June 28, 2023

IntelBrief: Iran and the United States Negotiating Understandings

Office of the Iranian Supreme Leader, Via AP

Bottom Line Up Front

  • U.S. and Iranian officials are undertaking discussions, mediated by several Arab Gulf states, to de-escalate growing tensions over Iran’s nuclear program, its regional influence operations, and its alignment with Russia’s war on Ukraine.
  • A key U.S. goal in negotiating with Iran is to obtain the release of several U.S. nationals improperly detained in Iran.
  • Iran expects the discussions to produce a lifting of U.S. restrictions on Iran’s access to some of its foreign exchange assets held in various Central Bank accounts abroad.
  • The talks have raised concerns in Congress who oppose offering Iran key concessions, including an easing of U.S sanctions, with little or no congressional oversight.

After a more than six-month hiatus in diplomatic talks to revive the 2015 multilateral Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA) that the Trump administration exited in 2018, U.S. and Iranian officials have reportedly been conducting indirect talks to de-escalate burgeoning tensions. U.S. and allied officials have expressed significant concerns over Iran’s expansion of its nuclear program, its efforts to exert influence in the region, including through attacks on U.S. personnel deployed in Syria and Iraq, and its sale of armed drones to Russia for use against Ukraine. The U.S.-Iran talks are intended, by all accounts, to reach a limited “understanding” and undertake mutual confidence-building measures rather than try to resuscitate the JCPOA talks. The effort to reinstate the JCPOA, which began in April 2021, but was declared “dead” by U.S. officials in late 2022, faltered over deep-seated U.S.-Iran mistrust and political opposition to compromise that is embedded in official circles in both countries. Iranian leaders resisted U.S. proposals that would have required the country to again dismantle much of its nuclear program. Iran had done so during 2015-2016, only to see the United States exit the deal in 2018 and reimpose all existing U.S. secondary sanctions on Iran’s economy. Iran sought guarantees, which U.S. officials cannot constitutionally provide, that no future U.S. government would again exit the deal. U.S. officials, for their part, face opposition in Congress from both major parties to offering Iran the comprehensive sanctions relief Tehran was demanding, including revocation of the Trump administration designation of the Islamic Revolutionary Guard Corps (IRGC) as a Foreign Terrorist Organization (FTO). Iran’s brutal repression of the “Women, Life, and Freedom” popular uprising that began in September 2022, as well as Iran’s supplying armed drones to Moscow, has fueled opposition in the United States to make any concessions to Tehran.

The stalemate in the JCPOA talks left both the U.S. and Iranian governments searching for an alternative that might ease tensions without engendering the political opposition in both countries. A wide range of reports indicated that indirect U.S.-Iran discussions quietly resumed late last year, mediated and facilitated by Omani and Qatari officials. U.S. President Biden’s senior Middle East adviser, Brett McGurk, reportedly traveled multiple times to Oman for indirect discussions with Iranian government representatives. Iran’s foreign ministry spokesperson said in mid-June that Tehran exchanged messages with the United States through Oman, adding that Iran does not endorse an interim agreement or new arrangements to replace the JCPOA. Key U.S. partners in Europe have sought to improve the prospects for a breakthrough; talks last week between Iran and the European Union in Doha, Qatar, focused on key sticking points, including nuclear enrichment levels and Iranian cooperation with the International Atomic Energy Agency (IAEA).

By negotiating informal understandings with Iran, U.S. officials seek de-escalation with the Islamic Republic not only on Iran’s nuclear program but also on regional issues, including an end to Iran-backed attacks on U.S. military personnel in Syria and Iraq. An Iran-backed militia assault killed one U.S. contractor at a U.S. base in eastern Syria in March, to which the U.S. retaliated, nearly erupting in an extended cycle of U.S.-Iran clashes. Further, U.S. officials want to forestall a crisis by halting any move by Tehran to cease cooperation with the IAEA or to enrich uranium to levels closer to the 90% purity that would constitute weapons-grade uranium (Iran is currently enriching small quantities of uranium to 60% purity). At the same time, U.S. leaders are hoping that the indirect talks with Tehran can secure the release of Americans who have been improperly detained in Iran. There are three Americans who have been designated as wrongfully detained: Siamak Namazi, Emad Sharghi, and Morad Tahbaz. An American permanent resident, Shahab Dalili, is also detained. Some reports also indicate that the United States hopes to deter Iran from providing Moscow with ballistic missiles for use against Ukraine and perhaps dissuade Iran from further armed drone sales to Russia as well.

For its part, Tehran appears to hope that an informal understanding with the United States will help avoid a U.S.-Iran conflict that would set back its recent efforts to lower tensions with its Arab neighbors in the Persian Gulf. Iran’s policy trend is exemplified by the March rapprochement with Saudi Arabia, under which the two countries have restored diplomatic relations. Yet, most experts agree that the main driver for Iran to consider an informal deal is the prospect of at least modest relief from U.S. sanctions. In a possible sign that the United States sees sanctions easing as a confidence-building measure, in early June, the United States issued a sanctions waiver allowing the transfer of $2.7 billion from Iraq to Iranian banks - money due Iran for electricity and natural gas supplies. Iranian leaders apparently hope to unlock even more funds as part of an informal deal with Washington. Reportedly under discussion are waivers needed to free up $7 billion in restricted assets deposited in Iranian Central Bank accounts in South Korea and potentially billions of dollars in additional assets in Japan, Turkmenistan, India, several European countries, and elsewhere.

At the same time, U.S. leaders are attempting to calibrate any concessions to Tehran to minimize opposition from many in both political parties in Congress, who support weakening Iran through more extensive sanctions and other forms of U.S. pressure. Some in Congress have introduced legislation to try to prevent any sanctions relief, and many are insisting that U.S. leaders submit any understanding with Iran, even if informal, to congressional review under the 2015 Iran Nuclear Agreement Review Act, INARA, that established congressional oversight of U.S. implementation of the JCPOA. Others argue that Washington needs to be attentive to the views of the government of Israel, a key U.S. partner that considers Iran’s nuclear program an “existential threat” and opposes any easing of U.S. pressure on Tehran. In Iran, hardliners oppose any limitations to Iran’s nuclear program or its ability to operate in the region by supporting a wide range of armed factions. Potential opposition to any compromise largely explains why any U.S.-Iran understandings will likely be informal, unwritten, and subject to flexible interpretations by both Tehran and Washington.