United States Institute of Peace

The Iran Primer

Treasury Dept: Sanctions Far from Being Lifted

            On February 4, Treasury Under Secretary for Terrorism and Financial Intelligence David S. Cohen testified before the Senate Foreign Relations Committee on the limited sanctions relief for Iran included in the interim nuclear deal. The following are excerpts from his statement.

 
Maintaining Pressure on Iran
 
Viewed in light of the depths to which Iran’s economy has sunk – brought about in large part by the sanctions that continue to remain in place – the approximately $7 billion in relief that Iran stands to receive over the next six months will not materially affect its economy.  To the contrary, because of our ongoing active efforts to implement and enforce the manifold U.S. and international sanctions that remain in place, we expect the economic pressure on Iran will continue unabated during the pendency of the JPOA.
 
For the first time in 20 years, Iran will be in a recession for two consecutive years; its economy contracted 6 percent in the Iranian fiscal year ending in March 2013, and we assess that it will contract again this fiscal year.  Iran will continue to have limited or no access to almost $100 billion in foreign exchange holdings in accounts overseas.  Its budget deficit reached about 5 percent of GDP last year and will remain sizable in the current budget year.  And Iran’s currency, the rial, has lost around 60% of its value against the dollar since 2011 while the official inflation rate is around 38%. 
 
Going forward over the six-month duration of the JPOA, Iran’s economy will continue to be buffeted by sanctions, as the core architecture of U.S. sanctions remains firmly in place. 
 
For example, we are continuing to implement and enforce our oil sanctions, which have driven down Iran’s oil exports by more than 60% over the last two years.  These sanctions also preclude the purchase of Iranian oil by any country other than Iran’s six remaining oil customers, who may not exceed their current purchase levels as outlined in the JPOA and our sanctions relief.  During the period of the JPOA, the oil sanctions alone will cost Iran approximately $30 billion in sales it cannot make. 
 
We are continuing to implement and enforce our financial sanctions, which require the payment for oil imported from Iran by the six current customers to be paid into accounts that can be used only to facilitate humanitarian transactions or bilateral trade between the importing country and Iran.  This Iranian oil revenue can neither be brought back to Iran nor moved to third countries, except to facilitate humanitarian trade.  And since the accounts that receive the oil revenue already hold more funds than Iran chooses to spend, the effective value of those oil sales to Iran is far less than 100 cents on the dollar.
 
We are continuing to implement and enforce our banking sanctions, which call for the exclusion from the U.S. financial system of any foreign bank that knowingly engages in significant transactions with designated Iranian banks.  The EU is also continuing to implement and enforce its banking sanctions, which have led to the termination of SWIFT access for most Iranian banks.  Altogether, these banking sanctions – which all remain fully in force – have largely cut-off the Iranian banking sector from the international financial system. 
 
We are continuing to implement and enforce the vast majority of our sanctions on Iran’s energy sector.  That includes, among other things, sanctions on significant investment in Iran’s energy sector and on the sale of significant goods or services that could be used in Iran’s energy sector.
 
And we are continuing to implement and enforce the broad trade embargo between the U.S. and Iran.  Outside of transactions involving humanitarian goods, U.S. banks and businesses, including their overseas subsidiaries, are largely forbidden from engaging in any transactions with Iran.
 
Now, to be sure, since the election of President Rouhani in June, there has been some improvement in a few economic indicators, such as the value of the rial and the inflation rate.  None of that improvement, however, is attributable to the limited sanctions relief in the JPOA which, of course, went into effect only two weeks ago.  Indeed, these indicators are largely unchanged over the past few months.  Instead, much of the uptick in these metrics occurred over the summer following the election of President Rouhani in June; they appear to be due largely to public optimism that the Rouhani administration would put in place competent economic managers and obtain comprehensive sanctions relief.     
 
While President Rouhani did, in fact, replace many of those responsible for mismanaging the Iranian economy during President Ahmadinejad’s tenure, the JPOA does not deliver comprehensive sanctions relief.  To the contrary, because the most potent sanctions remain firmly in place, Iran’s economy will remain under pressure.  Most importantly, its oil revenues will remain significantly depressed and the vast majority of its foreign reserves will remain restricted or inaccessible.  As a result, Iran will continue to struggle to finance its imports, to fund its government operations, and to defend the value of the rial. 
 
Even with a slight uptick here or there in some economic indicators, the continuing impact of our core oil, banking, financial, and energy sector sanctions – and the cumulative impact of those sanctions – means that the Iranian economy is operating at significantly reduced levels and will continue to massively underperform for the foreseeable future.  To get out of the hole that it is in, Iran needs better economic management and substantial, structural economic relief that can come only from lifting the broad sanctions that remain in place – something the JPOA does not contemplate, but the promise of which we assess will motivate Iran to negotiate a serious and comprehensive solution to our concerns with Iran’s nuclear program in the next phase.
 
