working with Iran from consequences related to the possible reimposition of sanctions set to be lifted under the recently inked nuclear deal, according to a document provided to Congress and obtained exclusively by the Washington Free Beacon.
Secretary of State John Kerry admitted to Sen. Marco Rubio (R., Fla.) that the United States will work with foreign companies who financially engage Iran to shield them from penalties in the aftermath of Iran violating the agreement, a decision experts told the Free Beacon risked a corporate rush into Iran that will permanently bolster the Iranian economy and incentivize Iranian cheating.
Kerry acknowledged that the Obama administration had provided confidential guarantees that Washington “would not retroactively sanction companies” who helped bolster the Iranian economy and that the United States would work with those companies to bring their future activity in Iran into compliance with any new U.S. sanctions.
“For companies that have contracts that would otherwise continue after snapback, we have a consistent past practice of working with companies to wind down their contracts,” he wrote in the on the record statement.
The statements were in response to a congressional inquiry about a provision in the Joint Comprehensive Plan of Action (JCPOA), dubbed a “grandfather clause,” that would provide contract sanctity to corporations doing business in Iran. While the administration has denied that any such provision exists, Kerry admitted to Rubio that it would be provided on a case-by-case basis.
“We would consult with relevant states on a case-by-case basis to address issues that may arise,” Kerry writes. “We have not, however, committed to provide a blanket exemption (or grandfather clause).”
Kerry tried to justify the assurances as necessary to convince American rivals such as Russia and China to go along with the deal. Both nations and their private companies stand to benefit greatly from arms deals and other future agreements with Iran.
“When we were negotiating this provision, some of our partners expressed concerns that if sanctions snapped back, their companies would be suddenly sanctioned for doing business in Iran that was consistent with the JCPOA,” Kerry writes.
The guarantees were provided in secret letters sent to China, Germany, France, and the United Kingdom. Kerry noted that the letters were transmitted to lawmakers as part of a mandatory disclosure required by legislation providing for congressional review of the deal.
Lawmakers and their staffers are prohibited from sharing the contents of those letters with the American public. The administration appears to have intentionally mixed classified and unclassified information into that disclosure to bury the material, the Daily Beast reported in July.