Few nuclear agreements in the technology’s history have been so transformative for the protagonists as the Iran nuclear agreement. Not only has the 14 July 2015 deal plucked Iran out of international isolation (as perceived in the West, though Iran never was ostracised internationally as such) it has also brought the industrial world arrayed against it the promise, as Iran reopens to western business, of timely relief from its various economic, financial and geopolitical woes.
The International Institute for Strategic Studies in London, a think tank known for its academic rigour but also, alas, for having strayed frequently and crucially on its past analyses of both Iraq and Iran, has had time to reconsider its own position and look closely at the nuclear agreement.
Today, 22 July 2015, the institute offered an informed comment on the deal and explained what its terms mean. For the views from elsewhere, see various articles appearing in the pages of The Middle East in Europe.
Recalling the 20 months of intense negotiations between Iran and its six main adversaries that preceded the 14 July agreement, the IISS said, “If faithfully implemented, it will put off the threat of a nuclear weapon for 15 years, and remove Iran from its economic and political isolation.
“The detailed verification measures outlined in the deal and the threat of sanctions re-imposition provide incentives for adherence,” the institute opines in an unsigned ‘strategic comment’ published as part of a series under the editorship of Alexander Nicoll. Below is an edited text of that comment. To read it in full visit the institute website at http://www.iiss.org/
Early on in the negotiations between Iran and the EU/E3+3 (European Union, France, Germany and the United Kingdom plus China, Russia and the United States) that produced the newly agreed Joint Comprehensive Plan of Action (JCPOA), IISS points out, the six powers dropped their demand that Iran forgo all activity related to uranium enrichment.
“They realised that this particular goal had become unattainable, given the centrality of enrichment in Iran’s self-identity and sense of sovereignty,” IISS says.
The growing size of Iran’s enrichment programme – by September 2013, nearly 19,500 centrifuges were installed – also argued for seeking limits rather than holding out for zero enrichment. If Iran were to employ its declared facilities to produce highly enriched uranium for a nuclear weapon, it theoretically could do so within two to three months, although as a practical matter it would take longer. This was the so-called ‘break-out’ period.
The EU/E3+3 set a one-year break-out period, to last for at least ten years, as their negotiating goal. As outlined in the political framework reached in Lausanne on 2 April, the JCPOA meets this goal by limiting the enrichment capacity and the size of the low-enriched uranium (LEU) stockpile. For ten years, the installed uranium-enrichment capacity will be limited to 5,060 first-generation (IR-1) centrifuges, all at the Natanz enrichment facility. From year 11 they can be replaced with more advanced machines, but reportedly with no increase in capacity. An additional 1,044 IR-1 machines will remain installed at the Fordow facility, which for 15 years will not be used for enrichment. Fordow will instead be used for research and development involving other nuclear and physics technology: one third of the centrifuges there will be used for the production of stable isotopes; the other two-thirds will be used as replacements in case of breakage.
Approximately 13,500 centrifuges at Natanz and Fordow will be uninstalled, along with their pipework and other infrastructure. For 15 years, the level of enrichment will not exceed 3.67%, the level required for fuel for most light-water reactors. Until November 2013, Iran also produced near 20% LEU, the level required for fuel for the Tehran Research Reactor but also the level regarded as being on the cusp of weapons usability. The LEU stockpile – which currently amounts to about 10,000kg in various forms – is to be reduced to a total of 300kg, and this limit is to apply for 15 years. The excess LEU is to be down-blended to the natural uranium level (0.7%) or sold abroad in exchange for natural uranium.
Research and development of advanced centrifuges is constrained for a period of time, limited to IR-4, IR-5, IR-6 and IR-8 models and without operating them in cascades for ten years, with limited exceptions. This prevents Iran from rapidly introducing large numbers of advanced models when the limits are relaxed in the latter years of the agreement. Without first testing advanced models in large cascades for many months, they cannot reliably be employed for industrial use. Limited production of IR-6 and IR-8 centrifuges may begin at the end of year eight.
The JCPOA blocks any potential plutonium path to a bomb by requiring the redesign and rebuilding of the heavy-water research reactor in Arak so that it does not produce weapons-grade plutonium. The calandria (core) of the reactor is to be removed and disabled, and eventually replaced with one that uses LEU fuel and has half the power (20MWt) of the original design. Iran agreed to forgo reprocessing, and all spent fuel from Arak will be shipped out of the country for the lifetime of the reactor. No other heavy-water reactors will be built for 15 years. Although the no-reprocessing condition is limited to 15 years, Iran expressed an intention to continue thereafter to do without this sensitive technology.