Engagement with Foreign Counterparts and The Private Sector
 
So while we remain committed to providing, in good faith, the relief agreed to under the JPOA, we also remain hard at work implementing and enforcing a sanctions regime left largely intact by the JPOA – a sanctions regime of unprecedented force and scope.  The reason is simple: We know that intense sanctions pressure helped bring about the JPOA, and likewise will be a critical component in the negotiations to come. 
 
To ensure the force and scope of our sanctions, we are continuing our long-standing efforts to work with our international counterparts in the application and enforcement of our sanctions.  This has been a whole-of-government effort, involving officials at all levels of the Administration.  Secretary Lew, for example, has met with many of his counterparts in Europe and with literally hundreds of business and banking executives to drive home the point that the sanctions relief in the JPOA is narrow, that the sanctions that remain in place are broad, and that we intend to enforce our sanctions vigorously.  And over the last six weeks, I have traveled to the UK, Germany, Italy, Austria, Turkey and the United Arab Emirates carrying the same message: Iran is not open for business. 
 
In meetings with banks, businesses and trade promotion authorities, as well as with our governmental counterparts, I have explained that complex, robust, and broad sanctions remain in effect.  This means, of course, that substantial legal risk remains for anyone attempting to do business with Iran.  I have pointed out in particular that all of our banking sanctions, and all of the EU’s banking sanctions, remain in place, which means that any business looking to get paid for delivering goods to Iran will continue to confront an Iranian financial sector largely cut-off from the SWIFT network and mostly unable to transact internationally. 
 
And I have also emphasized that anyone doing business with Iran continues to incur significant reputational risk.  For years, we have exposed the complexity and sophistication of Iran’s deceptive attempts to evade sanctions to acquire material for its nuclear program – hiding behind false front companies, deleting identifying information from contracts and payment messages, and disguising the origin of its oil.  The line between licit and illicit Iranian business has always been blurry at best, and that has not changed.
 
Continued Robust Enforcement of Sanctions
 
Now, we recognize that most businesspersons and bankers do not set out intentionally to engage in sanctionable transactions.    And I would also strongly encourage anyone, anywhere who thinks now might be a good time to test the boundaries and challenge our resolve to think again. 
 
As President Obama has made clear, we will continue to vigorously enforce the vast array of sanctions that are not suspended by the JPOA – sanctions that reach Iran’s energy, banking, and trade sectors, along with its access to the international financial system.  We also will continue to target Iran’s support for terrorism and human rights abuses.  And we will continue – in the days, weeks, and months ahead – to respond to Iran’s efforts to evade our sanctions, wherever they may occur.  
 
We know that some companies are talking to the Iranians.  While there is nothing necessarily sanctionable about just talking, if those conversations turn into deals that exceed the narrow bounds of the relief agreed to in the JPOA and involve sanctionable activity, we will not hesitate to respond.  Indeed, the JPOA implementation understandings themselves explicitly recognize that we will enforce existing sanctions.
And we are doing so.  Just last week, for example, Treasury reached a $9.5 million settlement with the Bank of Moscow to settle potential civil liability for 69 transfers it sent to or through U.S. banks that were for or on behalf of Bank Melli Iran ZAO, a sanctioned Iranian entity.  None of the payment messages Bank of Moscow sent included direct references to Bank Melli Iran ZAO.  Instead, the Iranian bank was identified through the use of abbreviations while the Bank of Moscow avoided using terms such as “Melli,” “Iran,” or the bank’s SWIFT Business Identifier Code.  This settlement follows a string of Iran-related enforcement actions we have taken over the past few weeks and months.
Two weeks ago, we announced a landmark $152 million settlement agreement with Clearstream Banking S.A., of Luxembourg, to settle its potential civil liability for providing Iran with substantial and unauthorized access to the U.S. financial system.  Specifically, Clearstream served as the intermediary through which the Central Bank of Iran was able to maintain a beneficial ownership interest in securities held in custody in the United States.       
 
And before that, we reached a $33 million settlement with the Royal Bank of Scotland and a $91 million settlement with Weatherford International, Ltd.  Both settlements involved investigations of apparent violations of our sanctions on Iran; the latter was Treasury’s largest ever settlement outside of the banking industry.
 
At the end of last year, we designated more than a dozen targets located inside Iran and around the world – from Cyprus to Singapore – involved in efforts to help Iran or its military procure goods and technology for Iran’s nuclear or defense sectors through front companies and deceptive financial transactions. 
And we will continue to detect, disrupt, and disable those facilitating Iran’s nuclear and missile programs by identifying front companies, evaders, and violators and sanctioning them. We have done so more than 600 times before and we will continue to do so during the next six months.
The message should be clear: The United States is watching, and the Administration is poised to deploy our tools against anyone, anywhere, who violates our sanctions.
 
Conclusion
The Joint Plan of Action has created the space, over the next six months, to explore the possibility of a long-term, comprehensive solution to concerns with Iran’s nuclear program.  Achieving that goal will require, among many other things, that we deliver on our commitments to provide the specific, limited relief contemplated by the JPOA while maintaining significant pressure on Iran.  And that is precisely what we intend to do. 
 
