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APPENDIX D: Sanctions on Iran

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Iran has been subjected to fairly comprehensive U.S. sanctions since the early 1980s for a variety of reasons, including the regime’s support for terrorism, human rights violations, and proliferation concerns.

Additionally, since the UN Security Council took up the Iran nuclear file in 2006, Iran has been subjected to increasingly rigorous multilateral sanctions aimed at encouraging compliance with its nuclear nonproliferation obligations and addressing international concerns about the nature of its nuclear program. These sanctions focus on preventing Iran from acquiring the technologies and materials needed for its nuclear and missile programs by requiring all countries to restrict sensitive exports to Iran. The sanctions geared toward slowing Iran’s nuclear and missile programs appear to be increasingly effective as additional countries strengthen controls over exporting sensitive goods to Iran. But they have not prevented Iran from improving its domestic capabilities nor led Iran’s leadership to abandon the pursuit of a nuclear weapons capability.

U.S.-led sanctions have increasingly targeted the Iranian energy sector, the most critical part of its economy, to impose economic pressure on Iran in the hopes of influencing the decision-making of Iran’s leadership. More recently, the Iranian banking sector has been targeted by sanctions designed to isolate it from the global financial system by both the United States and the European Union.

Sanctions should remain an important component of efforts to demonstrate to Iran that it has nothing to gain and much to lose from its current nuclear ambitions, but sanctions will not be enough to end any nuclear aspirations.

UN Security Council Sanctions:

The UN Security Council first resorted to employing sanctions in 2006 when Iran refused to comply with a binding resolution that required, among other measures, that Iran suspend all uranium-enrichment and heavy-water-related activity. Three other resolutions tightening sanctions followed, with a June 2010 resolution introducing some of the most sweeping measures against Iran to date. Taken together, sanctions introduced under these resolutions prohibit Iran’s access to proliferation-sensitive items, technical assistance, and technology. The resolutions also target designated Iranian entities and persons involved in the nuclear and ballistic missile activities that are barred by the resolutions.

Resolution Key Proliferation-Related Provisions
1737 (2006)
  • Prevent the supply of all items which could contribute to Iran’s enrichment-related, reprocessing, or heavy water-related activities, or to the development of weapon delivery systems;
  • Iran may not export any items or technology related to nuclear programs or ballistic missile programs;
  • Iran should not receive financial services related to the supply or use of prohibited materials or technology;
  • States should freeze economic assets owned or controlled by people associated with supporting Iran’s nuclear activities or weapon delivery systems.
1747 (2007)
  • Iran should not receive grants, financial services, or loans except for humanitarian reasons;
1803 (2008)
  • States should inspect the cargoes and from Iran of any Iranian owned or operated companies, provided there is reason to suspect the cargo may contain prohibited materials;
  • States should monitor the activities of Iranian financial institutions operating in their territories to prevent any activities that may contribute to the proliferation sensitive nuclear activities;
  • Individuals who are associated with Iran’s proliferation sensitive nuclear activities or nuclear weapon delivery systems should not be allowed to enter the states.
1929 (2010)
  • States should seize and dispose of any items being supplied or transferred to Iran which could contribute to Iran’s nuclear program;
  • ran should not acquire interest in uranium mining, production, or use of nuclear materials and technology;
  • All states should prohibit Iranian investment in uranium mining and production in their territory;
  • States should inspect all cargo to and from Iran if the state has reasonable reason to believe the cargo is related to Iran’s pursuit of nuclear technology. States should refuse to fuel or supply ships for the same reason;
  • Iran should not receive financial services related to the supply or use of prohibited materials or technology;
  • States should not allow new branches or representative offices of Iranian banks in their territory if there is reason to believe they may be connected to proliferation-sensitive activities.

European Union Sanctions

Council Document
Proliferation-Related Sanctions
Council Regulation 423 (2007)
  • Freezes the assets of individuals and entities related to Iran’s nuclear and ballistic missile programs;
  • Prohibits the transfer of dual-use goods that could be used for Iran’s nuclear program;
Council Regulation 961 (2010)
  • Bans investments, sales, and supply of equipement and technology to Iran’s energy sector;
  • Requires members states to inspect suspicious cargo going to and from Iran.
Council Regulation 267 (2012)
  • Bans member states from importing oil or purchasing petrochemical products from Iran;
  • Bans insurance on shipments of Iranian oil;
  • Freezes assets connected to the Central Bank of Iran;
  • Prohibits trade using precious metals with Iran.

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Posted: June 24, 2014

APPENDIX E: The Military Option

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U.S. President Barack Obama has stated that the United States will not allow Iran to obtain nuclear weapons and that “all options are on the table” to prevent this outcome. This expression is generally used as shorthand for a preventive military strike against Iran’s nuclear facilities, presumably even without international authorization or broad support and absent any imminent military threat from Iran.

The objective of such an attack would be to seriously damage Iran’s potential ability to develop nuclear weapons. In September 2012, however, more than 30 former high-ranking U.S. officials and military officers endorsed a report concluding that a sustained military strike on Iran by the United States would only set back Iran’s nuclear program up to four years and subsequently increase Iran’s motivation to build nuclear weapons to inhibit any future attack.38

A military attack against Iran’s nuclear facilities would likely prompt Iran to withdraw from the International Atomic Energy Agency, probably accompanied by an Iranian revocation of its safeguards agreement and withdrawal from the nuclear Nonproliferation Treaty. These actions would close off the most important source of information available to the international community on the status of Iran’s nuclear program and increase uncertainty over time about the extent of Iran’s nuclear activities.

A military operation targeting Iran’s nuclear capability would require a major, sustained air campaign. The target list would likely extend far beyond Iran’s 25 declared nuclear facilities and related sites to include Iran’s air defenses, command and control nodes, and means of retaliation, such as its ballistic and cruise missile forces and the naval vessels used to lay anti-ship mines. Such a military campaign would probably continue for weeks.

Beyond the strike assets, additional resources would be required for personnel recovery and post-strike battle damage assessments. A campaign of this magnitude would necessarily involve phases, allowing some Iranian assets not initially struck to be removed and hidden. Afterward, the United States would soon confront difficult decisions concerning the need to go back and attack surviving facilities or disrupt the reconstruction of those that had been destroyed.

The Iranian government’s natural inclination to retaliate in response to an attack would be reinforced by popular sentiment. Iran’s nationalistic population is overwhelmingly supportive of the country’s nuclear program and sensitive about perceived threats to national sovereignty.

Such retaliation could take a number of forms, from ballistic missile attacks against U.S. military bases in the region and the cities, ports, and oil terminals of U.S. allies in the Persian Gulf to missile and rocket attacks against Israel. One of the most vulnerable retaliatory targets would be oil tanker traffic flowing through the Strait of Hormuz. Ninety percent of the oil produced by Persian Gulf states passes through the strait, as does almost 35 percent of all seaborne-traded oil and almost 20 percent of all oil traded worldwide.[39]

In 2006, Supreme Leader Ayatollah Ali Khamenei warned that if the United States punished or attacked Iran, then “definitely the shipment of energy from this region will be seriously jeopardized.” The most effective way to drive up oil costs would be to block the strait, halting or at least reducing the passage of shipping by laying several hundred mines in the water. Iran has a variety of platforms it could use for this task. From the first evidence that mines had been laid, maritime insurance rates and the price of oil would skyrocket, compelling the United States to undertake a mine-clearing campaign.

Given the limited number of mine countermeasure assets available and their vulnerability to Iranian attack, clearing even a relatively safe channel for passage would take several days; clearing the entire strait could take a month.

During a January 31, 2012, Senate Intelligence Committee hearing, Defense Intelligence Agency Director Lt. Gen. Ronald Burgess said the Iranians “have the capability, we assess, to temporarily close” the strait.[40] Other experts stated that efforts to reopen the vital waterway in the event of an Iranian closure could only be accomplished as part of a major military operation, which “could quickly become a war to clear the Iranian harbors and coast of most remnants of the country’s military.”[41]

Another vector of Iranian retaliation might be to sponsor Hezbollah and Hamas attacks against Israel. Thousands of short-range rockets of varying degrees of sophistication are available in Gaza and southern Lebanon for such action.

Iran could use surrogates to launch attacks on U.S. military forces deployed in the region, which has already happened sporadically and in varying degrees. In the wake of an unprovoked U.S. attack on Iran, the governments in Kabul, Baghdad, Islamabad, and elsewhere would be much less inclined to help provide protection for U.S. forces and more inclined to make deals with the militant opposition in Iran.

A close look at the military option reveals that it would fail at permanently halting Iran’s nuclear weapons pursuits and present grievous new challenges for U.S. foreign, domestic, and security policies, adding incalculable costs to the nation in blood and treasure.

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Posted: June 24, 2014

APPENDIX C: Text of the Joint Plan of Action

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Preamble

The goal for these negotiations is to reach a mutually-agreed long-term comprehensive solution that would ensure Iran’s nuclear programme will be exclusively peaceful. Iran reaffirms that under no circumstances will Iran ever seek or develop any nuclear weapons. This comprehensive solution would build on these initial measures and result in a final step for a period to be agreed upon and the resolution of concerns. This comprehensive solution would enable Iran to fully enjoy its right to nuclear energy for peaceful purposes under the relevant articles of the NPT in conformity with its obligations therein. This comprehensive solution would involve a mutually defined enrichment programme with practical limits and transparency measures to ensure the peaceful nature of the programme. This comprehensive solution would constitute an integrated whole where nothing is agreed until everything is agreed. This comprehensive solution would involve a reciprocal, step-bystep process, and would produce the comprehensive lifting of all UN Security Council sanctions, as well as multilateral and national sanctions related to Iran’s nuclear programme.

There would be additional steps in between the initial measures and the final step, including, among other things, addressing the UN Security Council resolutions, with a view toward bringing to a satisfactory conclusion the UN Security Council’s consideration of this matter. The E3+3 and Iran will be responsible for conclusion and implementation of mutual near-term measures and the comprehensive solution in good faith. A Joint Commission of E3/EU+3 and Iran will be established to monitor the implementation of the near-term measures and address issues that may arise, with the IAEA responsible for verification of nuclear-related measures. The Joint Commission will work with the IAEA to facilitate resolution of past and present issues of concern.

Elements of a first step

The first step would be time-bound, with a duration of 6 months, and renewable by mutual consent, during which all parties will work to maintain a constructive atmosphere for negotiations in good faith.

Iran would undertake the following voluntary measures:

  • From the existing uranium enriched to 20%, retain half as working stock of 20% oxide for fabrication of fuel for the TRR. Dilute the remaining 20% UF6 to no more than 5%. No reconversion line.
  • Iran announces that it will not enrich uranium over 5% for the duration of the 6 months.
  • Iran announces that it will not make any further advances of its activities at the Natanz Fuel Enrichment Plant[1], Fordow[2], or the Arak reactor[3], designated by the IAEA as IR-40.
  • Beginning when the line for conversion of UF6 enriched up to 5% to UO2 is ready, Iran has decided to convert to oxide UF6 newly enriched up to 5% during the 6 month period, as provided in the operational schedule of the conversion plant declared to the IAEA.
  • No new locations for the enrichment.
  • Iran will continue its safeguarded R&D practices, including its current enrichment R&D practices, which are not designed for accumulation of the enriched uranium.
  • No reprocessing or construction of a facility capable of reprocessing.
  • Enhanced monitoring:
    • Provision of specified information to the IAEA, including information on Iran’s plans for nuclear facilities, a description of each building on each nuclear site, a description of the scale of operations for each location engaged in specified nuclear activities, information on uranium mines and mills, and information on source material. This information would be provided within three months of the adoption of these measures.
    • Submission of an updated DIQ for the reactor at Arak, designated by the IAEA as the IR-40, to the IAEA.
    • Steps to agree with the IAEA on conclusion of the Safeguards Approach for the reactor at Arak, designated by the IAEA as the IR-40.’
    • Daily IAEA inspector access when inspectors are not present for the purpose of Design Information Verification, Interim Inventory Verification, Physical Inventory Verification, and unannounced inspections, for the purpose of access to offline surveillance records, at Fordow and Natanz.
    • IAEA inspector managed access to:
      • centrifuge assembly workshops[4];
      • entrifuge rotor production workshops and storage facilities; and
      • uranium mines and mills.

