The Iran Primer

      On November 24, Iran and the world’s six major powers reached a historical interim agreement on Tehran’s controversial nuclear program. Iran committed to halting the most sensitive aspects of its program and allowing expanded U.N. nuclear inspections in return for modest sanctions relief. The first step towards a comprehensive deal is set to last for six months and is renewable by mutual consent. Foreign ministers from the United States, Britain, China, France, German, Russia and Iran came to an agreement after four days of intense negotiations in Geneva—the third round of talks since President Hassan Rouhani’s election in June. The following is the full text of the interim agreement and a fact sheet released by the White House.

Joint Plan of Action

Preamble

The goal for these negotiations is to reach a mutually-agreed long-term comprehensive solution that would ensure Iran’s nuclear program will be exclusively peaceful. Iran reaffirms that under no circumstances will Iran ever seek or develop any nuclear weapons. This comprehensive solution would build on these initial measures and result in a final step for a period to be agreed upon and the resolution of concerns. This comprehensive solution would enable Iran to fully enjoy its right to nuclear energy for peaceful purposes under the relevant articles of the NPT in conformity with its obligations therein. This comprehensive solution would involve a mutually defined enrichment program with practical limits and transparency measures to ensure the peaceful nature of the program. This comprehensive solution would constitute an integrated whole where nothing is agreed until everything is agreed. This comprehensive solution would involve a reciprocal, step-by step process, and would produce the comprehensive lifting of all UN Security Council sanctions, as well as multilateral and national sanctions related to Iran’s nuclear program.
            There would be additional steps in between the initial measures and the final step, including, among other things, addressing the UN Security Council resolutions, with a view toward bringing to a satisfactory conclusion the UN Security Council’s consideration of this matter. The E3+3 and Iran will be responsible for conclusion and implementation of mutual near-term measures and the comprehensive solution in good faith. A Joint Commission of E3/EU+3 and Iran will be established to monitor the implementation of the near-term measures and address issues that may arise, with the IAEA responsible for verification of nuclear-related measures. The Joint Commission will work with the IAEA to facilitate resolution of past and present issues of concern.

Elements of a first step

The first step would be time-bound, with a duration of 6 months, and renewable by mutual consent, during which all parties will work to maintain a constructive atmosphere for negotiations in good faith.

Iran would undertake the following voluntary measures:

* From the existing uranium enriched to 20%, retain half as working stock of 20% oxide for fabrication of fuel for the TRR. Dilute the remaining 20% UF6 to no more than 5%. No reconversion line.

* Iran announces that it will not enrich uranium over 5% for the duration of the 6 months.

* Iran announces that it will not make any further advances of its activities at the Natanz Fuel Enrichment Plant (1), Fordow (2), or the Arak reactor (3), designated by the IAEA as IR-40.

* Beginning when the line for conversion of UF6 enriched up to 5% to UO2 is ready, Iran has decided to convert to oxide UF6 newly enriched up to 5% during the 6 month period, as provided in the operational schedule of the conversion plant declared to the IAEA.

* No new locations for the enrichment.

* Iran will continue its safeguarded R&D practices, including its current enrichment R&D practices, which are not designed for accumulation of the enriched uranium.

* No reprocessing or construction of a facility capable of reprocessing.

* Enhanced monitoring:

- Provision of specified information to the IAEA, including information on Iranˈs plans for nuclear facilities, a description of each building on each nuclear site, a description of the scale of operations for each location engaged in specified nuclear activities, information on uranium mines and mills, and information on source material. This information would be provided within three months of the adoption of these measures.

- Submission of an updated DIQ for the reactor at Arak, designated by the IAEA as the IR-40, to the IAEA.

- Steps to agree with the IAEA on conclusion of the Safeguards Approach for the reactor at Arak, designated by the IAEA as the IR-40.

- Daily IAEA inspector access when inspectors are not present for the purpose of Design Information Verification, Interim Inventory Verification, Physical Inventory Verification, and unannounced inspections, for the purpose of access to offline surveillance records, at Fordow and Natanz.