 

Kerry and Zarif: Meeting in Munich

      On February 2, Secretary of State John Kerry discussed upcoming nuclear negotiations with his Iranian counterpart, Foreign Minister Mohammad Javad Zarif, on the margins of the Munich Security Conference. After the bilateral meeting, Zarif told conference attendees Tehran realizes it is at a “historical crossroads” with Western countries. “I think the opportunity is there, and I think we need to seize it,” he said.Talks on a comprehensive agreement between Iran and the world's six major powers -- Britain, China, France, Germany, Russia and the United States-- are slated to resume in Vienna on February 18.
            The following is a statement from a senior State Department official on the Kerry-Zarif meeting.

            Secretary Kerry and Foreign Minister Zarif met on the margins of the Munich Security Conference this morning.

            They discussed the upcoming negotiations with the P5+1 and the EU on a comprehensive agreement that will begin in Vienna next month.  Secretary Kerry reiterated the importance of both sides negotiating in good faith and Iran abiding by its commitments under the Joint Plan of Action.  He also made clear that the United States will continue to enforce existing sanctions.

            Secretary Kerry pressed for the Iranians to work cooperatively with us in our efforts to help United States citizens Robert Levinson, Amir Hekmati, and Saeed Abedini to return to their families.
 
 
 

 

Western Countries Flood Tehran

            More than two dozen delegations of lawmakers, officials and businesspeople have visited Iran since the interim nuclear agreement was brokered in November 2013. Many Western countries and South Korea are particularly hopeful that Iran and the world’s six major powers – Britain, China, France, Germany, Russia and the United States – will find a comprehensive solution to the nuclear dispute. So politicians and investors have traveled to Tehran to begin renewing ties in anticipation of an agreement. The Elders, a group of veteran independent leaders, also visited Iran to “encourage and advance” dialogue between Tehran and the international community. The following is a chronological rundown of delegations that have visited since November 2013.

Slovenia

      Slovenian Parliament Speaker Janko Veber headed a 30-member business delegation to Tehran for a three-day visit. In his meeting with President Rouhani on May 12, Veber said that Ljubljana is keen on boosting ties with Tehran and expressed hope for successful nuclear talks between Iran and the world’s six major powers. Iranian and Slovenian businesspeople and government officials also met to explore potential fields for trade and investment.

Armenia

      Armenian Foreign Minister Edward Nalbandian arrived in Tehran on May 5 for meeting with high ranking officials. He met with Foreign Minister Mohammad Javad Zarif, President Hassan Rouhani and others. Nalbandian said he hopes to increase cooperation on transportation, energy, culture and education initiatives.

 

Italy

            On May 4, the Italy-Iran Parliamentary Friendship Group arrived in Tehran for a four-day visit. Ettore Rosato, the head of the 10-member delegation, met with Iranian Parliamentary Speaker Ali Larijani on the first day of the trip. “Italy supports the trend of the [nuclear] talks and it is interested to see that these talks bear the final results soon,” said Rosato. The delegation also met with the supreme leader’s top aide, Ali Akbar Velayati and the chairman of parliament’s national security and foreign policy committee, Alaeddin Boroujerdi.

Nicaragua

      On April 28, Nicaraguan Foreign Minister Samuel Santos Lopez (left) arrived in Tehran with a high-ranking delegation to strengthen bilateral relations. Lopez met with President Rouhani on the first day of his trip. “Detailed information about proper grounds in Nicaragua for the presence of private sector and Iranian investors must be offered to them,” said Rouhani. On April 29, Santos met with Parliamentary Speaker Ali Larijani, who pointed out “numerous opportunities for cooperation between the two countries in economic, industrial and agricultural sectors.”

United Kingdom

            On April 27, senior U.K. diplomat Simon Gass visited Tehran to discuss boosting ties and re-opening diplomatic missions. London withdrew its staff in November 2011 after protestors surrounded the Tehran embassy after Britain tightened sanctions.  Gass, the former ambassador to Tehran and the British representative to the P5+1, is the highest ranking diplomat to visit Tehran since 2011.
            Britain’s Foreign Office described the trip as “the next stage in the step-by-step approach to improving relations.” Gass held separate meetings with Iranian Deputy Foreign Minister for American and European Affairs Majid Takht Ravanchi and with Deputy Foreign Minister for Legal and International Affairs Seyed Abbas Araqchi. Araqchi and Gass discussed the ongoing nuclear talks between Iran and the world’s six major powers.
 

Austria

            Austrian Foreign Minister Sebastian Kurz arrived in Tehran on April 26 for a two-day visit. He said that Vienna is ready to enhance economic and cultural cooperation with Tehran in a joint press conference with his Iranian counterpart, Mohammad Javad Zarif. Kurz also expressed hope for the success of nuclear negotiations in a meeting with Parliamentary Speaker Ali Larijani. 

