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Sunday morning brought with it news that a major breakthrough had been achieved in the nuclear negotiations between Iran and the P5+1 (the five permanent members of the United Nations Security Council – United States, France, Russia, Britain, China – and Germany, Iran’s key trading partner), and that an interim agreement had been reached. Temporarily, at least, the war drums had been silenced.

The deal has its critics on both sides of the fence – Iran’s Supreme Leader, Ali Khamenei, did not make matters easy with his outbursts (though he has hailed the deal after the fact), nor do Iran hawks in the US Congress with talk of additional sanctions. In that sense, many suspect that it will be harder for US Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif to sell the deal to the more conservative elements in their own countries than to each other. Saudi and Israeli opposition to the deal as an outline emerged after last week’s talks in Geneva has also been consistent and vocal. Unsurprisingly, the Iranian announcement of the interim agreement came together with the usual symbolic defiance – the Atomic Energy Organisation of Iran declared its plans to construct two more power reactors at Bushehr.

The interim deal is, all things considered, a fair one; Iran receives some sanctions relief and the P5+1 are assured that Iran does not continue to inch closer towards nuclear weaponisation. The deal is set to expire after six months, giving time for negotiators to hammer out the terms and conditions for the next phase of a complete resolution to the Iranian nuclear question.

Towards the P5+1′s non-proliferation goals, the deal promises to:

  • halt enrichment at 5% and dilute all higher-enriched material to below that level
  • not add or upgrade centrifuges and limit production to repairs only
  • not increase stockpile of 3.5% enriched uranium
  • not commission or fuel the Arak heavy water reactor
  • halt fuel assembly for Arak and not install additional components to the reactor
  • not transfer heavy water or fuel to reactor site
  • not construct a reprocessing plant

In effect, these measures shut down Iran’s potential plutonium path to a nuclear weapon as well as severely curtail its uranium enrichment. Even if talks were to fall apart in a few months, Iran’s breakout time will have been substantially increased.

Towards the P5+1′s verification goals, the deal promises to:

  • provide the IAEA access to centrifuge and rotor assembly and storage facilities
  • provide the IAEA access to uranium mines and mills
  • provide the IAEA with Arak reactor designs
  • install surveillance cameras at Natanz and Fordow and provide daily access
  • provide frequent access to the Arak reactor

The increased transparency of Iran’s nuclear facilities at Natanz and Fordow, not to mention centrifuges, mines, mills, and storage facilities, make it very difficult for Iran to develop nuclear weapons on the sly. If these conditions are implemented and made permanent, Iran would effectively need an entire clandestine, parallel nuclear programme to bypass international scrutiny – the possibility of which is next to nil.

In return for the non-proliferation and verification Iran has agreed to, the country will be granted temporary, limited, relief totalling approximately $7 billion in the form of:

  • no new sanctions during the period of the deal
  • suspension of sanctions on gold, precious metals, petrochemicals, and auto sector to the tune of $1.5 billion
  • payment in installments, totalling $4.2 billion, from the sale of Iranian oil at present levels
  • unfreezing of $400 million for Iranian government tuition assistance to its international students
  • safety-related repairs of Iranian airlines

It is important to note that these measures will remain active for only a fixed period – after that, unless extended, Iran will again come under sanctions. This gives P5+1 negotiators time to discuss the complex issues involved with their Iranian counterparts without being accused at home of allowing Iran to creep up to the bomb. It also shows Iranian negotiators that P5+1 demands to halt the Iranian nuclear programme during talks is not a backdoor to shutting down the programme permanently if negotiations drag on endlessly.

Second, Iran receives limited relief from sanctions – the bulk of the sanctions architecture remains in place and only a tiny spigot is loosened to allow Tehran access to its own funds. Not only is the time period for relief small, the amount of relief is also small and not external to Iran’s revenue stream.

A point of concern is that the interim deal has already been interpreted differently by the two sides. Furthermore, the text of the Interim Nuclear Agreement and the US State Department’s Fact Sheet: First Step Understandings Regarding the Islamic Republic of Iran’s Nuclear Program, bear some discrepancies. A document of this import would certainly have gone through lawyers and translators to eliminate any grounds for misunderstanding. Yet, there exist some discrepancies with potentially enormous consequences on not only the interim agreement but the future of nuclear negotiations with Iran:

  • the Iranian document mentions that half of the 20% enriched uranium will be retained for fuel fabrication for the Tehran Research Reactor, of which there is no mention in the US document
  • the Iranian document suggests that this is a first step towards a comprehensive solution to the nuclear imbroglio which both parties will conclude within one year of this agreement but the US document sets the countdown at six months without mention of possibility of renewal
  • the Iranian document suggests that the final agreement would “[i]nvolve a mutually defined enrichment programme with mutually agreed parameters consistent with practical needs.” This line is not present in the US text and is of utmost importance in the understanding of this interim agreement.

