Thursday, July 16, 2015
9:30 a.m. - 11:00 a.m.
Carnegie Endowment for International Peace, Root Room
1779 Massachusetts Ave. NW, Washington, D.C.
Transcript available below.
Video available on CSPAN.
On July 14, negotiators from the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States) and Iran secured a comprehensive nuclear agreement designed to verifiably block Iran’s pathways to nuclear weapons development and guard against a clandestine weapons program in exchange for sanctions relief.
On July 16, the Arms Control Association brought together former high-level government officials and experts to address the challenges of implementing the deal and discuss steps that can be taken to enhance prospects for the deal’s success.
- Kelsey Davenport, Director for Nonproliferation Policy, Arms Control Association;
- Ilan Goldenberg, Senior Fellow and Director, Middle East Security Program, Center for a New American Security and a former Special Advisor on the Middle East and former Iran Team Chief in the Office of the Undersecretary of Defense for Policy;
- Richard Nephew, Program Director of Economic Statecraft, Sanctions and Energy Markets, Columbia University and former Principal Deputy Coordinator for Sanctions Policy, Department of State, and former Director for Iran, National Security Staff; and
- Daryl G. Kimball, moderator, Executive Director, Arms Control Association.
The Arms Control Association is an independent, membership-based organization dedicated to providing authoritative information and practical policy solutions to address the dangers posed by the world's most dangerous weapons.
KIMBALL: Well, good morning, everyone. Welcome to the Arms Control Association's briefing today on "The P5+1 and Iran Nuclear Deal: The outcomes, implementation and verification." I'm Daryl Kimball, the executive director of the Arms Control Association, and we are an independent, nonpartisan organization. We were established in 1971 to provide information, ideas, solutions to address the threats posed by the world's most dangerous weapons.
We have organized today's event to do discuss the recently concluded P5+1 and Iran nuclear deal, which is among the most complex and consequential of the nuclear age, which began 70 years ago today, with the first atomic bomb, which was detonated in New Mexico.
This agreement follows over two years of diplomatic machinations, intense negotiations involving seven nations, including long-time adversaries.
Our organization, the Arms Control Association, has intensively followed Iran's program and the diplomatic efforts to rein it in. And we have over this period of time sought to identify practical, technical and policy solutions to address the many different challenges on this issue so that the negotiators can help arrive at an agreement that prevents a nuclear-armed Iran.
In our analysis, after looking at the document, which is over 100 pages, quite substantial, is that it can effectively and verifiably block Iran's potential uranium and plutonium pathways to nuclear weapons and guard against a clandestine weapons program for more than a generation.
That's a view shared by a wide variety of nonproliferation security experts. And we believe it will be a net plus for nuclear nonproliferation, the effort to stop the spread of nuclear weapons, and for U.S. and regional security.
Congress now has 60 days to review this complex agreement, and we believe that each and every member needs to take a serious look at this agreement, get the answers to their questions -- and there are many questions -- and consider the benefits and the alternatives.
So to help contribute to this debate we have gathered three top-notch experts who are going to discuss the agreement, how it works, what its impact will be. We are going to start with the Arms Control Association's director for nonproliferation policy, Kelsey Davenport. She has been the author of our major research reports and policy briefs on this issue and she has been very closely monitoring the talks for more than four years or so. I think she is still recovering from her latest tour of duty, two and a half weeks in Vienna, the site of the final round of the talks.
And next we are going to hear from Richard Nephew, who is former principal deputy coordinator for sanctions policy at the U.S. Department of State, and director for Iran on the National Security Council staff. So he was one of the negotiators until the beginning of this year.
He is now the program director for economic statecraft, sanctions and energy markets at the Center on Global Energy Policy at Columbia University in New York, and is a nonresident senior fellow at the Foreign Policy Center at Brookings.
Then we are going to hear from Ilan Goldenberg, who is senior fellow and director for Middle East security programs at the Center for New American Security, and foreign policy and defense expert with extensive government experience covering Iran's program.
So after their opening comments and remarks about the agreement, its impacts, we are going to take your questions.
And I just want to make a final observation and thought before I ask Kelsey to talk about the nuclear nonproliferation elements of the agreement. Like any diplomatic agreement, this one is the product of give-and-take. It's not perfect. But if you look at it as a whole, we think it is very strong and is in many ways stronger than the framework that was reached in early April by the P5+1 and Iran.
Yet, it is clear already, just a couple of days after this agreement was concluded, that many critics believe that by rejecting the agreement, increasing sanctions pressure on Iran, the U.S. can somehow coerce, convince the leaders of Iran to dismantle its nuclear program or agree to better terms.
I think, many people think, I think the president thinks, because we heard him say this yesterday, this is basically a dangerous illusion. There isn't a better deal on the horizon, and if Congress somehow blocks this agreement, there are going to be very tough, negative consequences. We will have broken with our European allies. The necessary international support for Iran-related sanctions will dissipate. Iran would not be subject to limits on its nuclear program and could expand this program. We would lose out on enhanced inspections. The risk of a nuclear-armed Iran and a conflict would grow. It wouldn't be inevitable, but it would grow.
So a lot is at stake, and in the coming weeks we hope Congress is going to take a hard look at the agreement, what it does, and the alternatives.
So with that, let me turn it over to Kelsey Davenport, and then we will move briefly on to our other speakers. Thanks.
DAVENPORT: Great. Thank you, Daryl, and thank you all for being here this morning. At least I think it's morning. I'm still not quite sure what time zone I'm in.
So I want to talk today mostly about the nuclear elements of the deal, and while I won't be able to touch on all 158 pages of the agreement, during the question-and-answer we can explore the areas that I don't touch on, and would be happy to take any questions.
But from the perspective of the Arms Control Association, this is a very strong agreement from a nonproliferation perspective. In many ways it exceeds the expectations of what we thought a good agreement would need to achieve to block Iran's pathways to nuclear weapons and put in place an intrusive monitoring and verification regime that would ensure quick detection of any covert activity.
No, this deal is not perfect but it's good enough and it meets U.S. nonproliferation goals. It safeguards U.S. national security, and it's good for regional security as well.
So to get into first some of the details. The parameters that were agreed to in April in Lausanne, particularly on the uranium enrichment, were details. They were strong, and from our assessments, with these parameters in place it would take Iran more than 12 months to produce enough material for one nuclear weapon. That's about 25 kilograms of uranium enriched to above 90 percent.
And that will be achieved by reducing Iran's centrifuges from 19,000 down to 6,000, of which 5,000 will be operating. Iran's stockpile will also be capped at 300 kilograms. So all of that we knew.
But what we get from the final deal are a number of details that strengthen this assessment that Iran cannot quickly move toward nuclear weapons. One of the things that becomes clear in this deal is that all of the excess centrifuge machines will be removed, all of the infrastructure, the piping, vacuums, will also be taken out and stored under IAEA seal. These seals will feed directly to the agency so we have greater assurance that if Iran were to try and access these machines, the IAEA would immediately know.
Also, it's important to note that Iran will be using these machines to replace and repair any broken machines, and Iran will not be producing any additional centrifuges unless the stockpile of machines reduces to under 500. So this idea that Iran is going to use time to build up its centrifuges to quickly deploy them later is false, and it will be -- the machines will be counted and inventoried under the deal. So again, these are provisions that add a greater level of confidence.
Also, we have more information about the stockpile. In Lausanne, Iran agreed to reduce its stockpile of low enriched uranium, uranium enriched to about 3.67 percent, or reactor grade, from the approximate 10,000 kilograms it has now down to 300 kilograms. And that includes uranium in all forms.
Iran will not be able to simply convert the gas into oxide. Oxide can be converted back to gas and further enriched. So this is the entire stockpile will be capped at 300 kilograms.
Any scrap material that's in process, that's enriched to 3.67 percent, or even up to 20 percent, will be turned into fuel plates for the Tehran research reactor. The material that can't be turned into fuel plates will either be shipped out of the country, diluted, or mixed in a form that it cannot be enriched further.
So again, additional steps that Iran will take to ensure that there is not scrap material lying around that can be enriched further, providing more assurance that Iran cannot obtain the material necessary for a bomb under 12 months.
Now there is also been some concern about the fact that the agreement leaves about 1,000 centrifuges at the Fordo facility, which Iran originally began to build in secret, that's deep in a mountain near the city of Qom.
