United States Institute of Peace

The Iran Primer

Karroubi's Letter to Rouhani

On April 9, former presidential candidate and opposition leader Mehdi Karroubi published an open letter to President Hassan Rouhani asking for a court hearing. Karroubi, along with former candidate Mir Hossein Mousavi, has been under house arrest since 2011 for leading Green Movement protests after the disputed 2009 elections. But he has not been formally charged with any crimes. The following is the full text of the letter. 

In the Name of God, the Merciful, the Compassionate
Esteemed Brother Hojatoleslam Mr. Rouhani
The President of the Islamic Republic of Iran,
 
Greetings.
 
First, I must thank your honorable colleagues and especially thank the attention of Dr. Ghazizadeh Hashemi, the Minister of Health, and also your esteemed brother.
 

As you know, after four terms as a representative of the people in the parliament and serving as the speaker in the third and the sixth parliaments, after founding and managing institutions such as the [Imam Khomeini] Relief Foundation and the Martyr’s Foundation, after acting as the plenipotentiary lawyer for the whole estate of the founder of the Islamic Republic, and after supervising Iranian Haj pilgrims, membership in the Constitutional Supervisory Council and representing the Supreme Leader in Lorestan, in 1384 and 1388 [2005 and 2009], I was a candidate for presidency on the suggestion of a group of reformist friends and my own choice. Unfortunately, both times the rights of the honorable people of Iran and myself were trampled on by the interference of certain sections of the Revolutionary Guards, the [paramilitary] Basij and the Intelligence Ministry. Instead, a liar and a dishonest individual who distorted the sacred and Shia beliefs were imposed on the country and on the people, and he was the cause of the most corrupt government since the Constitutional Revolution [of 1906] in the name of Islamic Revolution.

 
During this disastrous period, the country and the people suffered heavy losses. In the next few decades we might be able to compensate for the material losses — the plundering of the people’s assets, the squandering of $700 billion of oil and tax income, giving away or selling off resort and free-trade zone lands from Pardisan Park [northwest of Tehran] to Qeshm and Kish islands, the transfer of $22 billion to Dubai and Turkey, losing oil rigs and ships without registration —but there can be no doubt that moral damages, divisions, the distrust of the people toward the government and religious authorities and more importantly, damages were done to Shi’ism and the Hidden Imam (may he return soon) cannot be repaired as easily.
 
By being self-centered, ambitious and in love with power, a number of individuals — who fancy that they have the power to decide the destinies of other Muslim nations and countries— intentionally ensnared the country in sanctions. On one hand they destroyed national assets by plundering and squandering. On the other hand, they robbed the people and pushed the country to the edge of a precipice while the people were impoverished and helpless. Only the grace of god and the awareness of various segments of the society and the statesmen saved the country from disaster. Unfortunately, they are so overcome by ambition and greed for power that they recognize no boundaries for their base desires and have sacrificed the wealth and the children of this country to their high-flying ambitions in the region.
 
Fortunately the steadfast resistance of various segments of the people — especially the students and political and human rights activists involved in the events of 1388 [2009] — and also the role played by the free media in informing people taught a big lesson to those who, contrary to the wishes of the martyrs and the [aims of the] war [with Iraq] and the thinking of Imam [Khomeini], consider people’s votes as mere ornaments and wanted to change the role of the elections. I thank God that that in the 1392 and 1394 [2013 and 2014] elections, people gave a crushing answer to these totalitarians and drove out some regime favorites out of the arena. They intelligently protested the transformation of the Guardian Council to a mere tool under the auspices of its secretary-general, whose intelligence and wisdom is an interesting story by itself. The people still believe in the ballot box as the way to reform the structure of the regime.
 
Unfortunately, by shirking its inherent duties and taking actions that none of the people behind the constitution could have imagined, the Guardian Council has become a tool in the hands of the regime. That is why we witnessed in the elections that this council defames respectable people and violates people’s rights to ensure that one [political] tendency wins and others are eliminated. One day (in the elections of [2005]) it qualifies candidates for the presidency, which, according to Article 115 of the constitution requires different qualifications than other positions, in order to sow discord among the reformists. And another day (parliamentary elections in [February 2016]), it disqualifies the same people from running for parliament. The Guardian Council has gone so far that it has prevented the elected representative of the people of Isfahan from going to parliament by resorting to a strange and ridiculous innovation that ignores people’s votes. After the candidates are qualified and the elections have taken place properly, it is a dangerous innovation to revise their qualifications. The government and the parliament must definitely not yield to this illegal act because it is the members of parliament who must approve the credentials of an elected representative, not the Guardian Council.
 
Honorable President:
 
In [2009] when I entered the arena, I was aware of the problems inside the regime. In a debate, I talked about the problems and the obstacles and stated that facing them was equal to jihad in the way of god. After the ridiculous results of the [2009] election were announced, I stood against this dangerous movement, which had its roots in the [2005] election. Its only goal was the destruction of the republic and Islam. I said “this is only the beginning of the story” because I considered silence in the face of a power grab by the potentates the same as cooperating with the project to destroy the republic and the Islamic system. I stood by the people, aware of the heavy price that must be paid. With the help of God, I will continue to stand by them. For disclosing secrets and for defending people’s rights and liberties, my home has been repeatedly destroyed, I have been beaten, people close to me have been put under pressure and even one of my children was arrested and was beaten to near death. But I willingly accepted all these disrespects and said: “I am the son of Ahmad and I will not remain silent.”
 
If the corrupt previous regime [of the Shah] used thugs [in the coup d’état of August 19, 1953]  and [on June 5, 1963 when supporters of Khomeini rose up], these days, the regime uses thugs every day across the country to attack the homes of religious authorities, religious and political figures who have been critical of the regime, embassies and artistic and cultural centers in the name of “values”. They violate the sanctuary of mosques for their political ambitions and know no boundaries in their desperate behavior. They imposed self-censorship on eminent people, so much so that a prominent religious authority in Qom said when asked about the refusal to publish his views: “I don’t want to deal with them breaking my windows.”
 
