RUSI EUROPE - Iran Analysis from RUSI's experts, publications and research en Once Bitten, Twice Shy: The UK Must Provide a Credible Plan for Economic Engagement with Iran <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">Previous disappointment will lead Iran to expect greater economic certainty in any renewed nuclear negotiations. London must play its part.</div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>The Iranian nuclear deal (formally known as the Joint Comprehensive Plan of Action or the JCPOA) has been in tatters since the administration of Donald Trump withdrew in May 2018, triggering a reimposition of US sanctions that had previously been lifted under the deal. In response, a year later Iran began to move away from compliance with the agreed restrictions on its nuclear activities. However, with a new president in the White House, progress is <a href="">reportedly being made</a> in Vienna towards establishing a roadmap back to compliance by all sides, with the prospect of a renewed lifting of sanctions by the US and a reduction of Iran’s nuclear activities.</p><p>As in 2016 when the JCPOA came into effect, nuclear activities and sanctions will be closely linked, and the success of a revived agreement with Iran will depend on decisions made in corporate boardrooms as much as those reached in the two Vienna hotels hosting the Iranian and US delegations. And as in 2016, there appears to be limited effort by governments to address private sector compliance concerns, or to ensure that necessary measures are taken to shift the business risk calculus in favour of the economic engagement expected by Iran.</p><p>As became clear in 2016, the willingness and ability of the private sector to engage with Iran following the lifting of sanctions is anything but certain. Hence, identifying ways in which confidence can be increased should be a critical objective for all involved. A failure to deliver meaningful economic benefit for a second time in exchange for limitations on Iranian nuclear activity would significantly undermine the credibility of US and European commitments in Tehran. It would also ensure that Iran continues to find the need to employ illicit financial and economic networks. More broadly, it would undermine the role of sanctions as a policy tool, which are meant (in theory) to cause temporary economic harm with the expectation that once the target country complies or changes its behaviour, they can be removed.</p><h2>The Role of the UK</h2><p>In its recently published Integrated Review, the UK government expressed its commitment to holding Iran accountable for its nuclear activity through renewed diplomatic efforts on a nuclear deal. With all parties expected to demonstrate economic engagement, in the UK it will fall primarily to the financial sector to underpin these diplomatic efforts and deliver the benefits desired by the Iranians.</p><p>Any meaningful economic engagement between Iran and the outside world will require access to financial infrastructure. Currently, as a result of US sanctions on the Central Bank of Iran and other key actors in the Iranian economy, few international financial institutions are willing to risk handling transactions with Iran or Iranian entities. Persistent corruption and legal and governance opacity in the Iranian economy also inhibit confidence. Such concerns are compounded by the Financial Action Task Force’s (FATF) <a href="">blacklisting of Iran</a> over gaps in the country’s financial crime regime.</p><p>For banks in the UK, an additional complication arises. Unlike other European countries, which allow banks to clear local currency transactions through accounts with their respective central banks, the Bank of England offers such access to only a select number of financial institutions. These banks then handle the transactions of all other financial institutions in the UK. Most of these clearing banks are large financial institutions with global operations and extensive exposure to the US; these banks are therefore reluctant to handle Iran-linked transactions for fear of violating both primary and secondary US sanctions. As a result, despite the importance of London’s financial sector to global trade and the potential it offers to Iran for meaningful economic relief following the lifting of US sanctions, the UK is in fact uniquely badly positioned to handle financial transactions with Iran.</p><h2>Creative thinking needed</h2><p>If the UK is serious about offering Iran economic relief as a credible incentive alongside nuclear deal negotiations and in diplomacy with Iran more broadly, London will need to demonstrate that it is serious about addressing such obstacles as well as the private sector’s reluctance to engage with Iran. For example, the Bank of England could provide a clearing account to be used for transactions with Iran, thus offering an alternative to clearing banks that will likely continue to shy away from Iranian transactions. Another possibility may emerge from work being done in the UK to explore the possible adoption of a central bank digital currency (CBDC). CBDCs and cryptocurrencies more broadly have the potential to <a href="">reduce sanctions risks</a> by bypassing reliance on the US dollar and the SWIFT financial messaging system (which has tended to be wary of violating US sanctions in the past). However, both the establishment of a Bank of England clearing account and the use of digital currency to support financial transactions with Iran would require considerable time and political will to implement – both currently in short supply.</p><p>Absent such developments, financial sector hesitancy will remain. The UK and its European allies must therefore elicit greater support from Washington given that their own measures, such as the <a href="">EU blocking statute</a>, have not provided the necessary cover. The obligations of non-US banks and other businesses with regard to US secondary sanctions should be clarified; non-US institutions must be provided with a channel to seek guidance from the US Treasury’s Office of Foreign Assets Control (OFAC); and a mechanism for non-US entities to apply for sanctions permits with OFAC should be offered. If non-US banks and businesses are expected to navigate the complex US sanctions regime in support of the nuclear deal, they should be afforded the necessary guidance and cover to assuage their understandable concerns. The pending <a href="">US review of its sanctions policies</a> offers a prime opportunity to examine such options.</p><h2>Looking beyond sanctions relief</h2><p>While the argument for financial engagement to support UK diplomacy and a return by all parties to the nuclear agreement seems clear, wider considerations should not be overlooked. Any effort to encourage greater private sector engagement must be considered alongside the UK’s broader policy objectives and its relationship with Tehran.</p><p>Iran is governed by a repressive regime with a dismal human rights record, which finances <a href="">organisations</a> designated as terrorist groups by the UK and engages in destabilising regional activity through its proxies. The country continues to detain UK-Iranian dual nationals, including journalist Nazanin Zaghari-Ratcliffe, apparently for political reasons and in an effort to secure the payment of an unrelated <a href="">UK debt</a>. Furthermore, Iran is a comparatively minor market for the UK and will likely remain so even if US sanctions are lifted. Key sectors are dominated by Islamic Revolutionary Guard Corps ownership, making them unacceptable business partners for UK engagement. The UK’s trade with Iran in 2020 was a mere £145 million, with Iran <a href="">ranking</a> 127th among the UK’s trading partners; in 2016, during the period of sanctions relief under the JCPOA, UK–Iran trade was still relatively limited, totalling £350 million.