Valdai Club

Does the Gordian knot around Iran’s nuclear programme need to be hacked or untangled? And is it still possible to unravel it? What will Washington's policy of tough negotiations and unwillingness to listen to its allies lead to?

 The nuclear programme in Iran began to develop during the reign of Shah Mohammad Reza Pahlavi (1941–1979) with the support of the United States. The collaboration took place under the “Atoms for Peace” programme of President Dwight David Eisenhower’s Administration. In 1958, Iran became a member of the International Atomic Energy Agency (IAEA), and the very next year, the Americans transferred a low-power reactor to the nuclear research centre of Tehran University.

 On July 1, 1968, a decade after joining the IAEA, Tehran signed the Treaty on the Non-Proliferation of Nuclear Weapons (ratified in 1970). In 1974, the Atomic Energy Organisation of Iran was created and a plan for the development of nuclear energy was adopted. It proposed the construction of 23 nuclear reactors with a total generating capacity of more than 20 GW, as well as the creation of a closed nuclear fuel cycle.

For decades, Iran’s nuclear programme was never a cause for much concern. The situation has changed since the beginning of the 21st century. In 2004, unrecorded IAEA centrifuges for uranium enrichment were discovered in Iran. This gave other nations a reason to suspect Tehran of seeking to create nuclear weapons. Negotiations began between Iran and the European trio (France, Germany and the UK). Iran was asked to abandon its nuclear weapons programme in exchange for technical assistance in the development of peaceful nuclear energy.  

The government of the fifth Iranian president, Mohammad Khatami, tried not to aggravate the situation with the West and, as a gesture of goodwill and a demonstration of the peaceful nature of the Islamic Republic's nuclear programme, temporarily stopped its uranium enrichment. However, under the next administration, the situation changed.

President Mahmoud Ahmadinejad, who came to power in 2005, firmly decided to rally the people, who had long lost their trust in the country's leadership. One of his main ideas was Iran’s national law on a nuclear programme. This was entirely justified, since Iran's neighbours in the region include China, Russia, Pakistan, India and Israel, which each have a nuclear arsenal.

Mahmoud Ahmadinejad annulled the Saadabad Agreement of 2003, which Iran had concluded with the UK, Germany and France, and re-booted nuclear weapons development.

Of course, the reaction of the West was wholly unreceptive. Tehran's controversial decision not only escalated tensions with the United States; it even provoked its main trading partner - the European Union, which, despite sharing economic interests with Iran, still opposed the move.

The first major consequence of the resumption of uranium enrichment came in the form of a warning issued by the IAEA Board of Directors dated February 4, 2006. It stated that if Tehran does not stop uranium enrichment, the case will be referred to the UN Security Council.

Tehran ignored the IAEA request, and a month later, on March 8, the Iranian nuclear dossier lay on the Security Council's table. In June 2006, the “six” began to negotiate with Iran - the United States, Russia and China joined the “European trio”.

In total, the UN Security Council adopted six resolutions against Iran. 

The first – № 1696 of July 31, 2006, was a warning and did not provide for punitive measures.

The second was resolution № 1737 of December 23, 2006. It dealt with important nuclear facilities and seized accounts and companies related to the country's nuclear programme.

The third was resolution № 1747 of March 24, 2007 – It mandated that foreign countries limit their cooperation with Iranian companies in the field of nuclear energy. The resolution also includes articles banning Iran from importing and exporting heavy weaponry.

The fourth was resolution № 1803 of March 3, 2008 – it tightened the previously- imposed sanctions. It increased restrictions on the outflow and circulation of funds in relation to specific individuals and legal entities of the Islamic Republic of Iran. It also made some of the restrictions prescribed in the previous resolutions mandatory.

Resolution № 1835 of September 27, 2008 was the fifth in the series. It did not indicate the introduction of new sanctions, but it emphasised the need for the speedy implementation of the restrictions stated in previous resolutions.

In September 2009, Iran officially informed the IAEA that it had started construction of the Fordow Fuel Enrichment Plant for the enrichment of uranium near the city of Qom. The agency demanded that it put an end to its activity. However, the Iranian government instead simply limited cooperation with the IAEA, and announced plans to build ten new plants in the country.

