Hints of progress on Iran nuclear talks, but time is running out

Breaking news: talk of “progress” and a “good deal”

The buzz surrounding the nuclear talks in Vienna between the parties to the Joint Comprehensive of Action (JCPOA), or Iran nuclear deal, revolves around “progress”.

Parties negotiating the deal, which provides sanctions relief in exchange for constraints on Iran’s nuclear program, include the UK, France, Germany, EU, Russia, China and Iran. The American President donald trump withdrew from the deal in May 2018. But the road to a deal is definitely through Tehran and Washington, with perhaps a side path from Washington to Jerusalem.

Statements out of capitals signal some qualified traction in the talks:

• State Department Spokesperson net price said on January 12 that “we have seen modest progress in recent weeks.”

• Russian Foreign Minister Sergei Lavrov was more optimistic. “There is real progress,” he said Jan. 14. “We hope an agreement will be reached.”

• Iran’s Supreme Leader, the Ayatollah Ali Khamenei declared on January 9: “The enemy’s aggression should not be tolerated. It is one thing to negotiate, for example, with the enemy, but quite another to interact and cooperate with him,” a statement widely interpreted as a boon to the nuclear negotiations in Vienna.

• Iranian Foreign Minister Hossein Amir-Abdollahian traveled to Oman and Qatar last week, where he reportedly briefed leaders on nuclear talks, while talking about Iran’s readiness for a “good deal” in Vienna, as Amwaj reports here.

If there is a deal: Iran is open for business…

The US framework is compliance for compliance’s sake. If Iran reverts to its obligations under the JCPOA for restraints on its nuclear program, the United States will waive sanctions reimposed in May 2018, including those targeting non-US persons and non-US affiliates of US companies.

While the United States did not allow direct transactions with Iranian banks after lifting sanctions in January 2016, the United States’ recommitment to the JCPOA would mean that Iran is once again open for business in the sectors energy, shipping, metals, automotive, insurance and others.

Iran’s economy took off in terms of real GDP growth after the implementation of the JCPOA, growing from minus 1.3% in 2015 to growth of 13.4% in 2016 and 3.7% in 2017. After As the Trump administration blew up the deal, the economy contracted again, down 6% in 2018.

Similarly, oil exports increased from 1.3 million barrels per day in 2015, before the JCPOA came into force, to over 2 million bpd in 2017. After the United States withdrew from the agreement, exports fell to less than 500,000 in 2019.

Like Bijan Khajehpur explains in this week’s “On the Middle East” podcast, Iran’s economic future depends on investment, and investment depends on sanctions relief. Although Iran’s economy is not on the verge of collapse and is expected to achieve modest growth (2%) this year, according to the IMF, ultimately the burden of debt, inflation and other structural challenges can only be resolved through sanctions relief.

…with upcoming transition and termination days

Ben Caspit reported here last week that Israel, increasingly resigned to the prospect of a nuclear deal this year, is pushing for an extension of the JCPOA’s “sunset clauses” regarding sanctions. Here’s why.

Transition Day (October 2023): Eight years after its adoption, and after the IAEA signaled that “all nuclear material in Iran remains in peaceful activities” and ratified the Additional Protocol, the UN will end restrictions on missile transfers to Iran Iran, and “the United States will seek to take such legislative action as may be appropriate to lift or amend to terminate the sanctions specified in Annex II on the acquisition of nuclear-related goods and services for nuclear activities contemplated in this JCPOA, be consistent with the United States’ approach to other non-nuclear-weapon states under the NPT.” (emphasis added).

Termination day (October 2025): Ten years after the adoption, around October 2025, and assuming that Iran respects the JCPOA constraints on its nuclear program, the UN would close the Iranian nuclear file.

No Snapback after the day of termination?

The United States has reportedly assured Israel that if Iran violates the JCPOA constraints on its nuclear program, the United States, or any member of the Council, can implement the sanctions “rollback” provision in the UN Security Council Resolution 2231 (2015), which allows parties to the agreement to call for the reimposition of sanctions that were lifted in previous phases.

But there could be a catch. UNSCR 2231, the implementing resolution of the JCPOA, expires on the day of termination, which also signifies the rollback mechanism.

Ever shorter lead times

Stephen Rademaker, former U.S. Assistant Secretary of State for Nonproliferation and now an attorney at the law firm Covington, assesses the challenge of the JCPOA sunset provisions.

“Those dates were far in the future when the JCPOA was signed in 2015, and there was reason to hope that Iran would be a fundamentally different country ten years later,” Rademaker told Al-Monitor. “It is clear today that Iran will not be a different country when these dates are reached. Yet the JCPOA deadlines will treat Iran as if it has become a normal and trustworthy country, in accordance with its non-proliferation obligations and posing a threat to All nuclear activities that concern us in Iran today should become fully authorized as the JCPOA restrictions expire in accordance with its terms.

Biden administration gives Iran ‘a few weeks’

The Biden administration has warned that Iran’s failure to comply with the JCPOA undermines the chances of a deal.

“They’re making progress that will become harder and harder to reverse because they’re learning things; they are doing new things after breaking their restraints under the agreement,” the US Secretary of State said. Antoine Blinken said on January 13.

Reports from the International Atomic Energy Agency (IAEA), which is responsible for overseeing Iran’s compliance with the JCPOA, have created a sense of urgency among the United States, its European allies and Israel. A November report warned that “the Agency’s verification and monitoring activities have been seriously compromised following Iran’s decision to halt implementation of its nuclear-related commitments under the JCPOA, including the additional protocol”.

Last month, the IAEA noted that Iran is now enriching uranium with more advanced centrifuges at the Fordow nuclear facility. An August 2021 IAEA report noted that Iran was enriching uranium to 60%, well above the JCPOA’s 3.67% cap. Highly enriched uranium at 90% purity is needed for nuclear weapons.

“We’re very, very short of time,” Blinken said in an interview with NPR.

“So we have, I think, a couple of weeks left to see if we can get back to mutual compliance,” Blinken said. “That would be the best outcome for America’s security. But if we can’t, we are considering other steps, other options, again, closely coordinated with the countries involved.”

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