Australia/Israel & Jewish Affairs Council

Evaluating the Interim Nuclear Deal with Iran

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Update from AIJAC

November 26, 2103
Number 11/13 #05

This Update is devoted to analysis of the detail and implications of the interim nuclear deal reached by the P5+1 states (US, UK, France, Russia, China and Germany) and Iran in Geneva on Sunday. (The actual agreement text is here, a White House "fact sheet" on the details is here, and some reporting about the agreement's provision is here.) Israeli leaders, meanwhile, have been lining up to make it clear that they are not happy with the deal.

The first analysis comes from Washington Institute for Near East Policy head Robert Satloff, who first of all takes issue with widespread claims that the deal "freezes" Iran's nuclear program, arguing it does no more than slow Iran's nuclear progress. Satloff says the key agreement provisions on 20%-enriched uranium and on the Arak heavy water reactor are real achievements, but argues that little-noticed clauses which promise Iran the ability to enrich uranium in a final deal, and allow the agreement to be renewed may have very significant consequences in the longer term. He also stresses that as a result of this agreement, the "perception of leverage will begin to tilt away from Washington and toward Iran" reducing Iran's long-term interest in a final nuclear deal. For all the details of his analysis, CLICK HERE. Other good contributions from Washington Institute staff in the wake of the deal come from Michael Singh, who identified three crucial questions to ask about the agreement, and  Patrick Clawson, who discusses what needs to be done to maximise the chance the agreement will succeed. 

Next up are Mark Dubowitz and Orde Kittrie, experts on the Iranian nuclear issue from the Foundation for the Defense of Democracy. They stress that while the current deal appears to be an improvement over proposals recently discussed, it falls very far short of getting Iran to comply with its legal obligations. Furthermore, like Satloff, they argue that the deal appears to weaken US leverage to obtain an acceptable final deal, and present some detailed analysis of the sanctions relief being offered to back up their claim. For their argument in full, CLICK HERE.

Finally, providing an Israeli perspective is top security correspondent Ron Ben-Yishai. While he identifies some achievements in the deal, he notes three significant flaws, relating to the plutonium-producing Arak reactor, to the fact that the agreement leaves Iran ample centrifuges and uranium stockpiles to stage a nuclear breakout, and to the failure to force Iran to reveal to inspectors their work on explosive devices and warheads. He concludes that the greatest danger is that the current situation will in effect be turned into a permanent arrangement, leaving Iran on the cusp of building nuclear weapons whenever it wishes to. For the rest of what he has to say, CLICK HERE. Other useful Israeli views come from Times of Israel editor David Horovitz and academic Reuven Berko, while the opinions of a number of Israeli experts are canvassed here.

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Iran's Nuclear Program Is Still Growing, and America's Fist Is Shrinking

Robert Satloff

New Republic, November 25, 2013

Israel may feel compelled to act if the Obama administration does not follow the Geneva deal with robust implementation, strict sanctions enforcement, and speedy negotiation of an even stronger final arrangement with Iran.

The blockbuster nuclear deal reached early Sunday morning in Geneva between Iran and the U.S.-led coalition is both less and more consequential than early reports suggest. And there is a good chance that its real value -- whether it prevents Iran's nuclear ambitions or inadvertently opens the door to an Iranian bomb -- may not be known until President Barack Obama turns into the home stretch for his second term, after the 2014 midterms.

The deal's major achievement doesn't match many of the breathless newspaper accounts written on tight deadlines since the Geneva breakthrough. "Major Powers Reach Deal with Iran to Freeze Nuclear Program," ran a headline in the Wall Street Journal; "Accord Reached with Iran to Halt Nuclear Program," proclaimed the New York Times; "Deal Freezes Iranian Nuclear Program for 6 Months," declared the Boston Globe. Wrong, wrong, and wrong.