Adding a condition that was not referred to in the Lausanne accord, the JCPOA bans Iran permanently from engaging in certain activities related to nuclear weaponisation, such as using computer models to simulate nuclear explosions and the development of neutron initiation systems.
Benefits to Iran in the JCPOA include civil-nuclear cooperation by the EU/E3+3 parties. They are to facilitate Iran’s acquisition of modern light-water research and power reactors – something that is already under way under contracts with Russia. Assistance will also be provided in the re-design of the Arak research reactor and in the area of nuclear safety. The JCPOA makes no mention, however, of Iran finally joining the International Atomic Energy Agency (IAEA) Nuclear Safety Convention. It is the only country operating a nuclear power plant that is not a party to the convention.
Verification and transparency
The verification procedures provided for in the agreement will amount to the most intrusive set of measures employed by the IAEA anywhere in the world. Modern technologies including on-line enrichment measurement and electronic seals that provide continuous measurements directly to the IAEA will be employed. Iran will fully implement the modified Code 3.1 of the Subsidiary Arrangement to its safeguards agreement, which requires early notification of any plans for new nuclear facilities. Iran’s unilateral abrogation in 2007 of its observation of this rule has been among the lingering points of contention about its lack of nuclear transparency.
Beginning in early 2016, Iran will provisionally apply the conditions of the safeguards Additional Protocol (an instrument that provides for intrusive inspections and has become the international norm, in force in 126 states to date, but that is not otherwise mandatory). At a later date, no longer than eight years, Iran will seek ratification of the Additional Protocol, which would lock in its provisions indefinitely. This timeframe was established to mirror a US obligation to seek legislative action in no more than eight years to terminate nuclear-related sanctions.
According to the JCPOA, the IAEA can seek access anywhere in the country where it has concerns about undeclared nuclear materials or activities, or activities inconsistent with the JCPOA. The latter phrase goes beyond the Additional Protocol in that it extends IAEA access rights to activities that might contribute to the development of nuclear explosive devices. Military sites are not ruled out, despite earlier statements by Supreme Leader Ayatollah Ali Khamenei that inspectors would be barred from such facilities.
The IAEA’s access is not unfettered, however. The Additional Protocol provides for ‘managed access’ under which, to protect military and commercial secrets, Iran can suggest alternative means for the IAEA to meet its verification objectives. Under the JCPOA, if the IAEA is not satisfied with the suggested means, and the two sides cannot reach agreement on the scope of access, the issue will be referred to a newly established dispute-resolution mechanism. A maximum of 24 days from the time of the IAEA’s initial request for access are allowed to elapse before Iran might be required to permit the requested access. This is enough time to remove any incriminating documents and equipment, but not to remove minute uranium traces left by nuclear materials that would be detectable by IAEA environmental sampling.
Also beyond the measures of the Additional Protocol, which will last indefinitely, the IAEA will be able to monitor all uranium ore concentrate produced or imported (for 25 years) and Iran’s centrifuge production, assembly and storage facilities (for 20 years). The JCPOA also established a ‘procurement working group’ composed of the eight parties to the agreement, which will have responsibility over the next ten years to review proposed sales to Iran of nuclear-related items and technology for its allowed nuclear programme. Any member can veto a proposed transaction. Verification measures were not specified concerning the ban on weaponisation activities (over which the IAEA has no explicit mandate if nuclear materials are not used).
In accordance with a separate ‘Roadmap’ agreement signed with the IAEA on 14 July, Iran by November 2015 is to address all of the IAEA’s outstanding questions concerning allegations of past and possibly present nuclear-weapons-related research. In a November 2011 report, the IAEA summarised 12 types of what it called nuclear activity of a ‘possible military dimension’, of which only one and a portion of another have been satisfactorily addressed to date. A classified agreement sets out the access Iran is to provide to sites, including Parchin, individuals and documents in order to address the questions. Although it appears unlikely that all questions will be resolved, IAEA Director General Yukiya Amano pledged to present a final report on this matter by December. It will then be up to the IAEA Board of Governors to determine whether to close the file. Significant sanctions relief will be dependent on Iran taking all steps specified in the Roadmap, but not on the nature of the IAEA final report.