Now, the 1,000 centrifuges that will be there, about 350 of the centrifuges will be used for stable isotope production. Now these machines cannot then be transitioned back to uranium enrichment, so that leaves about 600 machines that are idle.
The rest of the centrifuges and the associated infrastructure will be removed and it will be placed under seal back at the Natanz facility, which is where the 5,000 operating centrifuges will continue to produce enriched uranium.
So Iran can't take these machines back to Fordo, begin operating them quickly and use this facility to reduce enriched uranium. The IAEA would be able to detect any of those moves because the centrifuges are stored off-site, and because the IAEA will have access on a daily basis, if it wants it, to the Fordo facility. So this facility really does not pose a threat for the duration of the limitations there, which is 15 years. So very strong on the Fordo facility.
Now one of the criticisms that frequently has been levered against this deal is, what will happen after 10 years? Because in 10 years Iran -- Iran committed for 10 years to operate 5,060 of its IR-1 centrifuges. Iran is not going to go over a cliff in 10 years, and this agreement makes very clear that the work on advance centrifuge machines will be limited and they will be phased in in such a way that one day after 10 years Iran cannot deploy thousands of IR-8 centrifuges and then be just weeks away from attaining the material for a nuclear weapon.
So to look a little bit more closely at the R&D, Iran currently has about 1,000 advanced centrifuge machines in various states at its Natanz pilot production facility. Iran will have a few months to finish up the testing with some of those cascades, and then it will remove nearly all of the advanced machines and store them under seal.
During the duration, the 10-year duration, Iran will be allowed to operate one IR-4 machine, one IR-5 machine, one IR-6 machine and one IR-8 machine for eight years. It can test these machines with uranium but it cannot use these machines to accumulate enriched uranium. So again, we are not going to see a proliferation of advanced centrifuge machines that Iran can quickly use to break out.
After about eight and a half years, Iran will be able to test about 30 IR-6 machines and 30 IR-8 machines. And at that point they can begin producing about 200 of each of these models per year, but they will not be producing the rotors for these machines.
So around year 10, then, when Iran begins to transition these machines, it's important to note that its SWU capacity also will remain relatively stable for the next about three years.
UNKNOWN: What's SWU capacity, Kelsey?
DAVENPORT: I'm getting to SWU capacity. So SWU capacity is the measure of efficiency of a centrifuge machine. So that means that the capacity of Iran's 5,060 IR-1 centrifuges will remain constant as new machines are introduced. So if an IR-6 machine, say, has 10 times the SWU capacity of an IR-1 machine, if Iran introduces an IR-6 machine, they have to remove 10 IR-1s.
So this again ensures that we won't see a ramp-up in Iran's nuclear capacity immediately after sort of the 10-year restrictions on just using IR-1s to enrich uranium expire.
It's also important to note that we should not view any of these elements in isolation. So in addition to these restrictions on the number of machines that are being produced, Iran's procurement of materials that can be used for centrifuge development will also be monitored by the joint commission, which is set up through the deal, and any changes that Iran wants to make to its R&D will also have to be approved by the joint commission.
So if Iran starts to move or try and sort of move away from the R&D plan that it will submit to the IAEA as part of its additional protocol, it will become clear very quickly to the joint commission.
So one of the other areas where there has been a lot of questions relates to the transparency and the monitoring and verification elements of the deal. And this is something that at the Arms Control Association we were very concerned about because of Iran's illicit nuclear activities in the past.
But we feel that the intrusive inspections and monitoring and verification regime produced under this agreement will provide the highest degree of confidence that Iran cannot pursue nuclear weapons, either at its declared facilities or covertly.
So first at the declared facilities. Iran will have to expand its nuclear declaration under its additional protocol, which Iran has agreed to implement and then ratify within the eight years of the agreement. Now the additional protocol is an agreement between Iran and the IAEA that expands upon Iran's comprehensive safeguards agreement. It expands the number of declared sites. It gives inspectors greater access, and access on short notice to inspect these sites.
And on top of this, the agreement lays down a number of provisions that allows for continuous monitoring across Iran's entire fuel supply chain. That's 25 years at the uranium mines and mills, and 20 years at the centrifuge production shops, and then the continuous monitoring at Natanz and Fordo as well.
Essentially this means that if Iran wanted to covertly pursue nuclear weapons, they would need to replicate the entire fuel supply. They would need to find a new source of uranium ore, they would need to convert that into gas, and then they would need to enrich it. And these are large programs. You're not going to be able to hide this in a basement or even, you know, in a warehouse at a military facility.
Now another check against sort of this covert -- the concern about a covert nuclear weapons program comes with the increased access that will be granted to inspectors under the additional protocol. And it's very clear in the deal that if concerns arise about illicit nuclear activities, the IAEA will be permitted managed access to sites of concern, including military sites.
Now managed access means that Iran can state some conditions to protect sensitive military information, but it's important to realize that ultimately it will be the IAEA's decision about whether or not the conditions Iran places on access are adequate. And if the IAEA feels like they are not adequate, there is an adjudication mechanism in place that will decide if the IAEA should be given expanded access.
So if Iran and the IAEA cannot come to a decision within 14 days about access, the joint commission, which includes members of the P5+1 countries, the European Union and Iran, will have seven days to decide on access. And that's decided by a consensus vote, so five of the eight members. So that means Iran, China and Russia together can't block access. And then Iran will have an additional three days to comply with the joint commission's recommendation.
So in total, if the IAEA wants to access the sites, they can only be blocked from doing that for 24 days. Twenty-four days may be time for Iran to remove any equipment that is put in place, but it isn't enough time for Iran to eradicate any indication that illicit nuclear activities had taken place, and that's in part due to the very sophisticated environmental sampling that the IAEA can conduct.
So these layers really demonstrate the strength of the monitoring and verification, and I think it's worth noting too that we consider monitoring and verification in this deal by looking at the IAEA, but it isn't just the IAEA that's going to have its eyes on Iran's nuclear program. The national intelligence organizations of the United States, of the European countries, and I'm sure of Israel, will continue to watch Iran very closely.
In short, to sum up, I think the director of national intelligence, James Clapper, said this is as solid of a verification regime as you can get. No element is going to provide you a 100 percent guarantee, but together it provides the highest degree of certainty that Iran is not covertly pursuing nuclear weapons.
Also, I think it's important to note that Iran's nuclear decision-making generally has been guided by sort of a cost-benefit analysis. So with this deal in place, the cost of cheating becomes exponentially higher because this is an agreement that Iran voluntarily signed on to, and within the agreement there are further commitments by Iran not to undertake any experiments related to nuclear weapons development.
So if Iran was found to be violating this deal that it agreed to voluntarily, we'll see an extremely strong reaction by the international community. So it also changes the cost-benefit analysis.
There are a few additional elements that I think are important and worth noting that I don't think have gotten much coverage so far. There are conditions where Iran cannot export any nuclear material or technology unless it's approved by the joint commission. I think that's important when we think about sort of the spread of -- containing the spread of these technologies.
There will be joint work on the fabrication of fuel elements, which provides Iran the ability then to fuel the Iraq reactor using the domestic fuel that it produces. And then also if there are concerns about noncompliance, there will be sort of a time-bound sort of 35-day period that consists of review by the joint commission, review by the ministers if necessary, that really ensures that if any party is not satisfied with the breach then, it can move on and take the case to the Security Council.
So there are a number of other provisions in this deal that just add to its strength and amplify the non-proliferation value.
So finally, moving forward, Congress now has the opportunity to weigh in on this deal, but with the power that Congress has to vote on agreement comes a great deal of responsibility. And if they cause or prevent this deal from being implemented, I think they need to buy the consequences, which certainly will likely lead to escalation on the part of Iran, escalation -- sanctions from the U.S. side, and could increase the chances of a military conflict.
So when looking at this deal, it's important that Congress evaluates the deal on its merits. Does it block Iran's pathways to nuclear weapons? Yes. Does it put in place intrusive monitoring and verification? Yes. Does it provide recourse in the case of violation? Yes.
And really, also considered against the alternatives there is no better deal out there. We have heard about the need for any time-anywhere inspections. Those aren't necessary. The International Atomic Energy Agency can do its job with the flexibility granted to it under the additional protocol.