 

France

            On April 22, a French parliamentary delegation led by Senate Finance Committee Chairman Philippe Marini arrived in Tehran for a week-long visit. The Iranian parliament’s Planning and Budget Commission chief, Gholamreza Meshabi Moghaddam, had issued the invitation to his counterparts. The objective of the trip was to assess economic opportunities in Iran and improve bilateral ties, according to Marini.

Latvia

      On April 22, Latvian Foreign Minister Edgars Rinkēvičs (left) arrived in Tehran with a business delegation for a two-day visit. Rinkēvičs became the first high-ranking Latvian to visit the Islamic Republic. He met with President Hassan Rouhani (right), Foreign Minister Mohammad Javad Zarif, Parliamentary Speaker Ali Larijani, Senior Advisor to the Supreme Leader Ali Akbar Velayati and Minister of Transportation Abbas Ahmad Akhoundi. Rinkēvičs expressed Riga’s eagerness to expand economic and cultural ties with Tehran to Rouhani. The foreign minister also told the president that he hoped for increased E.U.-Iran cooperation after Latvia takes over the rotating E.U. chairmanship next year.
 
Switzerland
            On April 16, a six-member delegation of Swiss lawmakers arrived in Tehran for a four-day visit. The group included Co-chairman of the Iran-Switzerland Parliamentary Friendship Group Jean-François Rime and Swiss Federal Assembly member Luzi Stamm.  "Iran is a big country that plays an influential and undeniable role in the region's future,"  Stamm said in a meeting with Iranian parliamentarians.
 

Azerbaijan

            On April 9, Azeri President Ilham Aliyev met with Iranian President Rouhani to discuss boosting ties between their two countries. Azeri and Iranian ministers signed three memorandums of understanding and one agreement on tourism, cultural exchanges, emergency preparedness and economic development.

 

Belarus

           On March 16, Belarus Foreign Minister Vladimir Makei arrived in Tehran for a two-day visit. On the first day, Makei met discussed ways to boost bilateral trade with his Iranian counterpart Foreign Minister Zarif and Iranian business leaders.

            On March 17, Makei met with President Rouhani, who said Iran is ready to export engineering services to Belarus. Makei also met with former President and Chairman of the Expediency Discernment Council Akbar Hashemi Rafsanjani , Parliamentary Speaker Ali Larijani and Minister of Industry and Mines Mohammad Reza Nematzadeh.

Tajikistan

      On March 16 and 17, Tajik Foreign Minister Sirojiddin Aslov met with President Rouhani, Foreign Minister Zarif and  Parliamentary Speaker Ali Larijani. Rouhani said the two countries “enjoy great potential to boost the level of political, economic and cultural cooperation between the two countries.” Aslov invited Rouhani to Dushanbe later in 2014.

 

            Zarif told Aslov that Iran is ready to help Tajikistan fight terrorism and that extremism is a danger to both countries. Aslov also congratulated Zarif on Iran’s recent “diplomatic victories” on the nuclear dispute.  "The government of Tajikistan is determined to solve the problems with which the Iranian firms are entangled in our country, and favor commissioning the Iranian companies to implement development projects in Tajikistan,” Aslov told Larijani.

Greece

           On March 15, Greek Vice President and Foreign Minister Evangelos Venizelos arrived in Tehran for a two-day visit. He discussed the nuclear negotiations and bilateral trade with President Rouhani and Foreign Minister Zarif. Venizelos also met with former President and Chairman of the Expediency Discernment Council Akbar Hashemi Rafsanjani and Secretary General of the Supreme National Security Council Ali Shamkhani.
           Rouhani described relations between Iran and Greece as “deep-rooted” and “historical” while emphasizing the “vast potential to strengthen economic ties between the two countries.” “Greece will always remain Iran’s gateway to Europe,” the Greek foreign minister added. 
 

European Union

            E.U. foreign policy chief Catherine Ashton arrived in Tehran on March 8, marking the first visit by an E.U. high representative since 2008. The primary aim of the visit was to discuss new opportunities for improving Iran’s relationship with the European Union. Ashton discussed trade, human rights, the Syrian conflict and other pressing issues in her meetings with President Hassan Rouhani, Parliamentary Speaker Ali Larijani and Foreign Minister Zarif. She also discussed the difficult road ahead to a final nuclear agreement.

            The following are excerpted remarks from Ashton's statement after the visit.