- IAEA inspector managed access to:

. centrifuge assembly workshops4;

. centrifuge rotor production workshops and storage facilities; and,

. uranium mines and mills.

In return, the E3/EU+3 would undertake the following voluntary measures:

- Pause efforts to further reduce Iranˈs crude oil sales, enabling Iranˈs current customers to purchase their current average amounts of crude oil. Enable the repatriation of an agreed amount of revenue held abroad. For such oil sales, suspend the EU and U.S. sanctions on associated insurance and transportation services.

- Suspend U.S. and EU sanctions on:

. Iranˈs petrochemical exports, as well as sanctions on associated services. (5)

. Gold and precious metals, as well as sanctions on associated services.

• Suspend U.S. sanctions on Iranˈs auto industry, as well as sanctions on associated services.

• License the supply and installation in Iran of spare parts for safety of flight for Iranian civil aviation and associated services. License safety related inspections and repairs in Iran as well as associated services. (6)

• No new nuclear-related UN Security Council sanctions.

• No new EU nuclear-related sanctions.

• The U.S. Administration, acting consistent with the respective roles of the President and the Congress, will refrain from imposing new nuclear-related sanctions.

• Establish a financial channel to facilitate humanitarian trade for Iranˈs domestic needs using Iranian oil revenues held abroad. Humanitarian trade would be defined as transactions involving food and agricultural products, medicine, medical devices, and medical expenses incurred abroad. This channel would involve specified foreign banks and non-designated Iranian banks to be defined when establishing the channel.

* This channel could also enable:

a- transactions required to pay Iranˈs UN obligations; and,

b- direct tuition payments to universities and colleges for Iranian students studying abroad, up to an agreed amount for the six month period.

• Increase the EU authorisation thresholds for transactions for non-sanctioned trade to an agreed amount.

Elements of the final step of a comprehensive solution*

The final step of a comprehensive solution, which the parties aim to conclude negotiating and commence implementing no more than one year after the adoption of this document, would:

• Have a specified long-term duration to be agreed upon.

• Reflect the rights and obligations of parties to the NPT and IAEA Safeguards Agreements.

• Comprehensively lift UN Security Council, multilateral and national nuclear-related sanctions, including steps on access in areas of trade, technology, finance, and energy, on a schedule to be agreed upon.

• Involve a mutually defined enrichment program with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity, where it is carried out, and stocks of enriched uranium, for a period to be agreed upon.

• Fully resolve concerns related to the reactor at Arak, designated by the IAEA as the IR-40. No reprocessing or construction of a facility capable of reprocessing.

• Fully implement the agreed transparency measures and enhanced monitoring. Ratify and implement the Additional Protocol, consistent with the respective roles of the President and the Majlis (Iranian parliament).

• Include international civil nuclear cooperation, including among others, on acquiring modern light water power and research reactors and associated equipment, and the supply of modern nuclear fuel as well as agreed R&D practices.

Following successful implementation of the final step of the comprehensive solution for its full duration, the Iranian nuclear program will be treated in the same manner as that of any non-nuclear weapon state party to the NPT.

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(Footnotes)

(1) Namely, during the 6 months, Iran will not feed UF6 into the centrifuges installed but not enriching uranium. Not install additional centrifuges. Iran announces that during the first 6 months, it will replace existing centrifuges with centrifuges of the same type.

(2) At Fordow, no further enrichment over 5% at 4 cascades now enriching uranium, and not increase enrichment capacity. Not feed UF6 into the other 12 cascades, which would remain in a non-operative state. No interconnections between cascades. Iran announces that during the first 6 months, it will replace existing centrifuges with centrifuges of the same type.

(3) Iran announces on concerns related to the construction of the reactor at Arak that for 6 months it will not commission the reactor or transfer fuel or heavy water to the reactor site and will not test additional fuel or produce more fuel for the reactor or install remaining components.

(4) Consistent with its plans, Iranˈs centrifuge production during the 6 months will be dedicated to replace damaged machines.

(5) ˈSanctions on associated servicesˈ means any service, such as insurance, transportation, or financial, subject to the underlying U.S. or EU sanctions applicable, insofar as each service is related to the underlying sanction and required to facilitate the desired transactions. These services could involve any non-designated Iranian entities.