Your Excellency Mr. Rouhani:
 
From [February 2011 to February 2014] I was moved from place to place and suffered many deprivations. Since [February 2011], I have been the subject of a house arrest without any rules, surrounded by security agents. In these years, I have been denied the right to defend myself in the face of charges against me and against the slurs of domestic media and other tribunes of the regime. The irony is that those who wasted the material and moral assets of the country, and the consequences of their vision, have become clear to everybody. They are now seen as insightful and honorable, and those who gave warnings and predicted these days — those who in the past few years have suffered illegal imprisonment and house arrest for their reformist activities — are now called dishonorable. How pitiful is this illusion of the potentate, who imagine that they can decide which among the God’s servants are high and which ones are low.
 
Today is the day for speaking out and standing up to law-breakers. The culture of sacrifice and martyrdom has taught the great nation of Iran to fight against injustice. Nobody should cooperate with injustice or stay silent in the face of oppression in the name of expediency. We must not present our own interests as the interests of the country. We must stand up against the idea of a regime with one single voice, made so through monopolizing an unaccountable power. We must not doubt that if today our elites procrastinate and fail to act, then tomorrow the country and the people will pay a heavy price.
 
I am not asking you to lift my house arrest, nor do I believe that it is in your power to do so. But according to the responsibility assigned to you by the people and the constitution, I want you to ask the despotic regime to grant me a public trial based on Article 168 of the constitution, even if the court is constructed the way that the potentates want. With the help of God and working with my lawyer, we will hear the indictment and we will present our evidence to the public about the fraudulent [2005] presidential election, the rigging of the [2009] presidential election and what happened to the children of this country in legal and illegal detention centers. The outcome of this trial will show which side in the [2009] election dispute has turned its back on the revolution and which side is dishonorable. It will show which side continues in the path of the revolution and is honorable. “Allah is sufficient witness between me and you,” I emphasize that I will accept the verdict of this court without reserve and welcome it without asking for the right to appeal because the world is god’s court and his deputies on this Earth are the people. And there are no better judges than  God and the people.
 
And Praise be to Allah, the Lord of the Worlds.
Mehdi Karroubi
Jamarn [Tehran]
April 9, 2016
 
Translation via Iran Wire. Karroubi’s letter was originally published by Saham News.

Click here to learn more about the Green Movement.
 
Photo credit: Karroubi by Mardetanha via Wikimedia Commons [CC BY-SA 3.0]

Amnesty Report: Executions Rise in Iran

In 2015, Iran carried out at least 977 executions, according to a new report by Amnesty International. The organization estimates that at least 577 executions took place in addition to the 400 acknowledged by Iranian authorities – a 31 percent increase compared to 2014. China carried out the most executions in 2015, followed by Iran, Pakistan, and Saudi Arabia. The following is an excerpt on Iran from the report.
 
Iran carried out at least 977 executions in 2015. The Iranian authorities announced 400 executions through official and semi-official sources. However, credible sources confirmed that at least 577 more executions took place, in addition to those officially announced. At least 16 women and at least four juvenile offenders were executed. At least 58 executions known to Amnesty International were carried out publicly. Scores of death sentences were imposed in Iran during the year. However, Amnesty International was unable to confirm any credible figures.
 
The majority of executions carried out in 2015 were for drug-related offences. Iran’s AntiNarcotics Law stipulates mandatory death sentences for a range of drug-related offences, including trafficking more than 5kg of narcotics derived from opium or more than 30g of heroin, morphine, cocaine or their chemical derivatives.
 
In June, a new Code of Criminal Procedure came into force. The new Code repealed Article 32 of the Anti-Narcotics Law. This Article provided no right of appeal against death sentences imposed for drug-related crimes, in flagrant violation of international law. Under the repealed Article, all death sentences were subject to confirmation either by the Head of the Supreme Court or the Prosecutor General, who were entitled to revise or quash the sentence if they found it had contravened Islamic law or that the judge was not competent.
 
In December, several members of Parliament proposed a bill to replace the death penalty with life imprisonment for drug-related offences that do not involve armed activities.
Many death sentences in Iran were imposed after trials that fell short of international fair trial standards. Defendants often had no access to lawyers during pre-trial investigations, and courts generally dismissed allegations of torture and admitted as evidence “confessions” obtained under torture. As in previous years Iranian courts continued to sentence people to death for crimes that are vaguely worded and overly broad; not recognizably criminal offences under international human rights law; and do not meet the threshold of the “most serious crimes”.
 
In July, a court sentenced Mohammad Ali Taheri to death for “spreading corruption on earth” by establishing a spiritual group called Erfan-e Halgheh and promoting beliefs and practices which the authorities said were “perverse” and would advance a “soft overthrow” of the government by weakening people’s religious convictions. The Supreme Court quashed the death sentence in December, after concluding that Mohammad Ali Taheri’s activities before he was arrested in 2011 had not amounted to “spreading corruption on earth” as defined in the old Islamic Penal Code (which was in force until 2013 when a new Islamic Penal Code was adopted). He remained under investigation for various allegations, including “apostasy” (ertedad) and “insulting the Prophet” (sabbo al-nabi) which could carry the death penalty.
 
Behrouz Alkhani, a 30-year-old man from Iran’s Kurdish minority, was executed on 26 August despite the fact that he was awaiting the outcome of a Supreme Court appeal. He had been sentenced to death by a Revolutionary Court for “effective collaboration with PJAK” (Party of Free Life of Kurdistan) and “enmity against God” (moharebeh). His “confessions”, which he said were obtained through torture and other ill-treatment, were used against him.
 