</p><p>The rationale for offering economic benefits to Iran is thus far from clear, and questions as to whether London should be going out of its way to offer Iran economic benefits are well-justified. Furthermore, Whitehall cannot mandate private sector engagement with Iran. Persistent uncertainties around compliance with remaining US sanctions, a lack of confidence in the Iranian economy, concerns over corruption and terrorist financing, and Iran’s blacklisting by the FATF all mean that UK businesses will remain wary.</p><p>Yet, if the UK is truly committed to contributing to renewed nuclear diplomacy with Iran, it will need to show Tehran that it is engaging in good faith. This means demonstrating a credible effort to support economic engagement where private sector interest does exist. Proactive measures will be necessary. London’s reliance on the lifting of US sanctions to deliver Iran its expected economic dividend – without investment on the part of Whitehall – risks serious disappointment once again.</p><p><em></em><em>This Commentary was informed by a roundtable discussion hosted by RUSI's Centre for Financial Crime and Security Studies and Proliferation and Nuclear Policy programme in May 2021.</em></p><p><em>The views expressed in this Commentary are the authors', and do not represent those of RUSI or any other institution.</em></p><p><em>BANNER IMAGE: Courtesy of UK Foreign, Commonwealth and Development Office/<span>OGLv3.0</span></em></p></div></div></div> Wed, 02 Jun 2021 13:22:00 +0000 36405 at Can Italy Become a Big Player on Iran? <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">One of Europe’s big countries can do more for the continent’s engagement with Iran.</div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p class="xmsonormal">Over the past three years, Italy has lacked an influential role on the Iran file. But since Mario Draghi’s government has been in power – and the administration of Joe Biden has changed gears on Iran – Italy has signalled that, once again, it wants to feature among the key players on this crucial but complex issue. Whether it manages to do so will depend on the steps it is prepared to take.</p><h2 class="xmsonormal">A Dissenting Europe</h2><p class="xmsonormal">Since 2018, the so-called E3 countries (France, Germany and the UK) have led a policy towards Iran which has been aimed at preserving the 2015 nuclear deal (also known as the JCPOA, or Joint Comprehensive Plan of Action), notwithstanding the US’s withdrawal and reimposition of sanctions. Together with former High Representative of the EU Federica Mogherini, the three leading European countries <a href="">deemed the agreement</a> ‘a key achievement of the global nuclear non-proliferation architecture’, disassociating themselves from the measures adopted by the US under former President Donald Trump during his ‘maximum pressure’ campaign against Iran.</p><p class="xmsonormal">Between 2019 and 2020, the E3 undertook several measures to ensure the survival of the deal. The main one was the creation of <a href="" target="_blank">INSTEX</a>, a trading mechanism which was supposed to facilitate legitimate trade with Iran despite US sanctions, but which remained largely ineffective.</p><p class="xmsonormal">Another significant step was the launch of <a href="" target="_blank">EMASOH</a>, the European-led maritime surveillance mission in the Strait of Hormuz. The initiative, under the leadership of France, aimed at complementing existing maritime security efforts while avoiding any connection to the US-led mission (the IMSC, or International Maritime Security Construct) and Washington’s maximum pressure campaign. The goal was to lower tensions in the Gulf between Iran, the US and its allies in the region.</p><h2 class="xmsonormal">Italy’s Low Profile During Conte’s Governments</h2><p class="xmsonormal">Italy’s role in both initiatives has been minimal: in contrast to <a href="" target="_blank">other EU states</a>, and notwithstanding then-Prime Minister Giuseppe Conte’s commitment ‘<a href="" target="_blank">to enhance the EU's financial mechanism</a>’, Italy never became a member of INSTEX, judging the mechanism unlikely to be successful in improving legitimate trade with Iran but also considering it too provocative towards the US. On EMASOH, while Rome decided to support the mission politically, it did not provide any contribution in kind, such as frigates or staff officers – unlike Denmark, the Netherlands and Greece.</p><p class="xmsonormal">The choice to maintain a low profile on Iran was driven by the hesitation of Italy’s former government to join other EU countries in taking a different – and at times confrontational – stance towards the US, even if it was to defend an agreement Italy itself deemed in its security interests.</p><p class="xmsonormal">There was an element of ideological solidarity to this stance as well. During his visit to the US in June 2019, then-Deputy Prime Minister and leader of the right-wing League party <a href="" target="_blank">Matteo Salvini stated</a> that ‘Italy’s relations with Tehran [had] changed, as it is impossible to maintain normal relations with a country that wants to destroy Israel’. This represented an effort to forge a common vision with the Trump administration and to distinguish Italy from other European countries. Generally, however, foreign policy, including in the Middle East, did not feature highly as a priority for the previous Italian government –not even in relation to security dossiers such as the Eastern Mediterranean and Libya, which have traditionally been at the core of Italy’s strategic concerns.</p><h2 class="xmsonormal">Renewed Interest but Hesitating Steps</h2><p class="xmsonormal">Over the past three months, however, Italy’s approach to foreign policy has changed. Since the new government, led by former European Central Bank president Mario Draghi, has been in power, and despite the fact that Luigi di Maio of the populist Five Star Movement has remained its Minister of Foreign Affairs, Italy has reclaimed some of its foreign policy activism.</p><p class="xmsonormal">Draghi’s first trip abroad since taking office, for instance, was to Libya, signalling the importance the new government places on the country and the Mediterranean in general, in contrast with the previous administration. Italy has also joined the E3 and the US in foreign policy statements on countries ranging from <a href="" target="_blank">Iraq</a> to <a href="" target="_blank">Syria</a> and <a href=",Joint%20statement%20of%20the%20governments%20of%20France%2C%20Germany%2C%20Italy%2C,of%20America%20on%20Houthi%20Attacks&amp;text=%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A%D8%A9-,The%20governments%20of%20France%2C%20Germany%2C%20Italy%2C%20the%20United%20Kingdom,Yemeni%20city%20of%20Ma'rib." target="_blank">Yemen</a>, again showcasing a break with the past.</p><p class="xmsonospacing">On Iran, this new trajectory in Italy’s foreign policy has so far made very little difference at the public level. Relieved by the change in US posture towards Iran following the election of President Biden, and after nearly three years of silence, in January <a href="" target="_blank">Italy stated its appreciation</a> of the EU’s relaunched support for the JCPOA and declared that it was ready to endorse any initiative aimed at restoring the deal.</p><p class="xmsonospacing">In March, behind the scenes, it offered to play the role of intermediary between Washington and Tehran on the nuclear issue. The offer was not taken up by US officials, who engaged in indirect talks with their Iranian counterparts in Vienna instead. Publicly, Italy’s steps have merely consisted of renewed statements in <a href="" target="_blank">support of the deal and of efforts </a>to facilitate its revival.