Could we be seeing the first complications of JCPOA implementation?

Last week, the House passed H.R. 158, which included amongst its provisions one that would exclude from the U.S.’s visa-waiver program (“VWP”) two categories of individuals: (1) travelers to Iran who are nationals of a VWP country, which includes much of Europe, Japan, South Korea, and Singapore, amongst others; and (2) dual nationals of a VWP country and Iran. Those excluded from the U.S.’s visa-waiver program would be forced to pursue the more arduous route of procuring a visa to travel to the United States for business- or tourist-related purposes, including an interview with a U.S. consular official overseas.

Such legislation would capture European business-travelers to Iran, including those who have traveled to Iran since March 2011. As such, the U.S.’s JCPOA obligations could well be complicated. Pursuant to §29 of the JCPOA’s Main Text, the United States is committed to:

“…refrain from any policy specifically intended to directly and adversely affect the normalization of trade and economic relations with Iran inconsistent with their commitments not to undermine the successful implementation of [the] JCPOA.”

Penalizing European business-travelers, amongst others, for travel to Iran is reasonably likely to “directly and adversely affect the normalization of trade and economic relations with Iran,” in ways “inconsistent with [the U.S.’s commitment] not to undermine the successful implementation of [the] JCPOA.” The determinative question is whether this legislation was “specifically intended” to achieve this result – or, at least, whether Iran will view it as being so intended. (For what it is worth, Iran’s inclusion in the bill was a late addition and its provenance remains thus far unknown.)

So far, there is no verdict in Iran as to this legislation’s compliance with U.S. obligations under the JCPOA. This weekend, Iran’s Deputy Foreign Minister and lead negotiator for the JCPOA, Abbas Araghchi, noted that the legislation remained under study in Iran. However, Araghchi stated that if the U.S. legislation were found to be contrary to U.S. commitments under the JCPOA, then Iran would take responsive action in accordance with the nuclear agreement.

In other words, trouble may well lurk ahead as JCPOA implementation nears its final weeks.

Right now, Senate and House Republican leaders are trying to attach the legislation to the spending bill due to be voted on early this week. Despite growing concern among Congressional Democrats, the Obama administration has decided to back the visa-waiver bill, which subjects travelers to and dual-nationals of Iraq and Syria to the same restrictions as those traveling to and nationals of Iran. In consideration of the public mood regarding San Bernardino and the Paris attacks, as well as Iran’s current status as a U.S.-designated state sponsor of terrorism, it is unlikely that the administration or Congressional Democrats would seek to make a strong push to excise Iran from the broader bill. That leaves a high likelihood that the bill will attach to the spending bill and will be enacted this week.

Its effects remain unclear. Despite its support for the broader bill, the Obama administration is well-aware of the potential repercussions of the bill on bilateral relations with Iran, particularly in regards to JCPOA implementation. Nonetheless, those interested in Iran-related trade opportunities post-implementation will need to be especially cautious of the potential not just for sanctions-related legislation in the months ahead, but any other U.S. legislation impacting foreign trade ties with Iran. As this House bill evidences, the manner and the means by which Congress can impose penalties on Europeans, et. al., seeking to re-engage Iran in trade-related dealings are virtually limitless.