School of War - Reading Trump’s Iran Deal So You Don’t Have To, with Mark Dubowitz

Episode Date: June 18, 2026

Mark Dubowitz, CEO of the Foundation for Defense of Democracies, returns to School of War to discuss the newly released memorandum of understanding between the United States and Iran. What does the deal actually say? What are its biggest strategic implications? And is it comparable to the JCPOA—or something worse? 01:19 - Paragraph 1: Lebanon and Hezbollah 09:45 - Paragraphs 2–3: Sovereignty and the 60-day clock 11:24 - Paragraph 4: Lifting the blockade 16:37 - Paragraph 5: The Strait of Hormuz 23:48 - Paragraph 6: A $300 billion reconstruction fund 33:49 - Paragraph 7: Ending all sanctions 35:43 - Paragraph 8: Nuclear weapons and enrichment 39:12 - Paragraph 9: Maintaining the status quo 40:44 - Paragraph 10: Oil waivers and sanctions relief 43:48 - Paragraph 11: Releasing frozen funds 46:56 - Paragraph 12: Monitoring compliance 47:52 - Paragraph 13: Negotiating the final deal 50:59 - Paragraph 14: A UN Security Council resolution 51:13 - Squandering battlefield leverage Follow along on Instagram, X @schoolofwarpod, and YouTube @SchoolofWarPodcast Find more at The Free Press. Learn more about your ad choices. Visit megaphone.fm/adchoices

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and good faith. If you're a paid subscriber, join us in the forum. If you're not, become one today at www.vfp.com slash forum. It's not exactly the happiest conversation we've ever had on School of War, but I do think it's public service. Mark Dubowitz and I today go through each of the 14 provisions of the Memorandum of Understanding just signed between the United States and Iran and offer our assessment. Some say that this MOU is comparable to President Obama's JCPOA, his nuclear deal with the Islamic Republic from a decade or so ago. I say that in several material respects, this MOU is obviously worse than the JCPOA. Let's get into it. It is for a war.

The Rockin, they be a day of 1941, a date which will live in empty. The bloody experience of Vietnam is to end in a state. We continue to face a grave situation in France. The region, we shall fight on the landing ground. We shall fight in the fields and in the streets. We shall never threaten. If you read the headlines about Israel, you're only getting a tiny slice of a long, complicated story without depth, context, or sometimes even the basic facts. I'm Norma Weissman, the host of unpacking Israeli history, the podcast that dives into the fascinating

and sometimes controversial events and figures that have shaped Israel's past and present each week on unpacking Israeli history. I explore the layers of Israeli history, debates around the Palestinian and Israeli conflict, the cultural forces at play, drawing from a variety of sources and perspectives. So if you're looking for a nuance, thought-provoking, take on on Israel one that avoids the oversimplifications and political spin. I think you'll really appreciate the show. Find a packing Israel and history wherever you listen to your podcast or on YouTube. Hi, I'm Aaron McLean.

Thanks for joining School of War. I am delighted to welcome back to the show today. Mark Dubowitz, the CEO of the Foundation for Defense of Democracies, the host of the Iran Breakdown podcast, regular guest here on the show. Mark, welcome back. I'm honored to be back. Thanks for having me, Aaron. We're throwing this episode together pretty quickly.

We're going to get it up right away. So we're recording this at five in the afternoon on Wednesday, June the 17th. We, for the first time today, seem to have text of this memorandum of understanding between the United States and Iran. There's been drafts circulating lots of rumors over the course of the last week. But it seems that a senior U.S. official read the MOU aloud to reporters earlier today. And so, Mark, I thought it might be interesting and edifying and useful. to the School of War audience. If we just kind of went through the document,

talked about what's in it, and gave our assessment as we go. What do you think? Yeah, let's roll. Okay, all right. So I've got the text right here. It's in 14 paragraphs. It is indeed short.

It's about a page and a half, as the president and vice president indicated. Paragraph one, the United States of America and the Islamic Republic of Iran and their allies in the current war by signing this memorand, of understanding, declare the immediate and permanent termination of military operations on all

fronts, including in Lebanon, and undertake from now on not to initiate any war or military operation against each other and to refrain from the threat or use of force against each other and ensuring the territorial integrity and sovereignty of Lebanon. The final deal will confirm the permanent termination of war on all fronts, including in Lebanon and other provisions in this paragraph. In case you missed it, Lebanon appears three times in the paragraph. What's your first reaction? Yeah, I mean, negotiating win by the Islamic Republic of Iran. They were successfully put Lebanon, more specifically, Hezbollah on the negotiating table, and we're able to include this in the MOU. And in doing so, give what I think many people in Israel and the United States fear, which is an Iranian veto.

