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Future of Iran Talks in Question
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Kelsey Davenport

The future of senior-level negotiations between Iran and six world powers remains unclear after several rounds of lower-level discussions in July and August appear not to have made decisive progress toward an agreement that addresses international concerns about Iran’s nuclear program.

The parties had agreed on the sequence for the July-August lower-level talks at the end of the last round of senior-level meetings, which took place June 18-19 in Moscow. (See ACT, July/August 2012.) At that time, EU foreign policy chief Catherine Ashton, who led the six-country delegation in its talks with Iran, said “significant gaps” existed between the positions of the two sides.

The six-country group is known as the P5+1 because it includes the five permanent members of the UN Security Council—China, France, Russia, the United Kingdom, and the United States—plus Germany.

Talks between Iran and the P5+1 resumed in Istanbul last April after a 15-month hiatus. They were followed by two other rounds of senior-level negotiations, a May session in Baghdad and the June talks in Moscow.

The first of the lower-level talks, a technical-level meeting, took place July 3 in Istanbul. The purpose of the meeting, according to the EU Foreign Office, was to provide further details on the technical aspects of the proposals made by Iran and the the P5+1 during the earlier senior-level talks. Russian Deputy Foreign Minister Sergey Ryabkov said that although the talks were not a failure, they did not produce a breakthrough or “decisive progress.”

The experts meeting was followed by a July 24 deputy-level meeting in Istanbul and an Aug. 3 phone conversation between Ashton and Saeed Jalili, Iran’s top nuclear negotiator.

Ashton released a statement after the call, saying she pressed for Iran “to address the issues” now in order to “build confidence” and that she and Jalili were planning to talk again at the end of August “after further reflection.” Jalili told Iranian news outlets that, during the conversation with Ashton, he requested a “clear and specific response” from the P5+1 to Tehran’s proposals. Neither side mentioned a resumption of the high-level political talks.

Nevertheless, White House Press Secretary Jay Carney said on Aug. 13 that there is “every reason to continue” the P5+1 negotiations “while time and space remains.” Carney’s comments came the day after Israeli Deputy Foreign Minister Danny Ayalon called on the P5+1 countries to say that the “talks have failed” during an interview on Israel Radio.

U.S. Sanctions Strengthened

In the absence of progress in the negotiations, Congress and the Obama administration instituted harsher sanctions against Tehran in July and August. Carney described the effort as the “stiffest, most severe sanctions ever imposed” on a country.

On July 31, the administration issued an executive order expanding existing sanctions against Iran’s petrochemical industry and authorizing sanctions against individuals or entities that provide support for the Central Bank of Iran, the National Iranian Oil Company, or the Naftiran Intertrade Company.

On the same day, the White House announced that it was sanctioning China’s Bank of Kunlun and Iraq’s Elaf Islamic Bank for violating the 2010 Comprehensive Iran Sanctions, Accountability, and Divestment Act. According to the administration’s July 31 press release, the two banks were sanctioned under the act’s provisions that prohibit providing financial services to Iranian banks that are “designated for their connection to Iran’s support for terrorism or proliferation.” David Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, said the penalties “cut off Kunlun and Elaf from the U.S. financial system.”

The next day, Congress overwhelmingly approved legislation imposing additional sanctions after Sen. Tim Johnson (D-S.D.) and Rep. Ileana Ros-Lehtinen (R-Fla.) worked out a compromise reconciling versions of a bill that passed the House of Representatives in December 2011 and the Senate in May. The new bill passed unanimously in the Senate and by a vote of 421-6 in the House.

The legislation includes provisions that will sanction any entity or individual that works in or provides services to Iran’s energy sector, purchases Iranian debt, helps Iran evade sanctions, or helps transport Iranian oil.

The legislation also further restricts the administration’s ability to provide waivers under the fiscal year 2012 National Defense Authorization Act that allow foreign countries to continue purchasing oil from Tehran without penalty. (See ACT, June 2012.) Countries now must demonstrate that they are moving toward a complete cessation of Iranian oil imports to receive a renewal of its waiver, as opposed to reducing it “significantly.” Waivers are granted for 180-day periods.

Johnson said that the bill would send a “clear signal” to Iranian leaders that they will face “even greater economic and diplomatic pressure” if they do not “come clean on their nuclear program” and end support for terrorist activities.