</p><h2 class="xmsonospacing">Plenty of Scope</h2><p class="xmsonospacing">Still, the visit by Iran’s Foreign Minister Javad Zarif to Rome on 16 May, the second leg of an official trip to Europe and his last tour before Iran’s presidential elections, provided the first opportunity for Italy to signal its readiness to play a bigger role on the Iran file beyond just statements. On this occasion, <a href="" target="_blank">Di Maio merely stressed</a> the importance of talks in Vienna and of a compromise over the JCPOA. He mentioned Italy’s interests in expanding bilateral ties in the political, economic and cultural fields, but without any concrete suggestions on how to do so, leaving the statement of intent somewhat moot.</p><p class="xmsonospacing">There are areas in which Italy can make a difference and it should start actively working on those if it wants to be a key player on Iran. It can, for instance, facilitate a regional security dialogue, potentially through the <a href="" target="_blank">diplomatic track of the EMASOH mission</a>, which aims at ‘identifying ways to de-escalate tensions and to promote confidence-building in the maritime domain’, by engaging with regional countries and EMASOH’s participating members.</p><p class="xmsonospacing">This is especially important in the stages after a potential agreement on the JCPOA, and constitutes a key priority for all states involved. Rome could also invest its political capital in trying to restart the <a href="" target="_blank">E4 talks</a>, which have stalled since late 2019 but which, up until then, enabled Italy – together with the E3 – to engage with Iran on regional issues at the level of Political Directors.</p><p class="xmsonospacing">In preparation for the prospect that talks in Vienna result in a compromise on the nuclear deal, Italy should also explore ways to set up <a href="" target="_blank">credit lines and guarantees for exports</a> to Iran, along the lines of the Master Credit Agreement between Invitalia Global Investment and Iranian banks announced in 2016. This would facilitate the resumption of trade between Iran and Europe following the lifting of sanctions. Finally, Italy should explore ways to make INSTEX-like mechanisms more efficient in the future, preparing for the possibility that a future US administration adopts a divergent policy from the EU and increasing the chances that such instruments can enable legitimate and sustainable economic ties – not just with Iran, but with all countries that Europe deems in its interests, regardless of the US’s stance.</p><p class="xmsonospacing">Without any of these steps, and despite the efforts of Prime Minister Draghi to return Italy to being a major player on the international scene, Italy is unlikely to make a difference on the Iran file and will instead continue to linger on the margins.</p><p><em>The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.</em></p><p><em>BANNER IMAGE: Italian Prime Minister Mario Draghi. Courtesy of Reuters/Alamy Stock Photo</em></p></div></div></div> Tue, 25 May 2021 13:36:00 +0000 36317 at Salvaging the Iran Nuclear Deal: Round One in Vienna, and What Comes Next <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">Tough negotiations to save the Iranian nuclear deal are resuming, and they are by no means guaranteed to succeed.</div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>The original participants in the Iran nuclear deal are gathering in Vienna for a second round of negotiations following last week’s attempt to salvage the agreement. Last week was the first time that the group had met since former US President Donald Trump withdrew from the deal in 2018, and the first such meeting – <a href="">after several failed attempts</a> to kick-start talks – since President Joe Biden entered office pledging to seek a return to the deal. But there are limits: Iran joined <a href="">on the condition</a> that there would be no direct US–Iran talks, meaning that the other participants – the UK, France, Russia, China, Germany and the EU – have to play the role of intermediaries.</p><h2>Progress So Far</h2><p>By all accounts, the first round of talks which concluded last week were constructive. Two expert-level working groups were quickly formed on sanctions and nuclear issues to develop a plan for what the US and Iran would need to do to come back into compliance with the deal, known as the Joint Comprehensive Plan of Action (JCPOA). Furthermore, all parties agreed to reconvene in Vienna this week for further discussions – a positive result in and of itself.</p><p>But it is also clear that significant hurdles exist to revitalising the deal. While the specific details of what transpired in Vienna are unknown, comments by US and Iranian officials have helped shed light on the positions of each side and the related sticking points.</p><p>During the talks and in <a href="">a follow-on press call</a>, US officials stated what was already largely assumed: that the US is willing to lift ‘all sanctions that are inconsistent with the JCPOA and are inconsistent with the benefits that Iran expects from the JCPOA’ as part of a mutual return to compliance. The first part of the statement likely refers to the nuclear sanctions re-imposed by Trump that are clearly inconsistent with US commitments under the JCPOA.</p><p>The latter phrase is likely a nod to the sanctions the Trump administration imposed on major Iranian entities under non-nuclear sanctions authorities (i.e. terrorism), including the Central Bank of Iran, the National Iranian Oil Company and the National Iranian Tanker Company. These sanctions may not be technically inconsistent with the JCPOA (though Iran argues that they are), but if left in place they would make it virtually impossible for Iran to realise the benefits of the deal, thus preventing its revival.</p><p>Less clear, however, are the specific designations that the US believes would be consistent with its JCPOA commitments and that it therefore intends to keep in place – an issue that will almost certainly be a point of contention between Washington and Tehran. Notably, this US position is still far apart from <a href="">Iran’s demand</a> that the US remove <i>all</i> sanctions imposed under the Trump administration (more on that below).</p><h2>The Less Obvious Nuclear Track</h2><p>Compared with the sanctions track, almost nothing is known about the discussions on the nuclear track, and <a href="">some reports</a> suggest this issue took a backseat to the sanctions debate in Vienna. <a href="">Iran is fond of talking about</a> how quickly it can roll back its nuclear programme, but the US is likely to insist that such actions do not outpace the ability of the International Atomic Energy Agency (IAEA) to monitor them. As a sequencing matter, it would be prudent for Washington to ask that Iran first <a href="">restore the deal’s added transparency measures</a> – such as IAEA access to cameras at Iran’s nuclear facilities and Iran’s implementation of the Additional Protocol – <i>before</i> Iran begins its nuclear reductions.</p><p>In addition to ensuring that Iran’s nuclear rollback adheres to the letter of the JCPOA, new compromises may need to be developed for technical advances that do not have a neat solution in the deal. It is also likely that the US will closely evaluate whether and how any of Iran’s nuclear advances impact its <a href="">one-year breakout timeline</a> (not a requirement of the deal, but a result of the JCPOA’s technical constraints and an important US political selling point), or its ability to produce nuclear weapons. Examples of activities that may require discussion include Iran’s <a href="">expanded production and use of advanced centrifuges</a>, as well as recent and planned <a href="">production of uranium metal</a>. It is generally a safe bet that the nuclear issue <a href="">will be easier to work out</a> and less contentious than sanctions rollback, but it is hard to know for sure given that the US and Iran have yet to meet to dig into the details and Washington has not spoken much in public about its objectives.