We have heard that more pressure would perhaps induce Iran to make greater concessions. I think a deal like this deal that allows Iran to say it met its strategic objectives of retaining a limited civilian nuclear program and receiving sanctions relief gives Iran greater buy-in to the agreement. It makes the deal more sustainable because Iran sees incentives to comply. So I think this idea that more concessions were necessary would not produce necessarily a stronger deal.
Also again, I think it's important that when evaluating this deal we don't miss the forest for the trees. All of these elements need to be viewed together. If we look too closely at any one particular detail, we may miss the symbiotic relationship between the entirety of the package.
And ultimately this deal removes the threat of an Iranian nuclear weapon. It's good for U.S. security, it's good for regional security, and I think it deserves the support of policymakers here in Washington.
KIMBALL: All right, thank you very much, Kelsey, for that overview and the details on some of the new elements. And you mentioned sanctions. We are going to turn to that issue now and how that relates to this agreement from Richard Nephew.
Richard, thanks for being here.
NEPHEW: Thanks for having me, and thanks, everybody, for being here today.
I was just going to touch on three points to deal with the sanction-related issue. First, I wanted to touch on the contents of the relief and the timeline and sequence of how it would all be rolled out.
Second, I want to touch on what's left because I think while there is a sense out there that this means the entire U.S. or international sanctions regime has been taken away, that's simply not true. Some of the sanctions that remain in place frankly are going to continue to hamper Iran's ability to even take advantage of some of the relief, which may be in itself a future problem.
And last, I want to touch on the impact of sanctions relief and how the Iranian economy, how the Iranian population and how the Iranian security apparatus may use the benefits of sanctions relief.
So first off, I can say in terms of the contents, I actually have a much easier job than Kelsey because the sanctions relief package is fairly straightforward and it's fairly direct and it's fairly broad. The decision was made very clearly by the negotiating partners to make this an issue of the nuclear problem and how to get resolution of the nuclear problem by incentivizing rapid Iranian action.
So the timeline that's been established for implementation of relief was configured as such. The Iranians have to complete all of the nuclear modifications that Kelsey was outlining, with a few things that, just by their very nature, are going to have to continue on for eight, 10 years, in some instances going on for 25 before any new sanctions relief will be given.
So all this talk about signing bonuses and billions of dollars flooding into Iran before a single centrifuge has been dismantled is all false. The way the relief is structured at this point and the way that the deal puts it in place, the Iranians are not going to see anything beyond the joint plan of action's continuing relief until they have done their part. Period.
Now, when they have done their part, the relief that they are going to get is going to be substantial, and in the judgment of myself, and I think of the administration, it was worthwhile in order to get the kinds of nuclear concessions that Kelsey has laid out.
So what's in play? Well, first off, all of the U.S. sanctions that are going to be discussed here are secondary in nature. They do not include the U.S. primary embargo, which is off the table, with the exception of a few very specific license things.
What the U.S. has offered to do is to provide relief from the sanctions that it imposes on foreign companies' interactions with Iran. So if you are BP, if you are Totol (ph), if you are any number of other companies that reside out there in the world, you are now going to be able to do business with Iran after the Iranians have done the nuclear steps that they are supposed to do.
And it's going to be across a wide range of sectors. The energy sector, both in terms of the sale and purchase of products, investment, financial services, financial transactions, insurance, transportation. There's going to be a wide range of economic activity that the Iranians are going to be able to do. Again, with foreign companies and foreign actors, subject to their own laws.
Now this will not take place until after these nuclear steps have been taken, which is going to take a long time as well. The way that the timeline has been set up, we are now in a period that you could loosely call phase 1, but leading up to adoption day. And it's in this 90-day period in which every single country that's part of the P5+1 has to go to its national legislatures or any other legal procedures that they have and to get buy-in for the deal.
Upon the expiration of this 90-day clock, or sooner if the parties agree, and frankly I don't think that's possible, given our own 60-day clock here in the United States, then the Iranians will start to take their steps. And this will include removal of centrifuges, modification of the Iraq (ph) reactor, as well as a variety of other nuclear things that Kelsey was describing.
For the United States, European Union, there is a requirement to have in place the waivers and legal modifications to sanctions that will start upon IAEA verification that the Iranians have done what they were supposed to do. So there will be promulgation of new regulations and new executive orders and waivers and things along those lines, but they are all going to be tied to a trigger, and that trigger is a report by the IAEA director general that the things that the Iranians are supposed to do have in fact been done.
There are a variety of estimates out there as to how long this could potentially take. My own estimate, we can talk about this as we get into questions, is that it would be easily four to six months before the Iranians would be able to have achieved primarily the removal of centrifuges. It's theoretically possible that can go faster, but I wouldn't bet on that. I think four to six months is a pretty good timeline.
So if you add 90 days plus four to six months, we are really talking about April, maybe March, when the Iranians are actually going to be able to achieve sanctions relief, and when they are going to start to see new business start to flow.
That's very important because that basically means that for the time being the Iranians are highly incentivized to do all the things they are supposed to do, and we are going to see the Iranians take all the steps that they were required to do in order to see a dollar of the additional relief they're supposed to get.
Back during the joint plan of action I remember vividly there was a lot of suggestion that the Iranians were somehow going to stop implementing their obligations before the deal becomes implemented. I think, frankly, that the scope and scale of this relief suggests that that would not in fact be the case here.
There is then basically a hiatus in terms of additional sanctions relief for eight years or the IAEA's reaching a broader conclusion of the nature of Iran's nuclear program, whichever one comes first. And during this time relief will continue to exist, the Iranians will be able to take advantage of it, but they are also going to be under restrictions.
And Kelsey described some of these, but one of the most important ones that I want to touch on is the procurement channel and how it relates to the sanctions that still remain. Under this eight-year time period, the Iranians are going to have to go to the procurement channel established under the joint commission to ask for any nuclear-related items, and that's because the nuclear-related Security Council restrictions are going to remain in place.
And they are going to remain in place and require Iran to describe what it intends to do with these items and to submit itself to end-use verification checks and a variety of other different checks to ensure that they are actually going where they are supposed to be going. So in this instance it's both a restriction on the Iranians as well as a still being utilized part of the sanctions regime that will be in place.
The procurement channel itself will extend another two years beyond this adoption -- beyond this eight-year period until the U.N. Security Council's requirements themselves are canceled in 10 years' time.
There will be after this eight-year period, though, modification to other parts of the Security Council infrastructure and other legal instruments, including the United States and the E.U. These primarily deal with proliferation-related items and potential sources of concern.
It's notable, though, that if you look at the text, what's put in is not Iran will get to import whatever it wants to import from anyone it wants to import. Rather, certainly from the U.S. perspective, Iran will from that point forward be treated like anybody else, which means it will still be subject to export controls and still potentially subject to U.S. sanctions if we were to find that there were things going on there that we had concerns about.
That's basically it in terms of the sanctions lift timing. The Iranians don't get anything until after they have implemented their nuclear obligations. That will take between four to six months after this 90-day period, so around April of 2016, and then nothing really again for a number of years thereafter.
The question, therefore, becomes, what's left? Well, as I said, there are a number of very specific restrictions that remain in place with regard to Iran's ability to acquire nuclear-related items, plus missile-related technology, so on and so forth. But that's not the limit of it.
U.S. sanctions with respect to terrorism and human rights will remain in place. The U.S. primary embargo will remain in place, with the exception of some very specific licensable transactions involving, for instance, the sale of commercial planes.
However, even in that provision it's very clearly stated that they have to be used for civil uses. So if the United States were to find all of a sudden that a brand-new Boeing that arrived in Tehran was now funneling arms into Assad, assuming we're talking about Assad still in power many years from now, then that would be cause to terminate the licensing. That's clearly stated in the text.
And this also means, therefore, that the Iranians are going to have to be on their best behavior with respect to these planes because they are quite obvious. And as we've discovered, the United States has the ability to detect what kinds of planes are being used for what kinds of purposes and then to identify them back to the international community.
The Iranians are also going to have to deal with the continued sanction. They have a number of people that could be loosely described as bad guys, including the Iran Revolutionary Guard Corps, which is going to remain under U.S. sanctions, the Quds force, which remains under sanctions, Kassim Suleimani, who will remain under sanctions.
And there has been a lot of talk about this so I will just take a brief moment to describe it, about what is contained in the actual deal. Kassim Suleimani will in fact will be de-listed by the U.N. and by the E.U., and that's because he was designated for nuclear-related reasons by both of those institutions.
