New Momentum for Nuclear Talks?

The United States and Iran took limited steps to de-escalate tensions over the past few weeks, but it is unclear if the progress will lead to a resumption of talks over Iran’s advancing nuclear program and steps to reduce nuclear risk.

On Sept. 18, five Americans imprisoned in Iran returned to the United States. In exchange, five Iranians in U.S. custody were released, and South Korea completed the transfer of $6 billion of Iran’s frozen assets to Qatar. Iran can access those funds to pay for goods exempt from U.S. sanctions, such as food and medicine.

The Biden administration faced criticism for releasing Iran’s money as part of the prisoner swap, despite the strict limits on how Tehran can use the funds. Brett McGurk, National Security Council coordinator for the Middle East and North Africa defended the Biden administration’s approach. “We took time to get the details right,” he said in a Sept. 18 interview with The Washington Post. McGurk said the funds in Qatar are subject to “more legal restrictions now” as compared to South Korea. Iran will be able to withdraw money to pay vendors for humanitarian goods and “no funds whatsoever are going into Iran,” he said. 

The prisoner swap followed a modest reduction in Iran’s production of 60 percent enriched uranium over the past quarter.

The reduction has no immediate impact on Iran’s proliferation risk: Tehran can still produce enough weapons-grade material for a bomb in less than a week and around five weapons in a month. But Iran views its stockpile of 60 percent material as a key source of leverage in talks with the United States. Tehran’s willingness to slow production may be a political signal of the country’s intentions to de-escalate, particularly given that the United States and Iran reportedly discussed a cap on the 60 percent stockpile during indirect talks in Oman earlier this year.

While a return to the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA) is still highly unlikely due to the geopolitical environment and Iran’s nuclear advances over the past year, the prisoner swap and Tehran’s decision regarding the 60 percent enriched uranium could inject much-needed momentum into talks over Iran’s nuclear program. 

McGurk suggested that negotiating a deal to release the Americans was a top U.S. priority and needed to be addressed before pursuing further diplomacy on Iran’s nuclear program. He said the prisoner swap “was not linked to nuclear diplomacy” but that Washington made clear that “diplomacy cannot meaningfully advance” if U.S. citizens are “wrongfully detained” in Iran.

U.S. Secretary of State Antony Blinken said on Sept. 18 that the Biden administration is not currently engaged with Iran over its nuclear program, but it would see “if there are opportunities” in the future.

Representatives from the three European countries party to the JCPOA, France, Germany, and the United Kingdom, met with the lead Iranian negotiator, Ali Bagheri Kani in New York on Sept. 20 to discuss the nuclear issue, but it does not appear that there are plans yet for any direct or proximity talks between U.S. and Iranian officials. 

There is also a risk that spoilers could put Washington and Tehran back on the path to escalation.

Iran is still failing to provide the International Atomic Energy Agency (IAEA) with the cooperation necessary to enhance monitoring and implement safeguards. Tehran also has not provided the IAEA with credible answers regarding the presence of processed uranium at two locations never declared to the agency. (See below for details.)

IAEA Director General Rafael Mariano Grossi continued to warn about the challenges Iran’s intransigence poses for agency efforts to determine that Iran’s nuclear program is entirely peaceful and to reestablish a record of nuclear activity due to gaps in monitoring over the past 18 months.

Furthermore, there are still tensions between the United States and Iran in the region. During his Sept. 19 address to the UN General Assembly, Iranian President Ebrahim Raisi suggested that Iran is open to talks regarding its nuclear program if the United States demonstrates its commitment to implementing an agreement. However, he also threatened further retaliation for the U.S. drone strike that killed General Qassam Soleimani in 2020. Raisi’s words may be intended more for a domestic audience, but the rhetoric underscores the challenges any renewed diplomacy will face and the risk of spoilers.

McGurk also raised concerns about regional tensions and Iran’s support for Russia’s war in Ukraine. He said if Tehran is “escalating conflicts in the region” or supplying Moscow with drones, such actions make “meaningful diplomacy hard to envision.” The United States is “prepared for any and all potential contingencies with respect to Iran’s nuclear program,” he said.

While Raisi was in New York for the UN General Assembly, Russian Defense Minister Sergei Shoigu traveled to Iran, where he touted a strengthened relationship between Moscow and Tehran.

 During his trip, Shoigu met with the head of the Islamic Revolutionary Guard Corps Aerospace Force, Admiral Amirali Hajizadeh, and inspected several Iranian drone and missile systems.

To date, it does not appear that Iran has transferred ballistic missiles to Russia, but UN sanctions prohibiting Tehran from exporting those systems will expire Oct. 18.