over Israel's ability and freedom to respond to Hezbollah attacks, which have been ongoing for decades, but certainly intensified on October 8, 2023, and still represent a significant threat to Israel. And I would add, you know, many of those Hezbollah terrorists, including some have been taken out, have killed, maimed, kidnapped, and tortured Americans. So we as Americans have vested interest in this as well. Yeah. I have a couple of thoughts here. I will begin with the doom and gloom and then move to the practical thought. The doom and gloom thought is, you know, for weeks now, there's been sort of debate, sort of shadow boxing debate because we don't actually, we didn't actually know what was in the deal about whether this deal would be comparable to the JCPOA. In a way,

in a way, it's still hard to compare. First of all, there's the apples and oranges question that the JCPOA is about a nuclear program that is a going concern. We are currently negotiating. unit over a program that or apparently are going to negotiate in the future over a program that is in no small part rubbleized. And furthermore, it's hard to compare because apparently in the structure of this thing, the really meaningful nuclear negotiations are still to come. That all said, I want to, I want to throw out there the possibility that already out of the gate with this MOU, we actually have coming into focus a deal that is potentially worse than the JCPOA, meaningfully worse in a couple of ways, one of which we're talking about right now, which is critics of the Obama administration,

among their objections to the JCPOA, was that it left out the question of proxies. It also left out missiles. This leaves out missiles. But you could argue that this first paragraph actually, in a way, implicitly recognizes Iran's relationship to its proxies and implicitly recognizes their right to advocate for their interests, indeed to build their interests into deals with the United States of America. So I would say, in a way, point for the JCPOA on that front. Aaron, I think it's a fair criticism. Look, let me steal man the administration's argument. There was another senior administration official just hours ago saying that that provision does not preclude Israel from defending itself against Hezbollah attacks. And if we remember

the Biden administration's ceasefire that was reached between Israel and Hezbollah, the The Israelis took full advantage of that ceasefire because the ceasefire language made it very explicit that Israel could defend itself, not only against direct attacks by Hezbollah, but imminent attacks or imminent threats. And so Israel used that in order to pound Hezbollah, kill Nasrallah, launch the pager attack, induce massive damage to Hezbollah's infrastructure. If the Trump administration interprets that provision the same way the Biden administration does, then I'm less concerned. If on the other hand, they go to the left of Biden and the left of Obama on this issue, then big win for the Islamic Republic of Iran and big loss for the United States, America,

and Israel. And then the practical observation I was going to make is the parties to this MOU are the United States and Iran. Fighting in Lebanon are Iran's proxy, Hezbollah, and America's ally, Israel, neither of which are part. parties to the agreement. Both have close relationships. Israel is our ally, Hezbollah, as an extension effectively of Iranian power. But neither is signing this document. And so, I mean, I do find myself a bit befuddled that we are agreeing. I mean, you just gave an important qualification to it. Nevertheless, we are agreeing to somehow restrain Israeli behavior in Lebanon as a part of this agreement. And I,

I'm not so sure the Israelis are particularly intent on being restrained, given the threat that's posed to them by Hezbollah's ongoing attacks. Well, I think that's right. Look, I mean, I think the Israelis discovered after October 7th and the horrors of the Hamas invasion that you can't deter, you can't de-escalate, you can't bribe your enemy into not wanting to kill you. And so the Israelis demonstrated that you can escalate to de-escalate. and they went about over two and a half years imposing massive costs on their enemy.

I think the Trump administration understood that strategy, but the MOU does not. The MOU seems to think that you can bribe your enemy, in this case the Islamic Republic of Iran and its terra proxy, Hezbollah, into de-escalating. I think that's the fatal flaw of this MOU. Before we get into the specificities, is this idea that you can seduce the hard men of Tehran in Beirut to abandon their jihadist theocratic ambitions to destroy Israel and to drive the United States of the Middle East by flooding them with cash and turning them into responsible global stakeholders that with all that money, they will moderate, moderate and become pragmatic.

I think that is a delusion, but it is a delusion, to be fair, Aaron, that's been held by presidents for decades about the hard men of Tehran, Beijing. Moscow and Pyongyang. The idea that we're all material boys and girls and all we really want is money. Well, these regimes definitely want money. And they're definitely going to use that money to enrich themselves. But they'll become more dangerous, more deadly with that money because they are hard men with ideas. And we Americans seem to think we can seduce them to abandon those ideas. Yeah, we haven't gotten to the money yet. We will. But I can't remember who made this observation. I saw somewhere someone made what struck me as a very smart observation that,

though there was some bombing of economic targets towards the end of the campaign, and while the Israelis were certainly going after regime targets that not in every case were military, Iran's economic infrastructure, certainly their energy infrastructure, remains largely intact. So what do we think the money is going to go towards rebuilding? Well, the stuff that was destroyed, an enormous proportion of the stuff that was destroyed were military targets of some fashion or another. that's presumably going to be pretty high on the list of priorities for the use of the money. Well, that's exactly what we discovered with the JCPOA, where a year after the JCPOA, the budget of the Islamic Revolutionary Guard Corps, the IOC, increased by 90%. So back in that deal, the Obama administration was saying the money would go to rebuild Iran and would go to the people to give them a better life. And it turned out that when you looked at the budgets, the lion's share of the money went to the most extreme and aggressive elements.