In the United States, on the other hand, he was designated for terrorism, and in the United States' system that means he stays in place as a sanctioned inpidual until such time as he stops engaging in things we consider to be terrorism. I don't really think that's a likely event.
This is also important because the United States is not removing infrastructure it uses to make these residual sanctions impactful. And that includes the very important tool of CISADA, the Comprehensive Iran Sanctions Accountability Pestment Act, section 104. It's in this provision that the United States has exerted a lot of pressure on the international financial system with respect to designated entities.
Basically, when you boil it right down to it, the law provides for the United States to sanction those who conduct transactions on behalf of U.S.-designated people. Now the list of U.S.-designated people, inpiduals and entities, is going to go down when the nuclear-related targets are removed, but it will not go away, particularly for these terrorism, human rights and other related targets.
So the Iranians are still going to be under the pressure of having to face financial sector cutoff for all those entities and inpiduals who remain on the list, which means that institutions like Bank Saderat, which is a U.S.-designated bank for terrorism-related purposes, are going to remain and the financial impact on that bank is going to remain as well.
By the way, this means that any additional targets the U.S. identifies as being involved in terrorism or human rights-related violations also are potentially subject to the same sort of cutoff.
So the Iranians still are going to have to worry about what could potentially happen to their financial sector if in fact they amp up and start using the banks that we are even de-listing now for different purposes.
I think it's important at this juncture to note that the sanctions relief will not be this end-all and be-all restoration and renaissance for Iran. It's going to do a lot. But the very point that some sanctions remain, and the fact that there is going to be reputational and business risk attached to doing business in Iran means that the sanctions relief is going to take a long time to mature.
Now, from one perspective this is really good because that means that for those of us who are concerned about Iran's ability to do awful things in the region, and Ilan will speak to that, it means that there is a way of pacing and controlling and modifying Iranian behavior because if we continue to identify inpiduals and entities as involved in terrorism then the Iranians are going to have to deal with the consequences of that.
This is not U.S. unilateral sanctions disarmament. Period. This is a step to provide Iran palpable, useful relief, but they are going to be under the same threat with respect to these institutions that they were yesterday, the day before that, 10 years -- at this point five years ago once CISADA came into -- first into effect.
When you add that to the fact that a lot of businesses are going to be concerned about the possibility of snapback, I think you can see that there is going to take a long time for there to be a resurgence in a lot of really long-term trade with Iran. My own expectation is that the Iranians are going to see a lot of short-term business deals, purchases of their oil, things that people can do and then get out of Iran at they need to for the initial couple of years.
This is simple prudence on the part of international businesses. It doesn't make a whole lot of sense to do multibillion dollars worth of investment in the country when you have the risk of either snapback, noncompliance finding or some other concern that could get you in hot water, both in Washington as well as with your stockholders.
There may be some businesses that are willing to do this, but I would bet that they're going to build force majeure clauses into their contracts to allow them to get out of Iran very, very quickly, if in fact there were to be a reverse in the sanctions.
So the business operating environment in Iran will be different than it will be in other countries in the Middle East. And this would frankly be, notwithstanding the presence of sanctions, because Iran is still a difficult place to do business itself. The bureaucratic red tape in Tehran is as cumbersome and difficult to deal with as anywhere else in the world, and it's notable the number of international oil companies have said that they don't find the current contracts that the Iranians are starting to beat about with respect to oil services is all that attractive. They are looking for better terms.
This speaks to the fact that it's going to take time for the Iranians to get through their own bureaucratic process and overcome resistance and nervousness on the part of companies to really plunge back in.
But Iran is going to get a benefit, and the real threat to, I think, the longevity of a deal is that this benefit is too slow in coming on, and there is, I think, a very significant risk that the Iranians at some point say, we are not getting what we need. And it's at that point that you could see them say, we need to reconsider the terms of this deal.
So I think basically the sanctions relief picture in Iran is favorable to the P5+1, it's favorable to the United States. It will provide Iran some advantages, but it is not something that is going to overnight change the Iranian economy. That's going to take time, and there are ways to control it still further. Thank you.
KIMBALL: Thanks a lot, Richard. That was very helpful.
Now we are going to turn to Ilan Goldenberg, who is going to talk about the regional security dynamics related to this agreement.
GOLDENBERG: Thank you, Daryl, and thanks, everybody, for being here and for the Arms Control Association for having me.
I thought what I'd do is talk about the three major actors in the region who are reacting to this agreement and what's going to happen there, the first being Iran, the second being Saudi Arabia and the Gulf states around it, and the third being Israel.
Now I should start from the position that because of the nonproliferation benefits of the agreement, I very much agree with my colleagues up here that this is something that is in the national interest of the United States and that we need to be pursuing. But the regional ramifications are going to, I think, be much more complicated and mixed and there is going to be some negative downsides we are also going to have to manage, especially with some of our traditional partners over the next few years.
That doesn't mean we should be letting the tail wag the dog and not doing something that is in America's fundamental national security interests, but this is something that we are going to have to deal with.
So starting with how we expect the deal to shake out in Iran over the next few years. You sort of hear these two schools of thoughts and theories. One is, President Rouhani, Foreign Minister Zarif, these are the pragmatists inside the Iranian system. They are not democrats. They are men of the revolution.
I don't think they're looking for liberalism Western-style to break out tomorrow in Tehran, but they are more pragmatic when they weigh sort of the economic benefits and the benefits of international engagement versus support for terrorism and things like the nuclear program, and are more interested in those first set of interests for Iran.
Are they going to gain more influence and then be able to reflect into a more pragmatic Iranian foreign policy? And there's a real strong case to be made that's the case. Rouhani was elected based on the fact -- and allowed to come to power also by the supreme leader based on the fact that he would get the sanctions relief, that he would get this nuclear agreement. He's going to have tremendous credibility now and leverage.
We have parliamentary elections in Iran next March. It will be an interesting time in terms of the sanctions relief calendar that Richard just laid out, and to see if, you know, the pragmatic faction can pick up more seats inside the Iranian system. And we are going to have to see -- I do think that Rouhani and Zarif now could potentially have more influence in other areas of Iranian foreign policy where they haven't had as much effect.
On the other hand, you could also make the argument that the hardliners are going to double down, that they're going to want to batten down the hatches, they are not going to want to see this deal lead to more liberalization inside of Iran. They're going to take a harder line, they're going to use some of that money that comes in to increase their support for some of their activities in Syria and Iraq in Yemen and elsewhere in the region. That's going to happen too.
I would argue that the most likely scenario is both of these things are going to happen at the same time, and what you're going to end up with in Iran very likely for the next few years is a very intense political competition amongst the various factions around the supreme leader, who ultimately Ali Khamenei makes the final decisions.
Now Khamenei is someone who leans toward the hard-liner perspective, very skeptical the United States, has not left Iran in years. But he's also somebody who rules by consensus, so if all of his people come to him and all the key factions come to him and say, boss, this is what we should do, he usually goes in that direction.
I don't see him pursuing a major rapprochement with the United States in the years ahead, but he is going to pass from the scene at some point, I think before the expiration of this deal, given his health and his age, and at that moment we're really going to see, OK, what has this agreement and what has the aftermath in terms of political debate inside of Iran done? Who is his successor? What kind of system comes after him?
We haven't had a transition of power in Iran since 1989. It's been a long time. So this is going to be a major moment to indicate if we are going to see a fundamental shifting in Iran's foreign policy. Whether that fundamental shift happens or not, the deal is still implementable, the agreement still happens, but this is a potential huge benefit that we are going to have to watch over the next few years.
The second challenge is Israel. What happens there? Now obviously the Israelis are close partners of ours, and I spent years at the Pentagon working on Iran where one of our primary interests was in dealing with Israel and reassuring Israel and talking to them about the nuclear program, especially the time where speculation was much more rife that they might consider taking things into their own hands.
What I found from those exchanges was a couple of things. One, the Israelis, it's a small country surrounded by a lot of unfriendly neighbors in a very tough part of the world, and the approach that they take is they assume the absolute worst-case scenarios. I sort of like the joke that, you know, as American foreign policy makers we do our contingency planning based on worst-case scenarios and our policy based on most likely scenarios, whereas the Israelis do their contingency planning based on worst-case scenarios and their policy based on worst-case scenarios.