In return, the E3/EU+3 would undertake the following voluntary measures:

  • Pause efforts to further reduce Iran’s crude oil sales, enabling Iran’s current customers to purchase their current average amounts of crude oil. Enable the repatriation of an agreed amount of revenue held abroad. For such oil sales, suspend the EU and U.S. sanctions on associated insurance and transportation services.
  • Suspend U.S. and EU sanctions on:
    • Iran’s petrochemical exports, as well as sanctions on associated services.[5]
    • Gold and precious metals, as well as sanctions on associated services.
  • Suspend U.S. sanctions on Iran’s auto industry, as well as sanctions on associated services.
  • License the supply and installation in Iran of spare parts for safety of flight for Iranian civil aviation and associated services. License safety related inspections and repairs in Iran as well as associated services.6
  • No new nuclear-related UN Security Council sanctions.
  • No new EU nuclear-related sanctions.
  • The U.S. Administration, acting consistent with the respective roles of the President and the Congress, will refrain from imposing new nuclear-related sanctions.
  • Establish a financial channel to facilitate humanitarian trade for Iran’s domestic needs using Iranian oil revenues held abroad. Humanitarian trade would be defined as transactions involving food and agricultural products, medicine, medical devices, and medical expenses incurred abroad. This channel would involve specified foreign banks and non-designated Iranian banks to be defined when establishing the channel.
    • This channel could also enable:
      • transactions required to pay Iran’s UN obligations; and,
      • direct tuition payments to universities and colleges for Iranian students studying abroad, up to an agreed amount for the six month period.
  • Increase the EU authorisation thresholds for transactions for non-sanctioned trade to an agreed amount.

Elements of the final step of a comprehensive solution*

The final step of a comprehensive solution, which the parties aim to conclude negotiating and commence implementing no more than one year after the adoption of this document, would:

  • Have a specified long-term duration to be agreed upon.
  • Reflect the rights and obligations of parties to the NPT and IAEA Safeguards Agreements.
  • Comprehensively lift UN Security Council, multilateral and national nuclear-related sanctions, including steps on access in areas of trade, technology, finance, and energy, on a schedule to be agreed upon.
  • Involve a mutually defined enrichment programme with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity, where it is carried out, and stocks of enriched uranium, for a period to be agreed upon.
  • Fully resolve concerns related to the reactor at Arak, designated by the IAEA as the IR-40. No reprocessing or construction of a facility capable of reprocessing.
  • Fully implement the agreed transparency measures and enhanced monitoring. Ratify and implement the Additional Protocol, consistent with the respective roles of the President and the Majlis (Iranian parliament).
  • Include international civil nuclear cooperation, including among others, on acquiring modern light water power and research reactors and associated equipment, and the supply of modern nuclear fuel as well as agreed R&D practices.

Following successful implementation of the final step of the comprehensive solution for its full duration, the Iranian nuclear programme will be treated in the same manner as that of any non-nuclear weapon state party to the NPT.

* With respect to the final step and any steps in between, the standard principle that “nothing is agreed until everything is agreed” applies.


ENDNOTES

1. Namely, during the 6 months, Iran will not feed UF6 into the centrifuges installed but not enriching uranium. Not install additional centrifuges. Iran announces that during the first 6 months, it will replace existing centrifuges with centrifuges of the same type.

2. At Fordow, no further enrichment over 5% at 4 cascades now enriching uranium, and not increase enrichment capacity. Not feed UF6 into the other 12 cascades, which would remain in a non-operative state. No interconnections between cascades. Iran announces that during the first 6 months, it will replace existing centrifuges with centrifuges of the same type.

3. Iran announces on concerns related to the construction of the reactor at Arak that for 6 months it will not commission the reactor or transfer fuel or heavy water to the reactor site and will not test additional fuel or produce more fuel for the reactor or install remaining components.

4. Consistent with its plans, Iran’s centrifuge production during the 6 months will be dedicated to replace damaged machines.

5. “Sanctions on associated services” means any service, such as insurance, transportation, or financial, subject to the underlying U.S. or EU sanctions applicable, insofar as each service is related to the underlying sanction and required to facilitate the desired transactions. These services could involve any non-designated Iranian entities.

6. Sanctions relief could involve any non-designated Iranian airlines as well as Iran Air.

Posted: June 23, 2014

Solving the Iranian Nuclear Puzzle: Toward a Realistic and Effective Comprehensive Nuclear Agreement

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For well over a decade, the sensitive nuclear fuel cycle activities of the Islamic Republic of Iran have been at the center of international concern about the further spread of nuclear weapons.

In November 2013, after years of on-and-off negotiations, Iran and six world powers concluded an interim agreement that pauses the some of Iran’s most proliferation sensitive activities and opened the way for further talks on a long-term, comprehensive solution to would ensure Iran’s nuclear program will be exclusively peaceful.

This briefing book is designed to provide casual observers and experts alike with an overview of Iran’s nuclear history and diplomatic efforts to prevent a nuclear-armed Iran, and an up-to-date summary of the status and capabilities of Iran’s nuclear program.

It is the third and substantially revised edition of “Solving the Iranian Nuclear Puzzle” from the Arms Control Association’s research staff.

The volume also reviews the major issues and explains the policy options for the comprehensive agreement. These include: how to limit Iran’s uranium enrichment capacity and plutonium production potential, the significance of more extensive IAEA safeguards, options for resolving concerns about possible weapons-related experiments by Iran, and the options for the removal of nuclear-related sanctions against Iran.

Preface
Executive Summary
Section 1: Background and Status of Iran's Nuclear Program
Section 2: Understanding the Joint Plan of Action
Section 3: A Comprehensive Agreement
Appendix A: Timeline of Nuclear Diplomacy with Iran*
Appendix B: History of Official Proposals on the Iranian Nuclear Issue*
Appendix C: Text of the Joint Plan of Action
Appendix D: Key Sanctions on Iran
Appendix E: The Military Option
Endnotes

*These Fact Sheet versions are updated on an ongoing basis.

This report was made possible by the generous support of our members and donors, without which this report would not have been possible. In particular, we wish to thank the Carnegie Corporation of New York, the William and Flora Hewlett Foundation, the John D. and Catherine T. MacArthur Foundation, the Ploughshares Fund, and the Prospect Hill Foundation, which provide support for ACA research and public education programs on nuclear nonproliferation issues.

Posted: June 23, 2014

Endnotes

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NOTES

1. James R. Clapper, “Unclassified Statement for the Record on the Worldwide Threat Assessment of the U.S. Intelligence Community for the Senate Select Committee on Intelligence,” Office of the Director of National Intelligence, January 31, 2012, p. 6, http://www.intelligence.senate.gov/120131/clapper.pdf.

2. Ibid.

3. International Institute for Strategic Studies (IISS), “Iran’s Nuclear, Chemical, and Biological Capabilities: A Net Assessment,” February 3, 2011.

4. Abbas Milani, “The Shah’s Atomic Dreams,” Foreign Policy, December 29, 2010.

5. IISS, “Iran’s Nuclear, Chemical, and Biological Capabilities.”

6. Ibid.

7. U.S. Department of Defense, “Unclassified Report on Military Power of Iran,” April 2010.

8. U.S. Department of Defense, “Unclassified Report on Military Power of Iran,” April 2012.

9. “Iran Will Never Seek Nuclear Weapons: Leader,” Press TV, February 22, 2012.

10. International Atomic Energy Agency Board of Governors, “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions in the Islamic Republic of Iran: Report by the Director-General,” GOV/2014/28, May 23, 2014; David Albright et al., “ISIS Analysis of the IAEA Iran Safeguards Report,” ISIS Report, May 23, 2014, http://isis-online.org/uploads/isis-reports/documents/ISIS_Analysis_IAEA_Safeguards_Report_23May2014-finaldoc.pdf.

11. International Atomic Energy Agency (IAEA) Board of Governors, “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions in the Islamic Republic of Iran: Report by the Director-General,” GOV/2014/28, May 23, 2014.

12. The United States originally supplied Iran with the Tehran Research Reactor in 1967. At that time, the reactor operated using highly enriched uranium fuel enriched to more than 90 percent uranium-235. In 1993, conversion of the reactor to use fuel targets enriched to just under 20 percent was completed. Argentina facilitated the conversion and provided 115 kilograms of 20 percent-enriched uranium for the reactor. IISS, “Iran’s Nuclear, Chemical, and Biological Capabilities.”

13. William C. Witt et al., “Iran’s Evolving Breakout Potential,” ISIS Report, October 8, 2012, http://isis-online.org/uploads/isis-reports/documents/Irans_Evolving_Breakout_Potential.pdf.

14. David Albright, Paul Brannan, and Christina Walrond, “Critique of Gregory Jones’s Breakout Estimates at the Natanz Fuel Enrichment Plant (FEP),” ISIS Report, September 20, 2011, http://isis-online.org/uploads/isis-reports/documents/Critique_of_Greg_Joness_analysis_20Sept2011.pdf.

15. William C. Witt et al., “Iran’s Evolving Breakout Potential.”

16. Robert J. Einhorn, “Iran’s Heavy-Water Reactor: A Plutonium Bomb Factory,” Arms Control Association, November 9, 2006.

17. IISS, “Iran’s Nuclear, Chemical, and Biological Capabilities.”

18. Ibid.

19. IAEA Board of Governors, “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions in the Islamic Republic of Iran,” GOV/2011/65, November 8, 2011 (hereinafter IAEA 2011 Iran report).

20. Ibid.

21. Tabassum Zakaria and Mark Hosenball, “Special Report: Intel Shows Iran Nuclear Threat Not Imminent,” Reuters, March 23, 2012.

22. IAEA 2011 Iran report.

23. Office of the U.S. Director of National Intelligence, “Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, Covering 1 January to 31 December 2011.”

24. “AEIO Chief: Iran Entitled to Enrich Uranium to 90% Grade,” Fars News Agency, April 14, 2014.

25. Assuming a minimum construction time of five to six years.

26. Robert J. Einhorn, “Preventing a Nuclear-Armed Iran: Requirements for a Comprehensive Nuclear Agreement,” Brookings Arms Control and Non-Proliferation Series, No. 10 (March 2014).

27. Alexander Glaser, Zia Mian, Hossein Mousavian, and Frank von Hippel, “Agreeing on Limits for Iran’s Centrifuge Program: A Two-State Strategy,” Arms Control Today, July/August 2014.

28. Hillary Rodham Clinton, Testimony before the House Foreign Affairs Committee, March 1, 2011.

29. Ali Akbar Salehi, interview, Press TV, February 5, 2014.

30. Ali Ahmad et al., “A Win-Win Solution for Iran’s Arak Reactor,” Arms Control Today, April 2014.

31. David Albright, Oli Heinonen, and Andrea Stricker, “Five Compromises to Avoid in a Comprehensive Agreement with Iran,” by David Albright, Oli Heinonen, and Andrea Stricker,” ISIS Report, June 3, 2014.

32. Ibid.

33. IISS, “Iran’s Nuclear, Chemical, and Biological Capabilities.”

34. For more ideas on phasing out sanctions relief, see International Crisis Group, “Iran and the P5+1: Solving the Nuclear Rubik’s Cube,” Middle East Report N 152, May 9, 2014.

35. For further discussion, see Kelsey Davenport, “What the UN Security Council Resolutions Say (and Don’t Say) About Iran’s Nuclear Program,” Arms Control Now, December 4, 2013, http://armscontrolnow.org/2013/12/04/what-the-un-security-council-resolutions-say-and-dont-say-about-irans-nuclear-program/.

