Indian Defence Review

President Donald Trump was elected president of USA in 2016, the year that the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), was signed after hectic negotiations between Iran and the “P5+1” nations, namely Britain, France, Germany, Russia, China and the ‘one’ being USA, which joined in much later. All through his campaign for the elections, President Trump called the deal as ‘the highest level of incompetence’, and promised to revoke the deal, if elected.

Despite warnings, against discarding the nuclear deal, by advisors, who he has conveniently replaced, and allies, who he has conveniently ignored, President Trump finally declared on May 08, 2018, the withdrawal of USA from the JCPOA. Almost all parties to the deal claim to have foreseen this move, and the reactions too have been on predicted lines. President Trump, on his part, stated that America would arm-twist Iran to extract far bigger concessions from it; USA, on May 21, announced a long list of 12 demands for inclusion in a fresh treaty with Iran, to retard its nuclear weapons and delivery systems development, not just in the time-frame that the original treaty had stipulated, but in the far future too.

The Agreement: Highlights

To refresh the memory of the reader, some highlights of the agreement are as follows. Under the accord, Iran had to reduce its uranium enriching centrifuges to a figure of 6,104, almost a two-thirds reduction; Iran was also committed to using only the older models of IR-1, and could neither use the later versions of IR-4 or IR-6, nor develop any advanced versions. Iran was also to reduce its existing stockpile of enriched uranium from about five tons to 300 kgs, and maintain it for 15 years. Once it reached this figure, as per the estimates of US experts, it would take Iran a minimum of 12 months for it to enrich enough uranium for a weapon.

For all the sites and the stockpile of uranium, it was mandated that Iran was to give more access to the inspectors of IAEA. Should the inspectors ever find any suspicious activity, or were barred from any area that they wished to visit, the matter would be referred to an arbitration panel with a Western majority, to decide the future course of action. In any case, Iran would have to permit access to the site within 24 days. The reactor at Arak, which was near readiness in 2016, had to be redesigned so as to render it incapable of producing plutonium for nuclear weapons.

In return for the stringent measures announced against Iran, the EU and US sanctions were to be removed after due verification by experts. If at any time, it was believed that Iran was not fulfilling its obligations and moving ahead on the sly to either increase its stockpile beyond 300 kgs or produce weapon-grade material, the sanctions that had been removed could instantly be re-introduced, without a warning period! While Iran would get access to some modern, sensitive technologies, an arms embargo was placed for five years, and restrictions on Iran’s ballistic missile programme for another eight years.  

Iran had to wait for some months before the annulment of the sanctions began and provided the much-sought relief. The Nuclear Agreement is very heavily loaded against Iran, yet Iran has accepted it; with the passage of time, as the Agreement has unfolded the way it was planned to, Iran has accrued two major benefits. One, the revoking of trade and financial sanctions began to boost its economy, crippled by years of a limited ability to export oil and gas. Two, even while it shut down its centrifuges and downgraded its reactors, it continued to retain its nuclear know-how with a scaled down model of its nuclear infrastructure, thus enabling the making of a bomb, in another 15-20 years, perhaps.

The Agreement, however, has placed sufficient safeguards for the world to get ample indications to detect any movement to the contrary, should Iran decide to take that path. In addition, the accord is packed with conditions, penalties, and threats if Iran does ever decide to move away from its commitments.

Repercussions of the US Withdrawal

Iran has always insisted that it does not seek a nuclear weapon, but USA and its Western allies have consistently refused to believe Iran’s assurances; for them, and hence, for a majority of the other nations of the world, Iran is a ‘rogue nation’ and is a part of the ‘Axis of Evil’, as President George W. Bush had once declared in 2001. It is ironical, however, that it was USA, which actually began Iran’s nuclear programme, under its ‘Atom for Peace’ initiative by giving it a test reactor in 1967. That assistance, however, ended with the Iranian Revolution of 1979, which dethroned the Shah.