So this is where you get this difference in perception that has led to, I think, the break that we have got here with Israel. It's unfortunate that we've had this break, and I think part of it is personal between President Obama and Prime Minister Netanyahu and their personal styles, and part of this is this problem that we've had historically with Israel in differing risk perceptions, you know.
I think that going forward -- well, one thing I'll say, one of the unfortunate side effects of it has been that I always found engaging with the Israelis was incredibly useful when you were doing things like negotiating with Iran because they would come in with a group of very smart people who spent all their time working on this, and they would give you all the worst-case scenarios.
They would red-team it for you in some ways really effectively, and sometimes you could say, well, I don't really believe that that's credible, we don't believe that scenario is credible. But sometimes you could say, well, actually that's something we haven't thought about. Then it helps improve American policy. I think it's unfortunate we've had this split and pide, which has I think limited that over the next few months.
What happens next there? The Prime Minister has made very clear that he is going to oppose this agreement and try to undermine it in Congress. I think that is a big mistake because I think at the end of the day I don't think it's very likely that he will succeed, and what he's doing by doing that is really -- he's taking a bipartisan issue and turning it into -- support for Israel into a wedge issue inside the U.S. Congress, which I think is very damaging for Israel's long-term interests.
And I think there's a lot of people -- the political establishment in Israel is absolutely against the agreement because Prime Minister Netanyahu has set the conditions where it's impossible to be for the agreement. Even his political critics will say, I don't like your approach to how you're dealing with the Americans but I hate this deal.
The security establishment is different. They are much more subtle about it. I think because they also take that lower risk perception, they are ultimately uncomfortable with some elements of the agreement, but at the end of agree they don't see it as this existential threat that the prime minister does.
And what we are likely to see there -- what they do also are very concerned about is the way the prime minister has decided to handle himself, which is a very public confrontation with the president, going directly into the American media, going directly to Congress on this and trying to circumvent the executive branch.
That's something that I think causes a lot of anxiety for Israelis because Iran might, in many of their views, be an existential threat but fraying of the U.S.-Israel relationship is a more existential threat and has more importance to Israel's long-term security for many of them.
So I think that the big question is what happens after the 60 days, what happens after the congressional vote. Do the Israelis finally say, does the prime minister, which he is being encouraged by many to do, finally say, OK, I'm going to take my disagreements quiet and we are going to go back and start quietly engaging with the administration and seeing if the United States can find ways to fill this security gap that we now feel and these insecurities to American reassurances, which is what we have traditionally done? Or has he decided to write off this president and spend the next year and a half publicly confronting him?
I would really hope that he chooses the former and not the latter, and I know that there's a lot of people in the security establishment in Israel that would hope to see that too, but we're going to have to wait and see. And the president has already reached out. President Obama reached out to Prime Minister Netanyahu in April and tried to bring him back into the fold and say, let's take our conversations quietly, back to those back channels that we often consult in those closed rooms, as opposed to this public spat.
And he was rejected at the time, and I believe he tried to do that again earlier this week and was rejected, but let's see if the prime minister's view changes in September. We'll have to wait and see about that.
Finally, there is the third element here, which is Saudi Arabia and the Gulf states. They view things, I think, very differently than the Israelis. They have some overlap, but some differences too. Whereas Israel really is focused on the nuclear program, it also cares about Iran's regional behavior. Saudi Arabia really is focused on the regional question. They care about Iran's support for terrorism. They view what is happening right now in the region as Iran picking up influence in Syria and Iraq and Yemen and elsewhere, and that's their major anxiety.
People speculate that Saudi Arabia will respond to this by starting to build out its own nuclear infrastructure. I don't actually believe that's the problem. I think that's very unlikely. That's expensive, that takes time, there are costs that come to them in terms of international reactions, in terms of their relationship with the United States.
I think the real concern is that they are feeling -- they have this concern that the United States is pivoting to Iran and rearranging the alliance dynamics in the Middle East, which I don't think the Obama administration's intending to do, and certainly not what I would recommend to them. We still have a lot of things where we disagree with the Iranians.
Feeling that concern, the Saudis start to lash out in some destabilizing ways and take steps that we think are against our interests and against their interests in the region, and I think the best example of that might be what they have done in Yemen recently with this intervention without really a clear strategic plan about what happens after you start bombing the Houthis and pretty much putting a blockade on Yemen with really no endgame in sight.
So that's, I think, the more fundamental question for the Saudis, and one that, you know, the United States is going to have to wrestle with, both this president and the next. Because the reality is it's going to be hard for this president to do -- any president who is the one who cuts the deal with Iran, which I think we need it to do, is going to take a big hit in the Gulf and in Israel, as President Obama has done. In some ways it's almost the next president who has to come in and start to really do the big hug with some of our partners.
So what do we do going forward to try to address these challenges? I would argue there's three or four things that we need to do.
First, take advantage of the fact that we actually have this channel of communications with the Iranians for the first time in 35 years. That is meaningful and important, the fact that Kerry and Zarif have each other's email addresses and phone numbers, there is a channel. I can't tell you how many times when, you know, we wanted to, we were at the Pentagon, find ways to communicate to the Iranians, whether it was, hey, let's avoid a conflict here, or, knock it off, you are about to do something that you're going to regret if you go in that direction.
So having those channels I think it's very important. Talking is always better than not talking, and seeing if there are ways to start working together on some discrete issues. I think our interests in Afghanistan, maritime security and avoiding potential escalation in the Gulf, or inadvertent escalation in the Gulf are two interesting areas for early pursuit. There's other things, more people-to-people and things like that.
But even as we do that, especially as the sanctions are coming off, it makes sense to push back more forcefully on some of Iran's destabilizing activities in the region through joint efforts with our partners. Showing up in Saudi Arabia, for example, with a high-level delegation maybe led by Ash Carter and John Brennan, and saying, we are here to talk not about the nuclear program and not about how we deal with ISIS and Sunni extremists. We are here to have a serious and strategic conversation with you about how we are going to deal with Iran in the region. Let's talk about steps we can take together -- joint covert action, more aggressive interdictions, more -- potentially more serious efforts to train Sunni opposition in Syria and in Iraq, sort of partners we can work with in both those countries, things like that that will signal to our partners that we mean it when we say we are going to push back on this behavior that we don't find acceptable in Iran.
And also important signals to the Iranians that, you know, the nuclear deal doesn't give you free range over the region to pursue all these activities. We are going to push back. And one thing I will tell you is, when the United States pushes back against Iran, Iran backs off. Iran has no interest in a direct fight with the United States, and sometimes you do need to, you know, flex your muscles to show some deterrence. So I think that's another key thing that we have to be doing.
And the third element obviously needs to be just reassurance of other forms beyond those two, which for our partners I don't think we need to be selling the Saudis F-35s. I don't see -- they already outspend the Iranians dramatically. It's not about big weaponry, it's about the small stuff, but it's about training them to actually counter some of this low and asymmetric warfare.
But you know, security assurances, to some extent, there's things like that we can be doing with our partners in a set of activities, also with the Israelis, that can signal to them that we're sticking around, that this isn't a fundamental strategic pivot, that we're going to push back, even as we engage.
And we can do both. Just, you know, I'd say, I'll just close by saying that, you know, it's a very complicated balancing act to pull something like that off. It sends some mixed messages. But this has worked on Iran's nuclear program.
We just spent the last five, 10 years using a combination of pressure and engagement to get the Iranians to the table. And one on its own wouldn't have worked. And take that basic philosophy and apply it to the problems we face with Iran and the Middle East and the problems we face with our partners, and I think you can get there with this combination of tools.
So I'll stop there and hand it back now.
KIMBALL: All right. Well, thank you very much, Ilan.
As I said at the beginning, this agreement, this process is complex, it's consequential, and I think we've given you quite a bit to contemplate. It's now your turn to ask us a few questions that we're going to try to answer.
And I want to start out with some of the journalists that are here.
And Virginia, there's a question up here in front, if you'd bring the mike up.
And just identify yourself and tell us who you would like to answer the question. Thanks.
QUESTION: Yeah. Michael Gordon, New York Times. I have a question on the sequencing of sanctions relief, just a technical question, but just to clarify it in this 150-plus-page document.
The broad conclusion to be issued by the IAEA is obviously not going to come for a period of years. But Director General Amano on the day the agreement was promulgated presented a road map that's to lead to an assessment by December 15th. And he articulated a number of steps that are to be taken.