</p><p>While the US appeared to show some flexibility in Vienna, Iran doubled down on the key elements of its negotiating position during and after the talks, including that: 1) the US must remove all sanctions imposed by the Trump administration; 2) Iran will then verify their removal before bringing its nuclear programme back into compliance; and 3) all of this has to happen in one move, not as the result of a step-by-step process. There was also no indication that Iran was willing to engage in direct dialogue with the US. These positions are in direct conflict with US ones and, in some cases, the agreement itself. As a result, they present a significant challenge to reviving the deal. Resolving them will require creativity, compromise and a softening of Iran’s demands.</p><h2>Iran’s Demands</h2><p>Regarding the first demand, <a href="">multiple Iranian officials</a> have gone to great lengths <a href="">to clarify</a> that when they say all sanctions imposed under Trump must be removed, they do in fact mean <i>all </i>sanctions (even those that would be permissible under the deal, such as those on Iran’s missile programme or related to cyber activities and human rights issues). The US <a href="">has made clear</a> that it will not remove the full slate. So the question becomes: how much flexibility, if any, is there in Iran’s position?</p><p>It is also hard to see how the US would agree to meet Iran’s second demand: removing all sanctions, followed by a period in which Iran verifies their removal, and only then begins to dial back its nuclear programme. Trying to borrow the JCPOA’s implementation process – in which the US first issued sanctions waivers (Adoption Day) that then went into effect once Iran met its nuclear obligations (Implementation Day) – seems unlikely to work. Iran has <a href="">suggested</a> that verifying sanctions removal could include steps such as successfully exporting oil, signing new oil contracts and conducting financial transactions through multiple channels. A symbolic delivery of oil is one thing, but waiting for Iran to sign multiple new contracts is quite another.</p><p>Finally, Iran’s demand that all of this happen in one move – which appears slightly at odds with its demand that the US goes first – is likely to be the easiest to resolve, provided that Iran is willing to identify a detailed list and sequence of steps that each side will take under a ‘single’ move. Recent Iranian statements suggest that Tehran may be open to such an approach. In effect, this could resemble the JCPOA’s Implementation Plan but without identified transition periods: it would begin with countries taking the first steps, and end when they are done.</p><h2>All in the Balance</h2><p>It remains to be seen whether the parties can build on the constructive start in Vienna. The recent sabotage efforts against Iran’s main enrichment facility will probably make that harder in the short term. It is also still quite possible that Tehran is not intending to compromise any time soon: Iranian Supreme Leader Ali Khamenei could judge that his interests – and those of Iran – are best served by waiting until after the country’s June elections before trying to engage in serious dialogue. But that is certainly a testable hypothesis. The US and the remaining parties to the deal will get a better sense this week of whether Iran’s positions are ‘red lines’ or ‘pink lines’.</p><p><strong>Eric Brewer</strong> is a senior fellow and deputy director at the Project on Nuclear Issues, Center for Strategic and International Studies.</p><p><em>The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.</em></p><p><em>BANNER IMAGE: Meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA) in Vienna, Austria, April 6 2021. Courtesy of Xinhua/Alamy Stock Photo.</em></p></div></div></div> Tue, 13 Apr 2021 16:04:00 +0000 35737 at A New Engagement: Iran and the Global Community <div class="field field--name-field-image field--type-image field--label-hidden"><div class="field__items"><div class="field__item even"><img class="tab-images" src=";c=294b9a6f2ad4a6ada27f79d28e7ff00d" width="140" height="140" /></div></div></div><div class="field field--name-field-focus field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">This event was quoted in IRNA news.</div></div></div><div class="field field--name-field-organisation field--type-link-field field--label-hidden"><div class="field__items"><div class="field__item even"><a href="">IRNA</a></div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p><a href="">Watch the event here</a>.</p></div></div></div> Wed, 10 Mar 2021 13:04:49 +0000 35349 at Iran in the South Caucasus: Adjustment and Evolution <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">Iran’s position in the South Caucasus, a region it sees as a part of its historical interests, is coming under tremendous pressure. The 2020 Nagorno-Karabakh War underlined the need for Tehran to rapidly adjust its approach in light of Turkey’s and Russia’s growing power. </div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>The November 2020 peace deal which ended the war between Armenia and Azerbaijan showcased Iran’s fragile position in the changing geopolitics of the South Caucasus. Tehran did not have enough power to influence the course of the conflict. In contrast, both Russian and Turkey shaped the outcome, hammered out a ceasefire agreement and dealt with its implementation. Russia’s new peacekeeping mission and the return of Turkish soldiers to the South Caucasus signalled Iran’s absence from the renewed <a style="font-size: 0.875rem;" href="">great power competition</a> in the region.</p> <p>The conflict occurred against an unfavourable wider backdrop. Regional connectivity is a major weakness for Iran. Russia is pursuing the revival of Soviet-era railway lines from Azerbaijan to its exclave, Nakhchivan, and from Russia to Armenia. This would limit Iran’s influence over Azerbaijan. Since 1994, when the First Nagorno-Karabakh War ended, Azerbaijan has needed Iranian transit routes to reach its exclave – a dependency that might soon disappear. Yet there may be a positive dimension for Iran: the railway which will connect Armenia with Russia, via Azerbaijan, could be used by the Russians as a connection to Iran, in addition to the railway from Iran to Russia, via Azerbaijan, which is still under development.</p> <p>Iran is particularly concerned about growing Turkish influence. The two countries cooperate over Syria and fight Kurdish separatists, but the growing Turkish clout along Iran’s northern border is <a href="">seen as a major challenge</a>. This has been a trend since the late 1990s when Turkish military and economic involvement with Azerbaijan gradually increased. Yet while Iran has little ability to prevent the growth of Turkish influence, it may be able to build a better understanding with Azerbaijan.</p> <h2>Change in Iran’s Azerbaijan Policy</h2> <p>There is an undeniable ethnic dimension to Iran’s Azerbaijan policy. Tehran has historically been wary of Baku’s geopolitical ambitions, largely because of its subtle attempts in the early 1990s <a style="font-size: 0.875rem;" href="">to use Iran’s Azerbaijani population for an irredentist agenda</a>. At first, Tehran initially tried to pull post-Soviet Azerbaijan into its zone of influence. Trade relations, cultural exchange programmes and religious ties were developed, but ultimately Tehran deliberately distanced itself from Baku.