While it appears unlikely that any of the parties to the JCPOA will snap back UN sanctions under a provision of UN Security Council Resolution 2231, which endorsed the JCPOA, one of the European countries may reconsider if Iran ratchets up its military support for Russia.

France, Germany, and the United Kingdom already announced they retain nuclear and missile-related sanctions originally set to be lifted in October, citing Iran’s advancing nuclear program. (See below for details.)—KELSEY DAVENPORT, director for nonproliferation policy

Europeans to Retain Nuclear, Missile Sanctions

France, Germany, and the United Kingdom (E3) announced their intentions to keep in place certain sanctions on Iran that were set to be lifted in October under the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). Iran responded by rejecting another International Atomic Energy Agency (IAEA) inspector.

In a Sept. 14 statement, the E3 said the decision to retain the sanctions is a “direct response to Iran’s consistent and severe non-compliance” with the nuclear deal and that the action is “fully compliant with the JCPOA.” The statement referenced the E3 efforts to use the nuclear deal’s dispute resolution mechanism to address Iran’s noncompliance with its nuclear obligations and said Iran has “refused opportunities to return to the JCPOA twice.” Iran also continues to expand its program “without any credible civilian justification,” the statement said.

Iran’s Foreign Ministry called the action “illegal” in a Sept. 15 statement. The Foreign Ministry said that Iran’s decision to breach the JCPOA’s limits was “completely legal” and that the E3’s decision to retain sanctions in response is “not acceptable.”

Specifically, the E3 will retain nuclear proliferation-related sanctions as well as missile and arms embargoes which terminate under the JCPOA in October. The UN arms embargo on Iran already expired and its missile restrictions will end Oct. 18 unless snapped back into place by one of the parties to the JCPOA, which appears to be unlikely. Iran has threatened to withdraw from the nuclear Nonproliferation Treaty (NPT) and/or enrich to 90 percent in response.

While the missile restrictions expire, the option to snap back all the UN sanctions on Iran will remain until October 2025.

Iran retaliated by de-designating an IAEA inspector. According to the Sept. 4 IAEA report, Iran had recently rejected other inspectors.

States are permitted to reject inspectors, but IAEA Director General Rafael Mariano Grossi condemned the decision in a strongly worded Sept. 16 statement. He called it a “disproportionate and unprecedented unilateral measure” that affects IAEA verification activities and “openly contradicts the cooperation that should exist between the Agency and Iran.”

Grossi said that because of Iran’s actions “one-third of the core group” of the agency’s inspectors for Iran are “effectively removed.” He said it “constitutes an unnecessary blow” to the “already strained relationship” between the agency and Iran and called on Tehran to reverse course.

France, Germany, the United Kingdom, and the United States also raised concerns about Iran’s actions. In a Sept. 18 statement, the four countries accused Tehran of “deliberately hampering the normal planning and conduct of Agency verification and monitoring activities in Iran.” Iran “must immediately reverse these inspector de-designations” and cooperate with the IAEA, the statement said.

Current Safeguards Issues Remain Unresolved

The International Atomic Energy Agency (IAEA) reported no progress on two safeguards issues related to Iran’s current activities: an accounting discrepancy at Iran’s Uranium Conversion Facility and Iran’s failure to meet its obligations to share information about new nuclear facilities with the agency.

In the Sept. 4 report on Iran’s safeguards implementation, the IAEA stated that Iran “decided the locations for new nuclear facilities” but has not yet responded to IAEA requests for the design information.

Under modified Code 3.1 of a comprehensive safeguards agreement, a state is required to notify the IAEA when a decision is made to construct a nuclear facility or authorize the construction of the facility. Modified Code 3.1 also requires the provision of additional design information. Before the modification, a state was only required to provide the agency with design information 180 days prior to the introduction of nuclear material to the facility.

Modified Code 3.1 updated the 180-day requirement to give the IAEA more time and information to design an effective safeguards approach.

Iran maintains it legally halted implementation of Modified Code 3.1 in February 2021, when it reduced IAEA access and monitoring by halting JCPOA-specific monitoring measures and the additional protocol to its safeguards agreement. However, the IAEA maintains that Modified Code 3.1 is a legal obligation that Iran must fulfill, and it cannot be altered or suspended unilaterally. This is not the first time Iran and the IAEA have fought over whether Code 3.1 can be suspended. Iran agreed to implement modified Code 3.1 in 2003 but then tried to unilaterally suspend it in 2007.