And very little, there was a very little trickle down economics in the Islamic Republic of Iran post JCPOA. I suspect that will be the same thing during the MOU. All right. I'm going to speed through paragraphs two and three, though, you know, of course, stop me if you have points you need to make. And then I want to, some of these things I'll go through faster than others because I want to linger on some of it. So paragraph two, United States of America and the Islamic Republic of Iran undertake to respect each other's sovereignty and territorial integrity and to refrain from interfering in each other's internal affairs. A turning of the page for both, I have to say, if that sticks. Paragraph three, the United States of America and the Islamic Republic of Iran commit to negotiating and achieving the final deal in maximum 60 days.

Maximum 60 days, Mark Dibowitz. Extended it with mutual consent. So I guess maximum doesn't, that sentence, I would red pen that sentence. if this were a student? Yeah, yeah. I mean, I think the notion that they're going to negotiate all of this in 60 days is fantasy. I actually think in some respects, and again, this is speculation of my part, that Trump wants to continue negotiating through the midterms, so give it five months, keep oil prices low,

gasoline prices lower, and hopefully from his perspective, hold the House and Senate. it. And so that's, I think when we start talking about the economic benefits to Iran throughout the rest of this MOU, I have at least five months in mind, not 60 days. And so that means, that's meaningful because that means more sanctions relief, greater leverage for the Islamic Republic, diminishing leverage for the United States as we think about a, you know, 150-day clock, not a 30 or 60-day clock. Yeah, and look, I mean, letting Iran in its pretty battered state twist, even though the regime hasn't fallen, you know, as a purely strategic consideration, seems like a viable option, especially if you could get traffic going through the Strait of Hormuz again. But that's not really, that's not at all what we're doing here.

We are, through the provision of funds that we'll get to here in a second, we are giving them a very substantial lifeline as we extend the clock. Okay, so let's get to paragraph four. which you know my obsessions, Mark, with the straight-in-for-moose. So this is the one that sort of starts to, this one in combination with paragraph five is what makes my head start to explode. Immediately upon the signing of this memorandum of understanding, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran

and end the naval blockade within 30 days. So zero to 30 days. The blockade is done during this period. The traffic of vessels will be in proportion to the numbers of pre-war traffic being restored by the Islamic Republic of Iran, which I take to mean as they work on lifting their blockade of the strait, so we have to kind of match each other on our blockade and their blockade. The United States of America further undertakes to remove its forces

from the proximity of the Islamic Republic of Iran within 30 days after the final deal. So when everything is agreed at the maximum 60 days, comma, extendable, 30 days after that, we remove our forces from the proximity of the Islamic Republic, Islamic Republic of Iran, which seems here I'll actually go a little easy on them. It sounds bad, but like, what does that even mean? It's, to me, it means whatever we want. Like, what is the proximity of the Islamic Republic of Iran? Is it sovereigns? Is it the UAE? Is it their territorial waters?

I mean, what does that even mean? Yeah. I mean, my guess, and there was a background briefing by senior administration official who was asked this question. And he said that they would go back to, like, status quo ante. So pre-war military positioning, which means clearly a withdrawal of some U.S. forces, given that there have been a significant increase in U.S. forces before the war and during the war. But this isn't a withdrawal from U.S. forces from the region, clearly. And moving it away from the territory of Iran, I mean, that could be anything from making sure there's nothing on the territory are to two miles. in the territorial waters of the Islamic Republic to really pulling back from the U.S. military

back to its basis. It could mean a withdrawal of U.S. forces that are close to the territory, or it could be a withdrawal of U.S. forces within a, you know, 10, 15, 20-mile radius of the territory. So we don't know what it is. I'm sort of like you, less concerned about that provision and more concerned about Hormuz extortion, which I'm sure we're going to talk about. Yeah. Well, that's next. That's paragraph five, though. I basically find myself strangely sanguine about paragraph, the last part about paragraph where it is humiliating, I would think, to see it on paper, though. Well, Aaron, I just want to add something on that. I mean, I think that the untold story about Hormuz is that that Admiral Bradley Cooper, the head of Sancom and the U.S. Navy in Air Force, were actually doing a pretty good job.

of very quietly punching through this Iranian blockade, and that it's gone without much fanfare, and it certainly would have been much more effective if Trump had given Cooper the leeway to expand it instead of doing this MOU. But they were moving millions of barrels a day through the street, hiking the shoreline of Oman, escorting tankers, and also millions of barrels were moving through the East-West pipeline, the Saudis own, and the Fujara pipeline that the Emirati's own. So I've seen estimates that at least half of the barrels of oil, so the 20 million that were flowing before the war, at least 10 million of that was moving through the pipelines and through naval escorts.

So that's probably what kept oil prices in the low hundreds rather than the 150, 200s, in combination with a significant decrease in Chinese demand of about 6 million barrels a day, which gets you closer to the 20 that we're flowing through before. So it looked to me like that there really was an option to fight the Battle of Hormuz and win it rather than giving the Iranians what I worry about, which is the ability to blackmail us, not only through the 60 days, but after the 60 days when, in my view, there is no going to be no final agreement. Well, let's get to that right now because paragraph 5 is the article of blackmail or the preparatory article to blackmail. Upon the signing of this memorandum of understanding, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the sea of Oman and vice versa.