</p> <p>At the time, there were no political reasons for Iran’s leadership to adopt a closer relationship with Azerbaijan. Azerbaijan was experiencing a major surge in patriotic sentiment due to the war with Armenia, and this threatened to spread to the north of Iran, a region mostly <a href="">populated by ethnic Azerbaijanis</a>. Iran’s worst fears were often associated with the nationalistic then Azerbaijani president, Abulfaz Elchibey, who embraced pan-Turkic ideas and tried to reach out to ethnic kin in Iran. The ‘<a href="">Greater Azerbaijan</a>’ idea was developed in Azerbaijan. In response, Tehran supported Armenia by <a href="">reportedly closing the border</a> to Azerbaijani refugees and acted as Yerevan’s ‘lifeline’ for decades.</p> <p>The 2020 Nagorno-Karabakh War has changed Iran’s perspective. Iranian religious leaders were more supportive of Azerbaijan, <a href="">claiming that Karabakh and surrounding lands are inseparable parts of Azerbaijan</a>. Furthermore, during the leg of his recent regional tour which aimed to promote regional cooperation, Iranian Foreign Minister Javad Zarif <a href="">said</a> he is happy to see that Azerbaijan has regained control over its occupied territories from Armenia.</p> <p>In many ways, Iran’s change of perspective reflects the altered balance of power in its neighbourhood. Supporting Armenia would antagonise a strengthened Azerbaijan and drive it further into Turkey’s arm, potentially jeopardise the road and rail transit routes to Russia and complicate Iran’s position in the Caspian Basin. Tensions with Baku might also rekindle the idea of a Greater Azerbaijan. While some of these outcomes seem remote, poor relations with Baku make them more likely.</p> <p>Iran is also worried about high-level <a href="">military cooperation</a> between Azerbaijan and Israel. Azerbaijan’s geographic position on Iran’s border makes it an ideal site for gathering strategic intelligence. <a href="">Media sources claimed</a> that Israel helped Baku to build electronic intelligence gathering stations along the Azerbaijani border with Iran in the 1990s. And in 2012, Mark Perry, writing in <a href=""><i>Foreign Policy</i></a>, claimed that Israel had an arrangement with Azerbaijan allowing it to potentially fly sorties from the country.</p> <p>For Iran, close Israel–Azerbaijan ties are a part of US efforts to stymie its position. And there is some substance to this view. In the early 1990s, Washington encouraged a triangular relationship between Turkey, Azerbaijan and Israel. The geopolitical model has partly worked. Azerbaijan and Israel continue to see their geopolitical relationship as vital to their security in the region. The deterioration of ties with Azerbaijan could thus complicate Iran’s position in the South Caucasus.</p> <h2>Iran’s Regional Vision</h2> <p>Iran’s evolving position towards Azerbaijan is linked to a wider regional and even Eurasian perspective. The Caspian Basin and the South Caucasus have now become inextricably linked to the Middle East. Russia and Turkey have increased their footprint in the region over the past decade and now consider the South Caucasus as a part of a greater geopolitical game that stretches from the Mediterranean to the Caspian. Iran cannot ignore this development and will have to adjust. In the longer term, this could raise the profile of the South Caucasus in Iran’s foreign policy calculus and put it closer to other theatres Tehran is involved in across the Middle East.</p> <p>Iran has always been mindful of this regional perspective. Notwithstanding historical tensions in managing its interaction with Azerbaijan and Armenia, Tehran pursues a largely cooperative security strategy that covers all three South Caucasus countries, as well as Russia and Turkey. For instance, during the 2020 Nagorno-Karabakh War, <a href="">Iran proposed</a> an initiative to de-escalate tensions in the region and sent its deputy foreign minister of foreign affairs, Abbas Araghchi, to all the regional states.</p> <p>And, indeed, Iran sees changes in the South Caucasus as a part of the changing global order. The 2020 Nagorno-Karabakh War could be seen in this context: a post-Cold War system of state relations, backed by US power, experiencing a fundamental change. During the recent conflict, the West remained an outside player, while Russia and Turkey played a pivotal role.</p> <p>Geo-economics is a major consideration, particularly regional connectivity. Tehran’s positioning following the recent war will be affected by economic geography. Iran has pursued a port and railway development strategy which now forms a part of a bigger move to position itself as an interconnector to Indian, Chinese and Russian economic projects. In terms of the South Caucasus, the Eurasian Economic Union matters, and, for Iran, Azerbaijan is crucial to transit routes in the North–South economic corridor, stretching from the Indian Ocean to the Baltic ports. The Russian efforts to revive Soviet-era railways could turn Tehran into a major beneficiary as it will allow the expansion of trade ties with the region and Russia.</p> <p>Iran is slowly adjusting to the changing realities in the South Caucasus. Much remains uncertain. How might Tehran be able to tip the balance of power in its favour? Building greater ties with Baku seems to be one way; proposing regional cooperation platforms might be another. But no matter its choice, Iran will face entrenched Turkish and Russian influence in the region.</p> <p><strong>Emil Avdaliani</strong> is professor at the European University (Tbilisi, Georgia) and specialises in the geopolitics of the South Caucasus, Iran and Turkey.</p> <p><i>The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.</i></p> <p><em>BANNER IMAGE: The Iran–Turkey border. Courtesy of Elena Odareeva/Adobe Stock</em></p> </div></div></div> Fri, 26 Feb 2021 12:02:00 +0000 35093 at Israeli Options for Direct Attacks on Iranian Nuclear Sites <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">The Israeli government sees Iran’s nuclear programme as an existential threat. The Biden administration is attempting to re-open negotiations, but if these fail and Iran tries to produce a nuclear weapon then Israel might attempt to bomb Iranian nuclear sites. US supplies of new bombs and the B-52 bomber would be critical to any prospects of success.</div></div></div><div class="field field--name-field-abstract field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even"><p>The Israeli Air Force (IAF) would face multiple challenges if it attempted strikes against Iranian nuclear sites, since most are hardened and well protected. The IAF has access to ‘bunker buster’ bombs, including the <a href="">5000 lb GBU-28</a>, but these are unlikely to be powerful enough for this task. The US Air Force has developed the much larger <a href="">30,000 lb Massive Ordnance Penetrator</a> (MOP) bomb specifically for attack capabilities against deeply buried Iranian (and North Korean) facilities like the nuclear enrichment site at Fordow.</p><p>However, even if Israel could obtain the MOP, its F-15, F-16 and F-35 fighter bombers could not carry this giant bomb. In order to deliver the weapon, Israel would need to obtain a strategic bomber from the US. There is no chance that Israel could purchase either the B-2, let alone the upcoming B-21, but export approval would be somewhat more feasible for the venerable B-52 Stratofortress. The <a href="">proposal has been raised by various groups in the US in the past</a>, and rumours persist that Israel has privately enquired about a potential sale of these aircraft. Despite their age, the US Air Force’s B-52s have been continuously upgraded over the years and are expected to fly until the 2050s, so it would not be a short-term investment for Israel. Another potential option might be for the IAF to use its C-130J transports to deliver the MOP using a parachute-retarded ramp-drop, although the weapon is not currently cleared for such deliveries. However, C-130s have previously been used to deliver the 21,600 lb Massive Ordinance Air Blast weapon, as part of the war in Afghanistan.