- Status Report
Mentioned Suspect Entities & Suppliers:
On July 19, the present nuclear negotiations with Iran were extended to November 24, a date falling a full year after they were first announced in 2013, and providing another four months for the parties to try to reach a final deal. In a press statement announcing the extension, U.S. Secretary of State John Kerry pointed to “very real gaps” separating the sides on such issues as enrichment capacity at Iran’s Natanz facility.
However, Kerry also hinted at progress on the fate of Iran’s heavy water reactor at Arak, and on the enrichment site at Fordow, which Iran has tunneled into a mountain. In this positive vein, senior administration officials have said that Iran has agreed to accelerate the conversion of its 20 percent enriched uranium oxide stores into fuel plates for the Tehran Research Reactor. According to the International Atomic Energy Agency, Iran has already fulfilled its obligation under the interim accord to eliminate its supply of 20% enriched uranium hexafluoride gas, which can be quickly converted to a form suitable for use in nuclear weapons. This additional transformation would bring Iran’s uranium stockpile a further step away from weapons grade. Iran has also apparently committed to restrict its production of rotors for advanced centrifuges to those facilities at which the Agency has monthly access. Perhaps most important, Iran’s manufacture of advanced centrifuges will only be for the purpose of replacing damaged machines. In return for these concessions, Iran will receive access to an additional $2.8 billion of its previously frozen assets in six installments beginning on August 1.
Official comments about the extension were generally positive, although all of the parties said that work remained to be done. In a joint statement with EU High Representative Catherine Ashton, Iranian Foreign Minister Mohammad Javad Zarif cited remaining differences on “core issues.” In separate remarks, Zarif described the text of the final accord as “50 percent ready.” Russian Deputy Foreign Minister Sergei Ryabkov cited differences over Iran’s heavy water reactor and the fortified site at Fordow. French Foreign Minister Laurent Fabius appeared to reflect his country’s harder line as he called on Tehran to use the extension of the talks to make the “indispensable choices” necessary for a final deal.
As the nuclear talks continue, important actors in both Tehran and Washington have made comments that could signal difficulties in achieving the domestic support necessary for a deal. In one of his most detailed remarks to date on Iran’s enrichment program, Supreme Leader Ali Khamenei recently said his country has an “absolute need” for 190,000 centrifuges in any final agreement, in order to fuel Iran’s nuclear power program. Western officials and outside analysts have clearly stated that such a massive enrichment capacity would also enable Iran to make a dash to nuclear weapons in an unacceptably short timeframe. For example, if Iran had the enrichment power to fuel the Bushehr reactor annually and instead decided to make bombs, it could produce the fuel for a nuclear warhead every 15 days. Khamenei’s remarks led Senate Foreign Relations Committee chairman Robert Menendez to question the Iranian negotiating team’s authority to strike a deal in Vienna and to renew his demand that any final deal must include dismantlement of Iran’s nuclear capability. Meanwhile, House Foreign Affairs Committee chairman Ed Royce reacted to the extension of the talks by calling on the White House to begin working with Congress to craft new sanctions against Iran. An earlier July 10 letter from more than 300 congressmen to President Obama warned that Tehran’s “permanent and verifiable” termination of its terrorism, ballistic missile development, and money laundering activities would be necessary to lift most sanctions on Iran.
The uncertainty over the status of the various unilateral and multilateral sanction regimes against Tehran under the current interim accord was highlighted in a report released by the United Nations Panel of Experts on Iran in late June. The Panel found that some states are unsure about their obligations under existing U.N. Security Council resolutions, specifically related to Iranian nuclear procurement. The Panel also reported that Iran continues to try to skirt the procurement restrictions against it by seeking items slightly below the control thresholds specified for dual-use items. Other illicit procurement strategies mentioned in the report as being pursued by Tehran include using the petrochemical industry as a cover to buy nuclear-related items and employing freight forwarders as procurement intermediaries. Although the Panel noted a relative decrease in the number of procurement cases tied to Iran, it is not clear whether this indicates a genuine decrease in proliferation activity or simply improved concealment efforts on the part of Iran.