Journalists and headline writers who characterized Geneva as a "freeze" or "halt" of Iran's nuclear program have a strange definition of these words. When Jack Lord or Telly Savalas caught up with a bad guy, pulled a revolver and yelled "freeze" or "halt," the culprit wasn't being told to "keep moving, just more slowly"; he was being told to stop -- or else. Geneva, however, does not stop Iran's nuclear program. Under the agreement, thousands of centrifuges -- including many of the advanced IR-2 version -- will continue to spin and produce enriched uranium, though within defined limits. Among the many moving parts of Iran's complex, multifaceted program, the term "freeze" applies to two components -- the accumulation of 20 percent enriched uranium (which will be converted into another form) and the nuclear-related progress of the Arak heavy-water reactor project. Both achievements are substantial and important but the program itself is not, by any stretch, frozen.

To their credit, both Obama and Secretary of State John Kerry never made such extravagant claims. Instead, in their separate remarks announcing the deal, they characterized the main achievement of Geneva as "limiting progress" or "impeding progress" of Iran's nuclear program. From the outset, they admitted that even with this deal, Iran's nuclear program will continue to grow and develop, just more slowly and under much more intrusive inspections than before.

If the deal's major success is less consequential than many portray it, few commentators have focused on what may be its most consequential aspect -- an apparent promise that, at the end of the process, Iran may eventually be able to enrich as much uranium as it wants, to whatever level it wants. That emerges from language buried in the paragraphs of the Joint Plan of Action, the formal name of the Geneva deal, that concern the parameters of a final agreement that is supposed to be negotiated over the next six months. The specific terms state, "The final step of a comprehensive solution...would involve a mutually defined enrichment programme with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity, where it is carried out, and stocks of enriched uranium, for a period to be agreed upon."

There appear to be two huge elements in this sentence: that Washington and its partners are on record now agreeing that the final accord will allow Iran to enrich uranium, putting the last nail in the coffin of six United Nations Security Council resolutions calling on Iran to suspend its enrichment activities, even temporarily; and that any limitations the final agreement may impose will not be final at all but only for "a period to be agreed upon." This paragraph trumps the faux argument over whether Iran has a "right to enrich"; in practice, it could have an international stamp of approval to enrich. In this, this paragraph could be read as saying that if Iran acts like a Boy Scout long enough -- one expects the "agreed period" to be measured in years, not months -- Iran's ayatollahs may receive formal international blessing for nuclear activities that, for a long time, have flouted the will of the international community.

Taking the long view, therefore, the final deal contains a potentially huge payoff for Iran. Kicking the problem down the road -- usually phrased more diplomatically as "stretching Iran's potential breakout time" -- is a key element of the Obama administration's approach. And from two other overlooked lines in the Geneva deal, there is a real possibility that the two sides won't reach agreement on the actual terms of that final deal until after the midterms in November 2014.

Most news stories cite Obama and Kerry as saying Geneva is a six-month arrangement. However, the text of the agreement notes that the deal is "renewable by mutual consent." And lest that line is viewed as a throwaway to placate Tehran, the text specifically notes that the parties "aim to conclude negotiating and commence implementing" the final agreement "no more than one year after the adoption of this document." In other words, negotiators did not agree on a hard deadline to reaching agreement on the final deal, approving just an aspirational goal that it will be achieved a year from now. The administration probably welcomed this additional wiggle room to avoid a situation in which negotiations are deadlocked and it is cornered into admitting that the diplomacy had failed, forcing the White House to consider unattractive alternatives.

On the surface, it stands to reason that Iran has an interest in getting a final deal as quickly as possible. After all, the most punishing economic sanctions remain in place under the "first step" deal and Obama promised renewed vigilance in sanctions enforcement when he announced the Geneva accord. But with the signing of this deal, the perception of leverage will begin to tilt away from Washington and toward Iran, which may want to see how this deal improves its regional standing before it heads into talks for a final agreement.