As you understand the agreement, what sanctions relief can be provided prior to this December 15th assessment of where Iran stands on possible military dimensions? And what sanctions relief can only be provided after this assessment is completed and if it's a favorable resolution?
NEPHEW: So that's a great question. And it's especially complicated because we've now got two processes that are working simultaneous here.
I would say very simply I don't see any sanctions relief happening before PMD has been laid to rest. That's in part because the obligation on Iran is somewhat different than the obligation that technology IAEA has taken unto itself. Right?
The timing of the obligation that the IAEA has accepted is that it gets Iran's compliance, Iran's cooperation by the 15th of October. Right?
Well, based upon the structure of the implementation phase of the deal, there is zero chance that any sanctions relief can happen before that cooperation has been given. Right?
It's written into the document as an obligation of the Iranians to have done this by adoption day. And so as a consequence of that, if they didn't provide the cooperation, the United States and the P5+1 partners would be in a position to say, well, you're not fulfilling the terms of the deal, and so they could walk away from the deal altogether, you could theoretically go the dispute resolution process, so on and so forth.
Bottom line is, because of when Iran has to take its steps, right, I don't think that there's any chance that any additional relief could be given.
Now, there is potentially a theoretical world in which adoption has taken place, the Iranians speed through implementation, right, and the director general has not issued his report by the 15th of December. I can see that as a theoretical possibility.
I think that is highly unlikely, I'd put it almost at impossible because of how long it would take them to do things like removing centrifuges. But that is something that theoretically could happen.
This then goes to the question of, what are you going to get out of that report from the director general, right? There are only two conclusions that could potentially come out of the report: Iran had a weapons program, Iran didn't have a weapons program. And either circumstance, we think we already know the answer to the first, right, and we think it's the first, and so there's nothing really that's going to change the timing of relief and the timing of what goes forward because we already know the answer to it and the access and transparency to verify, it's not ongoing, will have already begun.
So I don't see in reading the documents that there is an explicit bit of sanctions tied to the explicit bit of PMD. But I think the way the sequence works and what the requirements are on each part of this means that there won't be any relief until Iran's done its part and then the report itself will kind of be icing on the cake, to some extent.
KIMBALL: Well, let me just ask you, Richard and Kelsey, to clarify one aspect of this, which is when we say Iran does its part with respect to the IAEA investigation, that means what?
As I understand it and I'm reading it, that means the Iranians need to provide the cooperation, the information, the access that the IAEA believes is necessary for it to close out its investigation, right? But not necessarily the time it would take for the agency, which can take a long time to draw conclusions from that information.
Is that correct? Or what is your -- am I wrong on this?
DAVENPORT: Well, according to the road map, Iran has to provide the International Atomic Energy Agency with the information access to answer all of the concerns that the agency laid out in the annex to its November 2011 report. And it needs to provide that information by August 15th.
Then the IAEA will evaluate that information. And by September 15th, if they want to ask Iran any follow-up questions, then that information can then be -- then Iran has some time to follow up with that information.
And ideally, this process is all concluded by October 15th.
Then by December 15th, IAEA has said it will issue its assessment about the sort of the full system of Iran's past PMD work. So that's according to the separate road map that the IAEA and Iran agreed upon and announced the same day as the deal, which was Tuesday.
KIMBALL: OK, thanks for the clarification.
All right. Other journalists who have questions?
Yes, ma'am? Thank you.
QUESTION: Hi. Jessica Schulberg, Huffington Post. This is mostly for Richard.
Is there any concern about kind of a contradiction or contradictory message that could be sent if Congress imposes new sanctions kind of immediately after the deal?
There were some efforts before the deal was reached to extend the 1996 Iran Sanctions Act for 10 years and I saw that part of that was addressed in the nuclear agreement. What kind of message would it send to extend sanctions under the guise of it being related to terrorism or human rights in the region?
NEPHEW: So I would definitely say there is always a risk of mixed messages here. And I think that there is a risk that acting, to some degree, precipitously with respect to imposing new sanctions is a real problem.
That said, I mean, let's be clear, the Iranians are not agreeing anywhere in this that they won't engage in things that look like to us terrorism or violations of Iranian human rights or other actions that we've got problems with. So they aren't changing their fundamental behaviors either.
What I think will have to happen, frankly, is navigating the tension between the Iranians doing bad acts in the region, but not pursuing nuclear-related bad acts that give us cause to walk away from the deal, us addressing Iranian bad acts, including through the use of sanctions, but not doing so to such a degree that the Iranians say, well, forget it, we're going to go get our nuclear weapons program back, you know, in effect because we think that the deal is coming unhinged through the back door.
And I think the text, it's interesting, tries to deal with this a couple of different ways. That the parties agree not to do things that are at variance with the purposes of the JCPOA, that the parties agree not to try and back-door things through regulations that were lifted as part of the deal.
So I think there's a tension here. I think it would be better to let the deal implement itself and get started before anybody on any side starts trying to rock the boat.
But ultimately, the true test really of the deal will be, can we keep it going, can we keep this arms control arrangement and this nonproliferation arrangement together, notwithstanding the fact that we've got all these other problems.
We were able to do so with the Soviet Union, we've been able to do so with the NPT if you think about it in a broader sense, so I think we can do that here. But I think we all have to be careful about what we do.
KIMBALL: All right. Other questions, please?
Why don't we go over here on this side, this gentleman, and then Nancy?
QUESTION: Hi. Adam Basiano (ph) with Senate Foreign Relations, minority side. This question is mostly for you, Kelsey.
Like you said, this is not a perfect deal, but I'm wondering, are there significant loopholes in the monitoring regime, in your opinion, maybe specifically with regards to secret facilities or past, undeclared nuclear efforts? Or are there no significant loopholes? Thank you.
DAVENPORT: I don't see any significant loopholes in terms of the monitoring and verification and that's in part because of the flexibility granted to the International Atomic Energy Agency under the additional protocol.
And also, I think it's important to remember that with this accelerated time line of the PMD investigation, the agency can still use the information gathered to inform its future decisions about what it monitors, what it looks for and where it goes.
Because when you consider sort of the entirety of Iran's nuclear program, with the expanded declaration under the additional protocol, the IAEA will now have much more regular access to every element of Iran's nuclear program that have far expanded from what it has access to now.
That includes the mines and the mills, the centrifuge production sites, the heavy water production plants for the Iraq reactor, all areas that the IAEA has had very little access to in the past.
There also is an element that will be put in place called modified Code 3.1 to the IAEA safeguards agreement and that ensures early notification for the IAEA of design changes to nuclear facilities or if Iran decides to build any new nuclear facilities.
So when you consider early notification, when you consider the expanded declaration and short notice access to all of the facilities in the expanded declaration, when you consider the flexibility that will allow the IAEA inspectors to access sites if concerns arise within 24 days, and then you layer on top of that the continuous monitoring, the use of these advanced technologies to check enrichment levels on a regular basis, to, you know, use radio seals, and then you add on top of that U.S. intelligence, the intelligence of other countries, including Israel, I think you have a system that is so layered that even if no one element is a 100 percent guarantee, an alarm bell will trip at some point because Iran would need to recreate the entirety of its process in order to covertly pursue nuclear weapons.
So I really think that this regime is as strong as it needs to be to provide sort of the highest guarantee that there will be no illicit activities, or if there are that they will be detected very quickly.
And then the U.S., the international community will have the time to respond.
KIMBALL: That is a very good explanation. It’s a reminder of one of the fundamentals of monitoring and verification that I think people lose track of. There's no such thing as 100 percent certainty of compliance with an agreement.
And one of the major purposes is to increase our confidence into the high 90s that we can detect militarily significant, non-compliant activity.
And so what does that mean for the cheater? It means the potential cheater is looking at a high 90 percent chance that they're going to get caught and that means that they've got to weigh the benefits and the costs.
And so in that sense, it can serve as a deterrent, especially when you factor in what the losses are.
So you know, there are going to be critics who are going to say, you know, this could be better here, that could be better there and those may be valid criticisms. But as a whole, as Kelsey said, the system needs to be considered as a whole and we need to consider what monitoring and verification is designed to do. It's not 100 percent certainty, but it is getting into the high, high 90s that we can catch major violations.
DAVENPORT: I would just add, too, before this deal was reached, before the interim deal was reached, James Clapper, the director of national intelligence, said with high confidence that the United States would be able to detect any Iranian attempt to pert material for a nuclear weapon before they were able to accumulate enough material for one bomb. So that is before all of these additional measures that are being put in place.
