WASHINGTON—The Trump administration plans a pre-election volley of sanctions against Iran intended in part to fortify its pressure campaign against any future effort to unwind it, according to people familiar with the matter. With former Vice President Joe Bidenleading in most national and battleground state polls, Trump administration officials fear his plan to reengage with Iran could upend the diplomatic leverage they believe is critical to strong-arm Tehran into signing a new nuclear and security deal.
The Trump administration has levied some sanctions under counterterrorism authorities, which analysts view as the most potentially difficult to undo. The administration previewed further planned action, according to the people, in calling out sectors it views as critical to financing Iran’s terror-linked activities, including the petrochemical and metals industries, but highlighting Iran’s energy sector in particular.
“Unwinding some of the designations would be quite difficult,” said Kirsten Fontenrose, a former senior director for Gulf Affairs in Mr. Trump’s National Security Council. A Biden administration would likely roll back a few of the sanctions against Iran as a show of goodwill to Tehran to get them back to the negotiating table, she said, “but he won’t be able to undo larger movements like designations.”
Mr. Biden has said he would return to the 2015 multilateral Iran nuclear agreement if Iran returns to compliance, and would attempt negotiation of new constraints on Tehran’s nuclear program. Mr. Biden’s campaign didn’t immediately respond to a request for comment.
Mr. Trump, in addition to quitting the pact and reinstating sanctions eased by the Obama administration under the deal, has also blacklisted the Islamic Revolutionary Guard Corps, the Central Bank of Iran and other important financial institutions under powers created in the wake of the Sept. 11, 2001 terrorist attacks.
In response to Mr. Trump’s withdrawal from the deal and the U.S. killing of a prominent IRGC general, Iran has said it will no longer will comply with limits on uranium enrichment under the pact, and has built up its supply of enriched uranium, prompting warnings from experts and diplomats that Tehran has slashed the time it would need to amass enough fuel for a nuclear weapon.
Besides creating political difficulties, counterterrorism sanctions risk tougher penalties for violators and add another significant layer of stigma that deters banks and others from doing business with those blacklisted, as compared with actions levied under many other powers, such as banks hit earlier this month for operating in Iran’s financial sector.
Terror designations, he said, help create a “sanctions wall of political and market deterrence.”
Part of the Trump administration’s sanctions policy, according to senior officials, is publicly detailing how Iran’s leaders use the country’s finances and businesses to fund its weapons programs, terror-designated proxies such as Hezbollah, and conflicts in Iraq, Syria and Yemen. Collectively, those actions build an official evidentiary base that represents a liability for banks, investors and other firms, former U.S. officials say, a risk that can create the same effect of a sanction even if they are repealed.
That dynamic can be seen in the failure of cross-border lending into Iran to pick up even after sanctions were lifted in 2016 under after the nuclear accord terms, according to Bank for International Settlements data.
The Treasury Department, in recent sanctions actions, has specifically linked major Iranian energy companies to terror financing. Those include engineering conglomerate Khatam al-Anbya, which is heavily involved in the petroleum industry and is owned by the IRGC, the National Iranian Oil Company and the Persian Gulf Petrochemical Industries Company.