(6) Sanctions relief could involve any non-designated Iranian airlines as well as Iran Air.

* With respect to the final step and any steps in between, the standard principle that ˈnothing is agreed until everything is agreedˈ applies.ˈ

 

Fact Sheet:  First Step Understandings Regarding the Islamic Republic of Iran’s Nuclear Program

Nov. 23, 2013
             The P5+1 (the United States, United Kingdom, Germany, France, Russia, and China, facilitated by the European Union) has been engaged in serious and substantive negotiations with Iran with the goal of reaching a verifiable diplomatic resolution that would prevent Iran from obtaining a nuclear weapon.
          President Obama has been clear that achieving a peaceful resolution that prevents Iran from obtaining a nuclear weapon is in America’s national security interest.  Today, the P5+1 and Iran reached a set of initial understandings that halts the progress of Iran's nuclear program and rolls it back in key respects.  These are the first meaningful limits that Iran has accepted on its nuclear program in close to a decade.  The initial, six month step includes significant limits on Iran's nuclear program and begins to address our most urgent concerns including Iran’s enrichment capabilities; its existing stockpiles of enriched uranium; the number and capabilities of its centrifuges; and its ability to produce weapons-grade plutonium using the Arak reactor.  The concessions Iran has committed to make as part of this first step will also provide us with increased transparency and intrusive monitoring of its nuclear program.  In the past, the concern has been expressed that Iran will use negotiations to buy time to advance their program.  Taken together, these first step measures will help prevent Iran from using the cover of negotiations to continue advancing its nuclear program as we seek to negotiate a long-term, comprehensive solution that addresses all of the international community's concerns.
            In return, as part of this initial step, the P5+1 will provide limited, temporary, targeted, and reversible relief to Iran.  This relief is structured so that the overwhelming majority of the sanctions regime, including the key oil, banking, and financial sanctions architecture, remains in place.  The P5+1 will continue to enforce these sanctions vigorously.  If Iran fails to meet its commitments, we will revoke the limited relief and impose additional sanctions on Iran.
             The P5+1 and Iran also discussed the general parameters of a comprehensive solution that would constrain Iran's nuclear program over the long term, provide verifiable assurances to the international community that Iran’s nuclear activities will be exclusively peaceful, and ensure that any attempt by Iran to pursue a nuclear weapon would be promptly detected.  The set of understandings also includes an acknowledgment by Iran that it must address all United Nations Security Council resolutions – which Iran has long claimed are illegal – as well as past and present issues with Iran’s nuclear program that have been identified by the International Atomic Energy Agency (IAEA).  This would include resolution of questions concerning the possible military dimension of Iran’s nuclear program, including Iran’s activities at Parchin.  As part of a comprehensive solution, Iran must also come into full compliance with its obligations under the Non-Proliferation Treaty (NPT) and its obligations to the IAEA.  With respect to the comprehensive solution, nothing is agreed until everything is agreed.  Put simply, this first step expires in six months, and does not represent an acceptable end state to the United States or our P5+1 partners.

Halting the Progress of Iran’s Program and Rolling Back Key Elements

Iran has committed to halt enrichment above 5%:

•        Halt all enrichment above 5% and dismantle the technical connections required to enrich above 5%.

Iran has committed to neutralize its stockpile of near-20% uranium:

•        Dilute below 5% or convert to a form not suitable for further enrichment its entire stockpile of near-20% enriched uranium before the end of the initial phase.

Iran has committed to halt progress on its enrichment capacity:

•        Not install additional centrifuges of any type.

•        Not install or use any next-generation centrifuges to enrich uranium.

•        Leave inoperable roughly half of installed centrifuges at Natanz and three-quarters of installed centrifuges at Fordow, so they cannot be used to enrich uranium.

•        Limit its centrifuge production to those needed to replace damaged machines, so Iran cannot use the six months to stockpile centrifuges.

•        Not construct additional enrichment facilities.

Iran has committed to halt progress on the growth of its 3.5% stockpile:

•        Not increase its stockpile of 3.5% low enriched uranium, so that the amount is not greater at the end of the six months than it is at the beginning, and any newly enriched 3.5% enriched uranium is converted into oxide.