Meanwhile, the pace of the International Atomic Energy Agency’s (IAEA) investigation into weaponization allegations has picked up in recent months. As part of a “Framework for Cooperation” signed with the Agency last November, Iran agreed to implement a series of transparency measures. For example, Iran has provided an explanation of the civilian use for exploding bridgewire detonators, which are relevant to nuclear weapons. During a series of technical meetings in April and May, Iran showed the IAEA that simultaneous firing tests of these detonators had been undertaken for a civilian application, a claim the Agency is still assessing. And on May 20, Iran agreed to provide the Agency with information about high explosive experiments and studies related to neutron initiators – both of which have nuclear weapon applications. Iran also agreed to give Agency inspectors access to a centrifuge research and development facility and to centrifuge workshops. Iran is expected to implement these measures by August 25. While cautioning that a full analysis of the information provided by Tehran on the “possible military dimensions” of its nuclear program will take time, IAEA Director-General Yukiya Amano praised Iran for its “substantive engagement” with the Agency under the Framework for Cooperation.
The Agency is also tracking Iran’s compliance with the terms of the interim accord presently in effect. According to the Agency’s June update, Iran has begun commissioning the Enriched UO2 Powder Plant (EUPP), which will be used to convert the five percent enriched uranium Iran has produced since January from gas into oxide form. Enriched uranium oxide is more time consuming to process into weapon fuel. Iran has also either diluted or converted all of its 450 kg of 20 percent enriched uranium as required by the interim accord. In addition, Iran has provided the Agency with “managed access” to centrifuge workshops and daily access to the enrichment plants at Natanz and Fordow. And Iran continues to restrict its enrichment activity as required under the interim accord, by not operating or installing any additional centrifuges.
Nevertheless, the nearly 9,000 first-generation centrifuges producing up to five percent enriched uranium gas continue to operate at the Natanz plant. At their present production rate, these centrifuges will yield approximately 2.4 tons of low-enriched uranium between mid-January and November 24 – the recently extended period of the interim accord. Although Iran is preparing to convert this output into oxide form, the interim accord does not require Iran to dilute or dispose of the low-enriched uranium that it had stockpiled before the accord took effect – an amount sufficient to fuel about seven nuclear weapons with further enrichment and processing. Nor does it require Iran to dismantle the 18,000 centrifuges it has installed, or restrict research and development on more advanced machines. Iran has more than 1,000 advanced IR-2m centrifuges installed at Natanz and has completed preparatory installation work for another 2,000 of these machines. No IR-2m centrifuges are currently enriching uranium, but they are thought to be capable of doing so at a rate several times faster than the first-generation IR-1 centrifuges now in use. Iran is also testing several even newer centrifuge designs at the Natanz pilot plant. For details about the weapon implications of Iran’s enrichment program, see “Iran’s Nuclear Timetable.”
The Obama administration estimates the sanctions relief already afforded Iran under the interim deal to be worth about $7 billion. In a speech on June 18, Treasury Secretary Jack Lew said that Iran’s economy remains “in distress,” with continued losses in oil sales caused by sanctions more than offsetting the value of the interim accord’s temporary relief. According to the International Energy Agency, Iran’s oil sales reached their highest level in 20 months in February and have averaged about 1.27 million barrels per day through the first six months of 2014, which is above the one million barrel per day threshold allowed under the interim accord.
European Union restrictions on the insurance and transport of Iranian oil have been eased under the accord, as have restrictions on bank transfers from the EU for humanitarian purposes, though such transfers are still proscribed from transiting through blacklisted Iranian banks. Iran has also been given access to its frozen assets held overseas. By mid-July, Iran had received the final tranche of the $4.2 billion total it was promised under the interim accord, with an additional $2.8 billion to be released by November 24. The penalties targeting Iran’s petrochemical exports, its auto industry, and its trade in precious metals have also been eased as part of the interim accord.