The memorandum of understanding between the United States and Iran — named the Islamabad MOU for the mediator’s host country — is vaguely written and intentionally so, given its clear purpose as a negotiation agenda catering to each side’s domestic audience. 

But the agreement’s text, read aloud Wednesday by a senior U.S. official on a call with reporters, provides a preview of the precarious path ahead for U.S. and Iranian negotiators, who have only two months after the MOU’s signing to secure a final deal to forever end Iran’s nuclear ambitions. The MOU, as laid out to reporters, reveals some significant wins for Iran that are likely to raise eyebrows in the U.S., especially among members of Congress, including U.S. support for a $300 billion reconstruction fund and no restrictions on Iran’s missile program.

The focus of the MOU is on economic measures, from ensuring the free flow of traffic through the Strait of Hormuz to providing Iran with economic incentives for good behavior. Only two of the document’s 14 points mentions the country’s nuclear program at all, with the rest revealing concessions the U.S. made to the country that President Donald Trump said have been “largely demolished.” 

Notably, Iran has only agreed to ensure the safe passage of commercial vessels through the strait via toll-free transit for 60 days, during which a significant demining effort must ensue before traffic can fully return to preconflict levels. After that, Iran and Oman will work “to define the future administration and maritime services” with other Persian Gulf states, which a senior U.S. official said would “never agree” to allowing Iran to charge for passage.

Impact on the Middle East

While the agreement ends military hostilities on all fronts, including Lebanon, Israeli Prime Minister Benjamin Netanyahu has not agreed to the digitally signed MOU that would require Israel to end its military campaign against Hezbollah and withdraw the Israel Defense Forces from southern Lebanon. 

Despite a senior U.S. official stressing that “this deal is no side deals, full transparency,” Israel seems to think there are further talks happening behind-the-scenes.

“What they’ve been saying to us is, look, if Iran actually does all the things that they’re telling you they’re going to do in the back channel, that would be a home run deal,” the official later said, still noting Netanyahu’s skepticism of Iran’s intentions. 

While the MOU says the U.S. would “remove its forces from the proximity” of Iran 30 days after a final deal is reached, the senior U.S. official clarified that does not mean all American troops and military assets at U.S. bases in the Middle East, which is something Iran had been pushing for. Rather, the MOU returns the U.S. force posture in the region to what it was before the conflict started.

Wins for Iran

The U.S. has agreed to work with regional partners to secure $300 billion toward a reconstruction and economic development fund for Iran, a sum higher than the $270 billion the Islamic Republic had demanded in reparations from the U.S. to rebuild after the war.

“If we get to a final deal and if the Iranians behave, we will permit the sanctions relief that would allow, for example, the Emiratis to build a power plant in Iran,” a senior administration official said, referring to the United Arab Emirates. “That’s all it says.”

Though the Trump administration has insisted there will be no taxpayer dollars going toward the fund to be financed by private investments and other countries, the U.S. would still play an active role in the fund by facilitating relevant financial transactions by granting licenses, waivers and permissions.

“Somebody is going to have to help them out,” Trump said on Wednesday, referring to the Iranians. “There’s no guarantee about helping them out, and it could be their neighbors will help them out a little bit. I don’t know, but it’s a lot of money.”

The MOU also says the U.S. would work toward ending all sanctions against Iran, including its own primary and secondary unilateral sanctions, as well as those implemented by the United Nations Security Council and International Atomic Energy Agency resolutions. 

In the meantime, Iran is set to get an immediate financial boon: oil waivers.

Until Iran shows progress on its “good behavior” prompting the lifting of broader economic sanctions, the Treasury Department will issue waivers “for the export of Iranian crude oil, petroleum products, and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.”

A senior U.S. official downplayed the significance of the gesture, which is slated to be implemented as soon as the MOU takes effect. The official argued current oil sanctions have allowed China to buy Iranian oil more cheaply, and waivers would stop that benefit.

“It’s not that significant in the scheme of things,” the official said. “They were able to do it anyway by opening the strait, and so we thought that was actually a fair concession to give them, and also it helps bring down global oil prices, which have come down quite significantly, which impacts obviously American households with gas prices.”

Despite the Trump administration’s assertion that the oil waiver would be the only economic relief provided to Iran prior to a final nuclear deal, the MOU’s text includes strategically ambiguous language regarding the unfreezing of Iranian assets.

“Assuming we get to a final deal, then they will have access to these assets,” a senior U.S. official said, noting the potential for releasing some frozen assets during negotiations.

