Iran Nuclear Deal Takes Effect: What's Next?

November 9, 2015

Publication Type: 

  • Articles and Reports

Weapon Program: 

  • Nuclear

Author: 

Simon Chin and Valerie Lincy

The nuclear agreement with Iran—the Joint Comprehensive Plan of Action—took effect on October 18, 2015.  On that date, called “Adoption Day,” the United States and European Union published the legal framework for future sanctions relief and Iran began the process of reining in some of its nuclear work.

This milestone comes 90 days after the adoption of a U. N. Security Council resolution endorsing the nuclear deal.  It sets in motion the process that will lead to “Implementation Day,” expected in 2016.  “Implementation Day” will arrive when the International Atomic Energy Agency (IAEA) verifies that Iran has fulfilled its first set of nuclear-related commitments under the JCPOA.  In return, the United States, European Union, and United Nations will provide a first round of sanctions relief.  The second round of relief will come in October 2023, on “Transition Day.”  On that day, some of the restrictions on Iran’s nuclear program will be relaxed.

The agreement is a trade-off.  The P5+1 have offered sanctions relief in exchange for temporary restrictions on Iran’s nuclear program.  These restrictions, if kept in place by Iran, will push Iran’s program further away from being able to fuel nuclear weapons for a period of time.  However, the agreement does not permanently block Iran’s pathway to a bomb because it allows Iran to build plants that can produce two types of nuclear weapon fuel: highly enriched uranium and plutonium.  Specifically, Iran can develop a large-scale uranium enrichment program after ten years and keep plutonium produced in some nuclear reactors.

This narrative describes Iran’s commitments under the agreement and the commitments made by the United States and its negotiating partners in return.  The chart below traces the milestones of the nuclear agreement – showing how long restrictions are to be kept in place, when they are to be loosened, and when sanctions are to be eased. 

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IRAN’S COMMITMENTS

Uranium Enrichment

Iran has two declared uranium enrichment plants, at Natanz and Fordow.  Under the terms of the deal, Iran has promised to reduce the number of operating centrifuges at both plants and to limit all of its enrichment activity for a period of 10-to-15 years.

Natanz

The commercial-scale plant at Natanz is the larger of the country’s two declared uranium enrichment facilities, with over 16,000 centrifuges installed, and a capacity to house over 50,000 centrifuges.[1]  Iran has promised to limit the number of first generation IR-1 centrifuges enriching uranium to 5,060 by Implementation Day and to maintain this level for the first ten years of the agreement.  All excess centrifuges – about 10,000 IR-1 centrifuges and 1,000 more advanced IR-2m centrifuges – will be removed from their installations and kept in storage at Natanz under IAEA monitoring. [2] 

After eight years, Iran has the right to start manufacturing a limited number of advanced centrifuges and after ten years will be permitted to manufacture and install these centrifuges at a rate determined by Iran's “enrichment and enrichment R&D needs.”[3]  These needs will be presented in a plan submitted to the IAEA as part of Iran’s implementation of the Additional Protocol.  This plan, however, will consist of only “voluntary commitments” and will be neither restrictive nor binding.[4]  In his October 21 letter to President Hassan Rouhani, Iran’s Supreme Leader Ali Khamenei called upon the government to develop a plan for the country’s nuclear industry to achieve an annual uranium enrichment capacity of 190,000 separative work units (SWU) within 15 years.[5]  If Iran were to achieve this output, and directed the power toward making nuclear weapon fuel, it could make enough fuel – annually – for almost 50 bombs.[6]

Iran has also promised to limit its total enriched uranium stockpile to 300 kilograms of up to 3.67% enriched uranium hexafluoride (UF6) for the first 15 years of the agreement and to limit all enrichment work to Natanz.  Between now and Implementation Day, Iran must reduce its 7,800 kg stockpile of low-enriched UF6 to this permitted level of 300 kilograms by either selling the excess abroad “in return for natural uranium” or by downblending the excess to a lower level of enrichment.[7]  The agreement allows Iran to continue to produce and stockpile an unlimited amount of natural uranium hexafluoride, which is the feedstock for enrichment using gas centrifuges, and which will add to the 550 tons currently on hand.[8] 

