Adoption Day: State Department Briefing

October 19, 2015
On October 17, senior State Department officials answered questions about implementation of the nuclear deal with Iran. The following are excerpts from the background briefing, which was held one day before Adoption Day, the point at which the agreement came into effect.
 
MODERATOR:  The reason for the call is that tomorrow [October 18] is 90 days from the day the UN Security Council Resolution 2231 was adopted on July 20th, which puts Adoption Day for the JCPOA tomorrow, on Sunday.  Most of you know this, but the significance of Adoption Day is it’s the point at which the JCPOA comes into effect.  All of the participants to it formally begin making arrangements and preparations for the implementation of their JCPOA commitments.  You all know that the specific steps to be taken on Adoption Day are laid out in the text, but in summary, starting tomorrow, Iran will begin taking all of its necessary nuclear-related steps to restrain its program, including the significant changes to the Arak reactor, the reductions to its uranium enrichment capacity, its stockpile, the increased access to and monitoring of its declared nuclear facilities.  Upon completion of these steps, when verified by the IAEA, we will then give sanctions relief under the JCPOA to Iran.  That comes obviously on implementation day.
 
So in terms of what else needed to be done to get to Adoption Day, Iran will notify the IAEA that as of – they will provisionally apply the Additional Protocol and fully implement Modified Code 3.1.  For the U.S. side, the President will issue a presidential memorandum to direct that appropriate measures be taken to prepare for implementation of our commitments and that the Secretary of State, acting under authorities delegated by the President, will be taking action with respect to waivers of statutory nuclear-related sanctions, again, which takes place after we reach or on implementation day.  We expect the first Joint Commission meeting to be held shortly after Adoption Day on Monday.  All of the participants to the JCPOA will attend – obviously, the EU, the P5+1, and Iran.  On our side, Ambassador Mull will attend, as will Ambassador Tom Shannon, who, as you know, has been nominated to replace Wendy Sherman, and a group of nuclear and sanctions experts from relevant agencies on the U.S. side.  This first meeting will probably include a fair amount of organizational work to establish the Joint Commission, prepare work as folks move forward toward implementation day, and we will let all of you know if there’s more of a readout coming from that meeting.
 
So in conclusion, tomorrow we hit the next milestone, Adoption Day.  Implementation day will take place only after the IAEA has verified Iran has completed all of the nuclear steps, which, again, start tomorrow.
 
QUESTION:  First of all, can you elaborate a little bit more on the Joint Commission meeting that will take place on Monday?  Where will that meeting be?  You mentioned that this one is organizational, but can you talk a little bit more about the overall goals going forward of the Joint Commission?
 
And secondly, the ballistic missile test that Iran conducted about a week ago – it does not break the letter of the JCPOA, but is there concern that it breaks the spirit of the agreement?
 
SENIOR ADMINISTRATION OFFICIAL ONE:  The Joint Commission will be meeting in Vienna.  We think our first meeting will be for about three hours, with, as [Moderator] said, all of the signatories of the JCPOA.  Among other things we’re going to be setting up, there are a couple of subgroups of the Joint Commission that the JCPOA specifies – for example, how to manage Iran’s ongoing procurements for the legal – for the permitted nuclear activities under the JCPOA, how that will be processed working through the Joint Commission and the Security Council.  So we’ll be addressing initial steps to set up that process as well as lay out expectations for subgroups meeting on technical issues, on sanctions issues to the extent that they ever come up as a matter of concern. 
 
And then more specifically, one of the early deliverables that we’ll have with Adoption Day effective tomorrow is the release of a statement of intent of China, Iran, and the United States on our intention to work together to modernize the Arak heavy water reactor so that it does not produce plutonium anymore.  So those statements of intent will be released tomorrow, and then at the Joint Commission on Monday I expect we’ll be reviewing in more detail about next steps in that process, because that’s one of the most important nuclear components of the deal and we’re actually moving forward pretty quickly.  And so we want to keep that momentum going as we meet in the Joint Commission.
 