36. UK Foreign and Commonwealth Office, “UK Explanation of Vote and E3+3 Statement on UN Security Council Resolution 1929 on Iran,” June 9, 2010, https://www.gov.uk/government/news/uk-explanation-of-vote-and-e3-3-statement-on-the-security-council-resolution-1929-on-iran-9-june-2010 (statement by Mark Lyall Grant).

37. Wendy Sherman, Testimony before the Senate Committee on Foreign Relations, February 4, 2014.

38. “Weighing Benefits and Costs of Military Action Against Iran,” The Iran Project, July 2012, http://www.wilsoncenter.org/sites/default/files/IranReport_091112_FINAL.pdf.

39. U.S. Energy Information Administration, “World Oil Transit Chokepoints,” August 22, 2012, http://www.eia.gov/countries/analysisbriefs/World_Oil_Transit_Chokepoints/wotc.pdf.

40. U.S. Defense Intelligence Agency, “Senate Select Intelligence Committee Holds Hearing on Worldwide Threats,” January 31, 2012.

41. Caitlin Talmadge, “Closing Time: Assessing the Iranian Threat to the Strait of Hormuz,” International Security, Vol. 33, No. 1 (Summer 2008): 117.

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Posted: June 23, 2014

SECTION 3: A Comprehensive Agreement

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To prevent a nuclear-armed Iran and find a permanent resolution to the Iran nuclear challenge, a long-term agreement that addresses a complex array of interrelated issues must be negotiated.

In February 2014, senior diplomats and technical experts from Iran and the P5+1 started formal negotiations on a comprehensive agreement on Iran’s nuclear program with the goal of reaching a deal by July 20. Arriving at such a diplomatic settlement will not be easy and will require that each side be willing to address the “core” requirements of the other side. The success of the effort will depend as much on the political will in Tehran, Washington, and other major capitals as it depends on the substantive and often very technical issues on the table.

The broad parameters of a comprehensive agreement were outlined in the November 24 Joint Plan of Action. The two sides agreed that the agreement will:

  • have a specified long-term duration to be agreed on;
  • reflect the rights and obligations of parties to the NPT and IAEA Safeguards Agreements;
  • comprehensively lift UN Security Council, multilateral, and national nuclear-related sanctions, including steps on access in areas of trade, technology, finance, and energy, on a schedule to be agreed on;
  • involve a mutually defined enrichment program with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity, where it is carried out, and stocks of enriched uranium, for a period to be agreed on;
  • fully resolve concerns related to the reactor at Arak (IR-40);
  • include provisions committing Iran not reprocess spent nuclear fuel;
  • fully implement the agreed transparency measures and enhanced monitoring;
  • ratify and implement an additional protocol, consistent with the respective roles of the Iranian president and the Majlis (Iranian parliament); and
  • include international civil nuclear cooperation, including among others, on acquiring modern light-water power and research reactors and associated equipment; the supply of modern nuclear fuel; and agreed R&D practices.

The Joint Plan of Action established that any deal would address UN Security Council resolutions, be comprehensive, meaning that “nothing is agreed until everything is agreed.”

After determining an agenda for the next three months of talks during the February meeting, Iran and the P5+1 met again in March and April in Vienna. During these two rounds of talks, each side outlined their positions. When the parties met again on May 13, they presented more-specific proposals and began the difficult task of negotiating to narrow the gaps between their positions in a draft document.

The parties hope to reach an agreement by July 20, when the six-month phase of the Joint Plan of Action expires. Although the interim deal can be extended for another six months, domestic pressures in the United States and Iran are motivating the parties to conclude a deal by the end of July. Lead negotiator for the P5+1, EU foreign policy chief Catherine Ashton, will complete her term later this fall, which could disrupt the negotiation process if it continues for many months more.

If either side pushes unrealistic requirements, the chances for a negotiated resolution will decrease, and the chances of a conflict and a nuclear-armed Iran will increase.

The considerations and potential options on the main issues confronting the negotiators are outlined below. Due to the complexity of these negotiations and the interplay of different elements of a deal, there is not a single solution to this puzzle.

Any agreement that is struck between the P5+1 and Iran should not be evaluated on the basis of any single feature, but must be assessed on the basis of its overall impact and in comparison to the alternative: no diplomatic solution.

Limits on Iran’s Uranium-Enrichment Capacity

In the November 24 interim agreement, the parties agreed that Iran’s uranium-enrichment program would be based on an assessment of its “practical needs.” In other words, Iran’s enrichment capacity and stockpile of material should not exceed what it requires for its civilian nuclear reactors.

Determining practical needs, however, is still a political decision on which the parties differ widely. The divergence in thinking about the size of Iran’s uranium-enrichment program is tied in part to Tehran’s future plans for its civilian nuclear power program.

Currently, if practical needs are based solely on operating nuclear facilities, Iran’s requirements for enriched uranium are minimal. Iran operates the Tehran Research Reactor, which requires fuel plates fabricated from uranium enriched to 20 percent. Iran’s current stockpile of material enriched to 20 percent will fuel the reactor for the foreseeable future.

Given that Iran has no other reactors requiring uranium enriched to this level, capping Iran’s uranium enrichment to reactor grade, or less than 5 percent, is reasonable. Iran has indicated in the past that it is willing to accept a cap on enrichment to reactor-grade levels.

Iran’s current needs for uranium enriched to reactor-grade levels are also minimal. Currently, Iran’s sole nuclear power plant at Bushehr is fueled by Russia. Under the original contract, Russia agreed to provide fuel for the reactor for 10 years, or until 2021-2022. As part of the agreement to complete construction of the reactor in 1995, Russia committed to supply the fuel for the lifetime of the reactor, should Iran chose to renew the contract.

Iran may need to produce small amounts of reactor-grade uranium to fuel the Arak heavy-water reactor, depending on how the parties agree to resolve concerns over that facility. If the reactor is converted to use reactor-grade enriched uranium, Iran could produce fuel for the reactor using less than 2,000 IR-1 centrifuges per year.

If the P5+1 defines “practical needs” by this strict accounting, Iran could be required to reduce its enrichment capacity by 80 percent, from about 10,400 operating IR-1 centrifuges to less than 2,000.

Iran will strenuously resist such a dramatic reduction. Iranian negotiators insist that Iran’s nuclear fuel needs may increase over time and say they cannot depend on foreign suppliers, given the unreliability of foreign sources in the past when Tehran was attempting to develop its nuclear program.

Moreover, considering the resources that Iran has dedicated to developing its enrichment program over the years, Tehran’s leaders would be hard-pressed to win sufficient domestic support for a deal that reduces its centrifuge inventory by such a significant amount.

Iran asserts that its practical needs include fueling the Bushehr reactor after the original contract with Russia ends. This would require operating approximately 100,000 IR-1 centrifuges per year.

According to the IAEA’s most recent quarterly report, Iran is planning to build another reactor to produce medical isotopes, a 10-MWt light-water reactor near Shiraz. This would require 20 percent-enriched uranium fuel, according to a February 8 letter that Iran submitted to the IAEA. The P5+1 could agree to provide fuel for this reactor in order to limit Iran’s enrichment to normal reactor-grade levels (below 3.5 percent). This commitment from the P5+1 would be consistent with the parameters of the Joint Plan of Action, which commit the P5+1 to civilian nuclear cooperation, including the supply of “modern nuclear fuel.”

Iran has made numerous other statements about expanding its civilian nuclear power program. Tehran has already declared to the IAEA its intention to build a 360-megawatt electric power plant at Darkhovin. In February 2014, Iran provided the IAEA with information about site selection for an additional 16 nuclear power plants, but did not give the agency any specific timetables for construction.

According to Ali Akbar Salehi, the head of the Atomic Energy Agency of Iran, Iran intends to start construction on the first in a series of four new nuclear power plants this (Iranian) year.[24] Iranian officials have made announcements about negotiations with Russia to build another two nuclear power plants at Bushehr and an additional four to six plants elsewhere in the country.

If these reactors are built according to the plan outlined by Salehi, the first reactor could begin operation as early as 2020 with additional reactors in 2022, 2024, and 2026.[25]

Many independent experts, however, dismiss this timeline as unrealistic, particularly given the slow pace at which the Bushehr reactor was completed. According to Einhorn, “[A]ny power reactor that Iran may wish to construct and fuel indigenously is at least 15 to 20 years away.”[26] Additionally, Russian contracts for nuclear power plants usually include a five- to 10-year fueling contract, so it is unlikely that Iran would need to produce fuel domestically for these reactors for years after they are built.

If the duration of any comprehensive agreement is 10 years or less, it is unlikely that additional reactors with additional fuel needs will be built within the time frame of the agreement. Therefore, the negotiators need not include them now in any calculation of practical need.

Iran, however, is likely to calculate domestic fuel requirements for the Bushehr reactor into its calculation of practical needs. Reports from the May 13-16 negotiations bear out this expectation. Yet, a steady increase in Iranian enrichment capacity to 100,000 operating IR-1 centrifuges by 2021 would not be acceptable to the P5+1.

Even an agreement to operate a smaller number of more-efficient, advanced centrifuges would be unacceptable to the P5+1 because the output would be the same. Experts assess that 25,000 IR-2M centrifuges would likely have a similar capacity as 100,000 IR-1 centrifuges.

There are options for bridging these gaps. One option is to increase Iran’s uranium-enrichment capacity over time, contingent on the growth of actual practical needs. A phased approach could begin with a number of operating IR-1 centrifuges similar or slightly below the number currently operating, which is about 10,200. This number could be increased depending on a re-evaluation of Iran’s needs as its nuclear power situation progresses. Tying centrifuge capacity to specific actions within a comprehensive deal and allowing Iran to increase capacity over time as trust builds and as actual fuel needs emerge is likely to be far more acceptable to Iran than long-term, severe limits on its uranium-enrichment capacity and restrictions on research on more-advanced machines.

Some researchers note that it is in Iran’s interest to stop pursuing and building more of the less efficient IR-1 machines and to make a transition to a smaller number of more-efficient IR-2M centrifuges. During this transition period, they propose that the two sides could agree to hold total operating separative work unit (SWU) capacity constant, but phase out the IR-1 machines and replace them with IR-2Ms. Iran could also continue R&D and even stockpile components for more-advanced centrifuges but not assemble them until there is a demonstrable need for commercial-scale enrichment. This would increase the time it would take Iran to operate the machines, providing added insurance against rapid breakout scenarios. The R&D facilities and centrifuge production plants would be subject increased transparency measures. To provide further assurances, surplus IR-1 centrifuges and components could be removed from Natanz and Fordow and stored under IAEA supervision. [27]

To provide further assurances to Iran about the future availability of fuel supplies for Iran’s existing reactors, a comprehensive agreement could include a fuel guarantee by the international community, whereby a supply of reactor-grade enriched uranium for Bushehr is guaranteed over the lifetime of the reactor, so long as Iran continues to comply with the terms of the comprehensive agreement. This could allay any Iranian concerns about the reliability of Russian fuel supply.

If Iran insists on supplying the Bushehr reactor after 2021 with domestically produced fuel, increases in centrifuge capacity could be tied to actions taken by Iran in a comprehensive agreement. For instance, when Iran completes its disclosure to the IAEA on the possible military dimensions of its nuclear program and the agency determines that Iran’s nuclear program is entirely peaceful, centrifuge capacity could be increased. An additional step tied to increasing centrifuge capacity could be Iran’s ratification of an additional protocol. This would expand IAEA access to Iran’s nuclear facilities permanently, which is key to detecting violations early.

An additional step could be to require Iran to convert all of the reactor-grade enriched uranium that it produces from uranium hexafluoride gas to uranium dioxide powder. Uranium dioxide powder is used to make fuel rods for nuclear power reactors and poses less of a proliferation threat because it must be converted back into gas in order to be further enriched. The IAEA would quickly detect this reconversion process.

