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Whether Congress approves it or not, Iran will still reap all the financial benefits of the nuclear deal, Donald Trump said on NBC’s Meet the Press Aug. 16.
When asked by host Chuck Todd how he would work with the Iran deal if he becomes president, Trump, running for the Republican nomination, said he would be "tough" on the contract, but it would be hard given all the money Iran would already have acquired as a result of the deal.
"The problem is by the time I got in there, they will have already received the $150 billion," Trump said. "Do you know if the deal gets rejected they still get the money? Which is something I found out a week ago. I couldn't believe it. If the deal gets rejected, they still get all of this money. Iran is going to be unbelievably powerful and unbelievably rich."
Does Iran actually get $150 billion from this deal? And if Congress rejects the deal, does Iran still get the money? Let’s take one question at a time.
The $150 billion
It’s true that Iran will reap significant economic benefits from the deal because many sanctions levied against Iran will be lifted as long as Iran complies with restrictions on its nuclear program. But it’s not like Iran will automatically receive a check or, as some critics have called it, a signing bonus.
"Will some considerable portion get transferred to Iran? Sure. But not all of it will automatically. That’s not how this works," said Michael Malloy, a law professor at University of the Pacific McGeorge School of Law and an expert on economic sanctions.
First, the money already belongs to Iran; Iran just hasn’t been able to access it. The $150 billion figure, primarily thrown around by critics, typically refers to the dollar amounts of Iran’s foreign assets that could be unfrozen when sanctions are lifted. An example is money Iran has earned from selling oil but is held by a foreign bank.
There’s also the many billions of dollars Iran has lost in revenues and opportunity costs because the country has not been able to fully participate in the global marketplace, Malloy said.
But $150 billion is on the high end of estimates of the value of Iran’s foreign assets, which start as low as $25 billion, said Garbis Iradian, chief economist at the Institute of International Finance. Most experts we interviewed, including Iradian, peg the amount of unfrozen assets at about $100 billion, but no one is 100 percent sure of the amount.
You can probably get to $150 billion if you count up every possible type of money that sanctions have made difficult for Iran to access and use, said Richard Nephew, an expert on economic sanctions at Columbia University’s Center on Global Energy Policy.
Iran has financial obligations other than the sanctions, so even if all the sanctions are lifted, they won’t suddenly have all of these assets at their disposal. For example, Iran owes billions to China for infrastructure projects. Lower estimates take into account restrictions on the money other than the sanctions, Nephew said.
So even if the total assets are $150 billion, it’s unlikely that that much will actually be available to Iran when sanctions are lifted.
The Obama administration has said that after Iran pays its outstanding financial obligations, it will have about $56 billion at its disposal.
What if Congress rejects the deal?
While the exact amount of Iran’s unlocked sanctions is less precise than Trump describes, experts told us that Trump’s broader point is largely correct: Even if Congress does not approve lifting the United States’ sanctions, Iran will likely be able to get a good chunk of the money it currently cannot access.
This is because other countries and international bodies, including the European Union and the United Nations, could decide to stop enforcing their own sanctions against Iran anyway.
Iradian estimated that Iran would be able to access $40 billion of its currently inaccessible assets in that scenario, and the Iranian economy could get an even bigger boost if European companies decided to invest heavily in Iran.
The United Nations, for one, has already passed a resolution to provide Iran with the funds withheld under the sanctions if Iran meets its end of the bargain, noted George Perkovich, an expert on nuclear strategy and vice president of studies at the Carnegie Endowment for International Peace.
Of course, Iran wouldn’t be able to access all of its assets in this scenario because much of them are tied up in the United States’ sanctions.
"There would be some crumbling of the sanctions wall, but that does not on its own free up the entire $100 billion," Malloy said, adding that the United States controls much of the petroleum market, which is important to Iran’s economy.
At the end of the day, the discussion entails a lot of speculation, but nearly every expert said there’s a reasonable likelihood that other countries would choose to stop enforcing sanctions no matter what the United States decides to do.
It’s worth noting that it will be difficult for Congress to maintain the sanctions because there would have to be enough votes to survive a presidential veto.
Trump said of Iran that "if the (nuclear) deal gets rejected, they still get" $150 billion.
Experts told us that even if Congress rejected the nuclear deal -- thus maintaining current U.S. sanctions -- other countries could stop enforcing their own sanctions anyway. As a result, Iran would be able to access at least some of its assets that have been frozen under international sanctions. However, experts said it’s highly unlikely that this would amount to $150 billion, the maximum estimate of how much Iran could benefit by the lifting of all international sanctions without regard to Iran’s outstanding financial obligations. Without United States participation, the best estimate we could find was $40 billion.
Trump’s claim is partially accurate but cherry-picks the high end of estimates for the unfrozen assets. We rate Trump’s claim Half True.
NBC, Meet the Press transcript, Aug. 16, 2015
New York Times, "Value of Iran Sanctions Relief Is Hard to Measure," Aug. 5, 2015
PolitiFact, "Bill O'Reilly tells Huckabee: Russia, China 'said clearly' they would not keep Iran sanctions," July 30, 2015
PolitiFact, "Israeli ambassador uses odd logic to relate Iran's frozen assets to the U.S. treasury," July 17, 2015
White House, Iran Deal Q&A, accessed Aug. 16, 2015
LobeLog, "Iran’s Economy after the Nuclear Deal," July 20, 2015
Phone interview, Michael Malloy, law professor at McGeorge School of Law, Aug. 16, 2015
Phone interview, George Perkovich, vice president at Carnegie Endowment, Aug. 16, 2015
Email interview, Garbis Iradian, chief economist at the Institute of International Finance, Aug. 16, 2015
Email interview, Richard Nephew, program director at the Center on Global Energy Policy, Aug. 16, 2015
Email interview, Jim Walsh, research associate at the Massachusetts Institute of Technology’s Security Studies Program, Aug. 16, 2015
Email interview, Djavad Salehi-Isfahani, economics professor at Virginia Tech, Aug. 16, 2015
Email interview, Matthew Bunn, professor at Harvard University's Belfer Center for Science and International Affaris, Aug. 16, 2015
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