The traffic of commercial vessels will immediately start in considering the need. for removing the technical and military obstacles and demining by the Islamic Republic of Iran will be instated. The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz, the services, that's nice, in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states in the Strait of Hormuz. Mark Dubowitz, to me, this is an objective strategic defeat for the United States of America, that we have apparently signed this document and agreed to this.

Before the war, Iran had a long history of harassing vessels on and off in the Strait of Formuz in its vicinity. But the United States had certainly never conceded nor had any other country, to my knowledge, that they could charge for passage or that they had some sort of sovereign right to administer those waters, or without the cooperation of Obama. And here we have, in black and white, us conceding exactly those things, except they don't charge for the first 60 days. Yeah, I mean, a few things. And again, I also want to be analytically fair.

So I'm going to try and steal man the administration's case, even though I don't agree with it. I think the administration would make the case. And I think it's a fair one that while they were interfering with shipping for many years, they were on a trajectory under the JCPOA or in a no-es. action scenario where they were going to build up the kind of capabilities with, you know, thousands of ballistic missiles, hundreds of thousands of drones, a Russian-Russian-Chinese-built military, nuclear weapons capabilities, ICBMs, that they could have a permanent stranglehold

over Hormuz. And there would be no battle of Hormuz that we would ever fight because the retaliatory potency of the Islamic Republic would be so devastating to the United States. to Israel, to our Gulf allies, to U.S. bases, U.S. embassies, U.S. troops, that we would never fight that battle. I think the fact that they are so much weaker, they played their Hormuz card out of desperation, out of weakness, but have done a really brilliant job, as you would expect, of turning that weakness into negotiating leverage, because, of course, the only place the Iranians ever beat Americans is at the negotiating table. So we are in a better position than we would have been if we hadn't acted, which doesn't mean we're in a good position

because we did act. Now, I would just say one thing to reinforce your case, Aaron. We are paying a toll, and we're paying it in the first day of this memorandum of understanding, because we are allowing the Iranians to begin to send oil into international markets. Now, we'll talk about the nature of the oil, where it's going, how they're going to monetize it. But if you just do back of the envelope calculation, if they are shipping two million barrels a day, which was sort of their pre-war average at $75 a barrel, right? They would be making about $5 billion a month and therefore $10 billion over the 60 days of the MOU. So in effect, we are paying a $10 billion dollar toll to the Iranians to allow us to send ships through Hormuz.

So that's a pretty hefty toll. Well, point of clarification, to allow the world to move commercial ships through the Strait of Hormuz, the paragraph is actually noticeably silent, though by implication it's aware of the existence of military shipping, military vessels, who are not covered. Iran makes no agreement whatsoever. So does the U.S. Navy from Iran's perspective have the right to sail through the Strait of Ramos? We certainly have not compelled them or persuaded them to say so. Yeah, I think that's a great point. So yes, there's the naval, there's a military issue. But I think just even on the commercial side, you know, again, $5 billion a month. My assumption is five months, Aaron, right? It's not one month. So five months at $5 billion a month. is $25 billion in oil shipments. And that's not even including, and we'll get to this as well, the frozen oil revenues

that are sitting in a number of banks. So I think just my basic point is we're paying a $25 billion toll to the Iranians to permit commercial ships from transiting the strait. And I would have preferred that Admiral Bradley Cooper got to expand what looked to be an increasingly successful military operation to move these, you know, five, six, seven million barrels a day through the strait under U.S. Navy escort. To permit commercial shipping to go through and after 60 days begin their own extortion racket in the strait, they only promised not to charge for 60 days. So after 60 days,

commercial shipping, in theory, could be charged by Iran under the terms of this MOU. We agree to that. We signed the document. Yeah, I mean, I guess, again, I'm trying half-heartedly to put the best face on the administration's case. I guess they would say, well, no, after 60 days, we renew it for another 30 days and then another 30 days and another 30 days on the same terms. So Iran doesn't get to change the terms. Now, they're going to try change the terms because this is what the regime does very successfully. but if you just roll over the MOU for another 30 and another 60, another 90, presumably you're rolling it on the same terms. The problem being that as you roll it, the Iranians get to send more oil, make more money, and therefore are effectively being paid a toll worth tens of billions of dollars.

That is an interesting point. That is at best ambiguous in the text. It is not at all clear that the 60 days mentioned in paragraph 5 is the same, the ontologically, if you'll allow my philosophy education to come in, ontologically the same 60 days as the 60-day term of the overall agreement. And if I were a RAN's lawyer, I would die on that hill. Okay, paragraph six. Isn't this fun? You having fun, Mark?

I'm having a good sign, yeah. That's great. You know, it's just worth, sorry, one 30,000-foot observation, this war that began, or this phase of this long war, that began with the president-making, these occasionally maximalist declarations about regime change that I thought were a little fanciful, but nevertheless, certainly going for the jugular of the Islamic Republic, killing Chaminet, things like that. Here we are, and, you know, this will iterate and things will change,

and it's not a straight line from here to wherever we're going, though it's not totally clear where we are going. But through the removal of forces that we're agreeing to on some level in paragraph four, the the restraining of Israel, the setting up of Iran to run the straight, we are at least on paper making major steps towards helping Iran achieve its strategic goals in the region. As articulated by you at the start of this recording where you said they want the destruction of Israel, which I don't think they're going to succeed with, I think Israel is going to hang in there, but also the ejection of the United States from the region. And at least on paper, we seem to be agreeing to being ejected on some level.

