Summary

Signed in 2015 by Iran and several world powers, including the United States, the JCPOA placed
significant restrictions on Iran’s nuclear program in exchange for sanctions relief.

President Trump withdrew the United States from the deal in 2018, claiming it failed to curtail Iran’s
missile program and regional influence. Iran began ignoring limitations on its nuclear program a year
later.

Washington and Tehran have both said they would return to the original deal but they disagree on the
steps to get there.

Introduction

The Iran nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), is a
landmark accord reached between Iran and several world powers, including the United States, in July
2015. Under its terms, Iran agreed to dismantle much of its nuclear program and open its facilities to
more extensive international inspections in exchange for billions of dollars’ worth of sanctions relief.

Proponents of the deal said that it would help prevent a revival of Iran’s nuclear weapons program and
thereby reduce the prospects for conflict between Iran and its regional rivals, including Israel and Saudi
Arabia. However, the deal has been in jeopardy since President Donald Trump withdrew the United
States from it in 2018. In retaliation for the U.S. departure and for deadly attacks on prominent Iranians
in 2020, including one by the United States, Iran has resumed some of its nuclear activities.

In 2021, President Joe Biden said the United States would return to the deal if Iran came back into
compliance. Renewed diplomacy initially seemed promising, but after stop-and-go talks, it remains
unclear if the parties can come to an agreement.

Who are the participants?

The JCPOA, which went into effect in January 2016, imposes restrictions on Iran’s civilian nuclear
enrichment program. At the heart of negotiations with Iran were the five permanent members of the
UN Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany—
collectively known as the P5+1. The European Union also took part.

Some Middle Eastern powers, such as Saudi Arabia, said they should have been consulted or included in
the talks because they would be most affected by a nuclear-armed Iran. Israel explicitly opposed the
agreement, calling it too lenient.

What were the goals?

The P5+1 wanted to unwind Iran’s nuclear program to the point that if Tehran decided to pursue a
nuclear weapon, it would take at least one year, giving world powers time to respond. Heading into the
JCPOA negotiations, U.S. intelligence officials estimated that, in the absence of an agreement, Iran could
produce enough nuclear material for a weapon in a few months. Negotiating nations feared that Iran’s
moves to become a nuclear weapons state risked thrusting the region into a new crisis. Israel had taken
preemptive military action against suspected nuclear facilities in Iraq and Syria and could do the same
against Iran, perhaps triggering reprisals by Lebanon-based Hezbollah or disruptions to the transport of
oil in the Persian Gulf. Additionally, Saudi Arabia has since signaled a willingness to obtain a nuclear
weapon if Iran successfully detonates one.

Iran had previously agreed to forgo the development of nuclear weapons as a signatory to the Nuclear
Nonproliferation Treaty, which has been in force since 1970. However, after the overthrow of the
Pahlavi dynasty in 1979, Iranian leaders secretly pursued this technology. (In 2007, U.S. intelligence
analysts concluded that Iran halted its work on nuclear weapons in 2003 but continued to acquire
nuclear technology and expertise.)

Prior to the JCPOA, the P5+1 had been negotiating with Iran for years, offering its government various
incentives to halt uranium enrichment. After the 2013 election of President Hassan Rouhani, who was
viewed as a reformer, the parties came to a preliminary agreement to guide negotiations for a
comprehensive deal.

For its part, Iran sought the JCPOA for relief from international sanctions, which starved its economy
[PDF] of more than $100 billion in revenues in 2012–2014 alone.

Does it prevent Iran from getting nuclear weapons?

Many experts say that if all parties adhered to their pledges, the deal almost certainly could have
achieved that goal for longer than a decade. Many of the JCPOA’s restrictions on Iran’s nuclear program
have expiration dates. For example, after ten years (from January 2016), centrifuge restrictions will be
lifted, and after fifteen years, so too will limits on the amount of low-enriched uranium Iran can possess.
Some of the deal’s opponents faulted these so-called sunset provisions, saying they would only delay
Iran building a bomb while sanctions relief would allow it to underwrite terrorism in the region.