After 15 years, Iran will be allowed to produce an unlimited amount of enriched uranium in any form,[9] including weapon-grade highly enriched uranium,[10] and Iran may use any method of enrichment after ten years.[11] 

Fordow and Other Plants

The Fordow Fuel Enrichment Plant is Iran's second – and smaller – declared uranium enrichment site.  It is an underground facility that currently holds about 3,000 IR-1 centrifuges, 700 of which are enriching uranium.[12]  Fordow is of concern because it is heavily fortified to withstand most airstrikes, rather than because of the number and type of centrifuges installed there.

Iran has promised to convert Fordow into a “nuclear, physics, and technology center.”[13]  The agreement states that “international collaboration will be encouraged in agreed areas of research.”[14]  For the first 15 years of the agreement, Iran will not to enrich uranium at, or introduce nuclear material into the plant.[15]  Of the 1,044 IR-1 centrifuges that will remain in place, 348 will be operating for the production of stable isotopes.[16]  About 2,000 IR-1 centrifuges will be removed and kept in storage at Natanz under IAEA monitoring. 

After 15 years, Iran will be permitted to resume uranium enrichment at Fordow and at any other declared facility, including with advanced centrifuges. 

 

Plutonium

Arak is a 40 megawatt heavy water reactor that is nearly complete but not yet operational.  If completed, Arak would provide Iran with weapon quantities of plutonium in its spent fuel.

Under the agreement, Iran will redesign and rebuild the Arak reactor such as “to minimize the production of plutonium and not to produce weapon-grade plutonium in normal operation.”[17]  By Implementation Day, the existing core of the reactor must be removed and filled with concrete, rendering it unusable.[18]  Iran has also promised to ship out all spent fuel from Arak for the lifetime of the reactor[19] and, for 15 years, to sell “excess heavy water.”[20]  Heavy water has nuclear weapon applications and will be needed in smaller quantities for the redesigned reactor. 

In addition, Iran has pledged not to reprocess spent reactor fuel or to build any new heavy water reactor for 15 years. [21]  However, the agreement does not place additional restrictions on the construction of power and research reactors during the term of the agreement.  Nor does it prevent Iran from keeping the spent fuel from its operating Bushehr reactor, which is governed by a separate contract with Russia.  Russia can continue to supply Iran with reactors and reactor fuel containing enriched uranium, which will not count against enriched uranium caps set in the agreement.[22]  Reactor fuel containing enriched uranium also can be made in Iran, as long as the fuel is approved by a Technical Working Group established through the agreement.[23]   The first core load of fuel for the Arak reactor will be made outside Iran, but future core loads can be made in Iran.[24]   

After 15 years, plutonium-related restrictions become voluntary.  Iran is expected, but not required, to rely only upon light water reactors for power generation and research and on international suppliers for reactor fuel.[25]  In addition, according to the agreement, Iran “intends to ship out all spent fuel for all future and present power and research nuclear reactors.”[26]  And Iran “does not intend” to engage in spent fuel reprocessing, spent fuel reprocessing R&D, or the construction of a facility capable of spent fuel reprocessing.[27]  However, Iran will be free to change any of these intentions after 15 years.

 

A Covert Program

Under the agreement, the IAEA will be responsible for verifying that Iran is not conducting prohibited work at secret sites and for ensuring that Iran is abiding by the nuclear restrictions of the agreement. As of Implementation Day, Iran has agreed to “provisionally apply” the IAEA’s Additional Protocol,[28] which will give Agency inspectors broader access to nuclear-relevant sites, such as uranium mines and heavy water production plants.  And Iran has promised to “seek […] ratification” of the Protocol after eight years, “consistent with the Constitutional roles of the President and Parliament.”[29]

Iran has agreed to additional measures aimed at increasing transparency over the nuclear fuel cycle. The IAEA will monitor production at uranium mills for 25 years[30] and will “implement continuous monitoring” on centrifuges in storage for 15 years.[31]  The IAEA will also keep an inventory of key centrifuges parts like rotors and bellows for 20 years, and will be allowed to monitor all locations containing centrifuge production equipment, also for 20 years.[32]