So I think that really does speak to how much the U.S. could do in the past, and when you add all of these other elements on top of that it provides an even stronger guarantee.
KIMBALL: All right. We had another question up front here.
Just wait for the microphone please, Nancy. Thank you.
QUESTION: Hi, Nancy Gallagher from the University of Maryland.
One of the issues that became a public controversy in the end game during the negotiations was what was going to happen with the U.N. sanctions on ballistic missiles and conventional arms. And some people have, in effect, said, oh, Iran tried to reopen something that had been settled at the very last minute. You know, other people have said, no, this was an open question all along that wasn't settled.
Given that the Luzan framework itself was never made public, but both sides, in effect, said different things about what was in it and they had agreed not to say anything that was inconsistent with what they had actually agreed, what I would like to know was, was there actually an agreement on that issue reached as part of the Luzan framework that the Iranians tried to reopen? Or was that one of the things that was genuinely an open question at the time?
KIMBALL: Richard, you want to take a whack at that? And folks should also read that newspaper, The New York Times, where there was an interesting account that speaks to that issue just this morning.
NEPHEW: Yeah. I mean, I guess my sense would be, I mean, frankly, you'd have to talk to the negotiators themselves. You know, I haven't been in the room since December, so I don't know to what degree it was agreed in Luzan.
I do think that there probably was a notional or provisional agreement on this point. I think the way that it erupted as a problem, particularly with the Russians coming in as hard on it (ph) as they did in support of the Iranian position, it struck me as being something that was being reopened. Or if it wasn't already closed, it was pretty closed, people were pretty confident that it was going to be closed and then it came back open.
But that said, the fundamental principle of this negotiation was always that nothing's agreed until everything's agreed. And so I am quite sure that the way the Iranians probably both described it to themselves and described it to the Americans, if in fact it is true that they tried to reopen something, is that no, other parts of the deal necessitated us coming back on this point.
And so in the end, I -- well, it's certainly interesting to know the back-and-forth. You know, I kind of look at the end result. And keeping a five-year conventional arms embargo in place against Iran when it was only adopted by the U.N. because of the nuclear-related issue I think is pretty good, especially when you have the complementary U.S. sanctions that will permit us to impose some pressure on people providing those systems to Iran going forward until whenever.
KIMBALL: All right. Well, we have a lot of questions.
All right, let's go here on the left, this gentleman. Go ahead, Steve.
QUESTION: I'm Steve Colecchi with the U.S. Conference of Catholic Bishops.
I have a question, but I'd like to just make a brief comment first. I think one of the things we have that's going to be in the discourse is hope versus fear, right? Hope versus fear. And as a person of faith, of course I'd like to speak for hope a little bit.
I think we should not underestimate what implementation, painstaking implementation of this agreement will do to transform international relationships, particularly the U.S.-Iranian relationship long term, to build trust through verification, not just through good feeling.
But my question is this. We keep talking about the date by which Iran could rush to enough material for a bomb, and that's one year. And it seems to me like the assumption that then in a year they could have a bomb and threaten their neighbor. Well, they have to test it, they have to deploy it.
QUESTION: Presumably, you'd want to have more than one bomb if you're going to become a nuclear power, I mean, because after you use the first one then you're kind of out of luck, you know?
So what is the realistic -- I mean, it seems to me we have a great deal of time even after that material is acquired before this becomes a genuine threat to the U.S. or anyone else.
KIMBALL: Well, the reason why the one-year breakout time line has been used as a measuring stick for the success of this, one of the reasons, is that once a country has enough fissile material for one bomb, it's very difficult to keep track of what they're doing with it.
But you're exactly right. Possessing one bomb’s worth of highly enriched uranium does not a nuclear arsenal make and there are many other steps that have to be taken. It has to be fashioned into a workable device. The country probably would want to test it to make sure it works, although there are some designs that don't have to be tested. And it also has to be mated with a delivery vehicle, a delivery system. So there's more time that would be necessary.
And of course, one nuclear weapon doesn't do too much good as a strategic weapon, maybe as a terror weapon.
But what's clear is this agreement does block all the pathways to acquiring even that much material so that Iran can't do it in any less than one year. And we didn't mention the plutonium route in the beginning, but the plutonium path to the bomb is, for all intents and purposes, completely blocked because the Arak reactor is going to be modified with some Chinese assistance so that it can't be producing a sufficient amount of plutonium in the spent fuel.
So, this is very strong in terms of preventing Iran from even amassing even that much of material.
All right. We have a lot of questions here. I’m going to try to get to a few of you but we're not going to get to all of you.
If you could, Virginia, the gentleman on your side near the middle row. Thank you. Yes.
QUESTION: Jose Chaboz (ph) from (INAUDIBLE) University.
My question is to Mr. Nephew. You know, one of several red lines of Iranians have been or their main concerns have been the sanctions, the (INAUDIBLE) sanctions as well as the sanctions against the central bank. Of course, as I recall, also there is European initiated and then followed by the American.
But in your view, what would happen to those entities, especially you spoke of the (INAUDIBLE) bank, but mostly the central bank, which is the monitor of all of the local banks in Iran, how that would be worked out.
And the second question, if I may...
KIMBALL: Very quickly, please.
QUESTION: OK. Mr. Goldenberg, if that what do you make of the comments that the president made yesterday about, you know, areas of Syria as perhaps an example of, you know, of the area that, you know, he mentioned that, you know, could be considered by Iran and the United States? What do you make of that comment?
KIMBALL: All right. So Richard and then Ilan.
NEPHEW: So, I mean, the terms of the deal basically remove the sanctions that are the most pressing on the central bank of Iran and permit Iran, generally speaking, have access to the swift system with respect to institutions that were previously designated.
So this will permit the Iranians to have broader financial ties internationally as well as to access central bank of Iran money that is located in bank accounts around the world, again, when the IAEA has verified Iran's done its nuclear bit.
GOLDENBERG: On the question of Syria, I would just say that I would argue that probably Syria is not where we want to start in terms of cooperation with the Iranians. It's probably the area where we have the most tension. If you're trying to sort of overcome 35 years of this taboo of not talking to each other, this seems to be an area where our interests are still pretty fundamentally opposed unless there's a recalculation on Iran's part that it wants to move to a political solution where Assad -- where they accept the transition away from Assad.
At the same time, I also think if we were to go tomorrow to the Iranians and say let's talk about Syria, it would just reinforce in the Saudis' in the rest of the region's mind all the worst-case assumptions about our plan to sell out Arab interests and just cut a deal with Iran.
So I would argue that probably it makes sense to start on issues that are less raw and also to think about if we're going to first spend some time pushing back in Syria and building up American leverage and investment and then coming to the negotiating table.
At the end of the day, there's only, you know, civil wars only end three ways: one, an outside power comes in and sits on the whole thing, not happening; two, one of the sides win, again, very unlikely at this point in Syria; and three, a negotiated political solution.
Iran will have to be part of that negotiated political solution. But I think first expectations on the ground, their calculus needs to change, our Sunni partners' calculus needs to change and we need to do some things to set the table for that through a policy of pushing back against Iran while finding ways to reassure our partners to do that.
KIMBALL: All right. I see Jessica Matthews who is a former president here at Carnegie and now a senior fellow. Why don't you go ahead, please.
QUESTION: Thanks, Daryl.
I wondered from all four of your points of view where are the soft spots in this thing, by which I mean the opportunities for one side or the other to fail to clearly meet their obligations that will lead to the kind of muddle that led to the unraveling of the North Korea deal, for example. Well, you violated first; no, you fell short first; no, you did.
Where are we likely to get in trouble in that respect?
KIMBALL: That's a good question. I haven't thought about it deeply since I woke up at 4 in the morning to look at the agreement. But why don't we ask each of you to give your take on that good question, starting maybe with Richard and then Kelsey and Ilan.
NEPHEW: Sure. I think the biggest risk is that because of the regional issues and terrorism-related issues, human rights-related issues, we have to continue an active sanctions policy that eventually chips away at the benefits provided in the relief.
And when you combine that with Iranian fiscal mismanagement and inability to do with their economy what they could do, either because of corruption or just because they screw up or because oil prices remain low or investment doesn't flow as fast, that the Iranian government says we're not getting what we're supposed to get.