On 4 March, six men from Iran’s Sunni minority, Hamed Ahmadi, Jahangir Dehghani, Jamshid Dehghani, Kamal Molaee, Hadi Hosseini and Sediq Mohammadi, were executed for the vaguely worded offence of “enmity against God” (moharebeh). The executions were carried out despite serious concerns about the fairness of the legal proceedings that led to the men’s convictions. The men had been held in solitary confinement during their pre-trial detention for several months without access to a lawyer or their families. They said they met their court-appointed lawyers for the first time, a few minutes before the start of their trials. The court proceedings were held behind closed doors and apparently lasted only 10 to 30 minutes.
 
Iran continued to impose death sentences on and execute juvenile offenders, in breach of its international obligations under the UN Convention on the Rights of the Child and the International Covenant on Civil and Political Rights (ICCPR).168 The Convention on the Rights of the Child and the ICCPR prohibit the use of the death penalty against juvenile offenders.
 
At least 160 juvenile offenders were on death row at the end of 2015. Some of them had been in prison for more than a decade. At least 73 juvenile offenders were executed between 2005 and 2015. Four of them were executed in 2015: Javed Saberi, Vazir Amroddin, Samad Zahabi and Fatemeh Salbehi. During the year, a number of juvenile offenders had retrials based on the provisions of the 2013 new Islamic Penal Code; the courts found that they had sufficient “mental growth and maturity” at the time of the crime and they were sentenced to death again.
 
Click here to read the full report
 

US & Iran Clash on Nuclear Deal Compliance

Since late March, U.S. and Iranian officials have accused each other of taking actions that undermine the nuclear deal. On April 1, President Barack Obama accused Iran of not following the “spirit” of the agreement by engaging in test launches of ballistic missiles on March 8 and 9. Chief of Staff of the Iranian Armed Forces Hassan Firouzabadi countered by saying that "We studied the details of the nuclear agreement and didn’t see anything but its text, and don’t have any information about its spirit.” Although ballistic missiles are outside the scope of the nuclear deal, U.S. officials allege the launches are inconsistent with U.N. Security Council Resolution 2231, which bans Iran from testing ballistic missiles capable of carrying nuclear warheads.
 
Supreme Leader Ayatollah Ali Khamenei said on March 20 that “The Americans have not honored their promises," accusing Washington of only lifting sanctions "on paper." Iran still faces restrictions on certain financial transactions under remaining U.S. sanctions for terrorism and human rights violations. But State Department official Chris Backemeyer insisted that "We are a good faith partner…It is not in our interest just to sanction for no reason.” The following are recent remarks from U.S. and Iranian officials on compliance with the nuclear deal.
 
 United States
 
President Barack Obama
 
Obama“So let me say broadly that so long as Iran is carrying out its end of the bargain, we think it’s important for the world community to carry out our end of the bargain.”
 
“Iran, so far, has followed the letter of the agreement.  But the spirit of the agreement involves Iran also sending signals to the world community and businesses that it is not going to be engaging in a range of provocative actions that might scare business off.  When they launched ballistic missiles with slogans calling for the destruction of Israel that makes businesses nervous.  There is some geopolitical risk that is heightened when they see that taking place.
 
“If Iran continues to ship missiles to Hezbollah, that gets businesses nervous.  And so part of what I hope happens is we have a responsibility to provide clarity about the rules that govern so that Iran can, in fact, benefit, the Iranian people can benefit from an improved economic situation.  But Iran has to understand what every country in the world understands, which is businesses want to go where they feel safe, where they don't see massive controversy, where they can be confident that transactions are going to operate normally.  And that's an adjustment that Iran is going to have to make as well.”
– April 1, 2016, in a press conference
 
Treasury Secretary Jacob Lew
 
“Since Iran has kept its end of the [nuclear] deal, it is our responsibility to uphold ours, in both letter and spirit.”
– March 30, 2016, in a speech
 
State Department Under Secretary for Political Affairs Thomas Shannon
 
“I believe it [the missile tests] violated the intent of [U.N. Security Council Resolution] 2231.”
– April 5, 2016, in a Senate hearing
 
"Any effort to step away from (the deal) would reopen a Pandora's box in that region that would be hard to close again.”
 
A U.S. rejection of the deal "would be grasped by hardliners in Iran to assert that we were an unreliable interlocutor” and would be seen as “a clear signal that they needed to return to their nuclear program."
– April 5, 2016, in a Senate hearing
 
Deputy National Security Advisor Ben Rhodes
 
“Thus far we have seen Iran meet its major commitments under the Joint Comprehensive Plan of Action.”
 
“We were also clear that they were going to continue to be engaged in behavior that we found counterproductive – ballistic missiles, support for terrorism, destabilizing activities in the region. That’s not the nuclear deal. It’s a separate set of issues on which we have the ability to respond.”
– March 31, 2016, in a press briefing
 
State Department Principal Deputy Coordinator for Sanctions Policy Chris Backemeyer
 
"We are a good faith partner…It is not in our interest just to sanction for no reason, so we're not going to be in a position where we're looking to trick someone, that's never been our objective."
 
"Snap-back is a mechanism that we negotiated in order to deter Iranian non-compliance, not one to give us some secret way of re-imposing sanctions on Iran because we felt like it."
– March 23, 2016, according to the press
 
 
 Iran

Supreme Leader Ayatollah Ali Khamenei
 
Khamenei“The Americans have not honored their promises and have not done what they should have. Of course, as our honorable Minister of Foreign Affairs said, they have done certain things on paper, but they have prevented the Islamic Republic from achieving its goals through many detours and short cuts.”
 