            “The main purpose of the visit was to, as E.U. High Representative, have a chance to talk to Iran about the potential for the relationship that we can have in the future. Many European Union countries’ ministers are coming here. Many have historical links and this was about joining up the whole of the EU in thinking through the issues that we would want to discuss. Not surprisingly there was a big focus on human rights: I met with women activists on International Women’s Day and talked to them about the situation that women find themselves in and some of the work that these women are engaged in, from journalists to those involved with Afghan refugees, people working across the spectrum of civil society and the importance of civil society.
            “And then thinking about some of the issues in the region, for example the real challenges of the drug trade from Afghanistan. Iran faces real difficulties there. There are ways in which we could work together to try and address that. And then looking into the future, the possibilities of all sorts of dialogues and discussions; again an example would be the environment. So that sort of group of different issues, things we may be able to talk about now because they’re important to the European Union to do now, but most importantly things that could be, depending on what happens with the nuclear talks -inevitably that’s been a backdrop to the conversations I’ve had.
            “One of the things that’s been very clear is the support that is given across the political spectrum for the work that is going on currently in Vienna to try and move forward on a comprehensive [nuclear] agreement. That does not mean that we’ll get an agreement; it does not mean that people are committed to any possible outcome at this stage, but I have had a real sense that people are committed to wanting to see the talks happen and that, I think, is encouraging of itself.”
            March 9, 2014 in remarks on her visit

 

Spain
            Spanish Foreign Minister Jose Manuel Garcia-Margallo arrived in Tehran on March 1 for what was supposed to be a four-day visit. But he left after just one day to attend an emergency meeting of European Union foreign ministers. The ministers will discuss the Ukrainian crisis. “We are concerned about the territorial integrity of Ukraine,” Garcia-Margallo said in a joint press conference with his Iranian counterpart Mohammad Javad Zarif. The Spanish official also said that Madrid is keen to expand economic ties with Tehran.
 
Poland
            Polish Foreign Minister Radoslaw Sikorski arrived in Iran with 20 business leaders on February 28. The visit --- the first by a Polish foreign minister in 10 years-- was supposed to last for three days. But he left early due to the standoff in Crimea between the Ukraine and Russia. The following are excerpted remarks by Poland’s ambassador to Tehran, Juliusz Gojlo, on the minister’s visit.
            “The Polish Foreign Minister is especially interested in encouraging both sides, in the year of 540th anniversary of the first diplomatic interactions between Poland and Iran, to develop trade exchange as both nations have done for centuries. To this end, Poland will soon be sending a trade delegation to Iran, headed by our deputy prime minister and comprising of 50 Polish business leaders. The visit will showcase the powerful economic component of Polish-Iranian relations.
            “Mindful of the tradition spanning over 500 years of good relations with Iran, Poland has always tried to serve as a bridge between Iran and the European Union.”
             Feb. 27, 2014 in an interview with the Tehran Times
 
Italy

            On February 22, Chairman of the Italy-Iran Chamber of Commerce Rosario Alessandro arrived in Iran with a business delegation for a four-day visit to explore investment opportunities. The Italian group met with the president of the Iranian Investment Organization and officials at Iran’s Industry, Mines and Trade Ministry.

 
Sweden
            Foreign Minister Carl Bildt traveled to Iran from February 3 to 6, marking the visit by a Swedish foreign minister since 2002. The following are excerpts from Bildt’s blog post written just before he arrived in Tehran.
            “When Hassan Rouhani was elected President of Iran in June last year, however, a new window of opportunity was opened. His election was driven by expectations of change and reform.
            “And the months since then have seen a dramatic and important diplomatic thaw in relations with Iran. Naturally, the most important aspect has been the interim agreement on the nuclear issue, which has now entered into force and also eases some of the sanctions.
“As I travel to Tehran, it is of course in the hope that it will be possible to continue down this path.”
            Feb. 3, 2014 in a blog post

 

France
            On February 3, a 107-member delegation of French businesspeople arrived in Iran to revive economic ties. The group included executives and investors from energy, telecommunications, automobile and engineering companies. They planned to attend an Iranian-French business conference and meetings with senior leaders, including U.S.-educated economist and President Hassan Rouhani’s chief of staff, Mohammad Nahavandian.
 
The Elders
            On January 27, the independent group of global leaders called The Elders began a three-day visit to Iran to “encourage and advance the new spirit of openness and dialogue between Iran and the international community.” The delegation, led by former U.N. Secretary General Kofi Annan, stressed the need to “rebuild trust and mutual respect in the region and further afield.”

 

South Korea
      Kang Chang Hee, the speaker of South Korea’s National Assembly, visited Tehran from January 26 to January 28. He discussed opportunities for expanded trade and Korean investment in Iran’s energy sector with President Rouhani on January 27. “South Korea has been successful in economy virtually without any natural resources. Our technology would help Iran’s mines be developed. Iran has taken significant steps toward Geneva deal and it definitely is of importance in bilateral relations with South Korea,” Chang Hee said in a joint press conference with his Iranian counterpart.
 
Mexico
            On January 21, the chair of the Mexican Senate’s Foreign Policy Commission, Gabriela Cuevas, signed a memorandum of understanding with her Iranian counterpart for increased parliamentary communication and cooperation. “Mexico is willing to expand its friendly relations with Iran, esspecially in economic, cultural and scientific fields,” she told Iran’s parliamentary speaker, Ali Larijani.
 