The first batch of uranium enriched to 20% was produced at the Natanz Nuclear Facility, Mahmoud Ahmadinejad reported on February 11, 2010. In a statement, he noted that Iran has the capacity to produce uranium with a higher degree of enrichment.

After these measures, the sixth Security Council resolution (№ 1929 of June 9, 2010) was not long in coming. It imposed a ban on Iran’s international trade in any goods or technology related to the enrichment of uranium or any other nuclear substance. UN member states were prohibited from supplying any type of military equipment to Iran, including tanks and armoured personnel carriers, military aircraft and helicopters, large-calibre artillery, warships, missiles, rocket systems and other equipment associated with these types of weapons.

In addition to the UN Security Council sanctions, Iran was also subjected to a whole series of unilateral sanctions, primarily originating in the US. 

IAEA inspectors visited Iran’s main nuclear facilities in August 2011. The audit confirmed that the country had continued to develop and improve technology that can be used to produce nuclear weapons.

In August 2013, Hassan Rouhani became president of Iran. One of his key objectives was to reduce tension concerning the nation's nuclear programme. According to political analysts, the first positive result of this policy was a "road map" on cooperation that Iran and the IAEA of a “road map” signed on November 11, 2013. According to this document, the Islamic Republic pledged to provide the agency with information on its nuclear facilities in a timely manner, and the IAEA agreed to take into account the Iran's national security interests, including through the use of regulated access and the protection of confidential information.

The turning point in Iran’s negotiations with the “six” took place on November 24, 2013, when the Joint Action Plan was signed in Geneva. This is an interim document which fixed an agreement on measures to significantly reduce the Iranian nuclear programme in anticipation of a more complete agreement. In accordance with the plan, Iran has undertaken to cease uranium enrichment in excess of 5%, destroy all stocks of nuclear materials enriched up to 20% and stop the construction of new enrichment facilities. In return, Iran was granted the right, confirmed by the international community, to enrich uranium to 5% and the UN agreed to ease sanctions, which had seriously impeded the development of the Iranian economy. The agreement was set to last six months; it came into force on January 20, 2014, and later its term was extended twice - first until November 24, 2014, then until June 30, 2015.

The fundamental shift in resolving the Iranian problem occurred on July 14, 2015, when the Joint Comprehensive Plan of Action (JCPOA) between the “six” international mediators and Iran was agreed upon in Vienna. On July 20, 2015, a resolution in support of this document was adopted by the UN Security Council. In accordance with the agreements, Iran pledged to have no more than 300 kg of uranium enriched to 3.67% for 15 years. Tehran will not produce highly- enriched uranium and weapons-grade plutonium, which are necessary for the creation of nuclear weapons. The Fordow Fuel Enrichment Plant was slated to be repurposed as a technology centre. In addition, Iran agreed to use the Arak Heavy Water Reactor Facility exclusively for peaceful purposes. All of the spent fuel generated will be shipped out of Iran for as long as the reactor remains in operation. IAEA experts were tasked with monitoring nuclear facilities for 25 years. All international sanctions were set to be lifted from Iran within 10 years, subject to the implementation of the agreement.

In many ways, the emergence of the JCPOA was made possible due to the position of Barack Obama, the first US President in many decades to agree to direct negotiations between Washington and Tehran. The "Iran deal", he believed, offered a number of key advantages:

• First, it put under strict and constant control Iranian nuclear program, suspended Iran from getting its own nuclear weapons technology for not less than 10 years and, as a consequence, increased security in the Middle East, and in the world as a whole. It minimized the possibility of a recurrence of migration crisis, as well as provided an opportunity to influence on other areas of Iranian policy, such as missile program development, regional activities, and so on. 

• Second, it gave Americans who had been detained in Iran the ability to return home;

• Third, it allowed for the settlement of Tehran’s financial claims against the United States, which had existed since 1981.

It is important to note that two of the three points were important for intra-American discourse and strengthening the international image of Barack Obama as a peacemaker  .