I think that goes further on paper than it will in practice if I had to bet, but it's still quite shocking. Well, I would just say before we get back into the fun of the deal, I mean, it's just extraordinary to me. You know, President Trump deserves credit for doing more damage to the Islamic Republic than any American president in 47 years. The U.S. and Israeli militaries have run an extraordinary campaign, and we can go through all of the indices of success and the degradation of Iran's war-making and nuclear capabilities. But again, having built up this massive leverage through Operation Epic Fury and Operation Economic Fury and Operation Midnight Hammer, I do find it a bit befuddling, while the president, who builds himself is a the greatest dealmaker who's ever sat in the Oval Office is squandering this leverage and doing so in a way that is potentially deeply damaging to the United States and is really helping pick the Islamic Republic off the floor, extending at a hand, and then believing that he can

somehow seduce them through his charm and the power of the greenback to not be ideological, theocratic, giatist regime. And by the way, I think that conceit is exactly the conceit that Barack Obama had in 2015. So in that respect, I know Donald Trump would hate this comparison, but he goes in

with the same set of flawed assumptions that he called Barack Hussein Obama. He's always quick to point out the president's middle name, had the exact same misunderstanding of the Middle East and of Islam

and its power. The release of that leverage, I mean, we're skipping ahead a bit here, but, I mean, the leverage is relaxed in some very concrete and harmful ways. So right up front, we lift the blockade, which we've covered within 30 days. We haven't covered yet, but we've alluded to the fact that there will be sanctions waivers right out of the gate, which leads to those billions of dollars in Iran being allowed to sell its oil that you've already pointed out. And then we haven't really talked about it yet. And it's a little complicated, but certainly beginning early in the process. It's a little ambiguous what pace it will proceed upon. There's also the release of frozen funds.

So blockade gone, waivers issued some frozen funds being thawed on some sort of timeline. But we're going to figure out all the nuclear stuff later. So the nuclear negotiations, which will also get to what's been pre-agreed for that, it's not much. Just to put it mildly, there's a lot of detail to be worked out yet. This MOU, which is meant to ensure that Iran will never have a nuclear weapon. Essentially, we're going to give them billions and billions of dollars. We're going to allow their economy to begin to recover. We're going to remove the blockade, et cetera.

And then we're going to ask them just give up the nuclear program afterwards. And I mean, I'm no hard charging, you know, professional negotiator mark. But it doesn't strike me as the most obvious way to maximize one's leverage. Well, Aaron, I think let's do this. I mean, why don't we read the provisions on the sanctions relief and then sort of dig into the details and then talk about the varying interpretations from least bad to really bad about what it actually could mean. Well, so we'll go in or we'll confuse people if we just. Let's go into paragraph six is somewhat relevant. It's not sanctions relief, but it is money oriented.

So this is the USA undertakes with regional partners develop a definitive fully agreed plan with at least. $300 billion for the reconstruction of economic development of the Islamic Republic. The mechanism for the implementation of this plan will be finalized as part of the final deal within 60 days. All required licenses, waivers, permissions, et cetera, will be graded by the USA. So this is not the sanctions relief. This is a $300 billion reconstruction fund that will be a pot of money for the Islamic Republic at the end of the jihadist rainbow. I don't know if you have any commentary to offer on this one. It's a lot of money. Yeah. Well, first I would say the Saudi foreign minister was just recently out saying that he hadn't actually heard about this so-called $300 billion

reconstruction fund that presumably the Saudis are going to play a very large role in funding. Second is, I think it's interesting, the $300 billion number that was chosen, because that's the Iranian estimate of how much damage they sustained during the 38-day war. So obviously, they had an incentive to overstate the damage so that they could insert this provision for the equivalent amount of reconstruction funds. At FDD, we did an estimate there was about $140, $150 billion of damage conservatively. And there's no doubt they've sustained serious economic damage. I think that's where the number is coming from. The third is, I mean, it speaks to something that I'm very concerned about.

because this is only if there is a final deal, and we get the demands met on the nuclear program that the president is talking about. But then the notion that we're going to lift primary sanctions, secondary sanctions, UN sanctions, European sanctions, every sanction that's been put in place since the era of Bill Clinton against this regime, if it gives us nuclear concessions only, and we are going to, going to allow the flow of $300 billion of so-called reconstruction and investment money into the Islamic Republic should be deeply concerning to any American and anybody in the Middle East who knows anything about the Islamic Republic's wave of terror attacks against Americans and others. Now, the administration would say, well, Mark, of course, if they continue to support terrorism, we won't lift the terrorism sanctions, and then they will be, no investment. But since terrorism has been effectively taken off the table in these negotiations,

and that I am not confident that the administration is going to be serious about stopping Iranian terrorism, and that I am supremely confident that the Supreme Leader of Iran is dedicated to continue terrorism, either this $300 billion provision is what they call in tech vapor where, meaning it means nothing, or the administration has some plan to basically destroy the sanctions architecture of the United States by taking away the designation of the IRGC as a terrorist organization and removing the designation of the Central Bank of Iran, the National Iranian Oil Company, and all of the Iranian banks which have been designated for supporting terrorism.