Ireland
            An Irish delegation headed by Pat Breen, the chairman of parliament’s Foreign Affairs and Trade Committee, visited Iran from January 10 to 14. They met with Foreign Minister Zarif, Parliamentary Speaker Ali Larijani, chairman of parliament’s National Security and Foreign Policy Committee Alaeddin Boroujerdi and senior trade officials. Breen told Larijani that President Hassan Rouhani’s election has presented a possibility for Iran to improve relations with the West.
 
Germany
            German parliament member Andreas Schockenhoff from Chancellor Angela Merkel’s party visited Iran from January 6 to 10. The deputy head of the Christian Democratic Union met with his counterparts in Tehran. “We not only welcome enhancement of Iran-Germany ties, but we welcome and support [such expansion of relations] with entire Europe; we are not satisfied with the current level of the relations,” he told Secretary of Iran’s Human Rights Council Mohammad Javad Larijani on January 8. The following are excerpted remarks by Schockenhoff to local media.
 
            “The initial [nuclear] agreement in Geneva is the first important step to find a final solution for the Iran nuclear issues and normalizing the relations with the country, however, much should be done to that stage yet.
            “If Iran and Powers work out a comprehensive plan in the set deadline, hopes would be invested on the détente between Germany and Iran, and I would say that Berlin is highly interested in entente with Tehran.”
            Jan. 6, 2014 to Iranian media

 

Italy
            Senator Pier Ferdinando Casini, chairman of parliament’s Foreign Policy Commission also visited Iran in early January. “We favor to see a historical agreement which will be able to guarantee Iranˈs right to produce peaceful nuclear energy and ensure the West of peaceful nature of Iranˈs nuclear program,” the delegation said in a January 5 statement. Besides Tehran, the delegation also visited the central and southern provinces of Isfahan and Fars.
            Italian Foreign Minister Emma Bonino previously met with Foreign Minister Zarif and other senior leaders in Tehran from December 21 to 22. Bonino’s visit was the first by an Italian foreign minister in nearly 10 years.
 
United Kingdom
            Former Foreign Minister Jack Straw led a four-man delegation to Tehran from January 6 to January 10. The delegates included members of the All-Party Parliamentary Group on Iran. They met with Iranian Foreign Minister Mohammad Javad Zarif, Parliamentary Speaker Ali Larijani, Chairman of the parliament’s National Security and Foreign Policy Committee Alaeddin Boroujerdi and others. The visit marked the first visit by U.K. lawmakers in years. The British Embassy in Tehran was closed in late 2011 after hardliner demonstrators stormed the building. The following are excerpts from Jack Straw’s op-ed in The Independent about the trip.
            “For this time, no deal with Iran does not mean Iran will stay isolated, as it did during the Ahmadinejad period. Rather, it will lead to a ragged erosion of sanctions. Russia and China will pull away. Pressure from European exporters will increase – especially from Italy and Germany. (Our Lufthansa flight back from Tehran was full of German business people.) Above all, there would be no guarantees whatsoever about Iran’s future nuclear activities.”

 

European Union
            Eight representatives of the European parliament arrived in Tehran on December 13 for talks with senior Iranian lawmakers and officials. The visit marked the first in six years for the European Union. The following are excerpts from an article on the visit by Tarja Cronberg, chair of parliament’s Iran delegation and a member of its foreign affairs committee.
            “There is no doubt that the people of Iran have very high expectations of the new president and the government, one of the more important observations made by our five member MEP delegation. Even the NGOs state that they can work more freely. There are cracks in the isolation. The momentum has to be seized.
            “It is obvious that President Hassan Rouhani is under great pressure to improve the human rights situation, in accordance with his electoral promises. The conservatives, however, still rule the human rights council and the judiciary. The president has released political prisoners, but executions have increased.”

 

 

Hillary Clinton on Iran: Give Talks a Chance

       Hillary Clinton reportedly wrote a letter opposing new sanctions in response to an inquiry from her former Senate colleague, Carl Levin. Levin had written to Clinton in January, asking for her insight as former Secretary of State, on whether new sanctions would help diplomatic efforts to find a comprehensive solution to the nuclear dispute. Levin has opposed calls for new sanctions by some of his colleagues.Clinton echoed the Obama administration, arguing that new sanctions could undermine prospects for securing a comprehensive agreement on Iran’s controversial nuclear program. The following are excerpts reportedly taken from the letter.

             I share the opinion of you and many of your colleagues that these sanctions and the carefully-constructed global consensus behind them are reponsible for driving Tehran to the negotiating table. It was because sanctions worked that we are starting implementation of the Joint Plan of Action, an important step – though still only a first step – toward a comprehensive solution.
 
             Now that serious negotiations are finally under way, we should do everything we can to test whether they can advance a permanent solution. As President Obama said, we must give diplomacy a chance to succeed, while keeping all options on the table. The U.S. intelligence community has assessed that imposing new unilateral sanctions now ‘would undermine the prospects for a successful comprehensive nuclear agreement with Iran.’ I share that view. It could rob us of the diplomatic high ground we worked so hard to reach, break the united international front we constructed, and in the long run, weaken pressure on Iran by opening the door for other countries to chart a different course.
 