</p><p>The US <a href="">is committed to keeping Israel’s qualitative military edge (QME)</a> over neighbouring states. It could be argued that selling refurbished B-52s and/or at least the MOP to Israel is in line with this QME commitment. </p></div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>The Iranian Air Force operates ageing fighters such as the Mig-29 and F-14A Tomcat, but they could credibly threaten either the B-52 or C-130J. Given an IAF fighter escort, the main threat would be from the Russian S-300PMU-2/VM, indigenously produced Bavar-373 and Sayyad series surface-to-air missile systems. A single S-300PMU-2 battery radar could detect up to 100 aircraft simultaneously at a 300 km range if they were flying at medium or high altitudes, and the maximum range of its missiles is 150 km. The IAF would most likely employ a combination of kinetic strikes and electronic and cyber warfare to degrade Iran’s ground-based air defences for enough time to allow the B-52 or C-130J to get in and out safely.</p><p>The IAF has conducted hundreds of sorties in Syria since 2012, facing the complex Syrian air defence systems, and only suffering a single F-16 shot down on return, on 10 February 2018. The IAF has learned vital lessons from the missions it carried out in Syria, but Iran has likely gained significant knowledge of IAF tactics from these operations, since it is a close ally of the Assad regime. At longer ranges, against the (probably) more capable Iranian defence systems, significant aircraft losses are likely to occur; however, these may be acceptable if the IAF manages to inflict major damage to Iran’s nuclear sites. Iran would likely try to rebuild those sites, necessitating repeat raids, probably against strengthened defences.</p><p>In the 1970s, the IAF received the F-15 and the F-16 from the US. Since then, it has become very familiar with American aircraft, although not with strategic bombers. Israel could send air and ground crews to the US to study the B-52 and to prepare its infrastructure for those huge planes. The IAF has experience operating large aircraft, including its Boeing 707 based aerial refuelling tanker. This might also help in assimilating the B-52. Although it would be both demanding and very expensive for Israel, the cost should be measured according to the risks of allowing Iran to have nuclear weapons. Israel has spent a great deal more over the years to prevent threats that are much less dangerous.</p><p>If the US Government were to agree to export it, the IAF should acquire and assimilate the B-52 as soon as possible. The IAF has experience in learning how to operate new aircraft in a short period of time. For example, in 1981 the IAF was planning to attack an Iraqi nuclear reactor with its existing A-4 attack aircraft and F-4 fighter bomber, but subsequently carried out the raid with new F-16s which had only recently been acquired from the US.</p><p>The IAF will have to fly more than a thousand miles just to reach Iran. The B-52 has a very long range, almost 9,000 miles. This advantage could be used to reach Iranian targets from an unexpected direction to gain the element of surprise. Israel is allowed, unofficially, to pass over Arab states such as Saudi Arabia, which fear Iran and its nuclear programme. The F-15 and F-16 would use external fuel tanks to reach Iranian targets but would also require air-to-air refuelling. The IAF is <a href="">looking to acquire American KC-46 tankers</a>, but it is unlikely that Israeli examples would be available for several years. Therefore, the IAF will have to rely on its aging Ram (Boeing 707) – a formerly civilian aircraft adapted for aerial refuelling.</p><p>Iran would most likely retaliate after any Israeli strike on its nuclear facilities by conducting terror and cyber-attacks against Israeli interests, in and outside of Israel. Iran does <a href="">possess a number of Su-24</a> supersonic, all-weather long-range attack aircraft. The Iranian Air Force examples are ex-Iraqi Su-24MKs with inferior avionics and weapon systems compared to modernised Su-24Ms in use by the Syrian Air Force and Russia. Theoretically, Iran could try to launch them in a retaliatory raid against Israeli targets. However, the presence of large numbers of advanced fighters and Patriot surface-to-air missile systems in Israel makes this course of action unlikely.</p><p>Instead, Iran would be more likely to retaliate with its <a href="">long-range missiles</a>. Iran’s Ghadr 1 (Shahab-3 Variant) has a range of 1,950 km, enough to reach Israel. Its circular error probable is 300 metres, which is more than sufficient to hit important Israeli targets. Israel would have to rely on its Arrow anti-missile systems for defence. The only time the Arrow was tested in combat was in 2017, when it shot down a Syrian S-200 surface-to-air missile. Therefore, the Arrow has never intercepted a hostile ballistic missile. The IDF has also conducted training with the US military in this area, including Exercise <i><a href="">Juniper Cobra</a></i>. The IAF might also attempt to locate and destroy the launchers of those missiles in Iran before they can be fired, although that would require further high-risk operations in Iranian airspace and is unlikely to prevent the majority of launches.</p><p>Iran has also invested heavily in arming Hizbullah, its strongest proxy, based in Lebanon. <a href="">Hizbullah has 150,000 rockets and missiles</a>, providing coverage over the whole of Israel. They could cause substantial casualties and damages, especially if a growing number of these missiles are being fitted with guidance kits. The IAF would have to attempt to bomb them. While Iran is far away and has an advanced air defence system, Hizbullah is located near Israel and its air defences are much less formidable (based around the SA-6 and SA-22). However, destroying most of the rockets and missiles in Lebanon will be a tall order for the IAF, and would almost certainly require Israel to also conduct a massive ground offensive there.</p><p>To be able to credibly threaten buried and hardened Iranian nuclear sites, the IAF needs the B-52, with its long range and ability to deliver the 30,000 lb MOP. The IAF might also be able to drop the MOP from its C-130J, despite the risks and complexity of such a daring operation. Either way, such a strike on Iranian sites would be a major gamble with wide ranging consequences and limited prospects of lasting success. However, if the alternative is an Iranian nuclear weapon, Israel may decide that the risk is worthwhile and attack with or without support from its American patron.</p><p><strong>Ehud Eilam</strong> has worked for the Israeli Ministry of Defense as a researcher. His latest book is <i>Containment in the Middle East</i> (University of Nebraska Press, 2019).</p><p><em>The views expressed in this article are the author’s, and do not represent those of RUSI or any other institution</em><span>.</span></p><p>BANNER IMAGE: US Air Force, Boeing B-52H Stratofortress, Photographer: Anna Zvereva (Licence: Wikimedia Commons)</p><p> </p></div></div></div> Tue, 23 Feb 2021 18:05:50 +0000 35033 at On the Quest to Revive the Iran Nuclear Deal <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">As US officials engineer the reinstatement of the 2015 nuclear deal, they should pay particular attention to Iran’s expectations of this process.