When viewed in combination with the outcome of the Syria chemical weapons episode, for example, there is little doubt that America's threat of force has lost much of its credibility. The most Geneva portends for Iranian violation is the end of sanctions relief and perhaps additional sanctions; though Obama made a passing reference to his role as commander-in-chief in his weekend remarks, he quickly followed that he has "a profound responsibility to try to resolve our differences peacefully, rather than rush towards conflict."

This will have an effect in two ways. First, countries around the world that followed Washington's lead on sanctions as an alternative to having the crazy Americans bomb Iran may now restrain their enthusiasm for obeying rules that cost them billions of dollars. And second, regional powers that deferred to the Obama administration's strategy for dealing with the Iran problem may begin to take matters into their own hands.

With Saudi Arabia likely to take its own defensive measures, in terms of deepening its nuclear partnership with Pakistan, all eyes are on Israel. Kerry bluntly said the Geneva deal "will make our ally Israel safer," but Israel's prime minister begged to differ. Instead, Benjamin Netanyahu denounced the Geneva deal as an "historic mistake" to which Israel is not bound. The U.S.-Israel rupture that burst into the open in early November is now routinized; as long as the Geneva deal is in force, a cold war between Washington and Jerusalem will be a permanent feature of a relationship that, until a few weeks ago, was celebrated for its unprecedented closeness.

The key question is whether Netanyahu is so incensed that he will turn the cold war hot by sending Israel's F-16s to do what Obama decided not to do -- derail Iran's nuclear program by force. While Israel has twice before bombed Arab nuclear sites -- in Iraq in 1981; in Syria in 2007 -- such a move would, in effect, not just blow up Iran's nuclear facilities but also Obama's most noteworthy diplomatic achievement. When the dust clears, no one can know for certain whether the U.S.-Israel relationship will still be intact.

Against this background, the chances that Israel acts militarily against Iran over the next six months are, for all practical purposes, nil. The political risks are just too great. Instead, Israel is likely to focus its efforts on urging friends on Capitol Hill to approve legislative measures that clarify and tighten aspects of the Geneva deal -- additional sanctions that only go into effect in the event Tehran violates the terms of the agreement, and limitations on the administration's ability to extend the period of the deal beyond its original six-month term. Some legislators will also try to exploit a loophole in the Geneva deal to expand non-nuclear sanctions, focusing on Iran's continued support of terrorism and worsening human rights record. The administration can be expected to oppose all these measures as contrary to the spirit of good faith promised in the Geneva text. A fight is coming.

But if no final agreement is reached within six months and the administration opts to extend the "first step" deal beyond its initial term, all bets are off. Israel may take that as a sign that the temporary is becoming permanent, a common Middle East occurrence, and consider itself free from the constraint of acting against a strategic partner. If Netanyahu regrets that he didn't act against Iran's nuclear program during the 2012 election season, as many commentators suggest, a decision to renew the first-step deal may give him another chance to act in the 2014 election cycle.

Hopefully, such speculation will amount to no more than a bad dream. But that will require the Obama administration to follow on the most important achievements of the Geneva deal with robust implementation, strict sanctions enforcement, and speedy, time-limited negotiation for an even stronger, tighter, firmer final arrangement with Iran. In other words, the really tough part is yet to come.

Robert Satloff is executive director of The Washington Institute.

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A Bad Agreement Likely to Get Worse

Tehran surrendered little on nuclear matters and gained much economically.


Wall Street Journal, Nov. 24, 2013

The Geneva deal agreed to Sunday by six major powers with Iran is a gamble on Western optimism. While slightly rolling back Iranian nuclear capability, the agreement greatly weakens Western economic sanctions. Iranian sanctions-busters will be in position to exploit the changing market psychology and newly created pathways to reap billions of additional dollars in economic relief beyond those projected by the Obama administration. The Geneva deal's provisions are too weak to prevent Iranian physicists from making further nuclear progress in several key areas.

The interim agreement has glaring loopholes even as it addresses some areas of Iran's nuclear-weapons capacity. It includes several Iranian commitments that, if verifiably implemented, would extend Iran's nuclear breakout time from about a month to about two months, while making it easier to detect an Iranian breakout.