             If the world judges – rightly or wrongly – that negotiations have collapsed because of actions in the United States Congress, even some of our closest partners abroad – to say nothing of countries like Russia and China – may well falter in their commitment.
 
             Like President Obama, I have no illusions about the ease or likelihood of turning the Joint Plan of Action into a permanent solution.
 
             So long as Iran remains a sponsor of terrorism and a threat to global security, we will have to remain vigilant in defense of our allies and partners, including Israel,” she wrote. “Yet I have no doubt that this is the time to give our diplomacy the space to work. If it does not, there will be time to put in place additional sanctions in the future, with greater international support necessary to ensure enforcement, and to explore every other option on the table.
 
             I come to the current debate as a long-time advocate for crippling sanctions against Iran. In my eight years in the Senate, I supported every Iran sanctions bill that came up for a vote and I spoke out frequently about the need to confront the threat posed by Iran’s nuclear ambitions, its support for terrorism, and its hostility toward Israel. As Secretary of State, I spent four years sharpening a choice for Iran’s leaders: address the international community’s legitimate concerns about their nuclear program or face ever-escalating pressure and isolation. With support from Congress and our allies, our diplomacy yielded the toughest international sanctions ever imposed.
 
             We can always put on sanctions. I mean that is no heavy lift for the United States Congress, believe me. So why do it now before we can really test? … And then we’re isolated again, and we’re back to where we basically were in 2008, without an international coalition and consensus that has, I believe, brought Iran at least to the point of our being able to explore whether there is a decent deal there.
 

 

            Clinton’s statement comes as a new letter is reportedly circulating among House Democrats to support diplomacy and oppose any imminent new legislation that imposes more sanctions on Iran. The following is the reported text of the letter now circulating in Congress.
 

 

Dear Mr. President:
 
As Members of Congress — and as Americans — we are united in our unequivocal commitment to prevent Iran from obtaining a nuclear weapon. The proliferation of nuclear weapons in the Middle East would threaten the security of the United States and our allies in the region, particularly Israel.
 
 

 

The ongoing implementation of the Joint Plan of Action agreed to by Iran and the “P5+1 nations last November increases the possibility of a comprehensive and verifiable international agreement. We understand that there is no assurance of success and that, if talks break down or Iran reneges on pledges it made in the interim agreement, Congress may be compelled to act as it has in the past by enacting additional sanctions legislation. At present, however, we believe that Congress must give diplomacy a chance. A bill or resolution that risks fracturing our international coalition or, worse yet, undermining our credibility in future negotiations and jeopardizing hard-won progress toward a verifiable final agreement, must be avoided.
 

 

We remain wary of the Iranian regime. But we believe that robust diplomacy remains our best possible strategic option, and we commend you and your designees for the developments in Geneva. Should negotiations fail or falter, nothing precludes a change in strategy. But we must not imperil the possibility of a diplomatic success before we even have a chance to pursue it.
 
 
Photo credit: By Roger H. Goun from Brentwood, NH, USA.BorgQueen at en.wikipedia [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], from Wikimedia Commons
 

US Intel Assessment

            On January 29, Director of National Intelligence James Clapper testified before the Senate Intelligence Committee on Iran’s nuclear program and regional aspirations. Clapper warned that new sanctions could “undermine prospects of a successful comprehensive nuclear agreement with Iran.” He outlined Tehran’s progress in developing its nuclear and missile programs but emphasized that the decision to build or not build a nuclear weapon depends on “political will.” Clapper also noted that new Iranian President Hassan Rouhani’s shift towards the political center may not necessarily lead to areversal of the authoritarian trend in Iranian politics during the past many years.” The following are excerpts from the hearing and the 2014 Worldwide Threat Assessment of the US Intelligence Community.
 
SENATOR ANGUS KING (D-ME): Thank you, Madame Chairman. Mr. Clapper -- Director Clapper, do you have an intelligence assessment of the impact of the interim agreement on Iran’s nuclear program? Does it -- does it slow it down, pause it, the requirements, as you know, about dilution and limitations of centrifuges and those kinds of things? Is this going to have a real impact on the progress of the nuclear capability in Iran?
 
DIR. CLAPPER: Yes, it will, Senator King. Clearly it gets at the key thing we’re interested in and most concerned about is the more highly enriched uranium, the 20 percent enriched uranium. So yes, it does.
 
SEN. KING: Second question, you told us back on the 20th, quote, “We judge that the -- that new sanctions would undermine the prospects of a successful comprehensive nuclear agreement with Iran.” Iranian Foreign Minister Zarif in early December said that the entire deal would be, quote, “dead,” if the international community imposed new sanctions. Is that still your view?
 
DIR. CLAPPER: Yes, sir. It would be good to have them in reserve if we need them but I think right now the imposition of more sanctions would be -- would be counterproductive.
 