“Notice that today, in all western countries and in all those countries that are under their influence, our banking transactions have been blocked. We have a problem bringing our wealth - which has been kept in their banks – back to the country. We have a problem conducting different financial transactions which require the assistance of banks. And when we pursue the matter, follow it up and ask about it, it becomes clear that they are afraid of the Americans. The Americans have said that they would lift sanctions and they have actually done so on paper, but through other ways and methods, they are acting in a way that the result of sanctions repeal will not be witnessed at all.”
 
“What this political analysis of the enemy means is that if America wishes, the Islamic Republic should even forget about its own defense mechanisms. You see what uproar they have created in the world on the issue of our missiles. They say, “Why does the Islamic Republic have missiles? Why does it have long-range missiles? Why do the Islamic Republic’s missiles aim at and hit the target in a very precise manner?” They say, “Why have you carried out a military maneuver? Why do you have military exercises and why and why and why!”
 
“This is while the Americans themselves carry out maneuvers from time to time in the Persian Gulf – which is several thousand kilometers away from their country - and they do so along with some regional countries. They do this while they have no responsibility in the region. However, when the Islamic Republic carries out a military maneuver in its own home, in its own territory and in its own security zone, they create uproar about why we have carried out a military operation, why we have adopted such and such measures and why our Navy and our Air Force have adopted such and such courses of action.”
– March 20, 2016, in a speech
 
Foreign Minister Mohammad Javad Zarif
 
Zarif“It does not matter which political party takes the helm. The nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), is Washington’s commitment, and it has nothing to do with who is in power at the White House.”
 
“With the serious follow-up of the Islamic Republic of Iran, the US government is obliged to execute its commitments not only in theory but in practice.”
– March 2016, according to the press
 
Chief of Staff of the Armed Forces Major General Hassan Firouzabadi
 
"We studied the details of the nuclear agreement and didn’t see anything but its text and don’t have any information about its spirit.”
 
"Therefore, the US arrogant expectations and excessive demands are ungrounded and unacceptable and no one in the Islamic Republic of Iran cares about them.”
– April 5, 2016, according to the press
 
Judiciary Chief Sadeq Amoli Larijani
 
"The Americans are now acting in violation of the nuclear agreement.”
– April 4, 2016, in remarks to high-ranking judiciary officials
 
Revolutionary Guards Commander General Mohammad Ali Jafari
 
“To see JCPOA a panacea and a successful solution would be naïve and imprudence; those advertising now different versions of JCPOA, primarily at home, inadvertently deviated from the true path of Revolution and tilting toward anti-Revolutionary front.”
 
“JCPOA provides only the least part of nation’s rights and should not and won’t be lionized as a golden chapter and a cause for exhilaration.”
– April 5, 2016, according to the press
 
Defense Minister General Hossein Dehghan
 
“I am certain that the Security Council and the United Nations will not respond, as our actions are neither a breach of the JCPOA nor are they against resolution 2231.”
 
“[The] Americans are basically against any increase in the national power of the Islamic Republic of Iran, in any dimension.”
– March 31, 2016, according to the press
 
Head of the Atomic Energy Organization of Iran Ali Akbar Salehi
 
"Legally speaking, there is a possibility that the other side misuses a point in the nuclear deal, but the document enjoys such an integrity and power that the other side doesn’t allow itself to create any problems.”
 
"I firmly announce that we act upon the Supreme Leader (Ayatollah Khamenei)'s views in a way that if the other side does not comply with its undertakings appropriately, we will show a proper reaction."
– April 6, 2016, according to the press
 

Economic Trends: February and March

Cameron Glenn
 
In February and March, Iran began reaping the economic benefits of the nuclear deal that was implemented in January. Following the lifting or suspension of E.U., U.S. and U.N. sanctions, the Islamic Republic hosted trade delegations, inked lucrative deals, and boosted oil exports to 2.2 million barrels per day. Even American companies – particularly Boeing and General Electric – began exploring the possibility of doing business in Iran.
 
But sanctions relief has not revived the ailing Iranian economy overnight. Increased oil outputs have generated limited revenues, as oil prices remained near record lows. Some international banks and investors are still wary of doing business in Iran because of remaining U.S. sanctions for terrorism and human rights abuses. And some Iranian hardliners questioned whether Iran should be focused on foreign investment in the first place. In March, President Ayatollah Ali Khamenei called for a greater focus on domestic resources and production and claimed that the dozens of foreign trade delegations had yielded few tangible benefits for the Islamic Republic. The following is a rundown of economic developments in February and March.
 
Sanctions Relief
 
The Tehran stock market rose 22 percent in the first month after sanctions were lifted in January. Iran regained access to around $100 billion in assets, though much of that amount was tied up in existing debts. In the short term, only about $7 billion will be transferred to Iran to avoid sparking inflation, according to government spokesman Mohammad Bagher Nobakht.
 
On February 7, French automaker Peugeot announced that it would pay Iran $446 million in compensation for losses after the company withdrew due to sanctions in 2012. On March 8, Shell settled the $1.94 billion it owed the National Iranian Oil Company but had been unable to pay due to sanctions. Iran also won its first major court battle since sanctions were lifted. On February 18, an E.U. court ruled that Iranian Bank Mellat’s assets should not have been frozen in 2010 over alleged links to Iran’s nuclear program. The bank is pursuing billions of dollars in damages from the United Kingdom.
 
Sanctions relief has also allowed Iran to reconnect to the international banking system. In February, several Iranian banks were connected to the SWIFT global transaction network. Turkish credit card company Iyzico announced in February that it will begin allowing its customers to process payments from Iran.
 
Despite the benefits of sanctions relief, some international banks are still cautious about reconnecting with Iran, fearing they will run afoul of remaining U.S. sanctions on Iran for terrorism and human rights violations. On February 4, during an event at Chatham House in London, Foreign Minister Mohammad Javad Zarif said that European banks may require “further assurance” from the United States that they would not be penalized for doing business with Iran.

