Brazil, Turkey Broker Fuel Swap With Iran

Peter Crail

Reviving a confidence-building proposal on Iran’s nuclear program dormant since late last year, the presidents of Brazil, Iran, and Turkey agreed May 17 on a plan by which Iran would export half of its low-enriched uranium (LEU) stockpile to Turkey in return for fuel for a medical research reactor. The terms of the arrangement are nearly identical to a proposal on which France, Russia, the United States, and the International Atomic Energy Agency (IAEA), the so-called Vienna Group, reached an agreement in principle with Iran last October. (See ACT, November 2009.) Tehran subsequently sought to alter the terms of that proposal, leading to its collapse. According to the May 17 plan, the Vienna Group would still need to approve the terms of any final fuel exchange.

The agreement came the day before the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom, and the United States) forwarded a draft sanctions resolution on Iran to the council’s 10 rotating members, which include Brazil and Turkey, putting the future of the fuel swap in question. Brasilia and Ankara have opposed additional sanctions on Iran, and Tehran has indicated that it would not agree to the exchange if placed under further sanctions.

Dropping long-held objections to exporting its LEU before receiving reactor fuel in return, Iran agreed as part of the May 17 declaration in Tehran to deposit 1,200 kilograms of LEU in Turkey as a confidence-building measure for up to a year while it awaited the fuel from abroad. Since last October, Iran had proposed at different times either that the two elements of the fuel exchange should occur simultaneously on Iranian soil or that both sides carry out the exchange in small batches.

The initial Vienna Group plan involved exporting 1,200 kilograms of Iran’s LEU to Russia in a single batch by the end of 2009 for further enrichment to 20 percent and then processing into reactor fuel in France. The U.S.-supplied Tehran Research Reactor, which produces medical isotopes and is expected to run out of fuel this year, operates on fuel enriched to about 20 percent of the isotope uranium-235, the threshold for highly enriched uranium (HEU). Nuclear weapons generally require HEU enriched to far higher levels, but acquiring 2 0 percent-enriched material can speed the process to achieve weapons-grade levels.

Argentina and France are the only two countries that currently maintain the capability to produce fuel for the Tehran reactor, which has been operating on Argentinean fuel since 1993.

After Iran rejected the October arrangement, declaring that it needed “100 percent guarantees” that it would receive the reactor fuel, Mohamed ElBaradei, then the IAEA director-general, proposed stationing the LEU in Turkey in escrow. (See ACT, December 2009.) Responding to the proposal, Turkish Energy Minister Taner Yildiz told reporters last November that Ankara had “no problem” storing the LEU in his country.

In February, Iran began enriching some of its LEU to 20 percent in order to fuel the reactor, even though it does not currently have the capability to make the reactor fuel plates. (See ACT, March 2010.) The day prior to the start of this additional enrichment, Atomic Energy Organization of Iran (AEOI) chief Ali Akbar Salehi told state television Feb. 9, “If [Western countries] come forward and supply the fuel, then we will stop the 20 percent enrichment.” In response to Iran’s efforts to enrich to 20 percent, the permanent representatives to the IAEA for France, Russia, and the United States delivered a letter Feb. 12 to IAEA Director-General Yukiya Amano describing the move as “wholly unjustified, contrary to UN Security Council resolutions [demanding that Iran suspend its enrichment activities], and…a further step toward a capability to produce highly enriched uranium.”

The envoys called the October proposal “the most effective and timely mechanism to assure the refueling” of Iran’s reactor “and to begin to establish mutual trust and confidence.”

Skeptical Responses

The United States and its allies responded coolly to the May 17 declaration, citing advances in Iran’s nuclear program since last fall and additional concerns about Iran’s nuclear program the deal does not address. Key among those concerns is Iran’s announcement that it would continue enriching to 20 percent even if the fuel swap went forward, Secretary of State Hillary Rodham Clinton said during a May 25 press conference in Beijing.

In an apparent reversal from his Feb. 8-9 statement, Salehi told Reuters May 17, “There is no relation between the swap deal and our enrichment activities,” he said, adding, “We will continue our 20 percent uranium enrichment work.”

Western governments indicated that Iran’s LEU stockpile has grown since last October, and removing the 1,200 kilograms would account for a smaller percentage of Iran’s total stockpile, lessening its value as a confidence-building measure. French Foreign Ministry spokesman Bernard Valero said in a May 25 press briefing that Iran’s stockpile now “must be” about 2,000 to 2,400 kilograms, up from about 1,600 kilograms in October.

“There’s a bit of a difference between the two, and that is also part of the problem,” he said.

British Prime Minister David Cameron echoed this concern in a speech to Parliament the same day. “Even if Iran were to complete the deal proposed in their recent agreement with Turkey and Brazil, it would still retain around 50 percent of its stockpile of low-enriched uranium, and it is this stockpile that could be enriched to weapons-grade uranium,” he said.

If enriched to weapons-grade levels, Iran’s 1,200 kilograms of LEU would be about enough material for one nuclear weapon.

Russia offered a more positive appraisal of the declaration. Stating that Moscow welcomed the agreement, Russian Foreign Minister Sergey Lavrov said during a May 27 press briefing, “If it is fulfilled in all its entirety, very important prerequisites will be created not only for resolving the concrete problem of fuel supplies to this reactor, but also important conditions will emerge for strengthening the atmosphere for resuming talks.”