In May 2014, Iran completed a facility for this process. This “zero stockpile” approach would make it more difficult and time consuming for Iran to move quickly toward nuclear weapons production. Also, Iran would have to anticipate some loss of fissionable material as a result of reconversion. As an additional step, the uranium dioxide could be exported to Russia for fabrication into fuel elements for the Bushehr nuclear power plant.

If there is to be a comprehensive agreement, the two sides must find a suitable formula that limits Iran’s uranium-enrichment capacity in a way that precludes an Iranian dash to produce enough HEU for weapons without being detected and disrupted, but allows for Iran’s practical civilian needs.

Getting to “yes” on such an approach will require difficult compromises for both sides, but solutions that prevent a nuclear-armed Iran and still provide Iran with the means to pursue a civil nuclear program are available.

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Fordow

The two sides must also reach an agreement on the future status of the Fordow uranium-enrichment facility. During earlier negotiations with Iran in the spring of 2013, the P5+1 wanted uranium enrichment at Fordow to end and for the facility to close. The facility, buried deep inside a mountain outside of the city of Qom, is less vulnerable to an airstrike, which is likely one of the reasons why the P5+1 originally wanted the facility closed.

Iran, however, has stated publicly that it will not accept closure of any of its nuclear facilities in a final deal.

Under the Joint Plan of Action, enrichment activities continue at Fordow, but the 696 operating centrifuges at the facility were converted to producing 3.5 percent-enriched uranium rather than 20 percent-enriched material. It is likely that the P5+1 will oppose the continuation of any production-scale enrichment at the facility, to dispel any Iranian notion that it has a secure breakout option.

In a final deal, the two sides might compromise by agreeing that Iran will effectively halt any enrichment activities at Fordow for production purposes and convert it to a “research-only” facility. Under this configuration, Iran could use the facility to develop and test advanced centrifuges, activities that currently take place at Natanz. The facility would still be subject to intensive IAEA monitoring. This compromise would keep the facility operating, as per the Iranian position, but address the proliferation risk.

Research and Development

Under a comprehensive agreement, Iran will want to continue R&D activities, including the development and testing of advanced centrifuges. Continuing these practices is consistent with the parameters for a comprehensive deal laid out in the Joint Plan of Action, which includes a commitment to respect Iran’s rights as an NPT member. If Iran’s R&D activities on advanced centrifuges are under safeguards, then it is meeting its obligations under the treaty on R&D.

Additionally, R&D on more-advanced centrifuges does not represent a significant breakout threat if the agreed limits on Iran’s enrichment capacity throughout the course of the agreement are determined in terms of SWUs (See “Understanding SWUs”).

Understanding SWUs

Uranium-enrichment capacity is measured in separative work units (SWUs). An SWU is roughly a measurement of the amount of separation done during enrichment. Centrifuge efficiency can be expressed in SWUs. More efficient centrifuges have a higher SWU capacity.

A nuclear deal with Iran may define Iran’s practical needs for uranium enrichment based on SWUs. This would allow Iran to operate a smaller number of advanced centrifuges, as opposed to a larger number of less-efficient, crash-prone IR-1s.

Each IR-1 centrifuge has an efficiency of approximately 0.8-1 SWU per year. Currently, Iran is operating about 10,200 IR-1 centrifuges, which is about 10,200 SWU per year. Iran is working on more-advanced models, including the IR-2M, which it had begun installing in production-scale cascades before the Joint Plan of Action froze new centrifuge installation. The IR-2M is estimated to be three to five times more efficient than the IR-1.

For example, if Iran’s SWU capacity was capped at 10,200 under a comprehensive deal, it could operate 10,200 IR-1 centrifuges, or 2,100 to 3,300 IR-2M centrifuges. Either configuration would keep them below the SWU cap.

To assess this need, the tables above presents estimates of the fuel requirements for current and possible future Iranian nuclear reactors.

 

 

Options for the Arak Reactor

A comprehensive agreement will need to determine the future of the 40-MWt, heavy-water reactor at Arak, which remains years away from completion. For the P5+1, this reactor presents a serious, long-term proliferation concern because heavy-water reactors are well suited to the production of weapons-grade plutonium. Iran maintains that the Arak reactor is intended to produce medical isotopes, although its large size far exceeds what is necessary for isotope production.

Under the current design configuration, the reactor will produce enough weapons-grade plutonium per year once operational for about two nuclear weapons. The spent fuel would need to be removed from the reactor and allowed to thermally cool for several months, then the weapons-grade plutonium-239 would need to be reprocessed, or separated from the spent reactor fuel, before it could be used in weapons. Iran currently does not have a reprocessing facility and says it has no intention to build one, but could construct a reprocessing plant relatively quickly if it chose to do so.

Additionally, because the Arak site represents Iran’s only indigenously developed and domestically constructed nuclear facility, Tehran strongly opposes any outcome that would require it to shut the facility and opposes to converting it to a more proliferation-resistant light-water reactor.

Shutting down the Arak reactor is not the only way to guard against its possible use for fissile material production. Its design can be modified in ways that significantly reduce the amount of weapons-grade plutonium in its spent fuel, while allowing Iran to use the facility for medical isotope production and research.

Salehi said that Iran could “make some change in the design in order to produce less plutonium in this reactor and in this way allay the worries and mitigate the concerns.”[29]

One of these design modifications would be to reduce the reactor from 40 MWt to 20MWt, 15 MWt or 10 MWt. This would reduce the annual output of weapons-grade plutonium from approximately eight to nine kilograms to around one kilogram. Approximately four kilograms of plutonium-239 are required for the construction of the core of a nuclear weapon.[30] Some analysts suggest it would be useful to modify the reactor vessel containing the fuel rods to ensure the modification is irreversible, so that Iran could increase the power of the reactor over time.[31]

Another option that would reduce the output of weapons-grade plutonium in the spent fuel would involve conversion of the reactor to use uranium fuel enriched to 3.5 percent or 20 percent instead of the natural uranium fuel that the reactor’s design currently requires.

Reactors that use natural uranium fuel are especially well suited for plutonium production because virtually all of the neutrons they produce that are excess to the requirements for maintaining the fission chain reaction are absorbed. There is less excess when using enriched uranium fuel.

Although fueling the reactor with enriched uranium would increase Iran’s practical needs for enriched uranium, the plutonium produced in the spent fuel would pose less of a concern for weapons use. Additionally, the need to produce 3.5 percent-enriched uranium for the Arak reactor could not be used by Iran to legitimize a large enrichment capacity. About 1,300 IR-1 centrifuges could produce enough material annually to fuel the Arak reactor operating at 20 MWt.[32]

From a nonproliferation standpoint, converting the Arak reactor to use 3.5 percent-enriched fuel would be preferable to converting it to use 19.75 percent-enriched fuel. If Iran produces its own fuel for the Arak reactor, it would be better that it not have a reason, in the near term at least, to produce more uranium that is enriched to almost 20 percent. Uranium enriched to that level requires much less additional enrichment to reach weapons grade (an enrichment level of 90 percent or more). Iran has produced enough uranium enriched to almost 20 percent to fuel the Tehran Research Reactor for several years at least and has suspended further production as a confidence-building measure under the Joint Plan of Action.

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Under either of these configurations, Iran could use the Arak reactor for the production of medical isotopes and nuclear research as originally intended.

An additional option to reduce the Arak reactor’s proliferation potential would be to require that all spent fuel from the reactor be verifiably removed for disposition in a third country, possibly Russia, to prevent it from becoming a source of plutonium for nuclear weapons development. Russia is already responsible for removing the spent fuel produced by the Bushehr reactor. The quantities of spent fuel from Bushehr far exceed what would be produced by the Arak reactor. This option would put the weapons-usable plutonium even further out of reach for separation by Iran.

Another possible compromise that would effectively neutralize the Arak facility’s plutonium potential would be to convert it to a more proliferation-resistant light-water reactor, but this option would require Iran to abandon its original heavy-water technology choice and would be strongly resisted by Iran, given its indigenous development of the reactor and its investment in technologies and facilities for the production of heavy-water.

Monitoring and Verification Measures

To provide greater assurance that any ongoing Iranian nuclear activities are not diverted for weapons purposes, the two sides will likely include additional international monitoring and transparency measures, including inspections of undeclared nuclear sites in order to guard against rapid breakout and a potential secret program.

Currently, Iranian nuclear sites that are part of its safeguards agreement are covered by IAEA monitoring and verification rules in place between NPT members and the agency. Safeguards are activities that the IAEA undertakes to verify that a state is living up to its international commitments not to use nuclear programs for nuclear weapons purposes. NPT states-parties are obligated to have a safeguards agreement in place. Safeguard activities undertaken by the agency are based on a state’s declaration of its nuclear materials and nuclear-related activities. Verification measures include on-site inspections, monitoring, and evaluation.

Iran’s safeguards agreement entered into force in 1974. It grants the IAEA access to Iran’s declared nuclear sites, including uranium-enrichment sites at Natanz and Fordow, the fuel fabrication plant at Esfahan, the Arak heavy-water reactor, and the Tehran Research Reactor, for monitoring and verification purposes.

The starting point for increasing the robustness of the monitoring and verification regime is the ratification and implementation by Iran of an additional protocol to its safeguards agreement with the IAEA. The Model Additional Protocol was developed to compensate for the deficiencies of the core safeguards regime that were revealed in the wake of the 1991 war with Iraq.

Zero Enrichment: Myths and Realities

Some policymakers and analysts argue that any negotiated settlement with Tehran must require Iran to give up all enrichment activities. There are numerous credible justifications for this demand, including long-standing U.S. policy that the nuclear Nonproliferation Treaty (NPT) does not include the “right to enrichment.”

Additionally, Iran has pursued its enrichment capability in secret for 18 years and did so as part of, or in parallel with, an apparent nuclear weapons program. Tehran only declared its enrichment-related facilities after those facilities were publicly revealed or otherwise discovered. The materials and technology for this work were primarily acquired illicitly through the Abdul Qadeer Khan network and by violating national export controls in other countries. In essence, Iran’s enrichment program was infused with illegal activity from the start.

The public rationale for the existence of Iran’s enrichment program is questionable. Tehran claims that it wants to enrich uranium to manufacture fuel for an ambitious nuclear energy plan, ultimately producing a total of about 20,000 megawatts of electricity in about 20 nuclear reactors. Yet, Iran’s sole nuclear power reactor at Bushehr began operations only last year, and Russia has agreed to provide fuel for that plant for at least the next 10 years. Any additional nuclear reactors that would require Iranian fuel are years away. As a result, Iran does not appear to have any need for low-enriched uranium for at least the next decade. The fact that Iran decided in 2010 to begin enriching uranium to 20 percent, well above the 3.5 percent level of material used in power reactors and in excess of its needs for the Tehran Research Reactor, further elevates concerns about Tehran’s motives.

Although the arguments against Iran maintaining an enrichment capability are sound from a nonproliferation perspective, the prospect of achieving such an outcome through negotiations or any other means is not realistic at this point. Iran is not likely to give up such a capacity willingly, and there are no credible options to forcibly eliminate such a capacity from Iran altogether. Additionally, the November 24 agreement stipulated that a final deal will allow Iran a limited uranium-enrichment program based on its practical needs. Insisting on a zero-enrichment result would violate the agreed-on parameters of a comprehensive deal.

The zero-enrichment stance does not appear to have much support from the international community. Developing countries, including key U.S. partners such as India, have frequently issued statements backing Iran’s rights to a peaceful nuclear program. A Brazilian-Turkish diplomatic effort with Iran concluded in a May 2010 statement that Iran has the right under the NPT “to develop research, production and use of nuclear energy (as well as nuclear fuel cycle including enrichment activities) for peaceful purposes without discrimination.”

Perhaps most importantly, although China and Russia supported the UN Security Council’s demand for enrichment suspension by Iran, they do not appear to favor requiring that Iran forgo enrichment activities permanently. If these key countries are unwilling to enforce a zero-enrichment demand on Iran, efforts to apply political and economic pressure on that basis will not be successful.

