By Mark Fitzpatrick, Director, Non-proliferation and Disarmament Programme

After years of international tensions over Iran’s nuclear programme, this has been a winter of diplomatic progress. Following on from the 24 November Joint Plan of Action that capped Iran’s nuclear capabilities and the 13 January agreement on the technical understandings, the six powers – the US, UK, France, Germany, China, Russia – will meet with Iran on 18 February to begin negotiations on a long-term, comprehensive agreement.

For reasons I will get to shortly, their job is extremely daunting. I see no more than a 10% chance of a comprehensive deal being reached this year. But there are grounds for cautious optimism about the interim deal. I see an 80% chance that it will be extended for another six months.

The Joint Plan of Action wasn’t a perfect deal for the Western powers, which got considerably less than what they had sought. They had asked Iran to ‘stop, ship and shut’ – to stop production of near-20% enriched uranium, ship out the accumulated stockpile of near-20% enriched product, and shut down the Fordow enrichment plant. They only got ‘stop’, plus a pale equivalent of ‘ship’ because the 20% stockpile will be removed in another way, but not irreversibly. But diplomacy involves compromises, and Iran made most of them. Here are six reasons why the interim deal is worth extending.

  1. It caps Iran’s nuclear capabilities. Iran has stopped producing near-20% enriched uranium and will soon start to eliminate the stockpile of near-20% uranium hexafluoride (UF6) that put Iran on the cusp of having sufficient fissile material for a nuclear weapon. The product won’t disappear entirely – half will be diluted to 5% and half converted to oxide, processes that can be reversed. Iran also has stopped installing new centrifuges and will not operate those that were already installed but not enriching. By removing the higher enriched UF6 stockpile, the time to produce a weapon’s worth of highly enriched uranium will approximately double. Without the deal, it was projected that the time would be cut in half by this summer.
  2. The impasse over the ‘right to enrichment’ issue was overcome with diplomatic finesse. Iran’s biggest concession was that it was not accorded an explicit right to enrichment. Iran maintains it has the right, under international law, to enrich uranium for peaceful purposes, and had insisted that in any deal this right had to be recognised. The United States, United Kingdom and France insist that the Non-Proliferation Treaty, in acknowledging the ‘inalienable right to nuclear energy’ does not extend that right to enrichment. I had thought that the Western powers would have to go part way toward acknowledging this right, but noting that it is conditional. But instead Iran dropped its insistence. The ‘right to enrichment’ issue was overcome by classic diplomatic fudge: each side interpreted the language differently.
  3. The immediate threat of war has been put off. The option for military action remains, in case diplomacy collapses. President Obama is still determined that Iran will not acquire nuclear weapons. For now, however, there is no more talk of war.
  4. The sanctions pressure largely remains in place. A desire to lift the UN and Western sanctions that have been choking their economy was not the only reason the Iranian electorate chose Hassan Rouhani as president in June, but it was certainly a significant factor. By inking the Joint Plan of Action on his 100th day in office, he delivered on his promise to the Iranian people to start dialling back sanctions. Combined with a reduction in inflation and a rise in value of the rial, the mood in Iran is optimistic. The sanctions are not reduced too much, however: the US$4.2 billion of frozen accounts released is only 4% of the total that is held up in foreign banks. And it is their money; nobody is gifting the money. Iran also can earn about US$3bn via other sanctions relief. How much is difficult to say, because banks are still reluctant to offer letters of credit.
  5. The fear that the sanctions regime will now unravel is misplaced, for two reasons. Firstly, sanctions were already in danger of unravelling. The most onerous sanctions were the reductions that the US forced Iran’s remaining oil purchasers to make every six months, but during the last six months of 2013, China, Iran’s biggest customer, reduced its purchases by only 2%. Beijing was reaching the point where it wasn’t going to cut back anymore. Also, if the US had been seen as intransigent in talks, global support for sanctions would have eroded. Secondly, the US, UK and others are trying to ensure that existing sanctions remain firm. In December, the US Treasury reached a US$100 million settlement with the Royal Bank of Scotland for violating sanctions. On 23 January, a US$152m settlement was reached with Clearstream Banking, based in Luxembourg, for having allowed Iran to bypass sanctions through the use of the company's access to the American banking system.
  6. Neither side has any incentive to cheat. Breaking the conditions of the Joint Plan of Action would see both sides lose the considerable benefits they derive from the deal. The momentum in the US Congress to push for new sanctions, which would have had the effect of breaking the conditions, has shifted. It was extraordinary that 59 Senators, including 16 Democrats, signed up to a new sanctions bill on 19 December that would move the goalposts, set impossible demands, and register support for military action. Senators said they were helping President Obama by playing bad cop. Obama feared the opposite. Iran would naturally see new sanctions legislation as a violation of the interim deal, which rests on the principle of a freeze in sanctions for a freeze in nuclear capabilities. A White House spokeswoman all but called the Menendez–Kirk bill a vote for war. That is why it was opposed by major US newspapers and foreign-policy experts as well as almost every Iran expert. Five of the co-sponsors have now expressed a form of buyer’s remorse. In any case, Senate Majority Leader Harry Reid will not bring the bill to a vote for now.

However, I am pessimistic about a long-term deal because the two sides are simply too far apart in what they consider their bottom lines.

  1. The West wants deep cutbacks: namely, the elimination of the vast majority of Iran’s around 18,800 centrifuges, an end to the Fordow enrichment plant and Arak nuclear reactor and for these limitations to last a generation – not a generation of centrifuge models but a human generation, that is, around 20–25 years. The West also want clarity concerning the evidence of Iran’s past weapons development work.
  2. Iran does not want to dismantle anything, as Rouhani told CNN’s Fareed Zakaria a week ago. As I see it, Iran wants to keep a capability to be able to produce nuclear weapons if a political decision is made. It is willing to make tactical adjustments, but sees limits lasting only a short time. Nor is Iran willing to confess to weaponisation work. In exchange for tactical limits, Iran wants all sanctions lifted.

Iran is correct that the deal did not explicitly call for dismantlement. Zakaria saw the differences over dismantlement as a looming train wreck. Some of the brouhaha over the dismantlement issue last week was semantic and confused. Iran insisted that the interim deal did not call for any dismantlement, contrary to how the White House characterised it. Iran is correct, but the issue is similar to the fudge over the ‘right to enrichment’. Each side can describe it as they see it. Disconnecting piping is a form of dismantlement. It’s reversible, of course.

Another post discussing possible solutions for will follow shortly.

This post is drawn from the first part of Mark Fitzpatrick’s 3 February presentation at Arundel House on ‘Assessing the Iranian Nuclear Deal’.

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