Britain, Germany and France, as noted by Valdai Club expert Alexander Maryasov, Russia's Extraordinary and Plenipotentiary Ambassador to Iran in 2001–2005, also considered the “deal” to be a first step towards the final removal of all their concerns about Iran’s nuclear programme. “While signing this deal, they also hoped to eventually involve Iran in compromise agreements on other matters, including its missile programme and the regional agenda,” he said.

The Iranians were counting on improving the socio-economic situation in the country and, as a result, strengthening the internal political positions of reformers. “The government of Hassan Rouhani also aimed to create favorable pre-requisites for normalising Iranian-US relations but did not publicly advertise this goal,” says Alexander Maryasov. “It was the creation of favourable prerequisites for moving toward the normalization of Iranian-American relations.”

The Iranian leadership’s reformist wing, headed by President of the Islamic Republic of Iran Hassan Rouhani, staked on the JCPOA, hoping that the nuclear deal’s implementation would help launch active trade, as well as economic and other cooperation with the West and attract foreign investment and cutting-edge technology.

The plan began to be implemented and this began to bear positive results, but the “deal” did not manage to last three years. Donald Trump, who won the US presidential elections in 2016, did almost everything within the power to annul the legacy of his predecessor Barack Obama. His criticism of the deal with Iran began during his election campaign and clearly reflected his Iranophobic position.

On May 8, 2018 at a speech in the White House, Donald Trump accused Iran of supporting terrorism and announced a US withdrawal from the JCPOA. "I am announcing today that the United States will withdraw from the Iran nuclear deal. In a few moments, I will sign a presidential memorandum to begin reinstating US nuclear sanctions on the Iranian regime,” he said. After these words, Trump signed this memorandum.

No less importantly, he declared his readiness to introduce so-called secondary (extraterritorial) sanctions against any country that assists Tehran in obtaining nuclear weapons. "America will not be held hostage to nuclear blackmail," Trump stressed (decree 13846). He gave companies which could be subject to sanctions six months, until November 5, 2018, to withdraw from the Iranian market.

Donald Trump has repeatedly called the JCPOA the worst deal in history, if not a “catastrophe". But why, exactly, did he consider the deal insufficient?

First, Trump believed that the Obama administration had focused solely on Iran’s nuclear programme and completely lost sight of the regional context. In particular, Iranian support of the government of Bashar al-Assad in Syria, Iran's alleged intervention in the civil war in Yemen, and the perceived negative influence of the Islamic Revolutionary Guards Corps (IRGC) in the Middle East.

Secondly, according to Trump, the JCPOA does not permanently deprive Iran of its capability of developing a nuclear programme and does not restrict missile tests in any way, and the IAEA and UN inspections, he claims, are kept from being sufficiently effective.

Third, the blocking of Iranian banking assets has been criticised. This, according to the current president, has deprived America of certain levers of influence on Tehran.

Barack Obama called the withdrawal of the US from the JCPOA a big mistake: “I believe that the decision to put the JCPOA at risk without any violation of the deal by Iran was a serious mistake. Without the JCPOA, the United States may ultimately remain before a losing choice between Iran, which will have nuclear weapons, and another war in the Middle East. ”

Former secretary of state Hillary Clinton, Trump's 2016 election rival, echoed the former president.“It harms the security and authority of the United States. Iran is now more dangerous,” she wrote on her Twitter.

Former secretary of state John Kerry acknowledged that “America has broken its word,” and expressed hope that the agreement will continue to operate, even if without the United States. 

The loss of confidence in US diplomacy is one of Washington’s main costs of leaving the JCPOA. The United States has demonstrated that in negotiations with them it is dangerous to make large-scale concessions, especially irreversible ones, since the next administration will not necessarily value continuity in politics.

Thus, from the original six, five remained. European participants in the deal expressed regret over America’s withdrawal from the nuclear agreement with Iran and expressed their intention to continue to comply with the terms of the deal.

"As long as Iran continues to implement its nuclear-related commitments, as it has done so far, the European Union will remain committed to the continued full and effective continuation of the nuclear deal," stated the EU's foreign policy chief Federica Mogherini.