Oil & Gas
 
Iranian officials have promised a quick increase in oil production now that sanctions have been lifted. In early February, Vice President Es’haq Jahangiri said that Iran had increased oil exports to 1.3 million barrels per day. On March 23, Jahangiri announced that exports had reached 2.2 million barrels per day – an increase of 900,000 barrels per day since January.
 
Europe and Asia have been the main beneficiaries of Iran’s increased oil output. On February 14, Iran began exporting its first shipment of oil to Europe since sanctions were lifted. Oil Minister Bijan Zanganeh said that French oil company Total would begin importing 160,000 barrels of Iranian oil per day. Italian oil company Eni is also in talks to revive oil imports from Iran. And South Korea imported 3.26 million barrels of oil from Iran in February – 20 percent more than the same period a year ago.
 
Despite the recent boost in production and exports, Iran’s oil industry still desperately needs foreign investment. On February 9, Zanganeh said Iran requires $200 billion to “develop the joint fields and enhance recovery of oil reservoirs,” noting that domestic resources will not be enough to meet those goals. Iran canceled a February oil conference in London where it intended to roll out new investment contracts for international firms. Iranian officials cited visa issues as a reason for cancelation. Hardliners in Iran oppose the new contracts, claiming that they allow Iran’s natural resources to be owned by foreigners.
 
Additionally, low oil prices limit the new revenue Iran will gain from increased output – and its policy of boosting production put it at odds with other oil producers. In February, low oil prices prompted several major oil producers – including Russia and OPEC members Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Venezuela – to call for a production freeze. Iran supported the idea of the freeze, but said that Iran should not be required to participate. “Iran is not the cause for this turmoil…We do not intend to sanction ourselves again,” Deputy Oil Minister Hossein Zamaninia told CNN in February. Oil Minister Bijan Zanganeh called it a “joke” that Iran would be required to freeze its oil output.
 
Diversification
 
As oil prices remained low, Iranian officials pushed for greater diversification of the economy. “Our past experience showed that oil at $147 [per barrel] cannot solve our employment and public welfare problems,” President Hassan Rouhani said at a labor forum in February. Parliamentary Speaker Ali Larijani praised Iran’s reduced dependence on oil. "There are many countries that were disturbed by plummeting oil prices, but Iran was not affected much," he said on February 8. Only around 25 percent of Iran’s budget for the next fiscal year relies on oil revenues, compared to 60 percent in past years.
 
The Islamic Republic hopes that investing in other industries, such as agriculture and food exports, will contribute to diversifying the economy. Business delegations from France have reportedly expressed interest in investing in Iran’s agribusiness.
 
Foreign investment
 
Iran has hosted a flurry of international trade delegations since the nuclear deal was implemented in January. On February 20, Economy Minister Ali Tayyebnia said that Iran is seeking $45 billion in foreign investment in the next few years. But Iranian officials disagree on the extent to which Iran should open its economy to the rest of the world. Supreme Leader Ayatollah Ali Khamenei said that the delegations have not yet yielded real economic benefits. “We haven’t seen anything tangible from these delegations visiting Iran,” he said on March 10. “Promises on paper have no value.”
 
On March 20, Khamenei said in his speech on Nowruz – the Persian new year – that the theme of the upcoming year would be “The Resistance Economy: Action and Implementation.” Focusing on domestic production, Khamenei argued, is Iran’s best defense against sanctions and the way to properly address other problems such as unemployment. “With the Resistance Economy, it is possible to fight unemployment and recession and to curb inflation; it is possible to stand up to the enemies’ threats; it is possible to create numerous opportunities for the country and use those opportunities,” he said.
 
Khamenei’s statement contrasts with President Hassan Rouhani’s focus on foreign trade and investment. In a March 16 cabinet session, President Rouhani called on Iran to continue its “constructive interaction with the world.” But on March 22, the president’s chief of staff Mohammad Nahavandian tied the concept of a “resistance economy” to foreign outreach. “To increase the resistance of Iran’s economy, we should expand ties with neighboring countries and the world,” he said.
 
Two thirds of Iranians support greater economic engagement with the West. The first round of Iran's parliamentary elections, held in February, yielded success for the Universal Coalition of Refomists, an electoral list associated with support for the nuclear deal and increasing normalization of Iranian political and economic relations with the outside world. But hardliners echo Khamenei’s fear that opening Iran to foreign investment will make the Islamic Republic too economically dependent on other countries. And some Iranian businessmen fear that foreign funds are being channeled only into large state-run enterprises rather than the private sector. Banking restrictions under remaining sanctions make it difficult for small businesses to benefit from the new rush of foreign investment.
 
Delegations and officials from the following countries reached out to Iran in February and March.
 
  • On February 15, Italy’s Maire Tecnimont engineering company signed a 1 billion euro collaboration agreement to build refineries and petrochemical plants in Iran.
  • On February 27, the Swiss president Johann Schneider-Ammann met with President Rouhani in Tehran and agreed on a roadmap to increase business and financial ties.
  • On February 29, the foreign minister of Romania arrived in Tehran to discuss renewing economic and diplomatic ties with Iran.
  • On February 29, Singapore signed an investment treaty with Iran to support companies looking to enter Iran.
  • On February 29, the Austrian environment minister said that Vienna hopes to restore economic and environmental ties with Iran to pre-sanctions levels.
  • On March 1, South Korea and Iran signed a maritime agreement granting Korean firms greater access to Iranian markets.
  • On March 3, a Turkish business delegation visited Iran to discuss boosting trade and economic ties.
  • On March 10, the United Kingdom’s export credit agency signed a memorandum of understanding with its Iranian counterpart to facilitate trade between the two countries.
  • On March 13, the foreign ministers of New Zealand and Iran met in Wellington and discussed expanding bilateral economic relations. New Zealand lifted sanctions on Iran on February 19.
  • On March 24, Iraq and Iran discussed increasing non-oil trade between the two countries.
  • On March 26, Pakistan and Iran agreed to increase their bilateral trade to $5 billion.
 