“Very much will depend on how the Iranian side will handle its obligations,” he said, indicating that Russia would support the agreement if Iran fulfilled its commitments.

Middle-Power Mediators

The May 17 fuel exchange declaration capped a high-profile visit to Iran by Brazilian President Luiz Inácio Lula da Silva, who had sought, along with Turkish Prime Minister Recep Tayyip Erdogan, to restart negotiations with Iran on the basis of the aborted October fuel exchange arrangement.

In the days leading up to the meeting, it did not appear as though Iran was willing to adjust its position on the fuel swap. Erdogan initially abandoned his plans to join Lula in Tehran to discuss the nuclear issue, telling reporters May 14 that he would not travel to Iran because Tehran had not taken steps to conclude a successful agreement. In a last-minute change of plans May 16, Erdogan announced he would visit Tehran the following day, suggesting sufficient changes to Iran’s position.

In the days before the meeting, Lula appeared far more optimistic about the chances of an agreement. During a May 14 press briefing with Russian President Dmitry Medvedev in Moscow, he told reporters he believed he had a 99 percent chance of securing an agreement. Medvedev had placed the chances at 30 percent.

Despite the apparent difference in perception of Iran’s willingness to negotiate an acceptable deal, a Brazilian diplomat said May 26 that “Brazil and Turkey coordinated closely throughout the whole process.”

Responding to the chilly reception to the fuel swap arrangement by the West, Brazil and Turkey insisted that the international community seek a “negotiated solution” to the Iran nuclear impasse. In an International Herald Tribune op-ed, Brazilian Foreign Minister Celso Amorim and Turkish Foreign Minister Ahmet Davutoglu argued, “The Tehran declaration needs to be given the opportunity to work.”

“[W]e believe the declaration helps to address the entire issue by providing essential confidence-building, the key missing component thus far,” they said.

Brazil in particular has claimed that the United States supported its efforts to broker a deal conforming to the terms of the October agreement. “We were encouraged directly or implement the October proposal without any leeway, and that’s what we did,” Amorim told reporters May 22.

In an April 20 letter to Lula, President Barack Obama said that Iran’s agreement to export 1,200 kilograms of LEU “would build confidence and reduce regional tensions by substantially reducing Iran’s LEU stockpile.” He cited a number of concerns regarding Tehran’s unwillingness to export its LEU beforehand, including the notion that there would be no guarantee that Iran would carry out the exchange after it was agreed.

Obama specifically endorsed the proposal for holding that material in escrow in Turkey, stating, “I would urge Brazil to impress upon Iran the opportunity presented by this offer to ‘escrow’ its uranium in Turkey while the nuclear fuel is being produced.”

Although Iran ultimately agreed to those terms, its new insistence that it would continue 20 percent enrichment has raised additional hurdles. At a May 22 press briefing in Brasilia, Amorim acknowledged that Iran’s position had complicated the matters, but he said, “It wasn’t on the agenda. Nobody told us, ‘Hey if you don’t stop 20 percent enrichment, forget the deal.’”

U.S. officials disputed Amorim’s statement. In a May 28 background briefing, a senior administration official said that Washington had raised the issue of Iran’s enrichment to 20 percent in consultations with Brasilia, saying that Brazil’s permanent representative to the United Nations, Maria Luiza Ribeiro Viotti, asked Iranian Foreign Minister Manouchehr Mottaki what Tehran would do about such enrichment if a deal were agreed during a May 7 dinner Iran hosted in New York for Security Council members.

Another senior administration official stressed that Obama’s letter to Lula “was not intended to lay out a comprehensive position,” because Brazil and Turkey were not asked to negotiate on behalf of the Vienna Group.

Responding to questions about the value of the deal if it does not require Iran to stop its enrichment work, the Brazilian diplomat said that the fuel swap proposal “was never meant to solve all problems related to the Iranian nuclear program,” but rather “was conceived as a confidence-building measure to facilitate broader discussions about the issue.”

UN Sanctions Still Pushed

Far from characterizing the May 17 declaration as a confidence-building measure, the United States has charged that Iran only agreed to the plan to avoid a new round of UN sanctions.

Clinton said in her May 25 remarks that Iran agreed to the fuel swap only “because the Security Council was on the brink of publicly releasing the text of the resolution that we have been negotiating for many weeks.”

U.S. officials have said that the sanctions and the fuel swap are separate issues. “[N]one of the elements of the fuel swap deal…have anything to do with what is called for in this resolution, which is a suspension of all enrichment,” the first senior administration official at the May 28 briefing said.

The draft resolution circulated by the five major powers expands on existing international sanctions against Iran’s nuclear and missile programs, its arms imports and exports, and its banking and financial sectors. Many of its enforcement provisions, however, are not mandatory.

It also seeks, for the first time, to prohibit all Iranian activities related to nuclear-capable ballistic missiles, including development and testing. Previous sanctions have only restricted imports and exports relevant to Iran’s ballistic missile program.

U.S. officials have argued that the sanctions can be used as a legal basis for U.S. allies, particularly the European Union, to adopt their own stringent measures against Iran.

Even prior to the May 17 fuel swap declaration, Western diplomats said that it would be difficult to move forward with sanctions while Lebanon held the May council presidency as it would complicate placing the issue on the council’s agenda. Beirut has voiced opposition to new sanctions, and Hezbollah, a U.S.-designated terrorist group with links to Iran, is a major Lebanese political party holding parliamentary seats.

Mexico holds the council presidency in June.