</div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>The debates in Iran on the 2015 nuclear agreement <a href="">suggest</a> that the Islamic Republic continues to prefer a return to the nuclear agreement over the possibility of it falling apart. Unsurprisingly, however, Tehran <a href="">insists</a> that the US has to take the <a href="">first step</a>, lift all nuclear-related sanctions and roll back additional sanctions imposed by former President Donald Trump. Once the US is back in compliance, Tehran would follow suit – this has been the consistent message across the institutional landscape in Iran.</p> <p>Tough positions in Iran on the Joint Comprehensive Plan of Action (JCPOA) continue to be <a href="">prominently advocated</a>, of course. These should not be seen as contradictory, but rather complementary, to the official line. Similarly, <a href="">legislation</a> with tight deadlines approved by Iran’s parliament in December 2020 certainly makes life difficult for the country’s government to champion a return to the JCPOA. However, such internal pressures raise the stakes on all sides and generate a sense of urgency for constructive solutions.</p> <h2>What Iran Needs from the US</h2> <p>It goes without saying that the deeply engrained mistrust towards the US was only exacerbated during the presidency of Donald Trump. This makes it increasingly difficult for the government of Hassan Rouhani to justify and sell at home a smooth return to the nuclear agreement.</p> <p>Therefore, statements of intent by the Joe Biden administration to return to JCPOA compliance will not suffice to convince Iran to take reciprocal steps, let alone initiate them. Mindful that rolling back the sanctions regime reimposed by Trump – a key demand of Tehran – would take weeks and months to be verifiably processed, Washington will have to underline its new commitment to the JCPOA through measures that have immediate effect and generate instant benefits. These could include the unfreezing of some Iranian foreign assets, reinstating wavers for oil sales and/or reviving the multibillion-dollar <a href="">Boeing deal</a>. Undoubtedly, such flagship moves would come with political cost for the Biden administration domestically and among Middle East allies. And yet, the readiness to invest such political capital is exactly what Tehran needs to see as proof that team Biden is genuine about its pledge to revive the nuclear accord.</p> <p>On political messaging, Iran insists that any remarks made in Washington on the nuclear agreement must avoid adding regional affairs or Iran’s missile programme into the mix. This is significant to counter the argument that the nuclear dossier is just an entry point to exert pressure on other issues.</p> <p>Unfavourable reactions in Tehran can also be avoided by making clear that the quest to revive the nuclear agreement is not an attempt to impact the outcome of Iran’s presidential election, set to be held on 18 June 2021. State Department Spokesman Ned Price has already <a href="">made clear</a> the US is not ‘looking at it in those terms’ – a line that should be consistently pursued both in the US and in Europe.</p> <h2>What Iran Needs from Europe</h2> <p>Conversations with policy stakeholders in Iran indicate that the view on Europe has reached a historic low. In the eyes of Tehran, Europe was too reluctant to expand trade relations when the deal was signed, then bowed down to Trump’s maximum pressure when the US left the deal (bringing trade down to a minimum), and is now playing tough now that the US return is on the horizon. In particular, statements coming from Paris – be it on the need for <a style="font-size: 1rem;" href="">Iran to move first</a> or that Israel and Saudi Arabia <a style="font-size: 1rem;" href="">should be part of the talks</a> – are viewed in very negative light, amplifying voices that argue the US and Europe are playing a good-cop/bad-cop game with Iran.</p> <p>Iran’s foreign minister, Javad Zarif, <a style="font-size: 1rem;" href="">has pointed out</a> that the EU can coordinate the steps to full JCPOA compliance by all sides. In fact, this has been the mandate of the EU ever since the nuclear talks started. So, while it is upon Tehran and Washington to <i style="background-color: transparent; font-size: 1rem;">take</i> the necessary steps, the EU can lay out the roadmap for them. This could help Tehran and Washington to set aside the face-saving routine by following a path outlined by the mandated arbiter of this process. Bringing in tools such as the Instrument in Support of Trade Exchanges or the Swiss Humanitarian Trade Agreement can help to speed up some of the steps the US is required to undertake vis-à-vis Iran while sanctions are still in effect.</p> <p>On the economic front, European governments would be well-advised to start engaging the US Department of the Treasury in order to issue clear guidelines for trade interactions with Iran. One reason for European reluctance after the finalisation of the JCPOA had been the vague and ambiguous regulations of the Treasury Department’s Office of Foreign Asset Control (OFAC) that made European business shy away from dealing with Iran. Only with effective support of OFAC can the originally desired normalisation of Iranian–European trade materialise.</p> <p>Given that Iran’s economy is already undertaking a major shift towards the East, a swift opening and re-engagement of European businesses in light of a possible restoration of the JCPOA can ensure that this shift towards the East stays gradual and leaves enough space for European companies.</p> <h2>Roadmap Needed as Time is Running Out</h2> <p>On the basis of a <a href="">parliamentary</a> bill, Iran is now going to further scale down its commitments to the JCPOA after 23 February. It will temporarily suspend the implementation of the Additional Protocol (AP) of the Nuclear Non-Proliferation Treaty, which means that the International Atomic Energy Agency (IAEA) will not be given access to AP-related video monitoring for at least three months. While Tehran made good on the promise to suspend AP implementation, <a href="">the arrangement</a> found by the IAEA and the Atomic Energy Organisation of Iran has prevented a crisis and leaves time for further diplomacy.</p> <p>A ‘softer’ deadline can arguably be set one month from now. After a week of national holiday following the new Iranian year, expect the pre-election run-up and campaigns to start from early April. This period will make it increasingly difficult for Tehran to take courageous foreign policy action and show flexibility, as every single step by the incumbent government, and mainly Foreign Minister Zarif, will be seen and framed as electoral campaigning. Therefore, a clear roadmap with a concrete sequencing of steps towards compliance-for-compliance needs to be established by mid-March, at the latest.</p> <p>So, unless clear and explicit signals are sent towards Tehran and some initial steps with immediate effect are undertaken by the Biden administration, expect further complications on Iran’s nuclear dossier.</p> <p><strong>Adnan Tabatabai</strong> is co-founder and CEO of the Center for Applied Research in Partnership with the Orient (CARPO) in Bonn, Germany.</p> <p><em>The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.</em></p> <p><em>BANNER IMAGE: Iranian Foreign Minister Javad Zarif in Cuba, November 2020. Courtesy of <span>EFE News Agency</span><span> / Alamy Stock Photo</span></em></p> </div></div></div> Tue, 23 Feb 2021 09:19:00 +0000 35021 at Iran’s uranium metal production is ‘most serious nuclear step’ to date, but deal can still be saved <div class="field field--name-field-image field--type-image field--label-hidden"><div class="field__items"><div class="field__item even"><img class="tab-images" src="" width="140" height="140" /></div></div></div><div class="field field--name-field-focus field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">Aniseh Tabrizi, a senior research fellow and Iran expert at the Royal United Services Institute, agreed. “It’s reversible, especially if done in the short term,” she said of Iran’s uranium metal production. “There has been condemnation, but no signal that this is the end of any attempt to revive talks on the JCPOA.”