Many observers are wondering what this deal means beyond its nuclear aspect. For now, there is no ‘beyond’ the nuclear deal. In fact, there are already many doubts about this deal. However, Iran might choose to ignore the question hanging over recognition of its right to enrich uranium and avail of the sanctions relief while insisting on its position during further discussions.

An interesting admission both the Iranian and US releases make is that the complete resolution will have to consider, among other things, UNSC resolutions. Ignoring the final position on Iran’s enrichment rights for now, the interim nuclear agreement allows Tehran, albeit not explicitly, to enrich uranium up to 5%. Does this acceptance violate UNSC Chapter VII Resolutions 1696 and 1737 (legally binding), both of which call for a suspension of Iran’s enrichment activity during negotiations? This may be one reason that Kerry declared that Iran’s enrichment has not been recognised. Were Zarif’s interpretation of the treaty accepted, it would not only recognise Iran’s right to enrich under the Article IV of the NPT but also nullify the ruling of the UNSC resolutions. This is a question for the lawyers, but one solution would be for the UNSC to pass a resolution supporting the interim agreement; another would be to maintain the façade of Kerry’s interpretation until a comprehensive agreement is reached.

If the interim nuclear agreement does not accept Iran’s right to enrich uranium, the P5+1 have given away next to nothing to achieve a temporary halt in Iran’s nuclear march and will gain a better knowledge of the Arak reactor. Seen in this light, the agreement tilts convincingly in favour of the P5+1; after all, $7 billion of relief over six months (or a year) is minuscule in comparison to the $100 billion in frozen Iranian assets globally or the $4 billion per month in lost oil revenue.

If the interim nuclear agreement does recognise Iran’s right to enrich uranium, the additional transparency measures Iran has agreed to will still go a long way in building confidence in Tehran’s intentions. However, Iran will have severely dented the US 123 Agreement Gold Standard and carved out a place in the non-proliferation hierarchy somewhere above non-nuclear weapon states (who have no enrichment and reprocessing rights) and below India (which has military nuclear facilities too). From this perspective, if Iran’s assertions that it does not want nuclear weapons are true, the deal favours Tehran’s unenumerated rights reading of the Non-Proliferation Treaty (NPT).

There are many questions the interim nuclear deal does not answer, such as research on weaponisation or other questionable facilities like Parchin. Critics will also point out that these safeguards hold true only for facilities discovered or declared and that Iran can continue a secret nuclear weapons project. This, however, would remain true even with full and unrestricted access – if a state really wants a bomb, the diffusion of technology makes it almost impossible to prevent proliferation. Nonetheless, through strict export controls and transparent facilities, it can be made extremely difficult. In any case, these issues, among others, are exactly what the second phase is for. As the saying goes, Rome was not built in a day.

Most importantly, the success of Geneva breaks the psychological indisposition to fruitful negotiations with Iran. If this agreement were to fail in six or twelve months, the P5+1 would have lost nothing; if it leads to further meaningful compromises, then everyone would have gained from this first step. Even those with misgivings about the NPT must concede that Iran has signed the treaty and all negotiations must be based on that fact; this is simply the price Iran has to pay for being party to the NPT. Could this deal have come earlier? Perhaps, but its time had not yet come.

[I have been asked by many what this interim deal means for India. My answer is, not much. India is an attractive trading partner for Iran presently because the sanctions have severely reduced the number of partners. Iran would, no doubt, like to have business relations with India, but if it had to prioritise where to spend its $7 billion in relief, Western markets would the first place Tehran goes shopping. Iran needs technology which India cannot provide, and it needs investment on a scale and at a pace that is inconceivable in the Indian political environment. As a result, Western, Russian, and Chinese markets would be Iran's first choice.

Additionally, while many fantasise about the political space the Interim Nuclear Deal may open up for India (particularly in Chabahar), such imagination must also counter-balance desires with the fact that Delhi has always been singularly obstinate in not involving itself in the global security commons.

Does this agreement affect India's relations with Pakistan? No. While the achievement of the interim nuclear agreement certainly does not lack in its power to inspire, the dynamics between Iran and the West are different from those between the subcontinent's two nuclear rivals. The first relationship has a strong element of coercion - economic sanctions and the threat of military force, while the second relationship has neither the economic nor the military arm-twisting.

If the interim agreement lives up to its promise and delivers a comprehensive solution to the Iranian problem by the end of next year, it can certainly have a major impact on the region. The spillover will not only affect Syria, Israel, Palestine, Lebanon, and Saudi Arabia, but also India and Pakistan. The removal of sanctions on ties to Iranian petrochemicals, shipbuilding, infrastructure, insurance, and other sectors will allow Delhi to aggressively pursue, if it wishes, the full development of Chabahar port and related projects. This will have a significant impact on trade with Afghanistan and potentially alter the security dynamics in Central Asia. However, Indian firms will have to compete in an open market with other countries unlike the last few years. This is all, however, a very big 'if' based on what happens in the next six months.]


This post appeared on Daily News & Analysis on November 25, 2013.

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