Iran will not experience any sanctions relief until after the US Congress has reviewed the agreement and it has survived any vote of disapproval. Sanctions relief is also dependent on United Nations Security Council adoption of a new resolution to replace previous sanctions resolutions, and on the fulfilment of Iran’s commitments under the agreement.
On what is called the ‘Implementation Day’, meaning once the IAEA confirms that Iran has fulfilled its obligations under the JCPOA, which is likely to take about six months, the UN, EU and the US are to cease their nuclear-related sanctions on Iran. The new UN Security Council resolution will nullify the previous six resolutions that placed restrictions on Iran, but it will retain an embargo on conventional arms sales to Iran that will last for five years, and the ban on missile sales for eight years. After ten years, the Security Council would ‘no longer be seized of the Iran nuclear issue’, meaning the file will be closed.
On Implementation Day, the EU will suspend most of its nuclear-related sanctions against Iran, including an embargo on oil sales and a freeze on the Central Bank of Iran and other institutions. Most of the Iranian individuals and entities on the EU designation list will be removed. In order to allow for ‘snap back’ of EU sanctions in the event of violation of the agreement, the EU Council decision that provided the basis for sanctions will remain in place until ‘Transition Day’. This is defined as eight years after Adoption Day or until the IAEA draws the ‘broader conclusion’ in accordance with the Additional Protocol that all nuclear material in the country remains in peaceful activities, whichever comes first. The EU embargo on the transfer of ballistic-missile technology and certain other EU restrictions will remain in place until Transition Day. Among the measures not fully terminated until that date is the EU sanction on the use of financial messaging services by designated banks. But the designation of most Iranian banks will cease on the implementation date, so they will be able to use the Belgium-based SWIFT messaging service.
On Implementation Day, the US will ‘cease the application’ of its most significant nuclear-related economic sanctions, including the freeze on approximately US$120 billion of Iran’s oil sales revenues and most banking sanctions. The US sanctions relief will generally apply to non-US persons. They will no longer be subject to US secondary sanctions in: finance and banking; insurance; energy; petrochemicals; shipping, shipbuilding and ports; gold and other precious metals; certain software and metals; and the automotive industry.
Foreign financial institutions will be able to engage in transactions with the Central Bank of Iran, as well as with other Iranian financial institutions that do not remain on the Specially Designated Nationals and Blocked Persons (SDN) list. The JCPOA also lifts the prohibition on transactions in the rial. The sanctions that apply to US persons will largely remain in place, with the exception of imports into the US of Iranian carpets and foodstuffs, and trade in civil aircraft and parts. After eight years or an IAEA ‘boarder conclusion’, the US executive branch will ‘seek such legislative action as may be appropriate to terminate’ most nuclear-related sanctions. It will be up to the US Congress of the day to decide whether or not to do so. Sanctions relating to human-rights abuses, support for terrorism and other non-nuclear activities are not affected by the JCPOA.
The JCPOA makes no mention of lifting the US Treasury designation in November 2011 of Iran as a primary jurisdiction of money laundering concern. This is one of several US sanctions that was applied in the context of the nuclear dispute with Iran, but ostensibly in response to other Iranian activities. Secondary US sanctions applied by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) will not be lifted either, although most of the Iranian individuals and entities to whom CISADA applies are to be delisted on Implementation Day. Like the EU regulations on financial messaging, the US sanctions architecture remains in place but the applicability is suspended by removing names from the blacklist.
An eight-member Joint Commission is to be established, comprising the EU/E3+3 parties, to oversee implementation of the agreement, including the status of sanctions relief. Commission decisions will be ruled by consensus, except for dispute resolution. If other efforts fail to resolve a dispute, any member of the commission can refer the issue to the UN Security Council, which would then be required to vote on a resolution to continue sanctions relief. The failure of such a vote after 30 days would entail the re-application of all sanctions under previous Security Council resolutions.
This is the so-called ‘snap-back’ sanctions procedure, under which the permanent members of the Council cannot veto the restoration of sanctions, although they can veto the continuation of sanctions relief. This provision for the automatic re-imposition of sanctions expires in ten years, although a side agreement among the permanent members expressed their intention to prolong the mechanism for another five years. Any snap-back sanctions measures would not apply retroactively to business activities with Iran that were consistent with the JCPOA and relevant UN Security Council resolutions at the time.
For the views from elsewhere, see various stories appearing in the pages of The Middle East in Europe.