If it is the ladder, that would be disastrous. If it's vaporware and meant just to incentivize the Iranians to continue negotiations, then I'm obviously less concerned. So another symbolic point on that front is to your point about $300 billion being a significant number. This is reparations. The Iranians said they were going to get reparations. And here is the United States of America agreeing that they will get reparations. We will arrange for the reparations to be paid.

It won't be taxpayer money. But this is reparations. It's extraordinary. It's extraordinary. What's even more extraordinary is that Treasury Secretary Scott Besson specifically said a couple of weeks ago that actually all the money that's sitting in frozen assets will be used to pay reparations to the Gulf countries for the destruction of their. infrastructure by the Islamic Republic of Iraq. So you go from Besson a few weeks ago saying, Iran, you're going to pay reparations to the Gulf to this MOU, which makes no mention of that. Instead, you go to reparations to a regime that is responsible for almost five decades of aggression

and bloodshed. It would be an extraordinary concession if that actually comes to pass. All right, here we go. Sanctions. This is paragraph 7. The United States of America undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including the United Nations security resolutions, i.e. IA.EA. Board of Governors resolutions and all unilateral U.S. sanctions, primary and secondary in an agreed-upon schedule as part of the final deal. The Islamic Republic of Iran and the United States of America acknowledge the critical importance of the sanctions termination issue above mentioned and expressed their intentions to immediately address these issues in the negotiations. in order to achieve mutual agreement on them. Should we come to a final deal? No more sanctions. Zip. Well, that's worse than JCPOA, which, to be fair to the Obama deal,

still maintained a number of U.S. secondary and primary sanctions, particularly relating to terrorism. So now that's what I alluded to earlier. if there is this final deal, we're essentially destroying the entire sanctions architecture that we built over decades on the assumption that Iran is going to stop all of its malign activities. Now, if the idea is that Iran is only going to make nuclear concessions in exchange for us ripping down the entire sanctions architecture, then what we've effectively done is greenlighting, it all of their other non-nuclear malign activities, including terrorism, missile proliferation,

and the reconstitution of their missile program, including ICBMs targeting America. That would be an extraordinary and egregious concessionaire. Paragraph 8. The Islamic Republic of Iran reaffirms that it shall not procure or develop nuclear weapons. Mark, when has the Islamic Republic ever said that it would develop or procure nuclear weapons? Oh, Aaron, I don't know if you heard, but the late Ali Khamenei had a fatwa against the development and procurement and acquisition of nuclear weapons. They pledged that in the opening preface of the JCPOA. They've maintained that position for decades.

And I believe if it was true that they were comfortable that they're not trying to build nuclear weapons, then this conversation, many other podcasts that we've had. In fact, all of the work that's being done on Iran has been a waste of time because the regime is actually not interested in nuclear weapons. And we could have saved ourselves a whole lot of time and energy. I'll keep going. The United States of America and the Islamic Republic have agreed to resolve the disposition of stockpiled and rich material pursuant to a mechanism that will be mutually agreed upon in accordance with the schedule mentioned in paragraph 7. So tied to the sanctions relief. With the minimum methodology to be downblending on site under the supervision of the eye.

IAEA. The two parties also agreed to discuss the issue of enrichment, which side note, President Trump in a press conference today basically said that he was open to enrichment after spending more than a year saying that zero enrichment was his goal. Discussed the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran's nuclear needs based on a satisfactory framework being agreed upon in the final deal. The final deal will confirm the provisions of this paragraph the Islamic Republic acknowledges, actually is acknowledge the critical importance of nuclear. or issues above mentioned and express their attention to immediately address these issues in the negotiations in order to achieve mutual agreement on them. Well, in a sense, it's kind of a waste of words because there's really nothing there that's meaningful. I think the only thing that is a bit concerning is that we're already, even before we start negotiating the final agreement, have conceded on an Iranian demand. and that there will be no destruction of the enriched material.

