April 10, 2014

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TSG IntelBrief: Iran Nuclear Talks Face Outstanding Issues

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Third Round of Talks Wraps Up

A third round of talks has been completed between Iran and the P5+1 (US, UK, France, Russia, China, and Germany), and hosted by European Union chief foreign policy official Catherine Ashton. The talks on a comprehensive nuclear agreement began in February 2014 following the implementation of an initial temporary agreement—the “Joint Plan of Action” (JPA)—agreed between the P5+1 and Iran in November 2013. The JPA essentially froze Iran’s nuclear program in place. The JPA period extends from January 20, 2014 until July 20, 2014, but it can be renewed by mutual consent for an additional six-month period.

By all accounts, the third round of talks that took place between April 7-9, following two  previous rounds in February and March, continued to make progress in building understanding and narrowing outstanding differences. The February round quickly reached agreement on an agenda for the five months of talks, and meetings of technical experts between subsequent rounds has produced major insights into Iran’s program. The International Atomic Energy Agency (IAEA) has reported that Iran has been fulfilling its commitments under the JPA, such as converting its stockpile of 20% enriched uranium to a form that cannot be easily enriched to weapons-grade levels (90%). Iran has received several tranches of oil payments by South Korea and Japan—a total of about $1.5 billion to date—as provided for in the JPA.

At the conclusion of the round of talks on April 9, Ms Ashton stated that another round of high level talks would convene on May 13 to begin the process of “narrowing the gaps” in the two sides’ positions. At the next round, the two sides are to begin exchanging drafts of a potential agreement. According to participants, the latest round was not affected by US-Russia differences over Ukraine or by the controversy surrounding Iran’s appointment of Hamid Aboutalebi as Iran’s representative to the UN in New York. By his own admission, Aboutalebi assisted the radical students who seized the US Embassy in Tehran in November 1979.

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Major Outstanding Issues

There remain significant obstacles to a final settlement, though P5+1 and Iranian diplomats say they are growing more optimistic. Discussion referred to Iran’s “hard choices” before a final settlement can be reached.

Uranium Enrichment. The single widest Iran-P5+1 difference is over the long term scope and sophistication of the country’s uranium enrichment. Differences on this issue were responsible for all the failed negotiations between the sides from 2006 until 2013. The JPA states that Iran will likely be allowed to continue some enrichment as part of a final settlement, but both sides have vastly different views on how extensive it will be. Iran insists it will not dismantle any enrichment facilities and has not agreed, to date, to remove any of its approximately 18,000 installed centrifuges. The US Administration reportedly might accept a level of about 3,000 centrifuges long term—a number that experts say would provide ample time to uncover any Iranian “breakout” attempt (an effort to quickly divert enriched uranium to manufacture enough weapons-grade uranium for a nuclear weapon). Even this limited scope might not satisfy those in the US Congress who insist on full dismantlement of Iran’s enrichment capability—and particularly the full closing of the hardened enrichment site at Fordow, near Qom—as a condition of a final deal. Related differences exist over whether Iran would be permitted to develop and use newer model centrifuges, and whether it could maintain a stockpile of lower enriched uranium (5% enriched).

Plutonium Production. The talks thus far appear to have substantially narrowed differences over facilities capable of producing plutonium—another fissionable material that could be used to produce a nuclear weapon. Some Iranian officials have indicated that Iran might be willing, as part of a final settlement, to re-engineer the Arak heavy water reactor now under construction into a light-water reactor. The latter would not be capable of producing plutonium.

Possible Military Dimension. The P5+1 insists, as stated in the JPA, that before a final settlement is reached, Iran clear up all remaining IAEA questions about past research and alleged experimentation on a nuclear explosive device. This basket of issues is referred to as “Possible Military Dimension” of Iran’s nuclear program. Just prior to the JPA agreement, the IAEA and Iran agreed to a “structured approach” to resolve these issues. Still, Iran is balking at granting the IAEA access to military facilities such as the one at Parchin where such experimentation allegedly took place. Iran argues that Parchin and other military bases are not declared nuclear facilities and that Iran is not required under its IAEA Safeguards Agreement to allow IAEA access.

Missiles. The two sides appear far from agreement on whether a final nuclear settlement will contain limits on Iran’s ability to develop long-range missiles. The JPA states that “nuclear capable” ballistic missiles would be prohibited in a final settlement because they are banned by UN resolutions on Iran. In the three rounds of talks thus far, Iran has refused to discuss the issue.

Monitoring. The two sides have agreed in principle that any final settlement will be subject to highly intrusive monitoring and verification procedures. However, the P5+1 is likely to insist on a far greater level of intrusiveness than Iran has indicated it would accept.  

Sanctions Relief. Differences remain over the extent and pace of sanctions relief. The JPA states that a comprehensive settlement would result in the lifting of nuclear-related sanctions against Iran. However, US officials have said that sanctions lifting would be sequenced to correspond to Iran’s fulfillment of the requirements of the settlement. There is also the potential for significant differences over whether sanctions would be lifted, or simply suspended indefinitely, as well as how to distinguish “nuclear-related” sanctions from those imposed because of Iran’s support of terrorism or its human rights record. Many US sanctions are enacted in law and would require congressional action to be repealed or terminated—and it is by no means certain that Congress would comply with a repeal or termination request.

Duration. There are differences over the duration of a final agreement. Iran seeks a duration of about ten years, after which time it could resume expanding its nuclear program again. The P5+1 seeks a longer duration.
 
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FORECAST

• Differences between the P5+1 and Iran will likely continue to narrow during the next round of talks in mid-May, but a final agreement is unlikely by the July 20, 2014 expiration of the JPA

• The JPA is likely to be extended from July 2014-January 2015

• The talks will increasingly center on the main area of difference—the eventual size and scope of Iran’s uranium enrichment—however, the potential for agreement on this point is increasing

• A final settlement will likely prohibit Iran from developing ballistic missiles of intercontinental range or capable of carrying a nuclear payload

• New trouble could be brewing behind the scenes with recent EU sharp criticism of Iran’s human rights record and a recommendation to raise it at every official engagement, which President Rouhani characterized as “[an] insult to the great Iranian nation.”

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