Over the past year, ever since President Trump announced his unilateral decision to withdraw from the Iran Nuclear Deal, Iran has retaliated against the much tougher US sanctions by continuing the war of words leading to military posturing, and also escalating its nuclear development activities against the provisions of the 2015 Nuclear Deal. The first phase of Iran’s retaliation, which was announced in May this year, when all waivers were withdrawn, saw Iran increase its stockpile of low-enriched Uranium immediately thereafter. The second phase was then announced in July with Iran stating its intention to increase its uranium enrichment beyond JCPOA limits. Iran is now moving ahead, as it had said earlier, with its third phase. Iranian President Hassan Rouhani announced that starting Sep 06, the Atomic Energy Organization of Iran would suspend all the JCPOA limits related to research and development and the testing of centrifuges, including: 

•  Conducting R&D in a way that does not accumulate enriched uranium. 

•  Limiting R&D for uranium to only the IR-4, IR-5, IR-6 and IR-8 centrifuges. 

•  Limiting mechanical testing of these centrifuges to two single centrifuges of each type. 

•  Halting research for other isotope separation technologies. 

Iran has cautioned that if Europe fails again to deliver financial relief to Iran, as promised in the deal, it would take a fourth step to further reduce its nuclear commitments in another 60 days (around Nov 05, 2019). While each round of violations by Iran is a boost towards the country’s timeline towards the development of a nuclear weapon, it is important to note that all the rollbacks by Iran thus far, are reversible and continue to be open to inspection by the international watchdog, IAEA.

The nuclear escalation by Iran and the military posturing by both USA and Iran, had, in the recent past months, increased the probability of a military confrontation, or at the very least, a limited strike by USA on Iran’s nuclear facilities. While President Trump has stated his objectives of limiting Iran’s nuclear and delivery systems capability for the long run, along with the stoppage of Iran’s interference in Yemen, Syria and in the region, Iran has an unstated objective. It does not want to walk out of the JCPOA, and would like to restart negotiations with USA, but with a condition of lifting sanctions, or at least easing the sanctions, while the talks are on.

What Next

In January 2019, the EU had approved a payment mechanism, called the Instrument in Support of Trade Exchanges (INSTEX), to facilitate countries to conduct trade with Iran, without the use of US dollars, so as to avoid the US financial system, thus circumventing the sanctions! But according to a Sep 04, 2019, Reuters report, France has reportedly warned that INSTEX will not be set in motion until Iran’s mirror payment instrument was deemed operational, and until its actions against terrorism financing and money laundering were deemed compliant with international standards. This French demand has now put pressure on Iran to move forward with the legislative reforms on reducing terror-financing and money laundering, which have been idling in 2019.

President Trump had initially indicated his willingness for conditional talks with his Iranian counterpart, which was rejected outright by President Hassan Rouhani. However, even as this piece is being written, there are unconfirmed reports of an offer by President Trump for unconditional talks with Iran (the author has not been able to confirm this from any source). If true, is this an offshoot of the impromptu visit of the Iranian Foreign Minister, Mohammad Javad Zarif, to the recently concluded G-7 summit in France, which caught many of the attending leaders, especially President Trump, by surprise; or is the offer of talks a result of the removal of the hardliner NSA, John Bolton, with whom President Trump had differences in handling, not just Iran, but North Korea and Venezuela as well!

From a tactical perspective the US strategy, to severely hurt the Iranian economy through the imposition of sanctions, is working. Iran is also well aware that it must, sooner or later, preferably sooner, engage with USA and/or exert enough pressure on other nations to introduce mechanisms that would allow Iran to evade US sanctions, as is being pushed by France.

Right now, the prospect of engagement with USA is unappealing to Iran, but as the hawkish elements in the White House are being marginalised, a face-to-face meeting on the sidelines of the UN General Assembly later this month, between the presidents of USA and Iran, does seem likely. It will be important to see whether President Trump eases his stance on Iran by, for example, showing a willingness to allow waivers on Iranian oil exports either through the French proposal on a Iranian credit line, or otherwise, and Iran, in return, de-escalates nuclear and military tensions.

If egos are set aside, this could pave the way for a victory of diplomacy.