It places more constraints on Iran's nuclear program than was the case in the deal that the Obama administration reportedly was prepared to sign two weeks ago. The Senate's threat to pass additional sanctions, France's objections to the initial deal, and Israel's fierce resistance to the terms of the proposed agreement seem to have played a role in providing U.S. negotiators with leverage to extract a better deal from Iran.

Even with improvements, the interim agreement fails to bring Iran into compliance with its key international legal obligations as spelled out in United Nations Security Council resolutions. The agreement comes closest on compliance with the resolutions' requirement that Iran "suspend" work on "all heavy water-related projects" including "construction" of the Arak reactor. While the Geneva agreement commits Iran to refrain from the most significant activities at Arak, it does not preclude Iran from general construction work at the site. Iran will easily be able to restart or threaten to restart the more dangerous work at Arak when the six-month interim period ends.

On Iran's other legal obligations, the gap is much greater. The Security Council resolutions require Iran to verifiably "suspend . . . all enrichment-related activities." Yet the Geneva agreement fails to commit Iran to suspend enrichment of uranium to 3.5%. The preamble language even appears to position Iran to begin negotiations for a final deal with its domestic-enrichment program already pocketed as a concession.

The U.N. resolutions require Iran to "provide such access and cooperation as the IAEA requests" to resolve the International Atomic Energy Agency's concerns about Iran's research into nuclear-weapons design. Multiple IAEA reports, including from March 2011 and November 2011, have provided extensive descriptions of Iranian research involving activities related to the development of a nuclear explosive and noted that some of the research "may still be ongoing." Yet the interim agreement does almost nothing to gain such access and cooperation or to require Iran to come clean or provide access and cooperation to ensure that such research is not continuing.

Remarkably, not even the agreement's "elements of the final step of a comprehensive solution" make clear reference to Iran revealing its past nuclear-weapons research. Thus, Iran's affirmation, in the interim agreement preamble, that "under no circumstances will Iran ever seek or develop any nuclear weapons" is, with respect to weapons-design research, all trust and next to no verify.

The Security Council resolutions also explicitly require Iran to "not undertake any activity related to ballistic missiles capable of delivering nuclear weapons." However, the interim agreement includes no Iranian commitments related to its ballistic-missile program. Not even the agreement's "elements of the final step of a comprehensive solution" make any reference to Iran halting its activity related to ballistic missiles that could deliver nuclear weapons.

In the absence of verifiable Iranian commitments not to proceed with nuclear-weapon and ballistic-missile research, there is nothing to stop Iran from having a designed bomb and ballistic missile ready to go. Once Iran completes a dash to weapons-grade uranium, it can insert the warhead and quickly have a deliverable nuclear weapon.

Thus, even if Iran faithfully implements each of its commitments under the interim agreement, it could find itself, in May 2014, a mere month further away than it is now from having weapons-grade uranium—but six months closer to having the rest of a deliverable nuclear weapon.

In exchange for these nuclear concessions, the Geneva deal provides significant relief to the Iranian government, which has been under severe pressure from financial sanctions. These sanctions cut Iran's currency and oil sales in half, and the sanctions restricted the regime's access to much of its estimated $80 billion to $100 billion in total foreign exchange reserves.

The Obama administration estimates that its sanctions-relief deal provides Iran with about $7 billion over six months in repatriated oil earnings, gold, petrochemical and auto sanctions, and some tuition assistance for Iranian students. Since Iran only has unrestricted access to an estimated $20 billion in overseas foreign-exchange reserves, even this $7 billion will increase Iran's unrestricted foreign reserves by over 30%. The interim agreement thus gives a rapid cash infusion to a regime that faced escalating sanctions and a potential full-blown balance-of-payments and currency crisis.