MODERATOR:  Look, there’s a reason we were – have been clear all along that this was an agreement about the nuclear program, and it is not – the test was not a violation of the Iran deal, period.  That doesn’t mean, obviously, we didn’t express great concern about it and have a number of other tools to counter Iran’s ballistic missile activity. 
 
SENIOR ADMINISTRATION OFFICIAL THREE:  No, sure, I think you hit it on the head.  The first point is it’s not a violation of the JCPOA, but it does appear to be a violation of the UN Security Council resolutions, all of which continue to remain in effect.  All of the existing resolutions don’t change at all until implementation day, and even after implementation day, we continue to have prohibitions on transfers of ballistic missile-related technologies and a call for Iran not to engage in any ballistic missile activities for a period of eight years after this – after – eight years going forward.  So we have every intention of raising this at the Security Council and asking the Security Council to do exactly what it has in the past when these things have taken place, which is investigate them and encourage them to take certain steps in response.
 
QUESTION:  Do you have concerns that Iranian officials are repeatedly saying they think their steps will be done by the end of the year?  Is there any risk from the U.S. perspective in Iran ripping out centrifuges too quickly or trying to move hastily given the U.S. had estimated it might take six months or so to do those steps?
 
And secondly, [Senior Administration Official One], what division of labor do you anticipate since Ambassador Mull may be the main point of contact over the next year with the Iranians in terms of if they change their mind about engaging with the U.S. on issues beyond JCPOA implementation?
 
SENIOR ADMINISTRATION OFFICIAL TWO: As we’ve said before, we would be delighted if Iran were able to actually complete all of its nuclear steps in a few months.  We hope that they are able to complete everything that they’re required to do.  Simply stated, implementation day will not happen until Iran is able to complete all of the nuclear steps that are necessary under the JCPOA.  That includes the steps at Natanz, at Fordow; taking the calandria out at Arak; and also, importantly, implementing additional transparency measures as provided for in the JCPOA.  We do envision that taking a little bit of time.  Obviously, the Iranians have an interest in trying to complete those steps as soon as possible.  We do envision conversations with the Iranians as this goes forward to monitor their progress, to make sure that their understandings comport to our understandings of the obligations they have under the JCPOA. 
 
But all I can say is that their obligations are very clear and we expect them to live up to all of their obligations prior to any sanctions relief.  That’s the way that we constructed the deal and that’s what we expect to happen.  Whether that takes two months, three months, four months, or beyond is really up to the Iranians, so we also are going to be in a bit of wait and see mode.  For us it’s important that it’s done right, not that it’s done quickly.
 
SENIOR ADMINISTRATION OFFICIAL ONE:  The day after Ambassador Mull’s appointment was announced back in mid-September, the Iranian Government announced that they would be appointing Deputy Foreign Minister for International and Legal Affairs Said Abbas Araghchi as its chief of Iran’s implementation efforts.  And so Ambassador Mull has been in regular contact with him and expect to be in contact with him.  He’ll be at the Joint Commission on Tuesday, and I’m sure there will be some bilateral interactions – again, just on the nuclear agreement implementation.  Now, as deputy foreign minister, of course, he has a portfolio much broader than that and is active on other issues.  Ambassador Mull’s engagement with him, though, is just going to be on the implementation of the JCPOA. 
Secretary Kerry, of course, most recently in New York had a couple of meetings with Iranian Foreign Minister Zarif.  We do have other channels of communication with the Iranians as appropriate issues come up for handling, so that really hasn’t been an issue.
 
QUESTION:  I wanted to follow up on the question about the timing for implementation day.  I mean, I know you say that it’s up to Iran, but there has been, as has been said on this call, quite a bit of communication with the Iranians.  You’re obviously looking at what they’re doing.  Are you able to gauge the progress on their end in a way that gives you a better sense of how quickly they’ll be in position to be ready for implementation day at the earliest?
 