Lastly, achieving a zero-enrichment state is not necessary to prevent Iran from obtaining nuclear weapons and should not be the roadblock that prevents an effective, comprehensive deal.

In testimony before the House Foreign Affairs Committee on March 1, 2011, Secretary of State Hillary Rodham Clinton said that, “under very strict conditions Iran would, sometime in the future, having responded to the international community’s concerns and irreversibly shut down its nuclear weapons program, have such a right [to enrich uranium] under [International Atomic Energy Agency] inspections.”[28]

Although an agreement that allows Iran to maintain a limited enrichment capability could arguably make it more difficult to convince other countries to forgo sensitive fuel-cycle technologies, the damage to the nonproliferation regime would be far greater if the opportunity to resolve the issue diplomatically was lost because the United States insisted on a zero-enrichment outcome.

Without an agreement with Iran that limits its capacity to produce fissile material and improves international monitoring in exchange for phased sanctions relief, Iran’s nuclear weapons capabilities would grow over time, and the risk of a military conflict would rise. If the international community perceives that the negotiations fell short due to U.S. demands that Iran halt all uranium-enrichment activity, it would be very difficult to sustain, let alone toughen the international sanctions against Iran.

Even if the P5+1 agree that Iran can continue to enrich uranium on a limited basis, it is unlikely that other countries will be encouraged to follow Iran’s example. For the vast majority of countries, national enrichment capabilities are not economically viable, they would be very costly politically, and, given abundant global fuel supply options, they are unnecessary for any state that wishes to pursue a nuclear energy program.

An additional protocol is a legal document granting the IAEA inspection authority beyond what is permitted by a safeguards agreement. Additional protocols are voluntary agreements negotiated on a state-by-state basis with the IAEA. A principal aim is to enable the IAEA inspectorate to provide assurance that there are no undeclared activities and all declared nuclear activities are for peaceful purposes.

Once an additional protocol is adopted and implemented by a state, the IAEA is granted expanded rights of access to information and sites. States must provide information about and IAEA inspector access to all parts of a state’s nuclear fuel cycle, including uranium mines, fuel fabrication and enrichment plants, and nuclear waste sites, as well as to any other location with nuclear material. Additional protocols typically include provisions granting visas to inspectors, granting access to R&D activities, and granting information on the manufacture and export of technologies, and allowing for environmental samples.

These inspections allow the IAEA to access nondeclared sites without prior notification, which is a strong deterrent against any clandestine nuclear weapons work.

The IAEA has stated repeatedly in its reports that unless Iran implements an additional protocol, “the agency will not be in a position to provide credible assurance about the absence of undeclared nuclear material and activities in Iran.”

Iran negotiated an additional protocol with the IAEA and signed the agreement in 2003. Between 2003 and 2006, Iran voluntarily implemented its additional protocol, but never ratified the document. In 2006, Iran announced that it would no longer implement the provisions of the agreement.[33]

It is likely that, under the terms of a still-to-be-negotiated comprehensive agreement, Iran would be required to implement its additional protocol at an early stage, with ratification at a later point in time. Once the Iranian parliament approves ratification, the duration of the additional protocol would be unlimited.

With an additional protocol in place, the IAEA would be able to visit all facilities associated with Iran’s nuclear activities, including sites to which it does not currently have access, such as uranium mines, Iran’s centrifuge production facilities, and its heavy-water production plant. The additional protocol would also substantially expand the IAEA’s ability to check for clandestine, undeclared nuclear facilities by providing the agency with authority to visit any facility, declared or not, to investigate questions about or inconsistencies in a state’s nuclear declarations.

The IAEA would be able to visit any site on very short notice. These monitoring and verification measures would give the agency a more complete picture of Iran’s nuclear activities and allow for early detection of deviations from peaceful activities. Early notification would give the international community time to respond to activities that might indicate Iran is violating any comprehensive agreement and is pursuing nuclear weapons development.

Under a comprehensive agreement, it is very likely that Iran would be required to comply with the terms of the modified Code 3.1 version of IAEA safeguards, which requires that countries submit design information for new nuclear facilities to the IAEA as soon as the decision is made to construct or authorize construction of a facility.

In 2003, Iran accepted the terms of the modified Code 3.1, but reneged unilaterally on its implementation in March 2007. The IAEA maintains that subsidiary arrangements, including Code 3.1, cannot be altered unilaterally. Also, there is no mechanism in the safeguards agreement to suspend implementation of Code 3.1. Therefore, the IAEA maintains that it remains in force and Iran is not adhering to its obligations under Code 3.1 to provide the agency with updated design information for new and existing nuclear facilities.

If Iran implements Code 3.1, the IAEA would receive information about any plans Tehran has to expand its nuclear program earlier than it would under the existing safeguards agreement. Iran would also be obligated to share any design changes to existing nuclear facilities.

Yet, an additional protocol and Code 3.1 will not be enough to provide sufficient assurance against proliferation if Iran continues to maintain an enrichment program.

The P5+1 will likely seek additional inspection measures for an extended period of time to provide still more confidence to the international community that Iran’s nuclear program is being used for entirely peaceful purposes. This could include additional formal verification requirements and confidence-building measures. Such steps would need to cover all of Iran’s nuclear activities, including its uranium mines, and would need to ensure that Iran would not be left with an LEU stockpile it could quickly convert to weapons-grade material.

Nuclear “Rights” and Responsibilities

Iranian leaders have argued for years that attempts to limit Iran’s nuclear program and impose sanctions infringe on Iran’s sovereign rights as a member of the nuclear Nonproliferation Treaty (NPT). Article IV of the NPT says that the states-parties have an “inalienable right to the peaceful use of nuclear energy.”

U.S. and other Western government officials, however, note that the NPT does not specifically give states parties a “right” to engage in sensitive nuclear fuel-cycle activities, including uranium enrichment and plutonium separation. They also point out that the treaty obliges non-nuclear-weapon states under Article II “not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices” and under Article III “to accept safeguards” in accordance with International Atomic Energy Agency standards and practices “with a view to preventing diversion of nuclear energy from peaceful uses to nuclear weapons or other nuclear explosive devices.”

Some critics of the November 24, 2013, interim agreement argue that “allowing” Iran to continue enriching uranium is counter to the U.S. policy position that does not recognize the right to enrich as part of the NPT, especially if states have engaged in illicit nuclear weapons-related research.

The P5+1 and Iran did not agree on the nature of Iran’s nuclear energy “rights” in their November 24 first-phase agreement, but the P5+1 recognized that Iran already has a nuclear enrichment program and would insist on retaining some enrichment capacity.

As such, as part of the broad parameters of the final deal, the parties agreed to negotiate practical limits on the scope of the enrichment program and additional safeguards on ongoing Iranian enrichment activities at its Natanz and Fordow facilities in order to reduce Iran’s nuclear weapons potential.

One of the key objectives for any enhanced safeguards regime in Iran would be instituting measures that would provide an accurate and thorough accounting of nuclear material being used at Iran’s enrichment-related facilities. Any nuclear facilities Iran maintains would continue to pose a risk that nuclear material might be diverted. Therefore, more-stringent material accountancy in key nuclear facilities would provide greater assurance that no material has been diverted and impose a stronger deterrent against such action.

Such stronger measures could include measuring the mass balance of uranium going into and coming out of Iran’s uranium-conversion plant and using the destructive analysis technique at Iran’s enrichment plant to reduce errors in measuring the amount of nuclear material present. Under these procedures, Iran would find it more difficult to siphon some of its nuclear material for any parallel, secret program.

An intensified safeguards regime would need to provide the earliest-possible indication of any diversion or any other attempted misuse of nuclear material and facilities. The expedited inspections regime under an additional protocol would need to be supplemented by real-time monitoring of key facilities, in particular Iran’s enrichment and conversion plants. If Iran decided to move its stores of uranium hexafluoride or LEU from those facilities to enrich either to weapons-grade levels, a real-time monitoring arrangement would provide the earliest-possible indication of such an action, allowing the international community to respond before Iran could manufacture nuclear devices.

Finally, Iran could institute confidence-building measures regarding the nuclear material it produces, such as exporting the LEU it produces for fuel fabrication, thereby preventing it from holding on its territory a stockpile of LEU that could be further enriched to produce nuclear weapons. Such a measure would not likely be agreeable on a long-term basis, but could be instituted following a suspension period to provide additional confidence and until Iran develops a domestic need for such LEU.

These measures should be of limited duration, particularly as the Joint Plan of Action stipulates that additional measures have an agreed-on duration. The lifting of more-intrusive monitoring and verification measures could be tied to actions taken by Iran, including the ratification of an additional protocol.

Sanctions Relief

Determining the sequence of sanctions relief within the terms of a comprehensive agreement will be difficult. Although the Joint Plan of Action stipulates that all proliferation-related sanctions, including U.S., EU, and UN measures, be lifted as part of a final agreement, the sequence of relief will be determined by the negotiations.

Iran will likely press for a deal that front-loads sanctions relief, whereas the P5+1 will probably push for sanctions to be waived for the short term before being lifted. In the United States, the president has considerable waiver authority to relieve sanctions, but actually lifting many of the measures will require congressional action.

In the short term, waivers could be a good compromise because they grant meaningful sanctions relief while leaving the core of the legislation in place that will allow for the rapid reimposition of restrictions if Iran breaks the agreement. Early relief could include releasing frozen Iranian oil assets on a monthly schedule, similar provisions in the Joint Plan of Action. The United States also could allow for Iran to repatriate its funds from oil sales. On the EU side, a meaningful measure could be to allow for insurance of tankers carrying Iranian crude. The United States also could waive the requirement that countries importing oil from Iran reduce the levels of their imports every six months.

Taken together, these measures would provide considerable financial relief for Iran.

In the United States, given that lifting sanctions in the long term requires legislation in Congress, that action could be tied to a reciprocal action in Iran that requires the approval of its parliament. Ratification of an additional protocol could be the reciprocal action for congressional action lifting oil, financial, and nonproliferation sanctions.[34]

Sanctions relief is not the only incentive for Iranian compliance. The Joint Plan of Action pledges civil nuclear cooperation with Iran. International assistance on these civil nuclear projects should be phased in through during the course of the agreement. Civil nuclear cooperation on new facilities, such as light-water reactors, could be linked to resolution of the issue concerning possible military dimensions of Iran’s nuclear program. When the IAEA is satisfied that Iran’s nuclear program is entirely peaceful, the P5+1 could work with Iran on constructing and potentially fueling these reactors.

UN Security Council Resolutions

The preamble of the Joint Plan of Action requires that the negotiations on a comprehensive deal address the conditions of the six UN Security Council resolutions dealing with Iran’s nuclear program.

The core demands of the resolutions are that Iran halt its nuclear activities, including uranium enrichment and construction of the Arak reactor, and address outstanding IAEA concerns.

Notably, the UN Security Council’s earlier demands for Iran to “suspend” uranium enrichment does not require that a comprehensive agreement must end all Iranian enrichment activity.

The purpose of UN Security Council demands for the suspension of uranium enrichment and other sensitive fuel-cycle activities was to prevent Iran from accumulating more enriched uranium and a larger fissile material production capacity until it restored confidence in the peaceful nature of its nuclear program, not to cease all uranium enrichment activities permanently.[35]

None of the six resolutions call for Iran to dismantle its enrichment facilities or permanently halt enrichment. All six contain the same language promoting a diplomatic resolution to the concerns over Iran’s nuclear program that respects Tehran’s right to a peaceful nuclear program.

During debate before the most recent resolution was adopted on June 9, 2010, British Ambassador to the UN Mark Lyall Grant, speaking on behalf of the P5+1, said the resolution was intended to keep “the door open for continued engagement” with Iran over its nuclear program. He said that the purpose of such diplomatic efforts must be to achieve a comprehensive, long-term settlement that respects Iran’s legitimate right to the peaceful use of atomic energy.[36]

That resolution, Resolution 1929, expanded the scope of sanctions and for the first time demanded that Iran suspend any activities related to the testing and development of ballistic missiles “capable of delivering nuclear weapons.” In addition, the resolution banned all transfers of heavy weaponry to Iran.