Iran has committed to no further advances of its activities at Arak and to halt progress on its plutonium track.  Iran has committed to:

•        Not commission the Arak reactor.

•        Not fuel the Arak reactor.

•        Halt the production of fuel for the Arak reactor.

•        No additional testing of fuel for the Arak reactor.

•        Not install any additional reactor components at Arak.

•        Not transfer fuel and heavy water to the reactor site.

•        Not construct a facility capable of reprocessing.  Without reprocessing, Iran cannot separate plutonium from spent fuel.

Unprecedented transparency and intrusive monitoring of Iran’s nuclear program

Iran has committed to:

•        Provide daily access by IAEA inspectors at Natanz and Fordow.  This daily access will permit inspectors to review surveillance camera footage to ensure comprehensive monitoring.  This access will provide even greater transparency into enrichment at these sites and shorten detection time for any non-compliance.

•        Provide IAEA access to centrifuge assembly facilities.

•        Provide IAEA access to centrifuge rotor component production and storage facilities.

•        Provide IAEA access to uranium mines and mills.

•         Provide long-sought design information for the Arak reactor.  This will provide critical insight into the reactor that has not previously been available.

•        Provide more frequent inspector access to the Arak reactor.

•        Provide certain key data and information called for in the Additional Protocol to Iran’s IAEA Safeguards Agreement and Modified Code 3.1.

Verification Mechanism

             The IAEA will be called upon to perform many of these verification steps, consistent with their ongoing inspection role in Iran.  In addition, the P5+1 and Iran have committed to establishing a Joint Commission to work with the IAEA to monitor implementation and address issues that may arise.  The Joint Commission will also work with the IAEA to facilitate resolution of past and present concerns with respect to Iran’s nuclear program, including the possible military dimension of Iran’s nuclear program and Iran’s activities at Parchin.

Limited, Temporary, Reversible Relief

             In return for these steps, the P5+1 is to provide limited, temporary, targeted, and reversible relief while maintaining the vast bulk of our sanctions, including the oil, finance, and banking sanctions architecture.  If Iran fails to meet its commitments, we will revoke the relief.  Specifically the P5+1 has committed to:

•        Not impose new nuclear-related sanctions for six months, if Iran abides by its commitments under this deal, to the extent permissible within their political systems.

•        Suspend certain sanctions on gold and precious metals, Iran’s auto sector, and Iran’s petrochemical exports, potentially providing Iran approximately $1.5 billion in revenue.

•        License safety-related repairs and inspections inside Iran for certain Iranian airlines.

•        Allow purchases of Iranian oil to remain at their currently significantly reduced levels – levels that are 60% less than two years ago.  $4.2 billion from these sales will be allowed to be transferred in installments if, and as, Iran fulfills its commitments.

•        Allow $400 million in governmental tuition assistance to be transferred from restricted Iranian funds directly to recognized educational institutions in third countries to defray the tuition costs of Iranian students.

Humanitarian Transactions

             Facilitate humanitarian transactions that are already allowed by U.S. law.  Humanitarian transactions have been explicitly exempted from sanctions by Congress so this channel will not provide Iran access to any new source of funds.  Humanitarian transactions are those related to Iran’s purchase of food, agricultural commodities, medicine, medical devices; we would also facilitate transactions for medical expenses incurred abroad.  We will establish this channel for the benefit of the Iranian people.

Putting Limited Relief in Perspective

             In total, the approximately $7 billion in relief is a fraction of the costs that Iran will continue to incur during this first phase under the sanctions that will remain in place.  The vast majority of Iran’s approximately $100 billion in foreign exchange holdings are inaccessible or restricted by sanctions.

             In the next six months, Iran’s crude oil sales cannot increase.  Oil sanctions alone will result in approximately $30 billion in lost revenues to Iran – or roughly $5 billion per month – compared to what Iran earned in a six month period in 2011, before these sanctions took effect.  While Iran will be allowed access to $4.2 billion of its oil sales, nearly $15 billion of its revenues during this period will go into restricted overseas accounts.  In summary, we expect the balance of Iran’s money in restricted accounts overseas will actually increase, not decrease, under the terms of this deal.