The Geneva deal, however, promises Iran potential sanctions relief of much more than $7 billion. Members of Congress, the Israeli government and the Foundation for Defense of Democracies have valued the potential sanctions relief over a six-month period at up to $20 billion. These calculations factor in how Iran could fully exploit the loopholes opened by the Geneva deal, and how an environment of sanctions relief and de-escalating sanctions could change the market psychology from fear to greed.

How could Iran do that? The impact of the Geneva deal on oil sanctions alone is instructive. First, despite administration promises not to touch the "core sanctions," the interim agreement does exactly that by suspending for six months a 2011 U.S. law that requires countries buying crude oil from Iran to significantly reduce those purchases. The deal also suspends the core European Union and U.S. insurance and transportation sanctions for these Iranian oil sales that have been a major barrier. This could be worth over $2 billion to Iran that it otherwise would have lost over the six-month period. In addition, sanctions relief on Iran's auto sector reverses the free-fall of an industry that, before sanctions, accounted for 10% of Iran's GDP and is the second-largest employer after the energy sector.

When it comes to sanctions, official loosening prompts more unofficial loosening as the market reads the trend lines. Ultimately, Iran may find that the Geneva deal gave it more than loopholes to exploit and cash to earn. The agreement has given Tehran a new environment of changing expectations for the trajectory of the Iranian economy and a major reprieve from a more severe economic crisis.

As American economic leverage diminishes and Iranian nuclear leverage increases over the next six months, a flawed interim deal may result in an even worse final agreement.

Mr. Dubowitz is executive director of the Foundation for Defense of Democracies, where he leads projects on Iran sanctions and nonproliferation. Mr. Kittrie is a law professor at Arizona State University and a senior fellow at the foundation.

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Pros and cons of Geneva deal

Analysis: Greatest danger is that interim agreement will become permanent, leaving Iran as 'threshold country'

Ron Ben-Yishai

Ynet.com, November 24, 2103

The agreement signed early Sunday in Geneva between the world powers and Iran is a reasonable agreement and even a good one – as long as it really is an interim agreement which will be effective for the six months of negotiations, as President Obama and his Secretary of State Kerry say. They promise a permanent agreement later on, which will disarm Iran of its nuclear and military capabilities.

But if the reasonable interim agreement turns into a permanent agreement, as Israeli officials fear, it's a bad and even dangerous agreement. It will allow Iran to remain what it is today, "a nuclear threshold country," which can "break through" and acquire material for a nuclear weapon within six to eight weeks.

In the meantime, there isn’t much Israel can do. Netanyahu must accept the verdict, but the Israeli intelligence will be required to make a double effort in the next six months: Ensure that Iran is not deceiving, and mainly that it is not developing the nuclear weapon itself – in other words, the nuclear explosive device and the warhead – and that the International Atomic Energy Agency inspectors are not cutting corners.

There isn’t much members of the US Senate and House of Representatives can do either. The Geneva agreement – at least on paper – does stop Iran from racing towards the bomb, and so there is no justification for further sanctions at this time. Jerusalem will have to accept that too.

Freezing, not retreating

In the current situation, beyond the "breakthrough" in the uranium path for acquiring material for the bomb, Iran will still require between four months to a year to complete the development of the nuclear explosive device and then the nuclear warhead (a bomb dropped from a plane or a warhead at the top of a missile). So freezing the situation does not prevent Iran from obtaining a nuclear weapon in the future, whenever it wants. What is needed is setting the program several years back.

But the interim agreement signed in Geneva only freezes the situation, in the best-case scenario, and what's worse – it implicitly recognizes Iran's right to enrich uranium on its soil. So Tehran will be able to maintain in the future, after the permanent agreement is signed, abilities and skills in this area which is critical for the development of a nuclear weapon.

There are at least three holes in this Swiss cheese: The major flaw has to do with the plutonium track. The Iranians are still unwilling to completely halt the construction of the heavy water reactor at Arak, as the French demanded in the previous round of talks. They are only committed to stopping the activity aimed at installing equipment in the reactor under construction, which will allow in the future – in about two-three years – the production of plutonium.