United States
 
U.S. companies are still generally barred from doing business with Iran, but some firms are interested in entering the Iranian market. In February, Boeing received permission from the U.S. Government to begin talks with Iranian airlines. The firm will need separate approval to actually begin sales in Iran. General Electric is also reportedly exploring business opportunities in Iran, particularly for its oil and gas business.
 
On March 20, Supreme Leader Ayatollah Ali Khamenei accused the United States of not fulfilling its pledges under the nuclear deal citing holdups on Iran regaining access to the banking system and its assets. "In Western countries and places which are under U.S. influence, our banking transactions and the repatriation of our funds from their banks face problems ... because (banks) fear the Americans," he said. U.S. officials, however, denied the allegation and insisted that Washington was complying with its obligations under the nuclear deal.
 
In late March, the U.S. Treasury was reportedly considering allowing overseas financial institutions to use U.S. dollars in transactions with Iran, a practice currently prohibited under sanctions. But U.S. officials later emphasized that Washington had no plans to grant Iran access to the U.S. financial system.
 
China
 
The volume of trade between Iran and China – the Islamic Republic’s largest trade partner – dropped 41 percent in the past year, in part due to low oil prices. China’s share of Iran’s auto industry is also expected to decline now that European manufacturers can enter the market. In March, the United States imposed sanctions on Chinese firm ZTE, a large supplier of telecommunications equipment, for selling U.S. technology goods to Iran.
 
But Iran and China have pledged to strengthen economic ties in the next ten years. On February 15, the first train connecting Iran and China arrived in Tehran carrying Chinese goods. The shipment is part of China’s “One Belt One Road” initiative, designed to revive overland Silk Road trade routes. In March, the Export-Import Bank of China made plans to provide funds for petrochemical and communications projects in Iran. Two Chinese firms also reportedly began to finalize deals worth billions of dollars in Iran’s railway and shipping sectors.
 
Russia
 
Russian aircraft manufacturer Sukhoi, automaker Avtovaz, and oil and gas companies Lukoil and Gazprom are among the firms preparing to do business in the Islamic Republic. Iran plans to hold an exhibition of high-quality food stuffs in Moscow in April, according to Mohammad Hossein Azizi, Chairman of the board of directors for Food Industries Association of Iran. Iranian food producers hope to expand into the Russian market. In March, Oil Minister Bijan Zanganeh said that Iran was interested in trading oil and gas with Russia and pursuing Russian investments in Iran’s oil and gas fields.
 
Auto industry
 
President Hassan Rouhani called for less government involvement in the auto industry. “Iran’s automotive industry should be completely privatized and competitive,” he said in a March 1 speech to the International Automotive Conference. Government support, he argued, was necessary under sanctions but “cannot be unlimited.”
 
In late February, Iran signed three memoranda of understanding with Swedish, Turkish, and Indian automakers. Iranian automaker Iran Khodro announced in March that it expects to sign a deal with German carmaker Mercedes-Benz in the next six months.
 
Aviation
 
On March 9, Iran’s Civil Aviation Organization signed a memorandum of understanding with its British counterpart to increase passenger and cargo flights between the United Kingdom and Iran. Also in March, Iran signed a memorandum of understanding with German company Lufthansa to provide logistics support to Iran’s airlines. 
 

Senate Hearing: Progress on Nuclear Deal

CongressOn April 5, the Senate Foreign Relations Committee held a hearing on progress in implementing the nuclear deal between Iran and the world’s six major powers. Thomas Shannon, the State Department’s Under Secretary for Political Affairs, provided testimony. The following are excerpts of his remarks.
 
The successful negotiation of the Joint Comprehensive Plan of Action (JCPOA) with Iran created a framework whereby we and our P5+1 partners could pursue a common goal of ensuring that Iran does not obtain a nuclear weapon. Reaching that goal however, will depend on how the JCPOA is implemented and whether Iran lives up to its international commitments. So far implementation is proceeding well. Should Iran continue along this path, we believe that, through the JCPOA, we can achieve our goal. Indeed, the significant nuclear steps Iran has already taken have put it much further away from a bomb than before this deal was in place.
 
While we are encouraged by Iran’s adherence to its nuclear commitments thus far, I assure you that the Administration shares your concerns about the government of Iran’s actions beyond the nuclear issue, including its destabilizing activities in the Middle East and its human rights abuses at home. Iran’s support for terrorist groups like Hizballah, its assistance to the Asad regime in Syria and the Houthi rebels in Yemen, and its ballistic missile program are at odds with U.S. interests, and pose fundamental threats to the region and beyond. Iran continues to violate fundamental rights of its citizens by suppressing dissent, restricting freedom of expression, and torturing prisoners, among other abuses.
 
It is my purpose today to talk about our progress since JCPOA Implementation Day and the path forward for the coming years. We have several key objectives in our policy toward Iran: First, to ensure Iran’s adherence to the JCPOA, which will prevent Iran from developing a nuclear weapon and guarantees that its nuclear program remains exclusively peaceful. Second, to counter Iran’s support for terrorism and other destabilizing activities, while also working diplomatically to encourage Iran to play a more constructive role in the region. Third, to promote respect for human rights in Iran. Let me speak briefly to each of these efforts.