In addition, Iran has promised to supply the IAEA with design information for new nuclear facilities as soon as the decision is made to construct them – a requirement for countries under the modified Code 3.1 version of Agency safeguards.[33]

Iran has also agreed to a dispute resolution mechanism to resolve any disagreement over access to an undeclared site deemed suspicious by the IAEA.  If a dispute over access to a site arises during the first 15 years of the agreement, the IAEA will be able to petition a Joint Commission composed of the P5+1 countries, Iran, and the European Union.  A consensus of five of the eight members of this Commission would be sufficient to rule in favor of access, and a final decision must be made within 24 days of the IAEA’s request.[34]  This dispute resolution process offers the Agency stronger rights than it has under the Additional Protocol: there is a hard deadline for access, and the Joint Commission could grant inspectors broader rights than those available under the Additional Protocol, which is limited to environmental sampling.[35]

Restrictions on procurement are also intended to prevent Iran from building a covert nuclear program. Iran has agreed to abide by the decisions of a newly established “white channel” that will review proposals for Iranian imports of nuclear-related and other proliferation-sensitive goods.  For up to ten years, the U. N. Security Council will control the import of all nuclear-related and nuclear dual-use items into Iran.  The IAEA will also monitor the end-use of some nuclear imports.[36]  U.N. restrictions on sales of missile-related technology to Iran will be legally binding for up to eight years, though the end-use monitoring of missile-related goods will be less stringent.  The new U.N. resolution only requires that Iran provide exporters of missile-technology with “appropriate end-user guarantees.”[37]

 

THE P5+1’S COMMITMENTS

European Union Sanctions

The European Union has agreed to lift its nuclear-related sanctions on Iran in two rounds.

On Implementation Day – expected in early 2016 – the EU will terminate all nuclear-related economic and financial sanctions, including restrictions on: 

  • Transfers of funds between EU entities, including financial and credit institutions, and Iran.[38]
  • Banking activities, including the opening of new branches of Iranian banks in the EU and the opening by EU entities of new offices, subsidiaries, joint ventures, or bank accounts in Iran.[39]
  • Insurance and reinsurance for Iranian entities.[40]
  • The import of Iranian oil, gas, and petrochemical products.[41]
  • Investment in and the export of equipment for Iran’s oil, gas, and petrochemical sectors.[42]
  • The shipping, shipbuilding, and transport sectors.[43]
  • The export of gold, precious metals, and diamonds and the delivery of Iranian banknotes and coinage.[44]

Iran will also regain access to financial messaging services, including SWIFT, on Implementation Day, but banks that remain designated by the EU will remain cut off from those services until Transition Day.  The EU will also lift sanctions that impose asset freezes and travel bans on a first set of companies and individuals (mostly in the financial, energy, shipping, and transport sectors).[45] 

A second round of sanctions relief is expected eight years after Adoption Day, or sooner if the IAEA should reach its so-called “Broader Conclusion” that all nuclear material in Iran remains in peaceful activities.”  This round covers all EU proliferation-related sanctions and the removal of a second, smaller set of individuals and entities from the EU blacklist – those designated for proliferation activity.[46]

 

United States Sanctions

The United States has also agreed to two rounds of sanctions relief, but this relief will only affect so-called secondary sanctions—the restrictions that the U.S. government places on non-U.S. persons and entities.

On Implementation Day, the United States has agreed to “cease the application of” the bulk of its secondary sanctions on non-U.S. persons engaged in Iran’s financial and energy sectors.  This will be done by executive waiver.  However, the agreement states that “U.S. persons and U.S.-owned or -controlled foreign entities will continue to be generally prohibited from conducting transactions of the type permitted pursuant to the JCPOA.”[47]

The secondary sanctions to be suspended in this first round include restrictions on:

  • Financial and banking transactions with Iranian financial institutions.[48]
  • Transactions in Iranian Rial.[49]
  • The provision of U.S. banknotes to the Government of Iran.[50]
  • The purchase or facilitation of issuance of Iranian sovereign debt.[51]
  • Financial messaging services.[52]
  • Insurance and re-insurance.[53]
  • Sales, investment, and transport of Iranian oil, gas, and petrochemicals.[54]
  • Shipping, shipbuilding, and port sectors.[55]
  • Trade in gold and other precious metals.[56]
  • The automotive sector.[57]

The United States has also agreed to remove a set of entities from various restricted party lists (mostly Iranian financial institutions, individuals and entities designated for being part of the Government of Iran, as well as entities in the energy, transport, and shipping sectors).