“What Iran wanted was restricted funds and assets of the Islamic Republic of Iran upon the signing of this MOU, and what they eventually conceded is that they wouldn’t get any money unless they performed good behavior,” the official added.

But the text of the MOU tells a different story.

Paragraph 11 says Iran’s frozen assets would not be released until the MOU is implemented, and after procedures related to the release are determined during the 60-day window for nuclear negotiations. But later, paragraph 13 says those negotiations would not even start until “the beginning of the implementation” of paragraph 11’s promise to make its frozen assets available.

The White House did not respond to a request for clarity before the deadline for this article.

The nuclear questions

The main section on the nuclear questions provided more questions than answers. 

Agreeing to discuss “the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran’s nuclear needs” is a far cry from the Trump administration’s initial demand that Iran never have a civilian nuclear program, punting the problem of enrichment to the next round of technical talks.

While the U.S. and Iran “agreed to resolve the disposition of stockpile enriched material,” the details of what that looks like will have to be hashed out during the negotiating period, with “the minimum methodology to be down blending on site under the supervision of the IAEA.”

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The onus is now on the U.S. to convince its adversary to fully hand over its stockpile of highly enriched uranium.

“Of course, that’s the floor, and we will push for more than that, but the fact that they’re conceding to that is a major, major win for the United States of America,” a senior U.S. official said. 

Trump seemed unconcerned by Iran’s enriched uranium stockpiles, backtracking from his earlier claims that their arsenal of “nuclear dust” posed an imminent threat to the U.S. that warranted attacking Iran.

“It’s not important that we do it quickly,” he said of getting rid of Iran’s enriched uranium, later adding, “It’s actually not valuable. Not a lot of value, but we would like to get it psychologically, but nobody’s touching it.”

Open questions

One goal both the U.S. and Israel appear to have abandoned is regime change. The MOU states Iran and the U.S. would respect each other’s sovereignty and “refrain from interfering in each other’s internal affairs.”

“When we are finished, take over your government — it will be yours to take,” Trump told Iranians when he announced the war on Feb. 28. Based on this text, the U.S. will not provide support to Iranian protesters in the future.

But perhaps more illuminating than what is included in the document is what is not. 

According to an Israeli readout of Netanyahu’s call with Trump last week about the emerging agreement, Trump made commitments to Netanyahu that the final deal at the conclusion of negotiations would include “the removal of enriched material, the dismantling of enrichment infrastructure, limits on missile production, and the cessation of of Iran’s support for its terrorist proxies in the region.”

The MOU’s framework for 60 days of negotiations does not mention limiting Iran’s ballistic missile program, which the U.S. claims to have decimated during its military operation. Nor does it mention Iran’s financial and military support of Hezbollah, Hamas, the Houthis or Iranian-backed militias in Iraq.

Given that the MOU makes a point to note that negotiations for a final agreement will be “exclusively” regarding issues named in it, Trump appears to have reneged on his promise to his Israeli counterpart. That could make it even less likely Israel will refrain from actions that could jeopardize reaching a final deal within the next two months.

On Wednesday, Trump made a 180 degree reversal, saying he’s open to Iran having “some” conventional ballistic missiles “in relative proportion” to neighboring countries like Saudi Arabia and Qatar.

“If other countries have them, it’s a little bit unfair for them not to have some,” he told reporters as he left the G7 summit in France.

A senior U.S. official said the issue of proxy militant groups would be discussed after the nuclear agreement is reached, echoing Trump’s comments that Gulf nations would later address non-nuclear issues. 

“Maybe let’s come up with a new framework for how to interact with each other and not threaten each other, and maybe that can lead to stopping the funding of proxies and can lead to a much more stable region,” the official said.

And as for enforcement, an actual mechanism to ensure compliance has not been determined. But a senior U.S. official insisted there would be “hourly, if not daily, interactions between sides,” noting new relationships had been formed with Iranian Revolutionary Guard Council contacts, senior Iranian leadership and religious figures in Iran “expressing the desire to do something different than what they’ve done before.”

“We’re going to just work together and see if we can do some things to build trust and see if we can pull off a deal that will obviously change the course of the relationship between the countries and potentially between Iran and the region and potentially the world,” the official said.

Trump however, took a different approach to enforcing the agreement.

“We’re going to bomb the hell out of them if they violate the agreement,” Trump said at the G7 on Wednesday. “I don’t want them to. I want them to honor the agreement.”

Julia Jester

Julia Jester covers politics for MS NOW and is based in Washington, D.C.