Iranian deal fails to hit the nuclear brakes

A deal struck late last Saturday night between western powers and Iran over the latter’s controversial nuclear programme was termed a “first step” by US President Barack Obama towards a normalisation of relations between the international community and the pariah government.

Reports from Tehran indicate the regime considers the deal to be a significant win for the radical Islamic leaders; large street demonstrations in support of the regime apparently broke out after news of the deal was released.

The deal arose during the third round of multilateral talks in Geneva. Few predicted a successful agreement after the tough conditions implemented by French President Francois Hollande before the talks began.

But the crippling sanctions on Iran and their new leadership, coupled with Mr Obama’s sense of urgency and a series of secret meetings leading up to the talks, all set the stage for the latest deal.

Many experts are sceptical the agreement will do much to halt Iran’s pursuit of nuclear weapons. Billions of dollars worth of investment and frozen assets are expected to pour into the Iranian economy as the rest of the sanctions may be lifted in the year ahead.

But all those next steps are at best tenuous because Tehran’s history of adhering to other negotiation deals is less than satisfactory.

Details of the deal

According to the text of the agreement, the following steps must be followed by Iran over a maximum of six months, during which time a more comprehensive text will be compiled.

• Iran must halt its enrichment of uranium above 5% U-235 (which is the isotope necessary for a specific type of nuclear weapons), and any uranium already enriched above this grade must be reduced below.
• No further centrifuges should be built or any additional enrichment facilities.
• Iran also must not increase its reactor-grade fuel stockpiles, although it can continue to produce this grade to maintain current levels.
• The heavy water reactor plant at Arak will not be commissioned or fuelled. Other work on the reactor will be permitted.
• International Atomic Energy Agency inspections must be legally recognized on most nuclear sites without restrictions.

In return, Iran will have “limited, temporary, and reversible relief” of economic sanctions. Much of this relief will be resumed access to frozen funds held in Western banks, estimated to be some US$4.2 billion. Other sanctions on gold, precious metals, Iran’s automobile sector, and even its petrochemical exports will also be lifted.

The White House made it clear many sanctions will remain in place on Iran’s oil, finance, and banking sectors. But no new sanctions will be imposed on Iran during the next six months. Western powers also reiterated these sanctions could be returned and reinforced if Iran does not comply or shows duplicity.

Already official responses from Tehran indicate the regime is looking for gaps.

The Iranian Foreign Ministry said November 26 that the text of the Geneva agreement released by Washington is inaccurate, Fars News Agency reported. The ministry's spokeswoman said parts of the White House's fact sheet contradict the text of the agreement.

And even though the agreement specifically curbs enrichment to above 5% and for the Arak reactor to cease much of its construction, Iranian Foreign Minister Javad Zarif said construction at the Arak nuclear facility would continue but that no new fuel would be produced and no new equipment would be installed.

This reactor will be a source of plutonium, but wasn’t planned for completion until at least a year from now. The wording of the agreement neatly sidesteps the provisions of adding new components to the reactor while leaving the existing plans free to continue as they don’t violate the deal.  

Mr Zarif also said in front of lawmakers November 27 that uranium enrichment at the Natanz and Fordow facilities will continue at levels around 3.5-5% purity, but the facilities' capacities will not be expanded.

Iran’s existing nuclear progamme

Over the next six months, Iran is likely to keep its current levels of reactor-grade uranium and refrain from increasing them, because it doesn’t need to. Increased monitoring from international agencies should keep them on their toes.

However, their existing stocks of uranium can still be converted to 20% enrichment - where it would be suitable for weapons-grade - in a timeframe of perhaps only a few months should the regime choose. All the machines necessary for this are already in place, according to assessments.

Analyses by the American Enterprise Institute, the Institute for Science and International Security, and the Nuclear Proliferation Education Centre suggest Iran already has enough enriched uranium to produce seven or eight nuclear weapons if they decide to enrich it further.

None of the provisions in the latest agreement do anything at all to limit the amount of uranium Iran currently possesses. Much of what Iran uses for their reactors is uranium oxide. This can be converted back into the uranium compound known as uranium hexafluoride, or UF6, which can be enriched to weapons-grade.

Ultimately, while Iran wanted to appear to be bowing to harsh sanctions and making significant concessions, Tehran has managed to pull off a huge ideological victory with this deal and the regime is likely to get a popularity boost. The happy crowds in the capital understand the agreement will only suspend Iran’s weapons programme, not end it.

But signing the deal effectively told the Iranians their years of circumventing sanctions would go unpunished.

Even more worrisome for international security, in not specifically leaning on the regime to shut down its nuclear programme, and instead only asking for existing facilities to not be increased, western powers are effectively condoning Iran’s nuclear programme.

Just like in North Korea in 1994, when a framework for freezing that country’s nuclear programme was enacted and IAEA inspectors were allowed in, the Geneva agreement in Iran has many gaps.

North Korea never quite complied with all of its provisions at the time, even secretly developing a parallel nuclear weapons programme before exploding their own bomb about a decade after. The exact details around Iran’s ability to create a nuclear weapon are still obscure, but that is the problem. The Geneva deal doesn’t fill these gaps.

What can be expected

The latest agreement brings Iran and the US closer together, and sets the stage for further steps in the future.

Iran’s economy will bounce back, the Islamic regime should be strengthened which may encourage greater civic freedoms, Tehran will enjoy deeper influence around the region, oil prices should drop further, and the precious metals trading market shouldn’t feel too much effect once Iran can return to using its own currency again.

However, the deal is a gamble that Iran will adhere to the path set before it and look kindly on a more robust agreement in the future.

It is difficult to predict, but the US and western powers might have conceded too much ground in favour of a political quick-fix. The way it stands now, there is nothing compelling Tehran to agree to conditions where its entire nuclear programme will be shut down.

Essentially, they can continue on as they please with secret reactors while looking like they are fully complying at known plants.

Most arms control and non-proliferation agreements are intended to be permanent. Things might change as the months progress, but the Geneva deal is of limited duration and everything could revert back to square one in six months.

nsmith@nbr.co.nz