United States Institute of Peace

The Iran Primer

A Setback for US-Iran?

            On July 31, the U.S. House passed a new sanctions bill that calls for broader economic sanctions and stiffer penalties for human rights violators. The Nuclear Iran Prevention Act’s main goal is to reduce Tehran’s daily oil exports by an additional one million barrels by imposing stiffer penalties on countries trading with the Islamic Republic. The vote was 400-20. Several members of Congress commented on the measure, including the awkward timing just days before the inauguration of new president. But to become law, the bill must pass the Senate, where it may meet for opposition. President Barack Obama must also sign the measure into law. The following are excerpted remarks by members of Congress with a summary of the bill.  

For the Measure:
Speaker John Boehner (Republican, Ohio)
            “We know Iran is the world’s most aggressive sponsor of terrorism – extending now into Syria, Iraq, Lebanon, even into this hemisphere.  We know that Iran is attempting to build illicit nuclear weapons capability, in willful defiance of both the UN Security Council and the IAEA.  And we know the Supreme Leader and the Ayatollahs remain committed to the destruction of Israel – one of our dearest allies.
            “The United States – especially its Congress – has a duty to respond to Iran’s actions, not its rhetoric.  So this bill seeks to reduce Iran’s oil exports by an additional 1 million barrels a day – which would be a two-thirds reduction from current levels.  We’re also looking to target human rights violators, close the loophole on access to hard foreign currency.  And we’ll give the president the authority to restrict significant commercial trade with Iran.” July 31 on the House floor
Minority Leader Nancy Pelosi (Democrat, California)
            “Iran’s nuclear pursuits continue.  Iran’s leaders refuse to change their approach in their policy.  Iran’s neighbors still feel the threat of the regime’s declarations and actions.  So our message must remain firm: Iran must suspend uranium enrichment, return to the negotiation table, and abandon its reckless pursuit of nuclear weapons.” July 31 on the House floor
Ed Royce (Republican, California)
            “Iran may have a new president, but its march toward a nuclear program continues.  The economic and political pressure on Tehran must be ratcheted-up.  Today the House took a critical step toward crippling this regime to prevent a nuclear Iran and the dire security consequences.” July 31 in a press release
Eliot Engel (Democrat, New York)
            “Congressional efforts to impose new sanctions should not be based on the Iranian political calendar. Today’s vote illustrates that the paramount consideration of the Congress is the Iranian nuclear clock – the amount of time it will take Tehran to achieve a nuclear weapons capability.  If President Rouhani truly has the will and authority to make a bold gesture on Iran’s nuclear program – such as suspending enrichment -- he has a small window of opportunity before this bill becomes law.  I think all of us would welcome such a gesture, but until that point we will continue to pursue a path of diplomatic pressure on the Iranian regime.” July 31 in a press release
Against the Measure:
16 Democrats to House Leadership
            “We believe that it would be counterproductive and irresponsible to vote on this measure before Iran's new president is inaugurated on August 4, 2013. A diplomatic solution remains the best possible means for ensuring that Iran does not acquire a nuclear weapon, and the House of Representatives should not preempt a potential opportunity to secure such an outcome with another sanctions bill. While we have no illusions about the nature of Iran’s government, Iran’s president-elect has sent several positive signals that must not be not be rejected out of hand.” July 31 letter to House leadership
Keith Ellison (Democrat, Minnesota)
            “Why aren’t we at least curious to find out whether or not President Rohani means that he wants to pursue this course of peace? I say let’s accept the olive branch extended by the Iranian people who selected a more moderate candidate.” July 31 on the House floor
Jim Moran (Democrat, Virginia)
            “This bill empowers the very hardliners that are the problem. This is the best opportunity we've had in the last eight years. Why throw that away?"
Bill Summary from the House Committee on Foreign Affairs
H.R. 850, as amended:
Ø  Stiffens penalties for human rights violators by applying the financial sector sanctions in existing law to transactions involving:
  • human rights violators
  • persons transferring technologies to Iran that are likely to be used to commit human rights abuses
  •  persons who engage in censorship or related activities against citizens of Iran, corrupt officials that confiscate humanitarian and other goods for their own benefit, and
  • persons exporting sensitive technology to Iran. 
Ø  Strengthens existing sanctions by compelling countries that are currently purchasing crude oil from Iran to reduce their combined purchases of Iranian crude oil by a total of 1,000,000 barrels per day within a year.  By taking 1,000,000 barrels per day of Iranian crude oil off of the market within a year (with safeguards to ensure that international oil markets can withstand such a reduction), the Iranian regime would continue to lose the long-term funding that it requires to pay for its nuclear program, ballistic missiles, and sponsorship of terrorism. 
Ø  Penalizes foreign persons who engage in significant commercial trade with Iran.  This would use the same model – targeting transactions through the Central Bank or a designated Iranian bank - that has successfully curtailed Iran’s oil trade over the past year. 
Ø  Expands the list of sectors of the Iranian economy effectively blacklisted, and provide the President the tools to add additional sectors of strategic importance to the government of Iran. 
Ø  Limits Iran’s access to overseas foreign currency reserves and impose additional shipping sanctions to limit the ability of the regime to engage in international commerce.      
Ø  Requires that the Administration produce annually a national strategy on Iran highlighting Iranian capabilities and key vulnerabilities that the United States may exploit, providing the United States Government a roadmap as to how to effectively address the Iranian threat.