And then, going back to follow up on the missile question, it’s clear it’s not a violation of the JCPOA.  But a lot of people, particularly in New York, where I’m following this issue, are saying that this is a major slap in the face by the Iranians to the U.S. and other members of the P5+1 and that they’re sending a signal about how they don’t intend to follow all of the restrictions that have been laid out for them, particularly those that aren’t specifically nuclear restrictions.  And I wondered if you could respond to that.  Thanks.
 
SENIOR ADMINISTRATION OFFICIAL TWO:  Sure.  So I think to answer the first question is it really depends on how quickly the Iranians work.  I think the fairest way to answer the question is to suggest that you speak with the Iranians directly about what their plans are.  They have not told us explicitly their timetables.  We have negotiated what they have to do.  We have not negotiated (inaudible) time frame in which they have to do it.  We have been very clear to them that each and every one of the nuclear-related steps, to include transfer of material – nuclear material – or pulling out infrastructure or centrifuges and also installing all the additional transparency measures, which can be time intensive, all need to happen before sanctions relief comes.
 
It is our estimate that that will be at least months.  Whether Iran can work very quickly and try to get that done in the month and a half or two months that we’ve heard them talk about publicly will remain to be seen.  Again, we’d be delighted if it happened that quickly, but our focus remains on it being done correctly more than it being done quickly, and we will not provide sanctions relief until each and every one of those nuclear steps is satisfied and has been verified to be completed by the IAEA.  So I know that may not be an entirely satisfactory information, but – or satisfactory answer, but I really can’t do a better job predicting how long it’s going to take, how long to do these steps, because it really depends on their will and on, frankly, the technical side of how long it takes to uninstall thousands of centrifuges or export or dilute 10,000 or 12,000 kilograms of uranium.  So there are certain things that are just unknown from this process, but we cannot imagine it taking less than two months, and it probably will take longer.
 
MODERATOR:  I’ll jump in on ballistic missiles…This is not, unfortunately, something new.  The Iranians have been testing ballistic missiles for a long time.  I would hesitate to draw any conclusion from their recent ballistic missile test and link it to their willingness to comply with the JCPOA and the commitments that are contained in that given this is a long pattern of Iran ignoring UN Security Council resolutions on ballistic missiles.  So obviously that’s something we feel very strongly about and have ways to counter and to take action against, as [Senior Administration Official Three] mentioned before, but [Senior Administration Official Three], I don’t know if you have anything else you want to add to that.
 
QUESTION:  I know U.S. sanctions are not going to be lifted with the reaching of Adoption Day, but does Adoption Day have any impact on what non-U.S. companies can or cannot do in Iran in terms of investment or business? 
 
And the second question is once we get to implementation day, can you explain a little bit more clearly what is it exactly that non-U.S. companies will be able to do that they cannot do now and that U.S. companies will still not be able to do?  Thank you.
 
SENIOR ADMINISTRATION OFFICIAL THREE:  Sure.  Well, your first question, will anything on change on Adoption Day, the answer is quite clear:  No.  There is no difference between – there’s no actual sanctions lifting that’s taking place tomorrow. What we’re going to be doing tomorrow is a couple of steps that will demonstrate our commitment and our preparation to take sanctions-lifting steps moving forward.  And the same thing with respect to the EU, and the same thing with respect to any sanctions that apply to non-U.S. or non-EU companies.
 
So here in the U.S. we’ll be issuing some waivers that will be contingent on reaching implementation day, when Iran completes all of its steps and is verified by the IAEA.  So those waivers will be out and issued so people will know what will be getting waived, but it won’t actually take effect until Iran completes its steps.
 
We’ll also be releasing a – or the President will be releasing a memorandum that essentially will instruct agencies to begin their preparations to take all the other additional measures that are going to be necessary to carry out our commitments.  But just like there won’t be any change in breakout timeline immediately when this agreement starts tomorrow, there’s not going to be any change in sanctions tomorrow either.
 