JCPOA Implementation
 
On January 16, the International Atomic Energy Agency (IAEA) verified that Iran had completed the nuclear-related steps necessary to reach JCPOA Implementation Day. This meant Iran had dismantled two-thirds of its installed uranium enrichment capacity, going from over 19,000 centrifuges before the JCPOA to just 5,060. In addition, Iran terminated all uranium enrichment at, and removed all nuclear material from, its underground Fordow facility. Reaching Implementation Day also meant Iran had shipped out 98 percent of its enriched uranium stockpile, reducing it from roughly 12,000 kilograms before the deal, to no more than 300 kilograms of up to 3.67 percent enriched uranium hexafluoride today, where it must stay. Iran also removed the core of the Arak Heavy Water Reactor and filled it with concrete, permanently rendering the core unusable and eliminating the nation’s only source of weapons-grade plutonium, thus blocking that potential pathway to a weapon. The reactor is now being redesigned to not produce weapons-grade plutonium during standard operation and to minimize non-weapons usable plutonium production.
 
Additionally, Iran is now adhering to the IAEA Additional Protocol and the IAEA has put in place the JCPOA’s numerous enhanced transparency measures. For example, modern technologies such as online enrichment monitors and electronic seals can detect cheating and tampering in real time. Iran’s key declared nuclear facilities are now under continuous IAEA monitoring, and the IAEA also has oversight of Iran’s entire nuclear fuel cycle from its uranium mines and mills to enrichment facilities.
 
Thanks to the JCPOA, Iran is now under the most comprehensive transparency and monitoring regime ever negotiated to monitor a nuclear program.
 
On March 9, the IAEA released its first monitoring report since Implementation Day. The report affirmed that Iran continues to adhere to its JCPOA commitments.
 
Iran has taken significant, irreversible steps that have fundamentally changed the trajectory of its nuclear program. Simply put, the JCPOA is working. It has effectively cut off all of Iran’s pathways to building a nuclear weapon. This has made the United States, Israel, the Middle East, and the world safer and more secure. Before the JCPOA took effect, Iran was less than 90 days away from getting enough fissile material for a nuclear weapon. Today, thanks to the JCPOA, Iran is over a year away from being able to get that material. Any attempt to do so would be detected immediately by the international community.
 
This is why the United States is confident the JCPOA will ensure Iran’s nuclear program is and will remain exclusively peaceful. In exchange for Iran completing its key nuclear steps, on Implementation Day the United States and the European Union (EU) lifted nuclear-related sanctions on Iran. The United States retains our ability and authorities to snap sanctions back into place should Iran walk away from the JCPOA. But as long as Iran continues to meet its commitments, the United States will continue to meet our commitments.
 
Regional Activity
 
I want to re-emphasize that the JCPOA did not resolve our profound differences with Iran. We remain clear-eyed about continued Iranian destabilizing activity. For decades, Iran’s threats and actions to destabilize the Middle East have isolated it from much of the world. Over the past three decades, Iran has continued its support for terrorism and militancy, including its support for Lebanese Hizballah, Palestinian terrorist groups in Gaza, Kata’ib Hizballah and other Iraqi Shi’a militia groups in Iraq, and Shia militant groups in Syria. Iran was designated a State Sponsor of Terrorism in 1984 and remains so-designated today.
 
The Islamic Revolutionary Guard Corps – Qods Force (IRGC-QF) cultivates and supports militant groups around the region. Iran has been smuggling weapons to the Houthis in Yemen, fueling a brutal civil conflict in that country. Additionally, Iran sees the Asad regime in Syria as a crucial ally in the region and a key link to Iran’s primary beneficiary and terrorist partner, Lebanese Hizballah. Iran provides arms, financing, and training to fighters to support the Asad regime’s brutal crackdown that has resulted in the deaths of over 250,000 people in Syria.
 
That’s why we have retained our sanctions related to Iran’s destabilizing activities in the region, including its support for terrorism. We aggressively employ Executive Order (E.O.) 13224, which allows us to target terrorists and those who support them across the globe including Iranian persons and entities that provide support to terrorism. The IRGC-QF, the Iranian Ministry of Intelligence and Security, Iran’s Mahan Air, Hizballah, and over 100 other Iran-related individuals and entities remain subject to sanctions under this E.O. On March 24, we designated six additional individuals and entities engaged in procurement activities for Mahan Air, which was named in 2011 as a Specially Designated Global Terrorist due to its support for the IRGC-QF.
 
We have found through experience that the most effective way to push back on aggressive Iranian activity is to work cooperatively with our allies to deter and 4 disrupt Iranian threats. This is why we increased our security cooperation with the Gulf Cooperation Council – the GCC – following the Camp David summit and have provided additional assistance to Israel. We continue to interdict, and actively work with our coalition partners to interdict, Iranian weapons shipments throughout the region. Notable successes on this front include Israel’s seizure of the Klos C vessel carrying weapons bound for Gaza in 2014, military and diplomatic efforts to prevent an Islamic Revolutionary Guard Corps (IRGC) naval flotilla from docking in Yemen in April 2015, and the four dhow seizures since September 2015 carrying weapons from Iran that we assess were bound for Yemen.
 
We take any threat to Israel extremely seriously and we understand that Iran’s support for terrorism requires our strong support to one of our closest allies. This Administration has provided more than $23.5 billion in foreign military financing for Israel under the current Memorandum of Understanding. Additionally, the United States has invested over $3 billion – beyond our Foreign Military Financing (FMF) assistance – in the Iron Dome system and other missile defense programs for Israel. And we are currently working together on additional long-term support to Israel.
 
Iran’s Ballistic Missile Tests
 
Iran’s attempts to develop increasingly advanced ballistic missile systems are a threat to regional and international security. While full implementation of the JCPOA will ensure that Iran is unable to develop a nuclear warhead to place on a missile, we will continue to use all available multilateral and unilateral tools, including sanctions when appropriate, to impede Iran’s ballistic missile program.
 
Following Iran’s October 2015 missile test, we sanctioned eight individuals and three entities involved in procuring materials and other equipment for Iran’s ballistic missile program. We also led an international effort at the United Nations to highlight and condemn Iran’s tests, which violated the provisions of UN Security Council resolution 1929.
 