What did Iran agree to?

Nuclear restrictions. Iran agreed not to produce either the highly enriched uranium or the plutonium
that could be used in a nuclear weapon. It also took steps to ensure that its Fordow, Natanz, and Arak
facilities pursued only civilian work, including medical and industrial research. The accord limits the
numbers and types of centrifuges Iran can operate, the level of its enrichment, as well as the size of its
stockpile of enriched uranium. (Mined uranium has less than 1 percent of the uranium-235 isotope used
in fission reactions, and centrifuges increase that isotope’s concentration. Uranium enriched to 5
percent is used in nuclear power plants, and at 20 percent it can be used in research reactors or for
medical purposes. High-enriched uranium, at some 90 percent, is used in nuclear weapons.)
Monitoring and verification. Iran agreed to eventually implement a protocol that would allow inspectors
from the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog, unfettered
access to its nuclear facilities and potentially to undeclared sites. Inspections are intended to guard
against the possibility that Iran could develop nuclear arms in secret, as it has allegedly attempted
before. The IAEA has issued quarterly reports to its board of governors and the UN Security Council on
Iran’s implementation of its nuclear commitments.

A body known as the Joint Commission, which includes representatives of all the negotiating parties,
monitors implementation of the agreement and resolves disputes that may arise. A majority vote by its
members can gain IAEA inspectors access to suspicious, undeclared sites. The body also oversees the
transfer of nuclear-related or dual-use materials.

What did the other signatories agree to?

Sanctions relief. The EU, United Nations, and United States all committed to lifting their nuclear-related
sanctions on Iran. However, many other U.S. sanctions on Iran, some dating back to the 1979 hostage
crisis, remained in effect. They cover matters such as Iran’s ballistic missile program, support for terrorist
groups, and human rights abuses. Though the United States committed to lifting its sanctions on oil
exports, it kept restrictions on financial transactions, which have deterred international trade with Iran.

Weapons embargo. The parties agreed to lift an existing UN ban [PDF] on Iran’s transfer of conventional
weapons and ballistic missiles after five years if the IAEA certifies that Iran is only engaged in civilian
nuclear activity.

How is the Iran deal enforced?

If any signatory suspects Iran is violating the deal, the UN Security Council may vote on whether to
continue sanctions relief. This “snapback” mechanism remains in effect for ten years, after which the UN
sanctions are set to be permanently removed.

In April 2020, the United States announced its intention to snap back sanctions. The other P5 members
objected to the move, saying the United States could not unilaterally implement the mechanism
because it left the nuclear deal in 2018.

Did Iran comply initially?

The agreement got off to a fairly smooth start. The IAEA certified in early 2016 that Iran had met its
preliminary pledges; and the United States, EU, and United Nations responded by repealing or
suspending their sanctions. Most significantly, U.S. President Barack Obama’s administration dropped
secondary sanctions on the oil sector, which allowed Iran to ramp up its oil exports to nearly the level it
was prior to sanctions. The United States and many European nations also unfroze about $100 billion
worth of frozen Iranian assets.
However, the deal has been near collapse since President Trump withdrew the United States from it in
2018 and reinstated devastating banking and oil sanctions. Trump said the agreement failed to address
Iran’s ballistic missile program and its proxy warfare in the region, and he claimed that the sunset
provisions would enable Iran to pursue nuclear weapons in the future.

Iran accused the United States of reneging on its commitments, and faulted Europe for submitting to
U.S. unilateralism. In a bid to keep the agreement alive, France, Germany, and the United Kingdom
launched a barter system, known as INSTEX, to facilitate transactions with Iran outside of the U.S.
banking system. However, the system is only meant for food and medicine, which are already exempt
from U.S. sanctions.

Following the U.S. withdrawal, several countries—U.S. allies among them—continued to import Iranian
oil under waivers granted by the Trump administration, and Iran continued to abide by its commitments.
But a year later, the United States ended the waivers with the aim of halting Iran’s oil exports
completely.