Iranian officials have publicly and privately expressed their strong opposition to any discussion of Iran-specific ballistic missile limitations in the ongoing nuclear talks. They argue that Iran’s missiles are a legitimate means of self-defense in an unstable region where other countries are threatening to attack it, and they note that the first-phase agreement made no mention of missiles in its framework for a final deal.

Some members of Congress and independent experts believe limits on Iran’s nuclear-capable ballistic missiles should be on the agenda of ongoing negotiations between Iran and the P5+1. For example, a bill introduced earlier this year by Senators Robert Menendez (D-N.J.) and Mark Kirk (R-Ill.) would require that any comprehensive agreement include specific limits on Iranian missiles.

In response, senior administration officials have provided assurances that the issue of Iranian missiles would be “addressed, in some way” during the ongoing negotiations because UN Security Council Resolution 1929 references it, but they have not elaborated how it might be addressed.

The missile issue is certainly relevant to the issue of Iran’s future nuclear weapons potential, but it must be handled very carefully. Attempts by the P5+1 to impose specific, binding limits on Iranian ballistic missile capabilities at this point could jeopardize chances to conclude an agreement that establishes verifiable limits on its ability to produce material for nuclear weapons. Without its ability to produce nuclear weapons, Iran’s ballistic missiles pose much less of a threat to its neighbors.

Therefore, the most effective way to address the potential threat of nuclear-armed Iranian ballistic missiles is to conclude a robust deal between Iran and the P5+1 to prevent Iran from being able to build nuclear weapons.

As the lead U.S. negotiator, Undersecretary of State Wendy Sherman noted in a February 4 hearing of the Senate Foreign Relations Committee, “[I]f we can get to the verifiable assurance that [the Iranians] cannot obtain a nuclear weapon,…then a delivery mechanism, important as it is, is less important.”[37]

The primary means of ensuring that Iran cannot obtain a nuclear weapon is to ensure that Iran’s fissile material production capacity is sufficiently limited and transparent. This requires that a comprehensive agreement lead to limits on Iran’s overall uranium-enrichment capacity that are commensurate with a realistic assessment of Iran’s practical needs for civilian nuclear activities, the implementation of a more rigorous IAEA safeguards regime, and the resolution of concerns about the possible military dimensions of Iran’s nuclear program. Within such a framework, the international community would have the tools to detect and the time to disrupt a possible attempt by Iran to break out of the NPT to build nuclear weapons.

The ballistic missile issue could be addressed in a comprehensive agreement under a requirement that Iran cooperate with the IAEA within the next year or so to resolve allegations that Iran has conducted research for adapting the front section of a Shahab-3 medium-range ballistic missile to accommodate the installation of a nuclear warhead. The final deal between Iran and the P5+1 should provide direction and a time frame to the IAEA and Tehran to finally resolve these and other outstanding issues with possible military dimensions.

It might be possible to persuade Iran to make a voluntary commitment to greater transparency with regard to its missile activities outside the terms of a comprehensive agreement. Such transparency measures might include providing timely notification of flight tests, exercises, and field deployments.

Iran could also pledge to join the Hague Code of Conduct Against Ballistic Missile Proliferation, a confidence-building regime to which 137 states subscribe. The provisions of this code include commitments to provide prelaunch notifications of launches of ballistic missiles and space launch vehicles. Subscribing states also commit to submitting an annual declaration of their policies on ballistic missiles and space launch vehicles.

Because no Middle Eastern countries currently subscribe to this code of conduct, a proposal to Iran and its key regional neighbors simultaneously seems the most likely way to induce Iran to participate.

In addition to the requirements on Iran imposed by the UN Security Council, four council resolutions include a series of progressively restrictive sanctions against Iran for failing to halt its nuclear and ballistic missile activities. These sanctions must be removed as part of a final deal.

Resolving Questions About Possible Military Dimensions

The preamble to the Joint Plan of Action requires that a comprehensive agreement address concerns listed in the UN Security Council resolutions on Iran’s nuclear program. Also, the IAEA has passed six resolutions calling for a halt to Iran’s nuclear activities and cooperation with IAEA investigations into its outstanding concerns about Iran’s initial declaration and the possible military dimensions of Iran’s nuclear program.

Iran and the IAEA are negotiating on these concerns in a separate track under a November 11, 2013, framework for cooperation. Yet, the issues of past activities with possible military dimensions will need to be addressed in a comprehensive agreement that allows the IAEA to continue its investigation uninhibited and ensures that Iran provides the agency with the information necessary to complete its task.

Given the pace of these investigations, Iran and the IAEA will not complete this process before the July 20 deadline. It is unlikely that the process can be completed by January, in the event that the P5+1 and Iran agree to an extension to the Joint Plan of Action.

It is vital that Iran cooperate with the investigation in a timely manner. Given the need for a thorough investigation, however, it would be unwise to rush the IAEA into a quick resolution of its investigation solely to meet negotiating deadlines. To make the determination that Iran’s nuclear program is entirely peaceful, the agency will need to investigate each of the issues involving possible military dimensions individually and as a system to gain a complete understanding of Iran’s past work on nuclear weapons development. Measures proposed in the U.S. Congress that require Iran to resolve all questions about the possible military dimensions of Iran’s nuclear program before the conclusion of negotiations on a comprehensive agreement would be counterproductive.

A comprehensive agreement can play a role in facilitating Iranian cooperation and a prompt conclusion to the agency’s investigation. A comprehensive deal could state that the information that Iran provides to the IAEA will be used only for the IAEA’s determination of whether Iran’s nuclear program is entirely peaceful. In other words, Iran should be assured that it will not be penalized for fully disclosing its past activities.

A comprehensive agreement could address the issue of possible military dimensions by tying UN Security Council sanctions relief to successful resolution of these issues and containing language that would reimpose sanctions if Tehran failed to complete the IAEA track. This should provide sufficient incentives for Iran to follow through on cooperating with the IAEA’s investigations into its work.

Bottom Line: A ‘Win-Win’ Deal to Guard Against a Nuclear-Armed Iran

To guard against an Iran armed with nuclear weapons and avoid a future confrontation over its nuclear program, the P5+1 and Iran must expeditiously negotiate and implement a long-term, final-phase agreement on the basis of realistic and achievable goals that meets the core requirements and respects the bottom-line needs of each side.

A “win” for the P5+1 is a comprehensive agreement that establishes verifiable limits on Iran’s nuclear program that substantially increase the time required for Iran to break out of the NPT and build nuclear weapons, increases the ability to promptly detect and effectively respond to a breakout, and decreases Iran’s incentive to pursue nuclear weapons development in the future.

A “win” for Iran would be preservation of key elements of its nuclear program, including some uranium-enrichment and R&D activities; protection of its “right” under the NPT to a peaceful nuclear program; and removal of international, nuclear-related sanctions.

If either side pushes to include unrealistic requirements, the chances for a negotiated resolution will decrease, and the chances of a conflict and a nuclear-armed Iran will increase.

A final-phase agreement will require difficult compromises on both sides, but it is the far more preferable and effective way to resolve the long-running dispute over Iran’s nuclear ambitions.

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Posted: June 23, 2014

SECTION 2: Understanding the Joint Plan of Action

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The November 24 Joint Plan of Action contains first-phase steps for Iran and the P5+1 to take over a six-month period that address urgent concerns of both sides. It also contains the broad parameters of a comprehensive agreement. This breakthrough accord was reached after three rounds of talks between the P5+1 and Iran, following Rouhani’s inauguration as president of Iran and his appointment of a new negotiating team led by Foreign Minister Mohammed Javad Zarif.

The framework agreement’s first-phase steps verifiably freeze progress in all areas of acute concern regarding Iran’s nuclear program. It also rolled back Iranian capabilities in some areas and significantly increased IAEA monitoring and verification of Iranian nuclear activities.

In exchange, Iran received some relief from proliferation-related sanctions imposed by the United States and the European Union, including the repatriation of $4.2 billion in frozen Iranian oil revenue, and a pledge that new nuclear-related sanctions would not be imposed for the duration of the agreement. Meanwhile, the core of the existing international financial and oil sanctions regime against Iran would remain in place.

Implementation of the agreement began on January 20. The six-month time frame for the first-phase actions will end on July 20, but can be extended for another six months if both parties agree.

Under the interim agreement, the IAEA submits monthly reports on the status of the implementation. Also, the Joint Plan of Action set up a joint commission to evaluate any disputes that might arise over the course of the six-month period. The rationale was that these issues should be separate from the negotiations on a comprehensive agreement.

Enriched Uranium

Implementation of the first phase of the agreement rolled back Iran’s uranium-enrichment program by capping the levels of enrichment, freezing the number of centrifuges enriching uranium, and neutralizing the most proliferation-sensitive aspect of Iran’s nuclear program: its stockpile of uranium enriched to 20 percent.

In the Joint Plan of Action, Iran committed to enrich uranium to no more than 5 percent over the course of the agreement.

On January 20, the IAEA confirmed that Iran halted production of uranium enriched to 20 percent at Fordow and the Pilot Fuel Enrichment Plant at Natanz. Fordow, which only produced uranium enriched to 20 percent, was repurposed by the Iranians to produce reactor-grade uranium, but the cascades at Fordow cannot operate in an interconnected design as they had in the past.

As part of the agreed monitoring and verification mechanism, the Joint Plan of Action allows the IAEA to visit Natanz and Fordow on a daily basis and the IAEA installed real-time monitoring to ensure that Iran does not begin operating additional centrifuges or restart enriching uranium to 20 percent. Under the terms of the agreement, Iran can replace broken or damaged centrifuges, but not put any new centrifuges into operation.

On January 20, Iran’s stockpile of uranium hexaflouride gas enriched to 20 percent was 209.1 kilograms, just short of the estimated 240 to 250 kilograms that, when further enriched, is enough for one weapon. In May, the IAEA reported that Iran’s stock of uranium enriched to 20 percent was 38.4 kilograms as a result of the implementation of the agreement.

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In the Joint Plan of Action, Iran committed to take steps to reduce the threat posed by its stockpile of uranium enriched to 20 percent. Half of its 20 percent stockpile of hexafluoride gas was to be down-blended to 3.5 percent-enriched uranium hexafluoride gas; the other half is being converted into a powder form that can be used to make fuel plates for the Tehran Research Reactor.

The powder form can be reconverted to gas, but Iran committed not to set up a line to do so, and the IAEA has confirmed that no such line exists. During any reconversion process, Iran would lose a significant quantity of material, perhaps as much as 30 percent, according to some experts.

The April 17, 2014, IAEA report on implementation confirmed that Iran completed the dilution of half of the 20 percent-enriched material to reactor-grade levels within the first three months, which was the time frame required by the agreement.

As of the May 23 IAEA report, Iran had converted 67 kilograms of 20 percent enriched uranium hexafluoride gas to powder form. An additional 38 kilograms remain to be converted.

Iran is allowed to continue enriching uranium to 3.5 percent under the November 24 agreement, but Tehran agreed to convert the uranium enriched to that level during the six months of the initial deal to a powder form that can be used to fuel nuclear power reactors.

In total, Iran’s stockpile of uranium enriched to 3.5 percent was about 7,600 kilograms at the time that implementation of the Joint Plan of Action began in January. Since January, the stockpile has grown to 8,475 kilograms, according to the May 23 IAEA report.

This growth is a result of the continued production of uranium enriched to 3.5 percent and the dilution of 105 kilograms of uranium enriched to 20 percent. Iran did not complete construction of the conversion plant that will allow it to convert the 3.5 percent-enriched uranium hexafluoride gas to uranium dioxide powder until May 2014. Conversion should begin in June 2014.

Iran originally said that the facility would begin operations in December 2013. Iran maintains that, despite the delay, it will be able to complete the necessary conversion of the 3.5 percent-enriched uranium to ensure that there is no net growth in the stockpile between January 20 and July 20.