President Barack Obama signed the bill into law on Aug. 10

U.S. Charges Pair With Export Violations

A federal grand jury in Washington indicted two men for allegedly seeking to purchase and illegally export U.S.-origin materials to Iran that could be used to “operate and maintain gas centrifuges,” according to a July 13 Justice Department press release.

The two men are accused of having placed orders in the United States between October 2008 and January 2011 for materials that Iran cannot legally purchase because of sanctions imposed by Washington and the UN Security Council. U.S. Attorney Ronald C. Machen said in the press release that the indictment “underscores” the commitment to “aggressively enforcing export laws.”

One of the materials that the men allegedly attempted to obtain is maraging steel, a special high-strength steel that can be used for developing advanced gas centrifuges and ballistic missiles. Posing as a toymaker, Zongcheng Yi attempted to purchase 20 tons of the material from a U.S. company, the Justice Department said. His Iranian partner, Parviz Khaki, intended to ship the material to Iran after it arrived in China, according to the department. The U.S.-based steel company that Yi allegedly contacted informed U.S. officials about the unusual request. Federal agents then began communicating with Yi and eventually Khaki; the agents claimed they could help the men buy and export the maraging steel, the Justice Department said.

In the following months, according to the press release, Khaki continued to contact the agents, requesting assistance with purchases of other nuclear-related materials, including radioactive sources and mass spectrometers. Khaki was arrested in the Philippines on May 24. Yi, believed to be in China, has not been detained.

The case “sheds light on the reach of Iran’s illegal procurement networks” that “continue to target U.S. and Western companies,” Assistant Attorney General for National Security Lisa Monaco said in the press release.

Separately, German officials on Aug. 15 announced the arrest of four men who allegedly “helped in the delivery of special valves” in 2010 and 2011 for construction of a heavy-water reactor in Iran. Although the statement from the prosecutor did not mention a specific site, Iran is constructing a heavy-water reactor at Arak. Tehran says it hopes the reactor will begin operations in 2013. The United States is concerned that it could be used to produce weapons-grade plutonium.—KELSEY DAVENPORT

International Response

Russia and China, however, have publicly criticized the U.S. government’s unilateral expansion of sanctions, indicating that the unity of the six powers behind the sanctions effort may be fracturing.

On Aug. 13, the Russian Foreign Ministry issued a statement saying the sanctions imposed by Washington “under the veil of concern about [the] Iranian nuclear program” are unacceptable and that Russia would “reject the methods” applied by the United States. Such an approach “cripples the chance for a settlement” and “compromises the process of negotiations,” the ministry said.

China reacted to the administration’s decision to sanction the Bank of Kunlun, which is affiliated with the country’s largest gasoline producer, the China National Petroleum Corporation. The Chinese Foreign Ministry said Aug. 1 that the sanctions “seriously violated norms governing international relations” and requested that the United States “correct” its actions and revoke the restrictions imposed on the bank. The statement said that China’s cooperation with Iran in the energy sector has “nothing to do” with Iran’s nuclear activities and does not violate UN Security Council resolutions.

Israeli officials have criticized sanctions efforts over the past several weeks, but for a different reason. In remarks delivered Aug. 1, Prime Minister Benjamin Netanyahu said the restrictive measures are hurting Iran’s economy, but “neither sanctions nor diplomacy” are having “any impact on Iran’s nuclear weapons program.”

A panel of experts, however, came to a different conclusion, reporting to the UN Security Council in June that sanctions are slowing Iran’s uranium-enrichment and ballistic missile efforts. The panel was authorized in June 2010 under UN Security Council Resolution 1929 to assess the effect of UN sanctions on Iran’s nuclear program. The Security Council first imposed international sanctions on Iran in December 2006, after Tehran failed to comply with an earlier resolution calling on the country to suspend all activities related to uranium enrichment.

The panel of experts concluded that although Iran’s nuclear activities are continuing, sanctions are slowing the procurement of “critical items required for its prohibited nuclear program” and hampering Tehran’s ability to “expand some aspects of its fuel cycle activities.” According to the report, the panel observed that countries demonstrated a “marked increase in awareness” of the need to implement sanctions.

Posted: August 30, 2012