U.S. Ambassador to the IAEA Laura Holgate raised concerns about this issue during her address to the agency’s Board of Governors on Sept. 12. Holgate said Iran’s refusal to implement Code 3.1 is “deeply troubling” and “especially egregious for a country with a long history of building undeclared nuclear facilities.”

The IAEA report suggested that the agency’s Code 3.1 comments refer to Iran’s announcements to build additional reactors. It does not specify locations, but it could refer to the Atomic Energy Organization of Iran’s plans for power reactors at Karoon and a test reactor at Esfahan.

Iran is also building an underground centrifuge assembly facility at Natanz that some officials and experts suspect could be intended to enrich uranium, which would require notification to the IAEA under Code. 3.1.

Regarding the second safeguards issue, the agency is not satisfied with Iran’s explanations for a discrepancy in uranium accountancy stemming from a transfer of uranium metals and waste materials from a laboratory to the Uranium Conversion Facility. Iran initially agreed that a discrepancy existed when the IAEA raised the issue in 2022.

In April 2023 Iran issued a revised accountancy report but the IAEA’s review of the document determined that it did not address the discrepancy or meet Iran’s safeguards obligations. The IAEA concluded that Iran’s assessment of the uranium in the solid waste was not “based on scientific grounds.”

In a July 5 letter, Iran said there was no need for any further correction and said the IAEA’s assessment of the discrepancy was “inaccurate” and “baseless.” Later that month Iran attempted to argue that the discrepancy was a “predictable” part of the uranium recovery process and argued the issue should be considered resolved.

The IAEA informed Iran it disagreed with that explanation and said the issue remains outstanding.

The material in question, 302 kilograms of natural uranium, does not itself pose a risk. But Iran is required to follow safeguards obligations in accounting for nuclear materials and its failure to address this issue over the past 18 months is concerning.

Iran Slows 60 Percent Uranium Production

Iran slowed its production of uranium enriched to 60 percent over the past quarter but continued to expand its nuclear program in other areas.

In a Sept. 4 report on Iran’s nuclear activities, the IAEA noted that since June Iran had reduced its rate of production of 60 percent enriched uranium by about two-thirds when compared to the previous quarter. The report said Iran’s stockpile of uranium enriched to 60 percent is 121.6 kilograms, an increase of only 7.5 kilograms since the May report. In total, Iran produced about 14 kilograms of uranium enriched at that level since over the last three months but it down-blended 6.4 kilograms to 20 percent levels.

Iran’s stockpiles of uranium enriched to 20 percent and 5 percent increased at a similar rate to previous quarters. Iran produced about 43 kilograms of uranium enriched to 20 percent. That quantity, plus an additional 22 kilograms of 20 percent uranium produced when Iran down-blended the 6.4 kilograms of 60 percent, resulted in a stockpile of 536 kilograms of uranium enriched to 20 percent. 

The stockpile of uranium enriched to five percent grew over the quarter from 1,340 kilograms to 1,950 kilograms.

If Iran were to use its stockpiles of 60 percent and 20 percent to produce weapons-grade uranium (about 90 percent) it would have enough for about six weapons. Tehran could produce the material for the first bomb in about a week—a time frame that has remained unchanged for months—and for five in about a month. So, the slowdown of 60 percent does not have a near-term effect on Iran’s breakout or meaningfully reduce proliferation risk in the short term. The step may be politically significant, however, given that Iran views its stockpile of 60 percent material as a source of leverage. Furthermore, the United States and Iran discussed capping the stockpile of 60 percent as a de-escalation measure during indirect talks in Oman.

The IAEA noted that Iran moved additional highly enriched uranium to its Fuel Plate Fabrication Plant at Esfahan. Iran now has 100 kilograms of uranium enriched to 60 percent and 455 kilograms of uranium enriched to 20 percent stored at the facility. It is unclear if Tehran intends to convert any portion of the materials to a powder form. Conversion would reduce proliferation risk as the uranium would need to be converted back to gas before further enrichment. Even if Iran does not intend to convert the material, it would have to move the stockpiles back to the enrichment plants if a decision were made to enrich the stocks to weapons-grade levels. Given that the material is stored under seal, the IAEA would quickly detect such a move.

The IAEA report noted little progress on advanced centrifuge installation, documenting only one new cascade of IR-4 centrifuges in the main enrichment hall at Natanz. Iran has not installed any new IR-1 centrifuge machines or advanced IR-6 centrifuge machines at Fordow, despite having announced plans in November 2022 to ramp up capacity from 8 centrifuge cascades (six cascades of IR-1s and two cascades of IR-6s) to 16 cascades (an unspecified mix of IR-1s and IR-6s). If Iran does begin installing additional IR-6s at Fordow it would be a serious provocation, given the efficiency of those machines and the deeply buried Fordow location.