Iran conducted another set of dangerous and provocative missile tests in March. On March 24, we designated two Iran-based entities directly involved with Iran’s ballistic missile program.
 
Additionally, we called for UN Security Council consultations on Iran’s missile launches on March 14, where Ambassador Samantha Power condemned these 5 launches as destabilizing and inconsistent with UN Security Council resolution (UNSCR) 2231. As a next step, on March 29, we submitted a joint letter along with France, the United Kingdom, and Germany to the UN Security Council requesting the UN Secretary-General report on Iran’s ballistic missile activity as inconsistent with UNSCR 2231, and calling for additional Security Council discussions in the “2231 format” on the launches so that the Council can discuss appropriate responses. The Security Council met at experts-level in its “2231 format” on April 1, where U.S. missile experts briefed on the technical details of Iran’s launches and explained why they were inconsistent with UNCR 2231.
 
We will also continue to work through the Missile Technology Control Regime and the Proliferation Security Initiative to prevent and interdict transfers of material and technology to Iran that would support its ballistic missile program.
 
In addition to our effects to enhance Israeli security, we’ll also work closely with our Gulf allies, as part of the Camp David process started by the President last year, to develop missile defense capabilities and systems.
 
Human Rights
 
Iran violates fundamental human rights of its citizens by severely restricting civil liberties, including the freedoms of peaceful assembly, expression, and religion. Iran has the world’s highest per capita rate of executions, which often happen after legal proceedings that do not follow Iran’s constitutional guarantee of due process or international obligations and standards regarding fair trial guarantees. There are over 1,000 political prisoners in Iran, including 19 journalists. Many of them experience harsh treatment and extended pretrial detention. Women continue to face legal and social discrimination and limitations on their ability to travel, work, and access educational opportunities.
 
We use a variety of tools to raise awareness of these human rights violations and abuses and to hold their perpetrators accountable. This policy has not changed as a result of the JCPOA. We continue to have human rights sanctions authorities, including under the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010. Since 2010, we have imposed sanctions on 19 individuals and 17 entities that were determined to meet the CISADA criteria. Human rights-related sanctions are not subject to relief under the JCPOA, and we continue to vigorously enforce these sanctions.
 
We are also working multilaterally to press Iran to better respect the human rights of its citizens. The United States strongly supports the annual UN General Assembly Third Committee resolution highlighting Iran’s poor human rights record and calling on Iran to take measures to address its abuses. Additionally, the United States fully supports the mandate of the UN Special Rapporteur on the Situation of Human Rights in Iran, which was renewed March 23 primarily because of our aggressive lobbying campaign.
 
We are vocal about our concerns with Iran’s ongoing repression of human rights and fundamental freedoms of its people. We document the Iranian government’s human rights abuses in the annual International Religious Freedom, Human Rights, and Trafficking in Persons reports. Iran is designated as a "Country of Particular Concern" under the International Religious Freedom Act and is a Trafficking in Persons Tier 3 country.
 
The Way Forward
 
As a result of the nuclear negotiations, we have started to talk directly with Iran in ways we had not done for decades. While our concerns about Iran are substantial, we believe it is in the U.S. national interest to continue a dialogue with Iran on the issues that divide us – while we also continue to use all tools available to counter the Iranian activities we oppose.
 
The nuclear negotiations also opened up the opportunity to talk with Iran about U.S. citizens unjustly held in their prisons, which was done on a separate track. We had a dialogue that freed four U.S. citizens – Amir Hekmati, Saeed Abedini, Nosratollah Khosravi Roodsari, and Jason Rezaian – and Iran separately released U.S. student Matthew Trevithick. The protection of U.S. citizens is a top priority of the State Department. We will continue to hold Iran to its commitment to bilateral discussions about the whereabouts of Robert Levinson. Iran has a responsibility to assist us in locating and bringing home Mr. Levinson, as he went missing on Iran’s Kish Island. And we continue to be concerned by the reports regarding the detention of U.S. citizens Siamak Namazi and his father, Baquer Namazi.
 
Iran also participates in the International Syria Support Group, working with over 20 other countries and international organizations to reach a political transition in Syria. We know Iran works against our interests supporting the Asad regime, but we also know we can’t resolve this conflict with Iran outside the tent playing a spoiler role. We thus judge that Iran, with its close relationship with and history of supporting Asad, needs to be a part of any lasting resolution to the conflict. This conflict has gone on far too long, and taken too many lives, to not have all the parties at the table trying to find a solution that gives the Syrian people a better future.
 
We know there is strong hostility towards the United States within certain Iranian quarters. We know parts of the Iranian establishment fear any relationship with United States. But we also know that millions of Iranians want to end their country’s isolation while also benefitting from new economic opportunities. We now see Iran reengaging with the global community via high-level visits and trade agreements.
 
U.S. policy toward Iran must be calibrated to talk with Iran when it is in our interest while ensuring we address the threats to peace and security Iran continues to pose.
Congress plays an essential role in shaping this posture. The legislative and executive branches should work together, like we did to build international pressure on Iran, to now calibrate our approach such that we are simultaneously resolute when dealing with Iranian threats, while willing to engage when we think it in U.S. interests to do so. I look forward to continued consultations with Congress as we strive to find this balance.
 
We also must continue to make clear that our hand of friendship is open to the Iranian people despite the significant differences we have with its government. That is why President Obama and Secretary Kerry yet again this year delivered Nowruz messages addressed directly to the Iranian people, expressing the desire for stronger ties between Iranians and Americans.
 
It is up to Iran to decide the scope and pace of engagement. Whether Iran engages substantively with us or not, we are confident that the JCPOA makes us and our partners safer. We will continue to work with the IAEA, the EU, and the P5+1 to vigorously monitor and verify that Iran is keeping its commitments, and will continue to use all of the tools, both unilaterally and multilaterally, to address our other issues of concern with Iran.
 
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