Click here for the full text.


The Fires Facing Hassan Rouhani

Robin Wright

      One of the most important questions in the Middle East this year is whether Hassan Rouhani's election will mark a new era -- both for Iranians and the outside world. The answer could mean the difference between peace and yet another war. Rouhani's campaign certainly made lots of promises. One of his most striking posters was a bright blue textograph of his face crafted from a slogan promising "a government of good sense and hope." The Scottish-educated cleric energized an election many Iranians had considered boycotting after pledging that "freedoms should be protected." He also won over key youth and female votes by vowing in televised debates to "minimize government interference" in culture and society and to give women "equal rights and equal pay."


            The upbeat promises have continued apace since the June 14 election, particularly on Rouhani's two English and Farsi Twitter accounts. @HassanRouhani tweeted the following message on June 15.

            The "bad behavior" was clearly a dig at outgoing President Mahmoud Ahmadinejad, whose status has plummeted over the past year. He leaves office almost in disgrace.
            Online, Rouhani even discreetly tipped his turban to the Great Satan. Four days after the vote, his account tweeted a decade-old picture of Rouhani visiting a U.S. field hospital set up after the devastating 2003 earthquake in historic Bam. He is pictured next to an American female medic.
            Now Iran's new president has to deliver. After the Aug. 4 inauguration, Rouhani faces a grueling test of the popularity he won at the polls against five other candidates. Iran's economy is toxic. Political divisions border on schisms. Regional allies--both secular and Islamist--are literally under fire. And the outside world has threatened military action if Tehran does not compromise on its nuclear program. Rouhani will find few quick fixes either. His gentle smile will only get him so far.


            "It's the economy stupid" applies as much in the Islamic Republic as in any capitalist society. Rouhani inherits an almost existential challenge in putting out the financial fires. The economic situation is beyond grim due to a combination of punishing international sanctions and Ahmadinejad's gross mismanagement.

      Iran's currency has lost about half its value since mid-2012. At least one out of four young people is now unemployed--including 4 million university graduates--in a country where more than half the voters are under 35. The Central Bank put inflation at 36 percent this spring, but Rouhani said his incoming team estimated that it was closer to 42 percent. Disgruntlement is visible. Sporadic demonstrations, including a July rally by steelworkers outside parliament, have protested unpaid salaries and layoffs.
            Iran's economic lifeline is oil. But crude oil exports were cut by almost 40 percent in 2012--to 1.5 million barrels per day, the lowest in more than a quarter century, according to the U.S. Energy Information Administration. By July 2013, the World Bank reported that Tehran had not paid back loans totaling $79 million for more than six months (out of $679 million due overall), which also meant Tehran would be ineligible for new funding and would find it harder to get new money from commercial creditors.
            "For the first time since the imposed war [with Iraq from 1980 to 1988], our economic growth has been negative for two years in a row. And this is the first time that negative growth is accompanied by high inflation -- the highest inflation in the region or perhaps in the world," Rouhani told the country's parliament in July. In Iran's unusual political system, the president's biggest portfolio is the economy--and it could make or break his presidency.