A second round of sanctions relief is expected eight years after Adoption Day, or sooner if the IAEA should reach its Broader Conclusion.  At this time, the United States has promised to seek legislative action in Congress to terminate the secondary sanctions that will be suspended on Implementation Day.  The United States has also committed to “seek such legislative action as may be appropriate to terminate […] sanctions […] on the acquisition of nuclear-related commodities and services for nuclear activities contemplated in this JCPOA, to be consistent with the U.S. approach to other non-nuclear-weapon states under the NPT.”[58]  The United States has also promised to delist a second group of 43 entities, many of which have been involved with illicit procurement for Iran's nuclear and missile programs.

 

United Nations Sanctions

The U.N. Security Council adopted resolution 2231 in July as a means of endorsing the nuclear deal and superseding the existing Iran-related resolutions.  On Implementation Day, resolution 2231 will terminate the provisions of resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1929 (2010), and 2224 (2015).  Resolution 2231 itself will be terminated on October 18, 2025—ten years after Adoption Day.

Of the 121 individuals and entities currently blacklisted by the United Nations, 36 individuals and entities will be removed from the sanctions list on Implementation Day, while sanctions will remain in place on the remaining 85 entities for eight years, or until the IAEA reaches its Broader Conclusion.[59]

The following U.N. sanctions will also remain in place:

  • The U.N. conventional arms embargo (five years).[60]
  • The U.N. ban on ballistic missile technology imports and ballistic-missile related activity (eight years).[61]  The language of the new U.N. resolution on the restrictions on ballistic-missile related activity appears to be more permissive than the existing ban under resolution 1737.[62]
  • The U.N. restrictions on nuclear-related procurement, overseen by the procurement channel discussed above (ten years).[63]

 

Technical Assistance

The P5+1 has agreed to provide technical assistance and support to Iran for several nuclear projects.  A Working Group will be established to facilitate the redesigning and rebuilding of the Arak reactor and its laboratories.[64]  The agreement also encourages international collaboration at Fordow once the facility is converted to a research center and calls for international cooperation to ensure that Iran will have the necessary supply of fuel for its future nuclear power and research reactors.[65]

Footnotes: 

 

[1] "Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran," International Atomic Energy Agency, GOV/2015/50, August 27, 2015, pp.5-6, available at http://www.iranwatch.org/sites/default/files/iaea_iran_safeguards_report_27aug2015.pdf

[2] Joint Comprehensive Plan of Action (JCPOA), July 14, 2015, Annex I, F, available at http://www.iranwatch.org/library/multilateral-organizations/european-union/joint-comprehensive-plan-action

[3] JCPOA, Annex I, K.

[4] JCPOA, Annex I, I.

[5] The separative work unit, or SWU, is the standard measure of the effort required to increase the concentration of the fissionable U-235 isotope.

[6] To produce a bomb’s worth of highly enriched uranium, it takes approximately 4,000 SWUs.  If Iran were able to produce 190,000 SWUs annually, and directed that power toward making nuclear weapon fuel, it could make enough fuel for about 47 bombs.

[7] JCPOA, Preamble and General Provisions, p. 7.

[8] "Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran," International Atomic Energy Agency, GOV/2015/50, August 27, 2015, p. 18, available at http://www.iranwatch.org/sites/default/files/iaea_iran_safeguards_report_27aug2015.pdf

[9] JCPOA, Annex I, E(25)

[10] JCPOA, Annex I, F (28)

[11] JCPOA, Annex I, S (81),

[12] "Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran," International Atomic Energy Agency, GOV/2015/50, August 27, 2015, p. 7, available at http://www.iranwatch.org/sites/default/files/iaea_iran_safeguards_report_27aug2015.pdf

[13] JCPOA, Annex I, ,H

[14] JCPOA, Annex I, H.