What is Iran’s current nuclear activity?

In response to the other parties’ actions, which Tehran claimed amounted to breaches of the deal, Iran
started exceeding agreed-upon limits to its stockpile of low-enriched uranium in 2019, and began
enriching uranium to higher concentrations (though still far short of the purity required for weapons). It
also began developing new centrifuges to accelerate uranium enrichment; resuming heavy water
production at its Arak facility; and enriching uranium [PDF] at Fordow, which rendered the isotopes
produced there unusable for medical purposes.

In response to the other parties’ actions, which Tehran claimed amounted to breaches of the deal, Iran
started exceeding agreed-upon limits to its stockpile of low-enriched uranium in 2019, and began
enriching uranium to higher concentrations (though still far short of the purity required for weapons). It
also began developing new centrifuges to accelerate uranium enrichment; resuming heavy water
production at its Arak facility; and enriching uranium [PDF] at Fordow, which rendered the isotopes
produced there unusable for medical purposes. In 2020, Iran took more steps away from its nuclear
pledges, following a series of attacks on its interests. In January, after the U.S. targeted killing of a top
Iranian general, Qasem Soleimani, Iran announced that it would no longer limit its uranium enrichment.
In October, it began constructing a centrifuge production center at Natanz to replace one that was
destroyed months earlier in an attack it blamed on Israel. And in November, in response to the
assassination of a prominent nuclear scientist, which it also attributed to Israel, Iran’s parliament passed
a law that led to a substantial boost in uranium enrichment at Fordow.

The following year, Iran announced new restrictions on the IAEA’s ability to inspect its facilities, and
soon after ended its monitoring agreement with the agency completely.
How has the deal affected Iran’s economy?

Prior to the JCPOA, Iran’s economy suffered years of recession, currency depreciation, and inflation,
largely because of sanctions on its energy sector. With the sanctions lifted, inflation slowed, exchange
rates stabilized, and exports—especially of oil, agricultural goods, and luxury items—skyrocketed as Iran
regained trading partners, particularly in the EU. After the JCPOA took effect, Iran began exporting more
than 2.1 million barrels per day (approaching pre-2012 levels, when the oil sanctions were originally put
in place). However, these improvements did not translate to a significant increase in the average Iranian
household’s budget.

The end of sanctions waivers on oil exports and the restoration of U.S. sanctions in 2018 has once again
cut deeply into a vital source of national revenue: oil and petroleum products account for 80 percent
[PDF] of Iran’s exports. By mid-2020, oil exports had plummeted [PDF] to below three hundred thousand
barrels per day. Additionally, in October of that year, the United States imposed sanctions on eighteen
major Iranian banks, causing the Iranian rial to fall further against the U.S. dollar.

Meanwhile, the wide range of U.S. sanctions unrelated to the nuclear program have added to the
damage. Multinational firms fear being punished by the United States for transacting with sanctioned
Iranian entities associated with, for example, the Islamic Revolutionary Guard Corps (IRGC) which holds
sway over many industries. With sanctions deterring international trade, black markets have boomed,
enriching the IRGC at the expense of the regular economy.

What is the outlook for the agreement?

The fate of the nuclear deal remains uncertain. JCPOA signatories began talks to bring Washington and
Tehran back into the agreement in April 2021, but they’ve since been off and on, complicated by Iran’s
election of conservative cleric Ebrahim Raisi as president and Russia’s invasion of Ukraine, among other
developments. Moreover, Tehran and Washington still disagree on several issues, including the IRGC’s
designation as a terrorist organization. U.S. officials have warned against more delays, saying further
nuclear advances by Iran could make returning to the original deal impossible. Amid reports that Iran
was days away from enriching enough uranium for a bomb, President Biden declared in July that the
United States will use “all elements of its national power” to prevent the country from acquiring a
nuclear weapon.