      During the presidential debates, Rouhani was quite conciliatory toward the outside world, at least compared with the defiant and discordant Ahmadinejad. "We need to move away from extremism," Rouhani said on national television. "We should maintain the country's interests and national security to provide conditions where we create opportunities." The key, of course, will be whether Iran and the outside world can settle longstanding questions about Iran's nuclear program.
            Unlike the economy, Rouhani is uniquely qualified on this issue. He is a mid-ranking cleric, but he was also the national security adviser for 16 years. As chief nuclear negotiator, he brokered a rare deal with the West in 2003-4, when Iran temporarily suspected uranium enrichment, a fuel process that can be used for both peaceful nuclear energy and the world's deadliest weapon. He left the job shortly after Ahmadinejad took office in 2005.
            Rouhani actually took a potshot at Ahmadinejad's team--including Saeed Jalili, the chief nuclear negotiator and another presidential candidate--in the campaign this summer. Among the six major powers negotiating with Iran, Jalili was famed for his long-winded tirades and stalling tactics that went nowhere during the five rounds of diplomacy since April 2012. The joke in Washington was that U.S. officials would actually not have minded if Jalili won the election, because at least they would no longer have to sit across from him at the negotiating table. He may have had the same reputation in Tehran.
            "The nuclear issue will only be resolved through real negotiations, not just announcements," Rouhani said during the debates. "Iran's foreign policy should be placed in the hands of skilled, experienced people -- not people who do not know what they are talking about."
            The sixth round of negotiations--with the United States, Britain, China, France, Germany and Russia--is expected to resume this fall. "Iran will be more transparent to show that its activities fall within the framework of international rules." Rouhani said in his first press conference after the election. The International Atomic Energy Agency--the U.N. nuclear watchdog--particularly wants access to facilities and scientists so far off-limits to the outside world. The looming question is also whether the regime will finally agree to direct talks with the United States to expedite resolution.
            "Relations between Iran and the United States are a complicated and difficult issue. It's nothing easy," Rouhani said at his first press conference. "This is a very old wound that is there, and we need to think about how to heal this injury. We don't want to see more tension. Wisdom tells us both countries need to think more about the future and try to sit down and find solutions to past issues and rectify things."
            Rouhani knows the nuclear program intimately. He also knows that a deal that lessens or eliminates sanctions would in turn be the key to reversing Iran's rapid economic decline. "It is very good for [nuclear] centrifuges to spin," he said in the final debate on foreign policy. "But it's also good for the lives of people to spin." For all his realism, however, Iran's new president remains committed to the unique ideology of the world's only modern theocracy. He also opposed terms of a deal offered in 2009.


      The central challenge for Rouhani is that he will not have the last word on virtually anything. In Iran's hybrid political system, a cleric is the ultimate executive. Supreme Leader Ayatollah Ali Khamenei (left) has virtual veto power, sometimes in subtle ways, over everything from cabinet appointments to political agendas and foreign policy. The last three presidents ended up alienating the supreme leader--and losing influence for themselves and their political factions.
            Tehran also has rival power centers. To win support for his initiatives, Rouhani will need to be a master wrangler to keep Iran's herd of bull-headed politicians in the same corral. He will have to navigate a balance between hardline principlists (so called for their rigid revolutionary principles) at one end of the spectrum and reform sentiments at the other, with many political shades between the two poles. For all their differences, Iranian and American politics actually have something in common--intense government rivalries that produce gridlock.
            After the election, Rouhani told a packed press conference that his government would include "moderates, principlists and reformists. There will be no restrictions. I don't like the word coalition, it will go beyond factions and be based on meritocracy."
            But blocks have already formed to hold Rouhani in check. Iran's unicameral parliament -- the Majlis -- is dominated by conservatives and hardliners, while Rouhani is a centrist. In a recent letter, 80 principlist members of parliament warned against naming "seditionists," a reference to reformers. Their six-point demands included absolute commitment by any appointee to revolutionary principles in domestic and foreign policies and total obedience to the supreme leader.
      Iran's elite Revolutionary Guards also wield enormous political influence. Under Ahmadinejad, veterans from the 1980-88 war with Iraq strengthened their hold on top government jobs, both nationally and in the provinces. The Revolutionary Guards also are a dominant economic force, holding billions of dollars in government contracts having little or nothing to do with the military. They are not shy when it comes to getting their way.
            So the honeymoon may be brief for Rouhani. Like his Western counterparts, he probably has 18 months to two years to produce something tangible before risking the leverage gained by his surprising first-round victory. Then he will have to begin thinking about the next election cycle.
This piece was first published in The Atlantic.
Photo Credits: Rouhani.ir campaign poster, Office of the Supreme Leader official website Leader.ir
Robin Wright has traveled to Iran dozens of times since 1973. She has covered several elections, including the 2009 presidential vote. She is the author of several books on Iran, including “The Last Great Revolution: Turmoil and transformation in Iran” and “The Iran Primer: Power, Politics and US Policy.” She is a joint scholar at USIP and the Woodrow Wilson Center. See her chapter, “The Challenge of Iran” from "The Iran Primer."


