Global Insights: As Interim Nuclear Deal With Iran Takes Effect, Uncertainty Remains

The implementation agreement for the interim nuclear deal reached between Iran and the P5+1 in November, in which Iran consents to constrain its nuclear activities in exchange for limited sanctions relief, officially entered into effect yesterday. The text of the implementation deal, finalized Jan. 12, remains confidential. But the White House released a summary that, while answering some important questions, still leaves uncertain whether the interim deal will achieve its main purpose of transitioning to a more comprehensive agreement.  
 
The implementation framework specifies the phasing and technical details of the reciprocal concessions the parties made in the interim agreement. These will occur gradually, with concessions by one side matched by those by the other. Iran will refrain from enriching uranium above 5 percent, which is the level used in civilian nuclear power reactors; increasing its stockpile of 5 percent enriched uranium; reprocessing spent uranium fuel into plutonium; constructing new enrichment facilities; or installing or manufacturing new centrifuges, except for replacements of damaged machines. Iran will also downblend its stocks of near-20 percent uranium into a less usable form as well as suspend construction work at the Natanz and Fordow uranium enrichment plants and the unfinished Arak heavy water reactor.
 
Furthermore, Iran will permit inspectors from the International Atomic Energy Agency (IAEA) more intrusive and frequent access—daily rather than weekly—to its enrichment facilities as well as, for the first time, allow access to its centrifuge assembly and rotor production plants. Iran will also provide more data to the IAEA on the design of its Arak reactor, its centrifuge production and its future nuclear activities. As a result, the general nature of the Iranian nuclear program will become more transparent.
 
In return, Iran will receive limited, temporary and targeted sanctions relief on an incremental basis worth between $6 billion and $7 billion in total. There are so many sanctions on Iran that finding some relatively harmless ones to relax was easy. These will include the suspension of limitations on Iran’s petrochemical exports; imports of automotive manufacturing goods and services; imports and exports of precious metals; imports of parts and services related to civil aviation safety; and on some restrictions on Iranians’ use of international financial services for already permitted humanitarian trade, tuition payments for Iranian students studying abroad, as well as payment of Iran’s United Nations obligations.
 
Though Congress and the Obama administration continue to debate the value of applying new sanctions on Iran, the administration’s lobbying, along with recognition of the risks of wrecking a possible nuclear deal, have persuaded many members of congress to pause any effort toward new sanctions, at least for six months. The Congress and president will likely declare that they will hold off from adopting new sanctions for now but remain prepared to reimpose the suspended ones—and add new sanctions—should the negotiations fail.
 
Although the implementation agreement designates the IAEA as the main body responsible for overseeing the process, the parties—which in addition to Iran include the U.S., France, the U.K., Germany, Russia and China—have also established a joint commission where their experts can discuss implementation issues and ideally resolve disputes. Experience shows that these are likely: The Iranian negotiators are expert hagglers, and we can expect disagreements over, for instance, what constitutes a “new” or a “replacement” centrifuge. Such disputes led to the collapse of an earlier EU-Iran comprehensive agreement, though Iran’s incentives to comply with the current deal are strong. According to the IAEA, Iran has already stopped enriching uranium above 5 percent and has been granting inspectors wider access to its nuclear activities.
 
If implemented as agreed, the interim deal would lengthen Tehran’s “breakout period,” or the time needed to make enough enriched uranium for one atomic bomb, by one to two months. The enhanced inspections would also make it easier to detect a breakout attempt. But while transparency will increase at Iran’s known nuclear sites, the more serious threat remains undisclosed Iranian nuclear activity at clandestine locations, which will be much harder to detect. This is why the Western negotiators are pushing for Iran to adopt the IAEA Additional Protocol, which includes provisions to allow the agency to monitor undeclared sites.
 
Furthermore, the interim agreement does not address the two other critical dimensions of Iran’s nuclear weapons potential—its past efforts to develop a nuclear warhead and its current progress in developing long-range ballistic missiles capable of carrying them. Its provisions also ignore a half-dozen U.N. Security Council resolutions demanding that Iran entirely suspend enrichment pending satisfaction of IAEA concerns about its alleged nuclear-weapons related experiments. Nor does the interim agreement oblige Tehran to dismantle any capabilities, which means they can easily be resumed. Iran can even develop and test new centrifuges as long as it does not put them into operation during the time of the agreement.
 
In recent remarks, President Barack Obama described the prospects of reaching a comprehensive deal at 50 percent, which seems unduly optimistic. Even if the implementation of the interim deal goes smoothly, the prospects of reaching a comprehensive settlement are still remote. The parties must address many difficult unresolved issues that the negotiators set aside to reach the interim agreement. These include how much enrichment Iran can pursue and at what level; what further guarantees are needed against breakout; what level of verification and IAEA presence are required for a more comprehensive set of limitations; what to do about the Arak heavy water reactor; and, from Tehran’s perspective, how much sanctions relief it will demand for these concessions.
 
Perhaps the most difficult issue will be to agree on the permitted scope of the Iranian enrichment program, which the interim text says should be "consistent with practical needs." Western negotiators will point out that Iran does not need any enriched uranium at present since it has only one civilian nuclear reactor at Bushehr, and the Russians have already provided sufficient fuel for that. The Iranians will argue that their future expansion plans, though unrealistic, envisage dozens of nuclear power plants located throughout their country. Members of the Iranian parliament even want Iran to produce highly enriched uranium to fuel nuclear-powered submarines.
 
One possible outcome is that, by mid-June, the parties will not reach a comprehensive agreement, but will also decline to accept total failure. Instead, they would note their progress to date and extend and enlarge the interim agreement—making it more comprehensive over time, with more Iranian restrictions for more sanctions relief—while never reaching an end point, and leaving Tehran in possession of de facto enrichment capabilities without explicit international acceptance.

The interim deal imposes some modest restrictions on the Iranian nuclear program in return for some modest sanctions relief. Whether it will lead to a more comprehensive resolution of the nuclear stand-off between Tehran and the West, however, remains very much uncertain.