Maintaining Economic Pressure on Iran and Preserving Our Sanctions Architecture

             During the first phase, we will continue to vigorously enforce our sanctions against Iran, including by taking action against those who seek to evade or circumvent our sanctions.

•        Sanctions affecting crude oil sales will continue to impose pressure on Iran’s government.  Working with our international partners, we have cut Iran’s oil sales from 2.5 million barrels per day (bpd) in early 2012 to 1 million bpd today, denying Iran the ability to sell almost 1.5 million bpd.  That’s a loss of more than $80 billion since the beginning of 2012 that Iran will never be able to recoup.  Under this first step, the EU crude oil ban will remain in effect and Iran will be held to approximately 1 million bpd in sales, resulting in continuing lost sales worth an additional $4 billion per month, every month, going forward.

•        Sanctions affecting petroleum product exports to Iran, which result in billions of dollars of lost revenue, will remain in effect.

•        The vast majority of Iran’s approximately $100 billion in foreign exchange holdings remain inaccessible or restricted by our sanctions.

•        Other significant parts of our sanctions regime remain intact, including:

-       Sanctions against the Central Bank of Iran and approximately two dozen other major Iranian banks and financial actors;

-       Secondary sanctions, pursuant to the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) as amended and other laws, on banks that do business with U.S.-designated individuals and entities;

-       Sanctions on those who provide a broad range of other financial services to Iran, such as many types of insurance; and,

- Restricted access to the U.S. financial system.

•        All sanctions on over 600 individuals and entities targeted for supporting Iran’s nuclear or ballistic missile program remain in effect.

•        Sanctions on several sectors of Iran’s economy, including shipping and shipbuilding, remain in effect.

•        Sanctions on long-term investment in and provision of technical services to Iran’s energy sector remain in effect.

•        Sanctions on Iran’s military program remain in effect.

•        Broad U.S. restrictions on trade with Iran remain in effect, depriving Iran of access to virtually all dealings with the world’s biggest economy.

•        All UN Security Council sanctions remain in effect.

•        All of our targeted sanctions related to Iran’s state sponsorship of terrorism, its destabilizing role in the Syrian conflict, and its abysmal human rights record, among other concerns, remain in effect.

A Comprehensive Solution

            During the six-month initial phase, the P5+1 will negotiate the contours of a comprehensive solution.  Thus far, the outline of the general parameters of the comprehensive solution envisions concrete steps to give the international community confidence that Iran’s nuclear activities will be exclusively peaceful.  With respect to this comprehensive resolution:  nothing is agreed to with respect to a comprehensive solution until everything is agreed to.  Over the next six months, we will determine whether there is a solution that gives us sufficient confidence that the Iranian program is peaceful.  If Iran cannot address our concerns, we are prepared to increase sanctions and pressure.

Conclusion

             In sum, this first step achieves a great deal in its own right.  Without this phased agreement, Iran could start spinning thousands of additional centrifuges.  It could install and spin next-generation centrifuges that will reduce its breakout times.  It could fuel and commission the Arak heavy water reactor.  It could grow its stockpile of 20% enriched uranium to beyond the threshold for a bomb's worth of uranium. Iran can do none of these things under the conditions of the first step understanding.
             Furthermore, without this phased approach, the international sanctions coalition would begin to fray because Iran would make the case to the world that it was serious about a diplomatic solution and we were not.  We would be unable to bring partners along to do the crucial work of enforcing our sanctions.  With this first step, we stop and begin to roll back Iran's program and give Iran a sharp choice:  fulfill its commitments and negotiate in good faith to a final deal, or the entire international community will respond with even more isolation and pressure.
             The American people prefer a peaceful and enduring resolution that prevents Iran from obtaining a nuclear weapon and strengthens the global non-proliferation regime.  This solution has the potential to achieve that.  Through strong and principled diplomacy, the United States of America will do its part for greater peace, security, and cooperation among nations.

Photo credit: U.S. State Department via Flickr