Natanz

Under the November 24 agreement, Iran committed not to install any additional centrifuges at the Natanz Fuel Enrichment Plant and not to operate any more centrifuges than were operating at the time of the November agreement.

The monthly IAEA reports confirm that the number of centrifuges installed at Natanz remained the same: 15,420 IR-1 machines in 90 cascades and 1,008 IR-2M machines.

The number of IR-1 centrifuges enriching uranium to 3.5 percent at Natanz is unchanged from the November report, with about 9,200 IR-1 machines operating in 54 cascades.

An additional two cascades that had been producing uranium enriched to 20 percent at the Pilot Fuel Enrichment Plant at Natanz have been converted to enrich uranium to 3.5 percent and are no longer enriching in an interconnected design.

The IAEA has set up additional surveillance at Natanz that will allow the agency to confirm that Iran does not begin operating any additional centrifuges on the days that it does not visit the facility.

Fordow

Iran committed to halt uranium enrichment to 20 percent at the Fordow facility and not to operate or install any additional centrifuges at the facility as part of the November 24 agreement. Iran also said it would no longer operate the four cascades running at Fordow in an interconnected design.

On January 20, Iran halted enrichment of uranium to 20 percent in the 696 IR-1 centrifuges operating at Fordow and notified the IAEA that it would begin enriching to 3.5 percent using the same 696 centrifuges. The monthly IAEA reports confirm these actions and that the agency has surveillance in place to ensure that Iran does not begin operating any of the 12 additional cascades at Fordow.

Centrifuge Production and Monitoring

Under the Joint Plan of Action, the IAEA was allowed managed access for the first time to Iran’s centrifuge assembly workshops, rotor production sites, and centrifuge storage areas. This access will help the IAEA ensure that Iran has limited its production of IR-1 centrifuges to those needed to replace damaged machines, as per the conditions of the November 24 agreement.

This access will help guard against the pursuit of any clandestine enrichment programs because it will give the IAEA greater oversight of Iran’s centrifuge production capabilities and allow it to better track the total number and locations of centrifuges Iran has produced.

As part of the agreement, Iran committed not to move forward on any new centrifuge enrichment plants over the agreement’s six-month time span. In 2010, Iran declared that it intended to construct an additional 10 facilities, but did not give any time frame for these plants or information to the IAEA about the facilities. As part of separate negotiations with the IAEA, Iran provided these details in early 2014, but they have not been made public.

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Arak

Under the November 24 agreement, Iran was required to provide the IAEA with updated design information for the heavy-water reactor at Arak (IR-40), refrain from installing any major components, and halt production of fuel assemblies. Also, Iran committed not to engage in any reprocessing activities or build a facility to reprocess plutonium from spent fuel.

As originally designed, the 40-MWt Arak heavy-water reactor poses a proliferation threat because when operational, the spent fuel would contain plutonium, which, when separated, is useable for nuclear weapons.

According to the May IAEA report, the agency has monthly access to the reactor as required under the Joint Plan of Action. The monthly reports confirm that no major components were installed since the November 2013 report and that updated design information was provided to the IAEA in February and March. The reports also confirm that Iran halted production of the fuel assemblies for the Arak reactor. As of the November IAEA report, Iran had produced 11 fuel assemblies made of natural uranium. The reactor is designed to contain 150 fuel assemblies.

The IAEA was able to access the Heavy Water Production Plant at the Arak site in December 2013 for the first time in more than two years. The IAEA reported that the plant has produced 100 tons of reactor-grade heavy water since it began operations in 2006.

The quarterly May 2014 IAEA report said that the agency is working with Iran to conclude a safeguards agreement for the Arak heavy-water reactor. On May 5, Iran and the IAEA met to continue discussions on the appropriate safeguards approach. The parties committed to complete the updated safeguards approach by August 25.

Research and Development

Under the terms of the November 24 agreement, Iran is allowed to continue its R&D activities under existing IAEA safeguards.

According to the IAEA’s quarterly report issued in May, Iran is continuing to test its advanced centrifuges (the IR-2M, IR-4, IR-6, and IR-6s machines) as single machines and in cascades at its R&D plant at Natanz. Iran also has an IR-5 centrifuge at the facility that it is not yet testing.

On December 4, Iran informed the IAEA that it will begin testing a new model, the IR-8. According to the May 2014 report, the IAEA noted that as of December 2013, a new centrifuge casing was installed in the R&D area but it was not yet connected for testing.

Sanctions Relief

In return for Iran’s actions limiting and rolling back its nuclear activities, the P5+1 committed to provide relief from proliferation-related sanctions over the course of the first-phase agreement. The Joint Plan of Action also committed the United States, the EU, and UN Security Council from passing any further sanctions related to proliferation concerns.

As part of the sanctions relief package, when implementation of the deal began on January 20, the United States and the EU suspended sanctions that prohibited the purchase of Iranian petrochemical products and trade with Iran using gold or other precious medals.

The United States also suspended sanctions on Iran’s auto industry and allowed for the supply of spare parts for civilian aircraft and installation services for the necessary repairs. On April 4, Boeing Co. announced that it received a license from the U.S. Department of the Treasury that will allow it to export spare aircraft parts.

Sanctions relief also targeted Iran’s oil sector. A December 2011 U.S. law required countries to stop importing oil from Iran unless granted a six-month waiver by the United States. Failure to comply would result in exclusion from the U.S. financial system. The waivers were renewable if countries continued to reduce their oil imports from Iran. Beginning in July 2012, the EU began its own oil embargo for all member states.

By the time of the November 24 agreement, Iran’s oil exports were limited to six countries: China, Japan, South Korea, India, Turkey and Taiwan. In total, this amounted to approximately 1 million barrels per day by mid-2013, roughly one-third of what Iran exported in mid-2011.

Under the November 24 agreement, the United States suspended its requirement that countries continually reduce their oil imports from Iran and froze Iran’s export levels at the November 2013 levels.

In addition, the agreement enabled the repatriation of $4.2 billion in Iranian oil revenue held abroad. Provisions that went into effect in 2013 prevented Iran from transferring oil payments back to Iran and required that the money only be used for trade between the country holding the funds and Iran. This has resulted in billions of dollars of Iranian oil revenues being held in foreign banks. The $4.2 billion was repatriated to Iran over the course of the first-phase agreement. Some of the payments were tied to the completion of Iranian actions, such as completion of the dilution of uranium enriched to 20 percent.

The first-phase agreement established a financial channel to facilitate humanitarian trade using the oil revenues held abroad. This channel was designed to allow for the purchase of food, medicine, and medical products and to pay for Iran’s UN obligations and tuition for Iranian students abroad.

The EU announced on January 20 a 10-fold increase in the authorizations for nonsanctioned trade with Iran.

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Posted: June 23, 2014

Executive Summary: Toward a Realistic and Effective Comprehensive Nuclear Agreement

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Negotiators from the United States and its P5+1 partners (China, France, Germany, Russia, and the United Kingdom) and their Iranian counterparts aim to negotiate a “comprehensive solution that would ensure Iran’s nuclear programme will be exclusively peaceful” and to settle the long-running international dispute over Iran’s nuclear capabilities and compliance with its nuclear Nonproliferation Treaty (NPT) safeguards obligations not to pursue nuclear weapons.

For the United States and its negotiating partners, an effective agreement should

  • establish verifiable limits on Iran’s program that, taken together, increase the time it would take for Iran to break out of the NPT and build nuclear weapons,
  • increase the ability of the international community to promptly detect and effectively disrupt any breakout attempt, and
  • decrease Iran’s incentives to pursue nuclear weapons in the future.

The framework and timetable for reaching a comprehensive deal was spelled out in their interim accord known as the Joint Plan of Action, which was concluded by the two sides in November 2013 and went into effect January 20, 2014.

This six-month-long agreement essentially freezes the growth of Iran’s nuclear capacity and increases international oversight of Iran’s nuclear activities, which has helped provide the time and trust necessary for negotiations on a comprehensive agreement.

Elements of a Comprehensive Deal

The two sides agreed in November that a comprehensive agreement would include several key elements.

  • Agreed limits on the size and scope of Iran’s uranium-enrichment program commensurate with its “practical needs” for a civil nuclear program.
  • Steps to reduce the proliferation potential of Iran’s Arak heavy-water reactor project.
  • More-extensive international monitoring and verification mechanisms, particularly at undeclared nuclear sites, to improve detection and deterrence of possible nuclear weapons-related activity in the future.
  • A resolution of the multiyear investigation by the International Atomic Energy Agency (IAEA) of past Iranian experiments with possible military dimensions.
  • Additional steps to address other issues cited in past UN Security Council resolutions relating to Iran’s nuclear program, which include Iranian ballistic missiles capable of delivering nuclear weapons.
  • Civilian nuclear energy assistance and cooperation for Iran.
  • The removal of sanctions imposed on Iran by the UN Security Council, the United States, and the European Union relating to its nuclear program.

Like the interim agreement, a comprehensive agreement would likely require that each side undertake reciprocal, step-for-step measures in stages. Whereas the interim agreement calls for actions to be taken within six to 12 months, the implementation steps for a comprehensive agreement would be measured in years.

A comprehensive agreement will set forth deadlines for the completion or initiation of certain actions by each side. Some provisions would be temporary and time limited, while other actions, such as more-extensive IAEA monitoring under the terms of an additional protocol to guard against the development of a secret nuclear weapons program, would be indefinite in duration.

The two sides appear to have made progress in several areas, but differences on some major issues must still be bridged, and time is running short.

It is possible that the negotiators will not be able to conclude a final, comprehensive agreement by their target date of July 20. By mutual consent, the two sides could agree to extend the interim agreement for as much as six months while they seek to reach agreement on any remaining issues.

Defining Iran’s Uranium-Enrichment Capacity

The most challenging issue appears to be how to negotiate a “mutually defined enrichment programme” with “agreed limits on the scope and level of enrichment, activities, capacity…and stocks of uranium” that are “consistent with practical needs.”

Since 2005, Iran increased its centrifuge capacity from 300 first-generation IR-1 machines at one site to about 19,000 installed, first-generation IR-1 machines at two sites. Today, about 10,200 are operating. About 1,000 advanced IR-2M centrifuges are installed at the Natanz enrichment plant, but are not operational.

Iran’s operating IR-1 machines could allow Tehran to enrich natural uranium stock into a sufficient quantity of highly enriched uranium (HEU) (25 kilograms in gaseous form) for one nuclear bomb in about six months, although such an effort would be detected first.

Taking into account Iran’s current stockpile of low-enriched uranium (LEU) (8,784 kilograms), Iran could use these operating centrifuges to produce enough HEU for one bomb in two to three months.

It is extremely unlikely that Iran would invite further sanctions or a military attack in order to produce enough fissile material for just one nuclear weapon, which is not an effective deterrent. If Iran tried to build a militarily significant nuclear arsenal, it would take considerably more than a year to amass enough material for additional weapons, convert the HEU gas to metal form, assemble and perhaps test a nuclear device, and mate the bombs with an effective means of delivery.

One critical goal for the P5+1 is to increase the time it would take to produce enough fissile material for an arsenal and enhance inspections and monitoring to ensure that any such effort could be detected and disrupted.

An agreement that significantly reduces Iran’s present-day enrichment capacity and its enriched uranium stocks would increase that time even further and still would provide Iran with more than sufficient capacity for its nuclear fuel needs, which are very limited for the next decade or more.

Yet, Iranian officials insist that Iran’s nuclear fuel needs will increase over the course of the next 10 to 15 years or more and say they cannot depend on foreign suppliers, given the unreliability of foreign suppliers in the past. It is estimated that Iran would need about 100,000 operational IR-1 centrifuges by 2021 to provide fuel for its Bushehr reactor if the current fuel supply contract with Russia is not renewed. Iran says it has plans for other power and research reactors.