Now, this might be honest that they're not getting what they're supposed to get because of some interaction of other sanctions. It may be just a front to cover what is bad economic policy on the Iranian part. But that could make the Iranians and certainly a populist figure like an Ahmadinejad, who knows who the next president of Iran's going to be, say we're going to pull out of this deal, it's the deal that's causing the problem, it's Rouhani who's causing the problem, you know, even though he's now in retirement.
QUESTION: (OFF MIKE) (INAUDIBLE) do you see the fact that the sanctions relief -- thank you -- might come after the parliamentary elections as a major problem here?
NEPHEW: I don't see it as a major problem, but certainly from an Iranian/Rouhani political stance, it would have been better for him and his guys had he started to have it beforehand.
But I would say this, though. The celebratory mood in Tehran is such that I think he's going to get a boost anyway through the parliamentary process. Frankly, it would have been worse for him if the relief was six months already in place and they hadn't seen real money coming back in. So the timing actually might be OK for him.
GOLDENBERG: Can I just add one point on Richard's in particular? Because I very much agree, that's the greatest risk of the deal.
But I think there is a sort of American policy solution to it. A lot of times we have multiple tools to go after terrorism, some of which are the intelligence community deploys, some of which are deployed by DOD, some of which are deployed by Treasury.
Oftentimes, the approach is, well, the Treasury approach, let's sanction something because that's the lowest-risk approach. It involves least kinetic action, the least risk of military escalation, things like that.
It might actually be that given, paradoxically, given we have this nuclear agreement, defaulting to sanctions to respond to Iranian terrorism might be the riskiest approach because it undermines a broader interest that we have in perpetuating the nuclear deal. And so maybe DOD and the intelligence community need to be thinking more and those tools need to be used more aggressively in some of the steps that we take because there's risks associated with that, too, obviously, but it's a way to compartmentalize and try to separate and protect the agreement and our nonproliferation interests from our other interests in the region.
DAVENPORT: I would certainly agree with both what Richard and Ilan said and add as sort of another concern about any party intentionally exploiting the review process and the ability then to go to the U.N. Security Council with the intention of not resolving the dispute, but actually trying to kill the deal.
Because essentially, if a party does not think, if any one of the states does not think that an ambiguity or a concern has been resolved in the joint commission or then through the ministerial level or using sort of an arbitration panel, then they can go directly to the U.N. Security Council.
And for the permanent five members, you know, vetoing, you know, a resolution then will start to put these sanctions back in place. And that could be deliberately used, I think, to prevent the agreement from moving forward. And that option will remain open sort of past this administration. And when you hear some of the presidential candidates explicitly talking about wanting to unravel the deal, there certainly is an opening there that gives me some concern.
KIMBALL: One other quick thought. This is not so much a big threat to the implementation of the agreement, but it's something that I think everyone needs to pay attention to, including the Congress and the other governments involved in the negotiation and the P5+1, which is that the IAEA will need additional resources to do the added work. The IAEA has a rotating team of about 50 people on the Iran file. They do a very good job, but they're going to need more people, they're going to need more resources.
And there is a zero budget growth policy affecting all U.N. agencies. And so it's going to require voluntary contributions, additional contributions from key states, the United States, to give the agency the resources they need.
We probably will be hearing from Director General Amano in the coming weeks about now that he knows, you know, exactly what the terms are and he's had a chance to look at what they need to do, we're going to be hearing more from him probably about what kinds of resources he thinks he needs on an annual and ongoing basis.
It can be done, it's just going require governments stepping up and providing those resources.
GOLDENBERG: Yeah. Can I just -- one small point because I want to add on to just one other key, I think, vulnerability in the agreement that Kelsey got at is, what happens with our presidential transition?
And I don't think that a next, even if it's a Republican or somebody who opposed the agreement, if it's implemented for the next year-and-a-half, I think that the next president will continue to implement it.
The question is, will they implement it holding their nose? Will it be the president of the United States and the secretary of state or a senior-level special envoy who has direct access to the president of the United States when something comes up and there's a problem? Or it will be some deputy assistant secretary of state deep inside the State Department that nobody's really listening to? And in that case, I think the agreement just falls apart by neglect.
And we have lots of cases where I think an example of that is North Korea, I think another example of that is, you know, the different levels of prioritization of the Iraq issue in the Bush and Obama administrations. I think Obama, in many ways, executed the Bush drawdown plan on the security framework agreement, but the level of senior-level engagement nobody watched the issue for a few years.
This matters a lot. It's also an example of -- another example is the Clinton-Bush handover on al-Qaida. This is a problem as a U.S. government we have and that we're going to have to deal with here.
NEPHEW: I would (INAUDIBLE) a lot back, so I just need to point out one other thing, too. We've talked a lot about risks coming from the P5+1 side.
But you'll have to bear in mind, you know, the Iranians have cheated on their treaty obligations for 30-odd years. Right? It is not at all outside of their capacity to either cheat intentionally, have some guy do something that he's not supposed to do and have it also become a much bigger problem. There are a variety of things on the Iran side that could also make this deal fall apart, too.
It just bears to be noted that I think, you know, we were thinking more about our own perspective here, but certainly we have to make sure the Iranians do their part, too.
KIMBALL: Well, I think we were -- that's part of our concern and we simply weren't expressing it because it's quite obvious.
We can certainly expect there will be problems along the way. This is a long-term agreement and there are going to be disputes. And there are the mechanisms available to deal with them, but it's going to take continued good judgment, political leadership and good-faith efforts, particularly on the part of the Iranians so that we don't have a major blowup along the way.
We are almost out of time. I want to see if there's one more quick question that we can answer and then we're going to be closing.
Why don't we go with this gentleman on the right side, please.
QUESTION: Jonas Plesner, ministry counselor with the embassy of Denmark.
I was actually going to ask the same question as Jessica first about the stumbling blocks you saw ahead. So I think that's pretty well-answered.
So the second one is very specific and to Richard was on the sanctions. There's a stipulation in the agreement that says that if anything is inconsistent at the U.S. state and local level, the U.S. federal government do whatever it can in its power to ensure that.
So I was just wondering whether you could clarify where that could possible that you could have sort of local, state government that would sort of put in their own Iran sanctions and if you see that as a stumbling block.
NEPHEW: Well, there are, I mean, there are state and local pestment campaigns, you know, primarily that deal with Iran that could be and I think are considered to be sanctions both by the people who come up with the idea as well as by the Iranians.
Frankly, under our federal system of government there are limitations as to what the federal government can do here. And I think that's why the language is stated as it is. You know, there is no commitment on the part of the United States federal government to force the states to abandon pestment strategies and things like that.
There are laws on the books in the federal system (INAUDIBLE) that basically give cover to pestment and say it's something that, you know, state and local officials ought to be able to do. I think you could see some attempt to modify that.
But I think more broadly there's going to be two things. One is a general statement of advocacy that, you know, pestment decisions that are inconsistent with the terms of the deal are not helpful under the foreign policy authorities given to the federal government. There should be -- a supremacy clause should grant that to the federal government and so state and local officials ought not do things that are inconsistent with that.
But second, I think there's a bigger concern about overuse of federal authorities by local jurisdictions, including sanctions that may be suspended. And I think what this is intended to say is, if you're a financial regulator, for instance, and the federal government has suspended a sanction, this covers you, too.
So what this may set up in the future is legal challenge, frankly, between the federal, state and local levels to deal with particular cases, especially if the Iranians were to complain that a particular case is inconsistent with the deal.
We'll just have to see, frankly, how the courts will deal with that if and when that comes up.
KIMBALL: All right, thanks.
Well, as we said, it's complex. There's a lot to this agreement. We hope we've clarified a good bit about how the agreement is supposed to work, what's at stake, and what are some of the other considerations down the road.
And also, we hope we've provided some insights as to why so many believe this is, on balance, in the U.S. national security interests and a major step forward for the nuclear nonproliferation effort, especially in the world's most volatile region, the Middle East.
I want to thank everybody who came here today in our audience. I want to thank the audience on C-SPAN.
And more than anything, I want to thank our speakers for the great presentations.
The transcript of this event is going to be on the Arms Control Association website within a couple of days. There's more information about the agreement, Iran's program, the time line and history of efforts to get to this point.
So please join me in a round of applause for our great speakers today.
And we are adjourned. Thank you.