[15] JCPOA Annex I.H.

[16] JCPOA, Annex I H(46 and 50)

[17] JCPOA, Annex I, B.

[18] JCPOA, Annex I, B and Annex V, C(15.1)

[19] JCPOA, Annex I, B (11)

[20] JCPOA, Annex I C (14)

[21] JCPOA, Annex I, B(10)

[22] JCPOA, Annex I, J (59)

[23] JCPOA, Annex I, J (59)

[24] JCPOA, Annex I, B (9)

[25] JCPOA, Annex I D.

[26] JCPOA Annex I B(11)

[27] JCPOA Annex I B (12).

[28] JCPOA, Preamble and General Provisions, C.

[29] JCPOA, Preamble and General Provisions, Implementation Plan 34.iv

[30] JCPOA, Annex I, O

[31] JCPOA Annex I F (29).

[32] JCPOA Annex I R.

[33] JCPOA Annex I L; “Subsidiary Arrangement,” International Atomic Energy Agency, p. 7, https://www.iaea.org/sites/default/files/online_version_sg-fm-1170_-_model_subsidiary_arrangement_code_1-9.pdf

[34] JCPOA Annex I Q. 

[35] “Model Protocol Additional to the Agreement(s) Between State(s) and the International Atomic Energy Agency for the Application of Safeguards,” INFCIRC/540, Articles 5-6, September 1997, https://www.iaea.org/sites/default/files/infcirc540.pdf

[36] JCPOA Annex IV, Section 6.

[37] U.N. Resolution 2231 (2015), Annex B, Paragraph 4, http://www.un.org/en/sc/inc/pages/pdf/pow/RES2231E.pdf

[38] JCPOA, Annex II, Section 3.2.1

[39] JCPOA, Annex II, Section 3.2.2

[40] JCPOA, Annex II, Sections 1.1.3 and 3.2.3

[41] JCPOA, Annex II, Section 1.2.1

[42] JCPOA, Annex II, Section 1.2.3-1.2.4

[43] JCPOA, Annex II, Section 1,3

[44] JCPOA, Annex II, Section 1.4

[45] JCPOA, Annex V, Section 16.3

[46] JCPOA, Annex V, Section 20.

[47] JCPOA, Annex II, Section 4, Footnote 6.

[48] JCPOA, Annex II, Sections 4.1.1 and 7.2.

[49] JCPOA, Annex II, Sections 4.1.2 and 7.2.

[50] JCPOA, Annex II, Sections 4.1.3 and 7.2.

[51] JCPOA, Annex II, Sections 4.1.5 and 7.2.

[52] JCPOA, Annex II, Sections 4.1.6.

[53] JCPOA, Annex II, Sections 4.2 and 7.3.

[54] JCPOA, Annex II, Section 4.3 and 7.4

[55] JCPOA, Annex II, Sections 4.4 and 7.5.

[56] JCPOA, Annex II, Sections 4.5 and 7.6.

[57] JCPOA, Annex II, Section 4.7 and 7.8

[58] JCPOA, Paragraph 24.

[59] U.N. Resolution 2231 (2015), Annex B, Paragraph 6(c) and Attachment.

[60] U.N. Resolution 2231 (2015), Annex B, Paragraph 5.

[61] U.N. Resolution 2231 (2015), Annex B, Paragraph 3-4.

[62] Simon Chin and Valerie Lincy, "What the Iran Deal Says (and Doesn't Say) about Iran's Ballistic Missiles," Iran Watch, July 30, 2015, http://www.iranwatch.org/our-publications/nuclear-iran-weekly/what-iran-deal-says-doesnt-say-about-irans-ballistic-missiles

[63] U.N. Resolution 2231 (2015), Annex B, Paragraph 2.

[64] JCPOA, Annex I, Section B.4.

[65] JCPOA, Annex I, Section H.44 and D.16.