To your second question about what happens on implementation day:  Implementation day is when these waivers will essentially take effect and the – at least from the U.S. perspective, the sanctions that we have that restrict or in some cases sanction non-U.S. companies for engaging in various economic activities, those will be waived and those companies will be able to engage in those activities without fear of being sanctioned in the United States.  So that will include buying Iranian oil; that’ll include engaging with most Iranian banks or many Iranian banks that will be removed from our sanctions list on that day; it includes the removal of sanctions with respect to the transportation sector and various other economic sectors.
 
So as of that day, once we get to the point where the breakout timeline is over a year, where the centrifuges – where two-thirds of the centrifuges are gone, where the 98 percent of the stockpile is out, then there will be some – then there will be the opening up with respect to the sanctions.  As you rightly noted, that’s primarily with respect to non-U.S. companies.  For U.S. companies there’s only some fairly narrow categories where the sanctions on those companies change.  That includes with respect to the export of commercial passenger – or civilian passenger aircraft, with respect to the import of certain (inaudible) and handicrafts from Iran, and with respect to some of the activities that subsidiaries of U.S. companies can take – or can conduct overseas.
 
SENIOR ADMINISTRATION OFFICIAL FOUR:  No, I would just say in general the standard, which is – with respect to the foreign subsidiaries, it’s just activities that are consistent with the JCPOA, as [Senior State Department Official Three] noted, but that also U.S. parent companies will continue to be liable for any violations of those U.S. – sorry, of those U.S.-owned foreign subsidiaries.
 
QUESTION:  The Iranians during the UN General Assembly repeatedly made the point that there was a difference between a minimalist approach to implementation and honoring the spirit of engagement, and they were particularly concerned about U.S. pressure on European banks and companies not to do business with Iran, and they said there had been overtures to some European companies already to try to discourage them.  Can you talk about what – about this Iranian issue, and if you have indeed reached out to any foreign companies, foreign banks or others, to discourage them from doing business with Iran?
 
SENIOR ADMINISTRATION OFFICIAL THREE:  I heard that question from a lot of people as well.   Let me just say first and foremost, we are intent on carrying out our commitments fully and faithfully, and we’ve made absolutely no effort to try to discourage companies from engaging in business once those sanctions are relieved on implementation day.  At the same time, as a transparency matter, we have to be clear with these companies the fact that there is no change in the sanctions today.  And so we have – just as we always do, are clear about our laws.  For now the sanctions are in place, and after implementation day they will be – those sanctions as specified in the JCPOA will be lifted.  And so we’re making no effort to try to undermine the relief.  It’s not to our advantage in any way for Iran not to get the relief that it seeks out of this deal because it is part of what gets us the very important things that we get on the nuclear side.
 
So I know that there was a lot of spin going on in New York, and I think that’s exactly what it was, and – but I can tell you categorically that that’s not something that we’re engaged in.
QUESTION:  I’m wondering if somebody could explain to us the relationship between what the IAEA has to conclude by December 15th and the implementation of – or implement – the arrival of implementation day.  They were supposed to have received materials by last Thursday from Iran, and by December 15th they’re supposed to come out with a conclusion.  Does implementation have to do with the question of whether they got enough (inaudible) to reach some definitive conclusions?  Or do they simply have to turn out their report and implementation is not related to the nature or completeness of the conclusions?
 