To reach a comprehensive agreement, the two sides must find a formula that limits Iran’s uranium-enrichment capacity at the Natanz site in a way that precludes an Iranian dash to produce enough HEU for weapons without being detected and disrupted but allows for Iran’s practical civilian needs, which are very minimal for the next several years but could increase over time.

Iran and the P5+1 should be able to agree to several straightforward steps, such as

  • limiting uranium enrichment to levels of less than 5 percent;
  • keeping Iran’s LEU stockpile to a minimum (less than 1,000 kilograms or so); and
  • halting production-scale work at the smaller Fordow enrichment plant and convert it to a research-only facility.

Some independent analysts and some Israeli officials argue that Iran should mothball the underground Fordow plant, which is less vulnerable to an airstrike. Iran strongly opposes such an outcome.

Negotiators have other options available that could help square the circle on uranium-enrichment capacity and address the concerns of each side.

  • A comprehensive agreement could allow for appropriate increases in Iran’s uranium-enrichment capacity in the later stages of the deal. Such adjustments could be conditioned on Iran providing sufficient information to the IAEA to show that any past experiments with possible military dimensions have been discontinued and demonstrating that it cannot obtain foreign nuclear fuel supplies for the new nuclear power reactors that it builds.
  • Iran could agree to phase out, remove, and store under IAEA seal its less efficient, first-generation centrifuges and, over a period of years, replace them with a smaller number of more-efficient centrifuges. During the transition period, the total operating enrichment capacity would be held below agreed limits, ideally less than Iran’s current capacity. Iran could agree not to assemble the more efficient centrifuges until there is a demonstrable need for commercial-scale enrichment. This would increase the time it would take Iran to operate the machines, providing added insurance against rapid breakout scenarios.
  • To reduce Iran’s rationale for greater enrichment capacity to fuel future reactors, a comprehensive agreement could commit the P5+1 to provide fuel supply guarantees to Iran for any such needs.

Reducing the Proliferation Potential of the Arak Reactor

Another major issue that the two sides must resolve through a comprehensive agreement is the reduction of the proliferation risks posed by Iran’s effort to build a 40-megawatt thermal (MWt) heavy-water reactor at Arak. The reactor, as currently envisioned, is ideally suited to produce enough plutonium in its spent fuel for as many as two nuclear weapons annually.

The Arak reactor is a longer-term proliferation threat. The reactor, which is more than a year away from completion, would have to operate for approximately one year before spent fuel could be removed. The spent fuel would have to cool for several months, and then the plutonium would have to be chemically separated using a facility that Iran is not believed to have.

It appears that the two sides can probably come to terms on reducing the Arak reactor’s plutonium-production potential. According to statements made by the head of the Atomic Energy Organization of Iran, Ali Akbar Salehi, Iran is open to technical modifications of the reactor that would reduce its plutonium output. Members of the P5+1 indicate they would support this approach in principle. These design modifications include decreasing the power of the reactor from 40 MWt to 10 MWt and using low-enriched (3.5 percent) reactor fuel instead of natural uranium fuel.

These modifications would reduce the Arak facility’s annual output of unseparated plutonium-239 from about eight kilograms to less than one kilogram. The two sides would have to agree on how to ensure that the modifications are difficult to reverse.

The two sides should be able to agree, as they did in the November interim agreement, that Iran would not build a reprocessing facility to extract the weapons-grade plutonium from the reactor’s spent fuel.

As an additional safeguard, Iran and the P5+1 could agree to ship the spent fuel produced by the Arak facility out of Iran to prevent any covert reprocessing. Russia would be a likely destination because it is taking the spent fuel from the Bushehr reactor.

Resolving Concerns About Possible Weapons-Related Experiments

Another issue that must be addressed in order to build confidence in the peaceful nature of Iran’s nuclear program involves activities having possible military dimensions that Iran is believed to have conducted prior to 2004 and perhaps afterward.

Until this year, Tehran has not cooperated with IAEA efforts over the past several years to comprehensively verify Iran’s claims about the peaceful nature of its nuclear program, adding to suspicions about the purpose of Iran’s nuclear program.

Iran and the IAEA reached a framework agreement in November 2013 for moving forward to resolve the outstanding concerns. Although some initial progress has been achieved, the IAEA investigation will continue beyond July 20 and probably into 2015.

A comprehensive deal can play a role in facilitating Iranian cooperation and a prompt conclusion to the agency’s investigation. A comprehensive deal could,

  • clarify that the information that Iran provides to the IAEA will be used only for the IAEA’s determination of whether Iran’s nuclear program is entirely peaceful;
  • be conditioned on the IAEA determination that questions surrounding the possible military dimensions of Iran’s nuclear program have been addressed to the extent possible; and
  • clarify that international sanctions may be reimposed if Tehran fails to complete the IAEA’s requested actions in a timely manner.

These measures should provide sufficient incentives for Iran to follow through on closing its file with the IAEA.

Securing More-Extensive International Inspection Authority

If Iran were to pursue nuclear weapons development in the future, it would most likely try to do so by means of a secret program carried out at undisclosed facilities rather than its declared facilities under international monitoring.

The two sides agree that a comprehensive agreement should include requirements for more-timely notification of Iranian nuclear activities to the IAEA under Iran’s current comprehensive safeguards agreement with the IAEA and more-extensive IAEA inspection authority to guard against a secret weapons program under the terms of an additional protocol.

An additional protocol would allow the IAEA to conduct inspections of nondeclared sites without prior notification, which is a strong deterrent against any clandestine nuclear weapons work. In the first phase of a comprehensive agreement, Iran will likely be required to implement an additional protocol. At a later point, Iran would commit to ratify it. Once approved by the Iranian parliament, the duration of the additional protocol would be indefinite.

In addition, the P5+1 will seek more inspection measures for an extended period of time to provide still more confidence to the international community that Iran’s nuclear program is being used for entirely peaceful purposes, including ongoing monitoring of Iran’s centrifuge manufacturing facilities and support infrastructure.

Phasing Out Sanctions Against Iran

To secure a comprehensive agreement, the P5+1 will need to agree to phase out the tough, multilateral nuclear sanctions regime now in place, including the international oil and financial sanctions that are devastating Iran’s economy.

Iran will likely insist that, with each of the successive steps that it undertakes as part of a comprehensive agreement, there will be commensurate actions to suspend and then lift sanctions.

The step-for-step approach of a possible comprehensive agreement will require a new UN Security Council resolution on Iran’s nuclear program and positive, follow-up actions by the EU states and approval by the U.S. Congress of legislation that unwinds U.S. nuclear-related sanctions that impact other nations’ affairs with Iran.

Addressing Other Issues in UN Security Council Resolutions

The November 24 agreement stipulates that a comprehensive deal must address other issues in the existing UN Security Council resolutions. This includes Security Council Resolution 1929 (2010), which required Iran to halt all ballistic missile activity that could be used to deliver nuclear weapons.

The missile issue is certainly relevant to the issue of Iran’s future nuclear weapons potential, but it must be handled very carefully. Attempts by the P5+1 or the U.S. Congress to impose specific, binding limits on Iran’s ballistic missile capabilities at this point could jeopardize chances to conclude an agreement that establishes verifiable limits on Iran’s ability to produce material for nuclear weapons. Without Iran’s ability to produce nuclear weapons, its ballistic missiles pose much less of a threat to its neighbors.

Therefore, the most effective way to address the potential threat of nuclear-armed Iranian ballistic missiles is to conclude a robust deal between Iran and the P5+1 to prevent Iran from being able to build nuclear weapons.

Assessing the Outcome of the Negotiations

An agreement between the P5+1 and Iran should not be evaluated on the basis of any single feature. Instead, it must be assessed on the basis of its overall impact, especially the extent to which it limits Iran’s nuclear weapons-related capabilities, improves transparency about the program, and enhances the ability of the international community to promptly detect and disrupt any dash toward nuclear weapons.

Neither side can expect that they will achieve everything they seek. Inevitably, there will be critics of any agreement that emerges from the talks who will argue that the deal falls short of their expectations of what they consider to the requirements of any agreement.

In the final analysis, serious policymakers in Washington, Tehran, and other capitals who have responsibility for approving actions necessary to implement an agreement must consider whether their country is better served by an agreement than without one. They must consider that, without a comprehensive diplomatic solution,

  • there would be no verifiable limits on Iran’s uranium-enrichment capacity and Iran would likely deploy additional and increasingly efficient centrifuges;
  • Iran’s enriched uranium stockpiles would grow, not shrink;
  • the time it would take Iran to produce enough fissile material for nuclear weapons would decrease rather than increase;
  • IAEA inspections of Iranian facilities would likely continue but not be expanded to cover undeclared sites and activities, which is the most likely pathway to build nuclear weapons if Iran chose to do so; and
  • sanctions would remain in effect and some might be strengthened but sanctions alone cannot halt Iran’s nuclear progress and, over time, the willingness of international allies to help implement those sanctions could erode.

Although Iran would still have to overcome significant hurdles if it were to try to build nuclear weapons, this unpleasant scenario would likely increase the possibility of a military confrontation over time.

Yet, any use of military force against Iran’s nuclear sites by Israel or the United States and a coalition of the willing would only delay Iran’s nuclear program a few years at best and, at worst, would lead to a wider conflict and could very likely prompt Iran’s leadership to openly pursue nuclear weapons in order to deter any further attacks.

A ‘Win-Win’ Deal to Guard Against a Nuclear-Armed Iran

The P5+1 and Iran have a historic opportunity to negotiate a long-term, final-phase agreement that guards against a nuclear-armed Iran and helps avoid a future military confrontation over its nuclear program.

Both sides must focus on realistic and achievable goals that meet their own core requirements and offer solutions that respect the bottom-line needs of the other side.

If either side pushes to include unrealistic requirements or fails to follow through on the commitments established by the agreement, the chances for a negotiated resolution will decrease, and the chances of a military conflict and a nuclear-armed Iran will increase.

An effective, comprehensive nuclear agreement is the best option on the table to help resolve the long-running dispute over Iran’s nuclear ambitions.—KELSEY DAVENPORT, DARYL G. KIMBALL, and GREG THIELMANN

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Posted: June 23, 2014

Preface

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For well more than a decade, the sensitive nuclear fuel-cycle activities of the Islamic Republic of Iran have been at the center of international concern about the further spread of nuclear weapons.

In November 2013, after years of on-and-off negotiations, the Obama administration and its P5+1 partners (China, France, Germany, Russia, and the United Kingdom) secured an agreement with the Iranian government, led by newly elected, more moderate President Hassan Rouhani’s Foreign Minister Mohammad Javad Zarif.

The six-month-long interim agreement pauses some of the most proliferation-sensitive activities and opens the way for further talks on what the two sides called “a mutually-agreed long-term comprehensive solution that would ensure Iran’s nuclear programme will be exclusively peaceful.”

The negotiators’ immediate and more difficult challenge is to hammer out a comprehensive, final-phase agreement, possibly by July 20 or by the end of 2014 if the two sides agree to extend the interim agreement and the negotiations on a final deal.

This is the third edition of the Arms Control Association briefing book “Solving the Iranian Nuclear Puzzle” and is a substantial revision from the second edition. It is the first update since the conclusion of the interim agreement in November 2013.

This volume provides an overview of Iran’s nuclear history and an up-to-date summary of the status and capabilities of Iran’s nuclear program. It includes a new section analyzing the major issues and policy options now before the P5+1 and Iranian negotiators.

In our considered judgment, a comprehensive agreement that sets practical, lower limits on Iranian enrichment capacity, maintains Iranian nuclear material stockpiles at very low levels, and significantly reduces the proliferation potential of Iran’s other nuclear projects, combined with more-extensive International Atomic Energy Agency safeguards and a resolution to concerns about possible weapons-related experiments, in exchange for phased sanctions relief, could sufficiently guard against a nuclear-armed Iran for many years to come.

Concluding and implementing such an agreement will be difficult, but it is clearly the best option on the table.

—Daryl G. Kimball, Executive Director,
Arms Control Association, June 2014

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Posted: June 23, 2014

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