"France, Germany, and the UK regret the U.S. decision to leave the JCPOA. The nuclear non-proliferation regime is at stake," tweeted French President Emmanuel Macron.

The Europeans had high hopes for this deal; one key expectation was that it would strengthen trade and economic cooperation with Iran with respect to energy supplies.

Under pressure from Washington in November 2018, Tehran was disconnected from the SWIFT international settlement system. This seriously hampered the ability of Iranian business to engage in financial transactions with their foreign partners. Two months later, Berlin, London and Paris announced the creation of a special settlement mechanism with Iran - INSTEX  , which allows them to support trade and circumvent US sanctions. For this, a project company of the same name was registered in France. However, the scope of the mechanism was very limited. It can be used to purchase food products, medicine and medical equipment, which are not subject to sanctions.

Iran proposed expanding INSTEX to other groups of goods, primarily oil, which is the main source of revenue for the Iranian budget, but did not receive a response from its European partners.

The European Union has not demonstrated that it is determined to resist US pressure. A widely-discussed regulatory block that was introduced in 1996 to protect European business from the effect of economic sanctions against Cuba, Iran and Lebanon has not been put into effect. Many large European companies and banks which weren't able to count on Brussels and national governments rushed to leave Iran or freeze their activities there, fearing restrictions on access to the US market and large fines. So far, only some small and medium-sized companies that are not tied to the United States continue to cooperate with Tehran.

The meeting of the Joint Commission on Preserving Nuclear Deal, which took place on July 28 in Vienna at the level of political deputies and directors, did not bring any results either. “Yesterday’s meeting in Vienna did not give us any guarantees of the future of the JCPOA,” Iranian Foreign Ministry spokesman Abbas Mousavi said. “We will determine our next steps after the upcoming ministerial meeting (of the JCPOA guarantor countries),” he added. He also said that Iran has no confidence if the European efforts to preserve the deal are affective. According to him, Tehran will continue to demand the launch and normal functioning of INSTEX mechanism of facilitating trade with the country.

Thus, it can be said that the Europeans complied with US policy, although not without reservations. The main factor compelling broader support for the US demands was economic, since businesses faced the prospect of walking away from the American market and dollar revenues if they sought to continue to trade with Iran.

Thus, the United States was able to single-handedly reintroduce sanctions; the unilateral pressure of Washington certainly restrained the development of the Iranian economy, but could not force it to alter its political stance. Therefore, it can be said that since the late 1990s, Americans have increasingly relied on using the coalition to move against Iran, writes the programme director of the Valdai Club Ivan Timofeev. The US had begun by relying on its European allies and UN sanctions. It was thanks to the joint pressure of the UN, the EU and the United States that Tehran had initially pursued negotiations which resulted in the signing of the JCPOA.

There is no consensus regarding the transaction and within Iran. According to Andrei Baklitsky, a Valdai Club expert, and director of the PIR Centre's Russia and Nuclear Nonproliferation Programme, One group within the Iranian elite believes that political support from the European countries is important in limiting US influence in the international arena, and hopes that if the US elects a new president, the European market will re-open. Another group, however, believes that Europe does not make decisions independently of the United States and therefore, it doesn't make any sense to maintain relations with the European powers.

Since the JCPOA did not justify the hopes Iran had placed in it, Tehran decided to return to the development of its nuclear weapons programme. In the first decade of July 2019, Iranian Deputy Foreign Minister Abbas Arakchi announced that his country would begin to enrich uranium above the JCPOA-specified level of 3.67% "within a few hours"  .

According to him, Tehran was pushed to back away from the deal by its Western partners, who failed to help Iran compensate for the consequences of the US sanctions. According to the diplomat, this measure is not a violation of the contract and is provided for by articles 26 and 36 of the contract. If the partners of the “six” don't work to keep the JCPOA alive, Iran will continue to back away from its obligations every 60 days and will continue to increase the level of uranium enrichment.