New President Already Faces Opposition

            Hassan Rouhani is facing opposition to his cabinet appointments even before he announces the line-up—and even before his August 4 inauguration. On July 24, 80 hardline members of parliament warned the president against appointing “seditionists,” the code-word for reformists. In a joint letter, they also outlined the six criteria for their parliamentary endorsement of cabinet ministers, which include absolute adherence to revolutionary principles in both domestic and foreign policy as well as total obedience to Supreme Leader Ayatollah Ali Khamenei. The ultraconservative press has also used tough language to oppose any appointment of reformists.
            The Iranian right is now particularly vocal against anyone who might be linked to Mohammad Khatami, the reformist president between 1997 and 2005, or the Green Movement that disputed the 2009 reelection of hardline President Mahmoud Ahmadinejad, when millions took to the streets across Iran to demand a leadership change. Rouhani is a centrist who won more than half the vote against five other candidates in the first round, but conservatives and hardliners are actively signaling that he does not have a mandate from key political quarters.

80 hardline members of parliament
            Conditions for votes of confidence for Rouhani’s cabinet include:
1. Firm belief in the fundamentals of the Islamic revolution and conforming to Imam Khomeini’s practices in Iran’s foreign and domestic policies.
2. Belief and recognition of velayat-e faqih (guardianship of the jurist) and adherence to the Supreme Leader’s orders.
3. Not taking part in sedition and not siding with seditionists.
4. A clear record and political, monetary and ethical health, determination and will to fight economic corruption and to secure social and economic justice.
5. Sufficient knowledge and experience and management capability, and competence in their area of responsibility.
6. Will to interact with parliament within the constitution’s framework and approved laws.
In a July 24 joint letter
Fatemeh Rahbar, conservative member of parliament
            “Some of his potential choices...have problems, and I think that if these individuals are introduced to the parliament we will distance ourselves from the meaning of moderation and the first opposition in parliament to Rouhani’s cabinet will take shape. The president-elect’s contemplation can aid cabinet introduction so that the parliament’s vote of confidence can be cast without tension, contention or revealing some of the gentlemen’s cases in open session.  [This will also avoid] creating a difficult political environment at the beginning of the administration.” In July 31 remarks
Hossein Shariatmadari, editor-in-chief of hardline Kayhan
            “Because there are indications that supporters of Fetneh (Green Movement) are in the list (of proposed ministers), the Majlis should send its greetings (to the new government) through no-confidence votes against those ministers.” In a July 31 op-ed

Report: Is Iran a Cyber Power?

            Iran could pose a challenge to the United States despite its limited cyber warfare capabilities, according to a new report by the Atlantic Council. Given Tehran’s weak conventional forces, cyber attacks could be an attractive alternative. “Iran does not need the equivalent of a Ferrari to inflict damage on U.S. infrastructure: A Fiat may do,” warns the report. More than a dozen U.S. financial institutions may have already been hit by hackers linked to Iran in 2012, it says. Tehran has denied involvement in cyber attacks on SunTrust, JP Morgan Chase, CitiGroup and several others, which cost the financial industry millions of dollars. The following are excerpts from the report.