And then instead, we're going to downblend it. And that's been an Iranian insistence that it seems like we've already conceded to. I absolutely agree with the administration that we've got to get the 10,000 pounds of enriched material at all levels of purity. But I disagree that downblending is a way to do it. I mean, we don't have to get into the physics of this. But if you downblend it to lower levels of purity, the Iranians can very easily. easily then enrich it to higher level of purity. So you want to get it out of the country. And all other words around this are, I think, essentially meaningless because everything else

is being deferred to the final agreement. And I think the concern, of course, is that with President Trump's rhetoric, he seems to be like literally conceding in real time on Iranian nuclear demands, that to his credit, he's held firm on for a number of years. So that doesn't make me confident that we're going to end up in a good place if there's a final agreement. Paragraph nine, pending the final deal, the USA and Iran agreed to maintain the status quo. Islamic Republic will maintain the status quo of its nuclear program. The USA will not impose any new sanctions, will not deploy additional forces to the region. Or self-restricting military deployments as part of this MOU. That all seems pretty, I mean, without offering approval.

it seems at least straightforward to understand. I would actually say that's a huge concession that we've just made to the Islamic Republic. I'm less worried about additional military deployments given the massive military armada we have there. But the idea that we're not going to enforce new sanctions in the next 60 days is exactly the criticism that the Trump folks have had of Biden and Obama for many years. because the lack of enforcement of new sanctions is equivalent to sanctions relief. If you're not going to enforce new sanctions, and what you're effectively saying to the market is, go ahead, do business with Iran, do illicit business with Iran, and we won't sanction you. So you're normalizing illicit business, and you're sending a message to the regime

that you are providing sanctions relief, in addition to the billions in oil, access to frozen funds. we're not going to go after your shadow economy, your shadow banking, your shadow fleet, and you can get billions of more dollars in this period through the lack of enforcement by the U.S. Treasury Department. Paragraph 10, the United States of America undertakes it immediately upon the signing of this memorandum of understanding until the termination of sanctions. So time now, presumably this is underway now, or if we're timing it to the formal signing, I guess it will be underway momentarily.

the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products, and derivatives in all associated services, including banking transactions, insurances, transportation, etc. This is what we were speaking about earlier. Immediate waiver of sanctions so Iran can pursue the energy trade. Okay. So this is where there's a lot of ambiguity, and it could be like the least bad to really bad. The least bad is that the Treasury Department issues a job. general license, similar to what they did a couple months ago, that allows Iran to send oil to China or potentially other countries. But that money doesn't get repatriated back to Iran, and Iran can't use that money in those accounts. That has been the case under sanctions. And that's the result, and that's why we have about $100 billion or so that has been frozen around the world. What they've effectively done is created restricted accounts that the Iranians can't access.

Now, the Iranians, at least with the money sitting in China, which is the majority of those funds, have found a variety of workarounds and sanctions busting techniques to pull some of that money out of those Chinese accounts. But in the best case interpretation of that, all that money. money just keeps building up in those accounts and the Iranians can't access it, repatriated, or use it for legitimate trade. The worst case interpretation of that is, no, it's not just going to be that general license. OFAC, Office of Foreign Assess and Control the U.S. Trade Department, is going to issue waivers

that allow countries to buy the oil, pay Iran for that oil, and Iran can then access that oil, for trade or repatriated back. And in addition, the $100 billion sitting in frozen assets can be sent back to Iran. That would be an absolute disaster. What you're effectively doing is taking all the money that Iran earns in the 60 days or in the five months, as I've assessed it. So $25 billion in new oil sales, $100 billion in frozen assets. And now you're giving Iran $125 billion while you're negotiating with them over a final agreement to try to stop their nuclear weapons program. That's not a great way to negotiate.

You've effectively surrendered your leverage up front before you've gotten the kind of demands met on the nuclear side that the president still claims he wants. Paragraph 11, this one's a doozy. The United States of America undertakes to make fully. available for use the frozen or restricted funds and assets of the Islamic Republic of Iran. Upon the implementation of this memorandum of understanding, the United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds during the negotiations.

During the negotiations, key phrase, such funds, whether retained in the original account or transferred, shall be made fully usable for payment to any ultimate beneficiary designed, they mean designated by the central bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorizations accordingly. So when I saw a slightly different version of this, this morning mark, I thought that the timeline on this was kind of pushed to the right. Actually, if you compare paragraph 11 with paragraph 13, which calls for the implementation of paragraph 11 prior to a final deal, it's clear that this unfreezing of funds sort of begins soon and then proceeds, I don't know, to completion, but proceeds a pace through the negotiations. Is that, is that fair? Okay. So this is what I was talking about earlier, right? This is the so-called $100 billion that's sitting in these banks in China, in Qatar, in Oman, in Iraq, and some other money that's sitting in other places. The, again, The worst case scenario is exactly as I characterized it.

Iran gets full access to the $100 billion. If Iran gets full access to the $100 billion, our negotiating position has collapsed. Okay. But let's be fair to the administration. They can't be that stupid. Let's say what they're going to do is they're going to say to Iran, okay, you get access to the money, but we are going to limit that access to the payment of humanitarian transactions.