Could it have been possible at all to preserve the JCPOA in its original form, as specified in the “6 + 1” talks? "Considering the polarization of US party approaches to settling the Iranian nuclear issue, the Barack Obama administration was certainly unable to have it approved by Congress and could only sign a political agreement to this effect," he said. "To be fair, it should be made clear that even if the United States had signed a legally binding agreement, the new Republican President could have backed out of it." Therefore, the deal could have only remained stable if the Trump administration hadn't jettisoned it. However, this did not happen, and the United States and Iran are now engaged in an open confrontation.

Now, according to Alexander Maryasov, having emerged from the JCPOA, Washington is counting on establishing a deliberately advantageous situation for itself: tightening the sanctions will seriously aggravate internal socio-economic problems in Iran and force Tehran to sit at the negotiating table on American terms; if it does not, then the increasing protests of the population in the country will lead to a regime change.

However, both of these scenarios are unlikely and only indicate a lack of understanding of the mentality of Iranians, as well as the realities of Iran. During its more than 40-year history, the country has repeatedly faced external challenges at different levels, which have only consolidated the population and strengthened their determination to resist these threats.

This viewpoint is supported by Ivan Timofeev. The “American” scenario where the nation's woes would lead to a regime change is highly unlikely, and events could go almost in a diametrically opposite direction.

"Research on the way sanctions affect domestic politics in target countries shows that economic restrictions do not necessarily result in riots, coups or bring about democracy. Yes, the middle class and vulnerable social groups may suffer, there may be fewer resources, an economic decline and a deteriorating quality of life. Nevertheless, sanctions do not necessarily lead to a political transition, and the correlation between the two is non-linear at best. It is not uncommon for sanctions to consolidate political systems and boost the legitimacy of their governments."

There is no denying that US sanctions have been painful for Iran. They have had a very negative impact on the country's economy and the welfare of its citizens. The Iranian authorities have so far managed to cope with the negatives with the help of a number of emergency financial and economic regulation measures, within the framework of the implementation of the “policy of economic resistance” and a reliance on internal strength. At the same time, the emphasis has been on the religious and nationalistic feelings of citizens as a means of uniting the nation in the face of external threats. Also, Alexander Maryasov notes, “the Iranian leadership is confident that the country's flexible system of checks and balances, supported by a balance of power between all branches of government, with the Supreme Leader's office personally addressing problems, the Islamic Republic will further neutralise the economic and political challenges facing the existing regime.”

Iran is interested in preserving the JCPOA and lifting sanctions. In particular, Iranian Foreign Minister Mohammad Javad Zarif, in an interview with American journalists, explained that his country was ready to conclude a deal with the United States, in which they would officially and on an ongoing basis accept enhanced inspections at nuclear facilities, and the United States would irrevocably cancel the sanctions. But it's difficult to imagine the Trump administration accepting this offer with enthusiasm.

On the contrary, the US is trying to provoke Iran in a way that would facilitate a direct military clash. The “tanker war” unleashed on July 4, 2019 near Gibraltar is a clear example of this. Detained by British marines off the coast of the Iberian Peninsula, the Iranian tanker Grace 1 was accused of violating sanctions against Syria; it was alleged that the ship was delivering Iranian oil to the country. As stated by the Acting Minister for Foreign Affairs of Spain, Josep Borrell, the detention was conducted at the behest of the United States. The Iranian Foreign Ministry called the incident "an act of piracy".

Iran responded reciprocally to the actions of Great Britain and on July 19, in the Strait of Hormuz, detained the British-flagged Stena Impero oil tanker. According to the IRGC, the tanker was detained “in connection with the violation of international rules” and escorted to the coast for inspection.

The parties exchanged mutual accusations of violating international law, but the United States did not take any significant steps. Washington's 'wait and see' position will be a difficult test of the nerves of the respective sides; however, whoever blinks first, a zero-sum victory is hardly possible. This conflict will not only unequivocally bury hopes for the revival of the JCPOA, it also threatens to lead to political and economic catastrophe, not only on a regional, but also on a global scale. Therefore, it is absolutely impossible to cut the Iranian Gordian knot; you can only unravel it, or attempt to weaken the tension.