Iran did change its method of production for 60 percent enriched uranium at Fordow in June. Before the change, it was producing material enriched to that level using interconnected IR-6 cascades. The cascade of RI-6s with the modified subheaders, which allows Iran to switch between enrichment levels more quickly, was being used for the final enrichment and extraction of the 60 percent material. This is the configuration that Iran says caused the spike to 83 percent in January.

Now Iran is still producing uranium enriched to 60 percent, but the cascade of IR-6s without the modified subheaders is being used for the final stage and withdrawal of the enriched material. This makes it more difficult for Iran to quickly change the configuration to enrich to higher levels.

Regarding the particles of uranium enriched to 83 percent, the IAEA assessed as part of its annual physical inventory verification (PIV) that there was no diversion of nuclear material. The IAEA said in its May 30 report that the PIV was completed and shared the conclusion in the Sept. 4 report.

In the May report the IAEA noted that Iran updated its design information for the Arak (Khondab) reactor and that commissioning was planned for 2023. The IAEA, however, noted no real progress on the reactor. Iran has still not installed the reactor vessel, the Sept. 4 report said.

IAEA Reports No Progress on Safeguards Probe

The IAEA reported that Iran has yet to provide technically credible answers for the presence of uranium detected at two locations that were never declared to the agency. The activities in question date back to Iran’s pre-2003 illicit nuclear weapons program and are not ongoing, but Iran is still legally required to account for the nuclear materials and activities. 

Specifically, the Sept. 4 report said that Iran and the IAEA discussed the years-long investigation into Turquzabad and Varamin in August, but “no progress was made” in resolving the IAEA’s questions about the presence of undeclared uranium detected at those locations in 2019 and 2020, respectively.

The IAEA’s evidence suggests that Varamin was used from 1999-2003 for milling uranium ore and converting uranium into the gas form (UF6) necessary for enrichment. The agency assesses that Turquzabad was used as a storage facility for nuclear materials and equipment from the undeclared pre-2003 nuclear program. The IAEA was investigating two additional sites, Marivan and Lavisan Shian, but has no outstanding questions about those locations at this time. The IAEA did conclude in 2022 that Iran undertook activities to uranium metal at Lavisan Shian before 2003 that should have been declared. 

France, Germany, the United Kingdom, and the United States said in a Sept. 13 statement that the Board must be prepared to take further action to support the IAEA and “hold Iran accountable” if Tehran does not fulfill its safeguards obligations. The Board last passed a resolution in November 2022 requiring Iran to cooperate with the agency.

The four states accused Iran of persisting in its “deliberate refusal to engage earnestly” with the IAEA in a Sept. 13 statement, issued during the agency’s Board of Governor’s meeting.

The statement came after IAEA Director General Rafael Mariano Grossi accused states of declining interest in the Iran case and a “routinization” of the issue during a Sept. 11 news conference.

Iran disputed the IAEA’s assessment that there was no progress over the past quarter.

Ambassador to the IAEA Mohsen Naziri Asal said that the report “could have been better and presented to the Board of Governors in a manner that more accurately reflects the existing realities.” He said in a Sept. 13 interview with Iran Nuances that Tehran has had “numerous discussions” with the IAEA that demonstrate that Tehran can “resolve issues through a highly constructive and positive engagement with the agency.” Iran is committed to addressing the IAEA’s questions about the two sites, he said.

Iran said in a June 7 letter to the IAEA that it “exhausted all its efforts to discover the origin” of the uranium particles and again pointed to the possibility the locations were contaminated with uranium by “external elements such as sabotage and malicious acts.”

In an Aug. 28 meeting, however, Iran said it had additional information about the materials removed from Turquzabad and would provide the IAEA with information related to the dismantled containers removed from that site prior to the agency's visit in 2019. The IAEA requested that Iran provide this information “as soon as possible.”

The IAEA report reiterated that until Iran responds to the agency’s questions it will “not be able to confirm the correctness and completeness” of Iran’s nuclear declaration.

Eight states, including Russia and China, issued a statement in support of Iran’s position. The states welcomed Iran’s continued cooperation with the IAEA and said the remaining issues should be resolved in a “depoliticized manner without interference from the outside.”

Sixty-three IAEA member states rebuked Iran for its lack of cooperation in a Sept. 13 statement. The statement underscored “the urgent need for Iran to clarify and resolve these issues in a manner satisfactory to the IAEA.” The statement called upon Iran to “fulfill its legal obligations” and address the IAEA’s concerns.

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