So you can use that money. We will review the transactions, and you can use the money to buy pharmaceuticals and soy beans from American companies or other humanitarian trade that we authorize. Now, some people would say money is fungible and money that they get to spend on humanitarian, freeze up money so that they can spend their national budget

on missiles and drones and other nefarious activities, and that's true. Or the administration says, look, access is one thing, authorization of these transactions and another. And what we're really talking about over the next 60 days, it's not billions of dollars of released frozen assets, but maybe millions or tens of millions of dollars of authorized humanitarian transactions. If my generous interpretation of that provision prevails, then I don't think it's that material. If my pessimistic interpretation of that provision prevails, then it is a complete unmitigated disaster. Paragraph 12, the United States of America and the Islamic Republic of Iran agreed that an executive mechanism will be established to monitor the successful

implementation of this memorandum of understanding and the future compliance of the final deal. Who's going to be the mechanism, Mark? Do we have any idea? I have no idea. I wonder if the administration does. But that's for the final deal. I mean, I think we're so long, we're such a long way from the final deal. I'm deeply skeptical there ever be a final deal. But the actual mechanism to monitor it, I'm sure will be a combination of the IAEA on the nuclear side, OFAC on the sanction side, you know, maybe Department of Energy will have a bunch of U.S. experts. And then on the Iranian side, one can only wonder, maybe Mostabah Khomey will finally make his appearance and become the chairman of that executive monitoring committee. Almost there, two paragraphs to go.

Paragraph 13, after signing this memorandum of understanding and subject to the beginning of the implementation of paragraphs, one, that's cessation of hostilities, including Lebanon. Four, that's the lifting of the U.S. blockade. Five, that's the lifting of the Iranian blockade, though not the lifting of a very limited. Iranian claims to sovereignty and ability to charge tolls in the long run. Ten, that is the waivers for sanctions. And 11, that is the frozen funds issue we were just discussing. Subject to the beginning of the implementation of those paragraphs and the continuing implementation

of these measures, the USA and Iran will start negotiations regarding the final deal exclusively on the other paragraph. So we do all that stuff up front. And indeed, Mark, if your non-generous interpretations are true, we surrender all of our leverage. Honestly, even if your generous interpretations are true, we're surrendering a good deal of our leverage. The Balkate alone is an enormous amount of leverage that we're surrendering. Then we're going to negotiate the nuclear stuff, in other words. Yeah, and on the nuclear stuff, obviously, the Iranians have also been very successful in taking their missile program off the table.

When President Trump used to talk about this, it was nuclear, missiles, and terrorism. And by the way, the Iranian people, the Iranian people have been thrown under the bus. We talked about whether they're going to be serious about stopping Iranian support for terrorism. Column is skeptical. The reference to Lebanon and Hezbollah makes me worried. President Trump was just saying today, actually, Aaron, that, you know, of course Iran needs missiles. I mean, how can we tell Iranians they can't have missiles? So I don't know what that means, except that.

There's no direct negotiations between the United States and Iran over missiles. I think the administration has this idea that the regional actors, meaning the Gulf, excluding Israel, will negotiate with the Iranians over a mutually acceptable agreement on how many missiles Iran can retain at what range and what payload. Column is skeptical that our Gulf allies are going to do a better job of negotiating with the Iranians or with their missile program. And that leaves the nuclear program, which again, I mean, you know where I stand, full dismantlement, zero enrichment, zero centrifuges. Iran can have civilian energy. It can buy its fuel rods from abroad like 23 other countries. I think President Trump is day by day conceding on those demands. And now maybe conceding enrichment at some level. Iran doesn't have to destroy its enriched material, just dilute it, downblend it. One wonders about Sites are, whatever sites are remaining, like Pickax Mountain, these other Iranians are going to agree to dismantle that. Again, you surrender your leverage the way President Trump seems to be doing through this MOU,

and you don't have a hope in hell of getting the Iranians to meet your nuclear demands. Home stretch, actually big finale, paragraph 14, the final deal will be endorsed by a binding resolution of the UN Security Council. Final thoughts, Mark Dubowitz, on this, but also. more generally. Yeah, I have no doubt that there will be a binding UN Security Council resolution, as there was for the JCPOA. I mean, Aaron, what's interesting for me is that this MOU should be subject to the Iran Nuclear Agreement Review Act, which the JCPOA was subject to, which triggered a very lively debate, as you remember in 2015 and hearings and a vote.

Lindsay Graham has said, Senator Graham has said that this is also subject to A similar review process? Will Congress debate this? Will Republican senators dig into the details? Will the hold the administration accountable? One wonders. I see no hearings scheduled. I'm skeptical that hearings are going to take place over the summer. But Congress should review this because there's clearly a lot of questions to be asked, a lot of details to be understood. I would say one other thing. I'm also really concerned about side deals and side letters. These were things the Obama administration did with the Iran and credit to the administration from being transparent. They've actually admitted that there are side deals and side conversations and things, Aaron, that you and I are not old enough or mature enough to really understand. And if we did, we would really appreciate how much better this deal is than it looks in its 14 provisions. Clearly, the side deals and side understandings are also subject to review by Congress. And I hope Senator Graham and other senators are asking tough questions about the MOU and all these side deals.

And I would just finish with this. I mean, perhaps never in the history, in modern American history, has so much been achieved in the battlefields and squandered in the negotiating room. I hope that statement that I just made proves to be wrong. And this administration is as tough in negotiating over the next 60 days as the president has been resolute in using other instruments of American power to degrade this. regime. Call me skeptical. And here's hoping that our skepticism, Aaron, proves to be unwarranted. Mark Dubowitz, you are always welcome here on School of War when times are good, or indeed,

as now when times are bleak. Thank you so much for coming on. Thanks so much, Aaron.