SENIOR ADMINISTRATION OFFICIAL TWO:  Sure.  So thank you for the question.  I think you – well, (inaudible) a question that I think was slightly garbled and the answer is in between.  They – the Iranians have provided to the IAEA sufficient information for the IAEA to produce its independent report, which it is going to try to issue by December 15th.  We know that because the IAEA made such a statement on October 15th.  The October 15th provision – or by October 15th the provision of all of the information and access to the IAEA by the Iranians per the roadmap, which is not part of the JCPOA but was signed independently between Iran and the IAEA, is also about commitment.  So Iran has now provided, according to the IAEA, all of the information and access necessary for the IAEA to complete its final assessment on the PMD issue.  That final assessment, which the IAEA is aiming to complete by December 15th, is not a prerequisite for implementation day.  The implementation day prerequisite was all of the steps that had to be – the Iranian steps that had to be completed in the roadmap.  And so we do expect the IAEA to issue its independent report on PMD by December 15th, the conclusions of which are entirely up to the IAEA.  But what was important was that the Iranians provided sufficient information and sufficient access such that the IAEA was in a position to complete that report, and the IAEA has said that has been provided already by October 15th.  That is one of the reasons that we can now proceed with Adoption Day and subsequently with implementation day, because Iran has met that commitment.
 
QUESTION:  So that’s all done, basically?  The quality of the data is not related to implementation day, it’s just if they’ve provided what the IAEA (inaudible). 
 
SENIOR ADMINISTRATION OFFICIAL TWO:  Right.  We are not in a position to evaluate the quality, as you say, of the data.  That is between Iran and the IAEA.  What we were consistently doing in the negotiations was helping the IAEA to get the access that it needed to complete its investigation on PMD.  How Iran and the IAEA were able to complete that investigation was the resolution of the roadmap, which was the independent document.  It is now up to the IAEA to put forth its final assessment about the PMD case and that we expect to happen by December 15th.
 
MODERATOR:  And as you all have known for a long time, the U.S. Government has already made its assessment on Iran’s past programs. 
 
QUESTION:  Are you guys worried, though, about the overall sentiment?  I mean, since July and the agreement, Iran basically has jointly invaded Syria with the Russians; convicted a U.S. citizen of something we don’t even know about; have – Saudis stopped a large arms shipment going into Yemen that they said was coming from Iran; and they launched a ballistic missile.  Is this really the sentiment you were hoping for to start this agreement?
 
MODERATOR:  I’m happy to take that one, and we’ve talked about this before, and the President has been very clear – he’s been repeatedly asked about this, that we made a decision to in this deal just deal with the nuclear program, and that Iran has been doing things we don’t like in the region for a long time.  That continues.  But all of those things would be made worse if that was backed up by an Iranian nuclear weapon.  So we have separate ways of countering that activity.  We’re going to be doing more of that, working with the Gulf states and others.  But it’s not – this isn’t about sentiments, right?  This is about whether or not Iran lives up to its commitments, to the letter of them that is in the JCPOA very clearly.  And quite frankly, we have all these other tools that we’ll continue to use to counter Iranian activity in the region, but this deal is focused on the nuclear issue, period, and that’s what we’re focused on heading into Adoption Day tomorrow.
 
QUESTION:  Did the Iranians give you any heads-up in Vienna or elsewhere that they were planning to go into Syria with – in sort of a joint operation with the Russians?  Or did they keep that to themselves?
 
SENIOR ADMINISTRATION OFFICIAL THREE:  I can assure you I only discussed the nuclear deal with them.  That would be out of my – out of my purview. 
 
QUESTION:  Can you tell us a little bit more about this agreement – three-way agreement with China and Iran?  What – how is that separate from the broader implementation of the JCPOA?
 