            When most people think of the “military option” against Iran, they imagine a US attack that takes out Iran’s most important known nuclear facilities at Natanz, Fordow, Arak, and Isfahan. They expect Iran to retaliate by closing the Strait of Hormuz, sending missiles into Israel, and/or supporting terrorist attacks on US personnel in Iraq and
            But what if the response came in the form of an anonymous cyber attack that shut down the New York Stock Exchange for a few hours? Or an assault that cut off electrical power in a major US city, froze civilian air traffic, or interfered with further military strikes on Iran by conveying incorrect information to American military commanders?
            Many US officials and experts on cyberspace say Iran is probably not yet in a position to mount such a damaging assault against the United States. Iran, they say, is a “third tier” cyber power compared to the United States, its Western allies, or Russia and China. Yet this overlooks an important factor. In the history of cyber conflict, few attacks have themselves been devastating. For example, the Russian-encouraged attacks which hit Estonia in 2007—overwhelming government web sites, Estonia’s largest bank, and several newspapers—were neither technically significant nor very effective.They were disruptive, but for only short periods and with little or no long-term impact to Estonia’s GDP. The primary impact was political, not military, serving as a wake-up call on cyber vulnerabilities and leading to NATO establishing a Cyber Center of Excellence in the capital, Tallinn. In this way, a significant Iranian cyber attack against the United States would take on outsized importance regardless of its technical sophistication.
            Moreover, technological edges in warfare tend to be ephemeral. There is no assurance that Iran’s growing cyber forces—or a skilled foreign or nonstate actor hired by Iran—will not be capable of significantly disruptive activities in the next few years, especially as the United States continues to extend its already deep dependence on a very vulnerable cyberspace.
            In fact, there has already been an ongoing tit-for-tat of clandestine cyber conflict between Iran and the United States (and probably also Israel), though so far it has not passed into open cyber warfare. Concerns about Iran’s cyber abilities rose in 2012 in connection with so-called distributed denial of service (DDoS) attacks on American financial institutions that briefly cut off access to online accounts and required expensive countermeasures. The attacks appear to have come in retaliation for US-led banking sanctions on Iranian financial institutions and the Stuxnet worm that set back Iran’s nuclear program in 2010. Iran is also believed to have been behind an even more destructive assault in August 2012 on the Saudi Aramco oil company that wiped out data on more than 30,000 computers.
Iran’s Place in the Cyber Arms Race
             According to Dmitri Alperovich, cofounder and chief technical officer of the cyber-security firm CrowdStrike and a senior fellow at the Atlantic Council, the most effective cyber warriors—what he terms the “tier one actors”—are the United States, Russia, and US allies such as Great Britain. Alperovitch puts China a step behind at tier two and says that Iran is tier three.
            But this categorization should not give the United States false confidence that it can defeat any Iranian cyber threat. Iran does not need the equivalent of a Ferrari to inflict damage on US infrastructure: a Fiat may do.
             As the Atlantic Council has pointed out, the blowback for US government-approved attacks has come largely against the US private sector. Already, distributed denial of service (DDoS) attacks attributed to Iran have cost the US financial industry millions of dollars. The attacks, starting in 2012, hit more than a dozen major institutions including SunTrust, JPMorgan Chase, CitiGroup, Wells Fargo, U.S. Bancorp, Capital One, PNC, HSBC, and BB&T; at least five websites crashed in the face of traffic 10 times higher than any previously recorded assaults.Just one bank estimated spending least $10 million mitigating the attacks. Another hacking episode in April 2013 claimed by a group that may have ties to Iran—the so-called Syrian Electronic Army—caused the Dow Jones Industrial average to drop 150 points, briefly wiping out $136 billion in value. The damage was done by hacking the Twitter account of the Associated Press to report bogus explosions at the White House that were said to have injured President Barack Obama. In May 2013, there were allegations that Iran was behind new attacks on US energy firms.
            US allies have also been targeted. An individual with access to employees’ desktop computers at Saudi Aramco infected them last year with a virus that destroyed data on three quarters of the machines and displayed a picture of a burning US flag. These computers became paperweights, entirely useless with all their data destroyed—a significant escalation from attacks that entail only stealing information
or causing short-term disruption.
            Beyond the private sector, there have been reports of Iranian targeting of US government facilities. Diplomats from Iran and Venezuela were secretly filmed discussing plans for cyber attacks against US targets including nuclear facilities. Given Iranian terrorist attacks in Europe, the Middle East and Europe—and a foiled plot in 2011 to kill the Saudi ambassador in Washington—it is fair to draw a straight line to some potentially very bad scenarios.
            Indeed, given Iran’s conventional weakness, cyber is an attractive alternative—the ultimate asymmetric weapon. Attacks can be mounted from outside the country—say by hackers in Russia or Lebanon—and difficult to trace. An assault in March 2013 on South Korea that paralyzed ATMs and three television networks has been blamed on North Korea. There is no reason to believe that Iran’s growing cyber army is any less capable than that of an isolated Asian rogue state with few IT graduates, limited Internet access, and a paucity of computers.


Iran Angry Over New US Bill

             On August 1, Tehran warned that new U.S. legislation calling for tighter sanctions would “further complicate” negotiations on its controversial nuclear program. “Imposing sanctions against Iran is a failed policy,” said Foreign Ministry spokesman Abbas Araqchi. On July 31, the U.S. House voted 400-20 to coerce buyers of Iranian oil to find alternative suppliers — or risk heavy penalties in business dealings with the United States. The bill, if passed by the Senate, would also blacklist Tehran’s automobile and mining industries. The following are excerpted remarks by Araqchi.

Abbas Araqchi, Foreign Ministry spokesman
            “Imposing sanctions against Iran is a failed policy and will definitely not help find a logical solution to the existing problems, especially with regard to negotiations on the nuclear issue.
            “This measure has been taken without paying attention to the political development and the use of experts, and is a blatant example of unjust measures in an unjust time.
            “The only impact the imposition of sanctions will have is to further complicate the settlement of the existing issues, and will certainly offer no solution to any problem.
            “[The bill] simply indicates that neoconservative unilateralism dominates multilateral sovereignty in the American administration.” August 1 comment to the press

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