This is a serious flaw because after the construction is completed, the installment of plutonium production equipment in a constructed reactor can be implemented for about six months – and then Iran will have, together with the enrichment abilities it already possesses, a perfect fuel circle which can produce a plutonium-based nuclear weapon.

In addition, when that equipment is brought in and the reactor becomes "hot," it cannot be targeted in a military operation for fear of a Chernobyl-like disaster.

Insignificant commitment

The second flaw has to do with the uranium enrichment track. The Iranians are committing to stop enriching uranium to a 20% level and convert all the quantity they have into fuel rods or uranium oxide (uranium powder). Another commitment is not to increase the amount of uranium enriched to a low level – 3.5% to 5% which they possess.

These restrictions are in fact almost meaningless, as the Iranians have already managed to install nearly 18,000 centrifuges used to enrich uranium. With such an amount of centrifuges, they can enrich uranium to any level they want within a short period of time. At the moment they already have more than 8 tons of uranium enriched to a 3.5-5% level, which is enough for four to five atom bombs of the size dropped on Hiroshima. 

So the Iranians can quietly accept the neutralization of their ability to enrich and accumulate uranium at a 20% level. They can skip the stage of enrichment to 20%, and through the centrifuges they have already installed – enrich any amount they want to a level of fissile material.

According to the new agreement, the Iranians are committing not to operate the centrifuges of the new model (IR2M), which are capable of enriching uranium three to four times faster than the old model. They are also committing not to activate centrifuges which have already been installed and are no longer active. In addition, they are committing to limit the number of centrifuges in Natanz by half and the number of centrifuges in Fordo by three-quarters.

These are significant steps from Israel's point of view. It's a very significant achievement for the Americans and French in the Geneva talks – perhaps the most significant achievement.

But Iran already has enough centrifuges of the old model today to make a swift run towards a critical amount of fissile material sufficient for a bomb, even if they don't use the 200 kilograms of 20% enriched uranium they have accumulated and if they don't activate the new centrifuges. So this entire issue is in fact meaningless. Iran is already in the position of a threshold country in terms of its ability to produce fissile material, and this situation won't change. It will just be frozen.

The surprise element

Another serious and concerning flaw in the Geneva agreement is that it does not include an immediate Iranian commitment to uncover the efforts it has made and is still making to develop the explosive device and warhead. As opposed to uranium enrichment, these efforts are taking place in relatively small labs which are easy to hide.

The Iranians are only committing, sometime in six months, to answer questions presented by the IAEA on this matter. During this time, they can complete the development of the nuclear weapon. This is a serious flaw which Western intelligence agencies will have to work hard to overcome in the coming days and months.

The IAEA is demanding access to these camps and answers from the Iranians on the development of the nuclear weapon, but the Iranians are denying that their nuclear program has any military aspect. Until there is no supervision on the Iranian efforts to develop the weapon itself, Iran may surprise the West in spite of the new agreement, just like North Korea has done and is still doing. 

It appears that the supervision of the implementation of the freeze agreement will be conducted on an almost daily basis, and will allow unexpected inspections by IAEA staff at the enrichment facilities and at Arak. This is quite satisfactory if it is indeed carried out properly – and this matter belongs to the positive aspect of the interim agreement.

As for the eased sanctions, this is not drastic and it will be possible to re-impose them. On this matter the powers are right when they say that the pressure has not been lifted from the Iranian regime, as the amount of oil it can export and its ability to carry out financial transactions through the banks will remain very limited. So this issue should not really worry Israel or the Saudis.

To sum things up, the problem is that the freeze agreement does not fully guarantee that Iran will not deceive the powers, especially in terms of the construction of the Arak reactor and mainly in terms of the development of the nuclear weapon. But the greatest danger of all is that this agreement will essentially turn into the permanent agreement and leave Iran in the position of a "threshold country" slowly crawling towards the bomb, until one day we will all be surprised.