SENIOR ADMINISTRATION OFFICIAL TWO:  This is the statement of intent, and [Senior Administration Official One], please feel free to jump in here as well.  But the statement of intent essentially is our making clear what it is that we plan to do as part of the P5+1 to help Iran to modernize the Arak reactor.  So as you noted, there are very clear sentiments inside the JCPOA about both Iranians’ – the Iranians’ obligations as well as P5+1 as to what to do with the Arak reactor.  The statement of intent that will be issued on Adoption Day simply confirms that we all intend to live up to what we said that we would do under the Joint Comprehensive Plan of Action, that being that the Iranians intend to take out the calandria, the center of the reactor, and that we, the P5+1, will help to make that a modernized reactor – one that does not produce weapons-grade plutonium.  The significance of the statement of intent being published by China and Iran and the U.S. tomorrow is that China will be taking a lead role in the redesign, the reconstruction of the reactor, and the United States also will take a prominent role in making sure that the design is consistent with our nonproliferation objectives.  And Iran, of course, is taking the primary role because it’s an Iranian reactor, so they will be ultimately responsible for it. 
 
But the statement of intent is a way of our demonstrating in real terms at the very beginning of this process that we all plan to actually get the reactor up and running eventually, after the original design has been modified and the calandria has been taken out – our nonproliferation objective being met.
 
QUESTION:  I wanted to follow up also on the Arak reactor because the Iranians were saying to us in September that they wouldn’t – I guess they were feeling nervous about even touching the reactor until a lot of details and commitments were made on the redesign and reconstruction of the reactor, and what is being issued tomorrow doesn’t sound like a detailed takeout on that.  And so if you can speak to that a little bit more – what actually – what they want before they take the calandria out, that would be great. 
 
Also, any details on the removal of the fuel stockpile?  As we understood it, most of it would be going to Russia, if not all, and maybe waiting there until the fuel bank was up and running, but not clear on that either.  So if you could give us any hints on that, we’d appreciate it.
 
SENIOR ADMINISTRATION OFFICIAL TWO:  Sure, I’ll start that again and invite [Senior Administration Official One] to jump in.  But the answer to the first question is if you look at some of the details on the Joint Comprehensive Plan of Action, we made a commitment in the Joint Comprehensive Plan of Action to, starting on Adoption Day – which is tomorrow – work with the Iranians on an official document that carries forward the strong commitments of all the parties of the JCPOA to assign to ourselves the obligations to actually convert this reactor.  And that official document is supposed to be completed by implementation day.  That helps to clarify for the Iranians precisely who is doing what to redesign the reactor, to work on safety protocols, to actually pour the concrete, to redesign the fuel elements – all of those things.
 
What the statement of intent does tomorrow is it provides a preliminary, almost a preview, as to what it is that we’re going to be doing.  That said, the Joint Comprehensive Plan of Action and one of the attachments that goes with it is in extraordinary detail, frankly, in terms of what the design of the reactor is going to be.  So the design of the reactor was extensively negotiated so that we would know that the reactor design that was agreed to did satisfy our nonproliferation objectives, that it wouldn’t produce weapons-grade plutonium in normal operation.  And so there is a lot already that is known about what the reactor is.
 
We have been in touch with the Iranians on a number of occasions since the completion of the JCPOA in July to talk to them explicitly about this, to talk to them about not just the documents but exactly who is going to be doing what.  We’ve had a number of meetings with the Iranians as well as with the Chinese, who, as I said, are going to be taking a leadership role with us as dictated by the JCPOA.  And we’re very confident that the Iranians will feel comfortable in moving forward with the – all of their nuclear steps, to include removing the calandria.  Because as [Senior Administration Official Three] said earlier, we have every intention of abiding by all of our obligations, one of which is to help to – in the redesign of the reactor and the (inaudible) P5+1 commitments, which is to not just redesign but actually rebuild the reactor, although Iran maintains its position as the primary owner.
 
In regards to the second question, there again, this is really a question that Iran has to answer.  Iran has choices in some of what it can do here, and this is with regard to the stockpile question.  Iran can choose to either export all the 300 kilograms of its up to 5 percent enriched uranium, or dilute that material to natural levels.  It remains to be seen whether Iran will choose to ship out that material in exchange for natural uranium in response – in return, or whether it will choose to dilute it.  We expect to see more clearly what Iran’s choices are in the next few weeks, but at the moment that remains to be an Iranian choice.