SEN. KING: Now, how do you mean in reserve? If the Congress passed them, would you consider --
 
DIR. CLAPPER: Well, obviously the Iranians understand our system and the point there is if the -- if we had any additional sanctions right now, I think this would -- you know, the Iranians would live up to their word and it would jeopardize the agreement. But they understand that this is a subject of great interest in the U.S. Congress and to me, just that fact alone is a great incentive to ensure compliance with the bargain.
 
SEN. KING: So what you’re suggesting is we don’t need new sanctions, even those that have a delayed trigger. It’s the knowledge that Congress can impose them that provides the impetus.
 
DIR. CLAPPER: That would be my view, yes, sir.
 
Nuclear Program
            We continue to assess that Iran’s overarching strategic goals of enhancing its security, prestige, and regional influence have led it to pursue capabilities to meet its civilian goals and give it the ability to build missile-deliverable nuclear weapons, if it chooses to do so. At the same time, Iran’s perceived need for economic relief has led it to make concessions on its nuclear program through the 24 November 2013 Joint Plan of Action with the P5+1 countries and the European Union (EU). In this context, we judge that Iran is trying to balance conflicting objectives. It wants to improve its nuclear and missile capabilities while avoiding severe repercussions—such as a military strike or regime-threatening sanctions. We do not know if Iran will eventually decide to build nuclear weapons.
 
            Tehran has made technical progress in a number of areas—including uranium enrichment, nuclear reactors, and ballistic missiles—from which it could draw if it decided to build missile-deliverable nuclear weapons. These technical advancements strengthen our assessment that Iran has the scientific, technical, and industrial capacity to eventually produce nuclear weapons. This makes the central issue its political will to do so.
 
            Of particular note, Iran has made progress during the past year by installing additional centrifuges at the Fuel Enrichment Plant, developing advanced centrifuge designs, and stockpiling more low-enriched uranium hexafluoride (LEUF6). These improvements have better positioned Iran to produce weapons-grade uranium (WGU) using its declared facilities and uranium stockpiles, if it chooses to do so. Despite this progress, we assess that Iran would not be able to divert safeguarded material and produce enough WGU for a weapon before such activity would be discovered.
 
            Iran has also continued to work toward starting up the IR-40 Heavy Water Research Reactor near Arak. We judge that Iran would choose a ballistic missile as its preferred method of delivering nuclear weapons, if Iran ever builds these weapons. Iran’s ballistic missiles are inherently capable of delivering WMD, and Iran already has the largest inventory of ballistic missiles in the Middle East. Iran’s progress on space launch vehicles—along with its desire to deter the United States and its allies—provides Tehran with the means and motivation to develop longer-range missiles, including an intercontinental ballistic missile (ICBM).
 
            We assess that if Iran fully implements the Joint Plan, it will temporarily halt the expansion of its enrichment program, eliminate its production and stockpile of 20-percent enriched uranium in a form suitable for further enrichment, and provide additional transparency into its existing and planned nuclear facilities. This transparency would provide earlier warning of a breakout using these facilities...
 
Iran
            President Ruhani has heralded a shift in political momentum in Iran toward the center, but we do not know whether he heralds a reversal of the authoritarian trend in Iranian politics during the past many years. Iran’s economy will continue to struggle without comprehensive sanctions relief, which drives Ruhani and his team of technocrats to pursue nuclear negotiations. Since his election, Ruhani has had the support of the Supreme Leader, which has silenced some conservative critics. Hardliners, however, have consistently argued that sanctions fatigue will eventually break the international sanctions coalition and are wary of Ruhani’s engagement with the West, as well as his promises of social and political moderation. Ruhani must maintain the backing of the Supreme Leader in order to continue to advance his political agenda.
 
            Iran will continue to act assertively abroad in ways that run counter to US interests and worsen regional conflicts. Iranian officials almost certainly believe that their support has been instrumental in sustaining Asad’s regime in Syria and will probably continue support during 2014 to bolster the regime. In the broader Middle East, Iran will continue to provide arms and other aid to Palestinian groups, Huthi rebels in Yemen, and Shia militants in Bahrain to expand Iranian influence and to counter perceived foreign threats. Tehran, which strives for a stable Shia-led, pro-Iran government in Baghdad, is concerned about the deteriorating security situation in Iraq. Tehran is probably struggling to find the balance between protecting Shia equities in Iraq and avoiding overt actions that would precipitate greater anti-Shia violence. In Afghanistan, Tehran will probably seek its own additional security agreements with Kabul, promote pro-Iranian candidates in the 2014 presidential election to increase its influence at the expense of the United States, and maintain its clandestine aid to Afghan insurgent groups. Iran sees rising sectarianism as a dangerous regional development, but we assess that Iran’s perceived responsibility to protect and empower Shia communities will increasingly trump its desire to avoid sectarian violence. Hence, Iran’s actions will likely do more to fuel rather than dampen increasing sectarianism.
 
Click here for the full report.
 
 

Connect With Us

Our Partners

Woodrow Wilson International Center for Scholars Logo