</div></div></div><div class="field field--name-field-organisation field--type-link-field field--label-hidden"><div class="field__items"><div class="field__item even"><a href="">Iran’s uranium metal production is ‘most serious nuclear step’ to date, but deal can still be saved</a></div></div></div> Thu, 18 Feb 2021 10:14:41 +0000 Joana Bundo 34961 at Iran’s Shifting Nuclear Debate and the Shrinking Space for Diplomacy <div class="field field--name-field-block-text field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">Diplomacy has only a narrow window of opportunity, as the nuclear debate inside Iran remains volatile.</div></div></div><div class="field field--name-body field--type-text-with-summary field--label-hidden"><div class="field__items"><div class="field__item even"><p>Both <a href="">Iran</a> and the <a href="">US</a> have declared that they are willing to come back into full compliance with the nuclear deal, the <a href="">Joint Comprehensive Plan of Action</a> (JCPOA). However, as each side is waiting for the other to take the first step, there is an increasing risk of ending up with no nuclear compromise at all. Europeans should be careful not to overestimate Supreme Leader Ali Khamenei’s readiness to hold on to the JCPOA while underestimating the role of nuclear discourse in the Islamic Republic.</p><p>There has been a lively public debate in Iranian politics on nuclear issues since 2002, with vastly differing positions on which diplomatic approach would suit Iran’s national interests best. These debates have been an essential part of nuclear decision-shaping for the past two decades. As the main responsibility for the nuclear file was transferred from Iran’s Atomic Energy Organization to the <a href="">Supreme National Security Council</a>, a multilevel process of formal and informal consultations was put in place that was meant to aid the Supreme Leader in his decision-making. Public political discourse continuously fed into that process.</p><p>Khamenei has been mindful of the overall political climate and has allowed for several nuclear policy changes to be made throughout the years: from the temporary suspension of enriching any uranium to an enrichment grade of 20% under former president Mahmoud Ahmadinejad to greenlighting the JCPOA that heavily restricted Iran’s nuclear activities across the board. If the past is any indication, Khamenei is likely to change his position again when two circumstances coincide: public political discourse shifting in favour of disengagement; and a stalemate in nuclear talks with no credible resolution in sight.</p><h2>Back to 2004</h2><p>Today’s domestic trajectory is in many ways reminiscent of 2004, when conservative hardliners won a majority in parliament and started work on legislation that would later urge the government to expand the civilian programme, restrict cooperation with the International Atomic Energy Agency (IAEA) and suspend voluntary measures. Critics of the reformist government’s engagement policy with the E3 (Germany, France and the UK) gained political ground as it became increasingly clear that nuclear talks had reached a dead end and no further progress would be likely under the existing framework. Based on new legislation, Tehran notified the IAEA in August 2005 about its decision to resume activities at the Uranium Conversion Facility near Isfahan. Thus, when Ahmadinejad was elected president later that month, a nuclear policy shift was already underway. The changed political climate allowed him to move swiftly towards expanding Iran’s nuclear programme while taking a decidedly confrontational stance in international negotiations.</p><p>As in 2004, the current nuclear debate in Iran has become much harsher in tone. Conservative hardliners have reclaimed a majority in parliament and <a href="">passed legislation</a> urging the government of President Hassan Rohani to enrich uranium to 20% once again and to suspend the Additional Protocol if a 21 February deadline expires without tangible US sanctions relief. And much like 2004, Europeans and Iranians have exhausted their means to move forward on their own, despite Russian and Chinese support this time around. In some regards, the current conditions are even worse than they were in 2004, as Iran has now seen the outcome of a nuclear deal. Due to the negative experience of the JCPOA, long-held assumptions within the Iranian political discourse about the lack of US willingness and the absence of European abilities to uphold a nuclear compromise have been confirmed, leaving a much bigger credibility deficit to overcome.</p><p>Arguments put forward by groups that were fundamentally opposed to the nuclear compromise, such as the hardline <a href="">Endurance Front</a>, once obscure outliers in Iran’s nuclear debate, have now become much more acceptable. Shifts can also be observed among the general population. Approval rates for the JCPOA have plummeted in recent years. As Iranians did not economically benefit from the nuclear deal in any substantial way, <a href="">support for the agreement dropped</a> from 76% in 2015 to a little more than 40% at the end of 2019.</p><h2>A Different Pathway </h2><p>Under these circumstances, it would not be entirely unreasonable for the Iranian leadership to give up on the JCPOA by letting it fall apart. Iran could be inclined to leave the Nuclear Nonproliferation Treaty and further accelerate its nuclear programme until it is on the verge of breakout. This would significantly increase Iran’s power projection and deterrence capacities, even without building a single nuclear weapon. Given the high price that Tehran has already paid in terms of sanctions, assassinations, cyber attacks and other acts of sabotage, proponents of such a path could argue that at this point the long-term strategic gains far outweigh any additional harm that might be imposed by external actors and would thus be worth the risk.</p><p>Moreover, as Iran’s economic outlook appears to be less grim, with an <a href="">expected positive growth rate, even if sanctions were to remain in place</a>, many in Tehran believe that today the Islamic Republic is much better equipped to withstand ongoing economic pressure and that sanctions are no longer an existential threat to the Iranian economy or to the political system.</p><p>A changing nuclear rationale could be further cemented by the presidential elections in June. As things stand, right-wing candidates from the conservative spectrum are in a favourable position to win. While a victory by a hardliner would not necessarily mean a more confrontational nuclear policy, any new cabinet will find itself in a domestic environment much more willing to change course. </p><p>Things could get even more complicated should Khamenei no longer be able to exercise his powers due to illness or death. Given Iran’s domestic fault lines and the current volatility of its power struggles, there is a high degree of uncertainty over how the transition period might unfold and how it would impact nuclear talks or any additional agreements that both Europe and the US are hoping to reach.</p><h2>No Time to Lose</h2><p>Europeans should not take the current dynamics in Iran lightly. While Iran’s nuclear advancements are worrisome, the biggest challenge remains political. Unlike most technological steps, a major policy shift cannot be easily reversed. Thus, Europeans should focus on disincentivising Tehran from turning its back on the JCPOA at a time when this is still achievable.</p><p>A harsher public stance by the E3 and continued posturing will not prevent Tehran from suspending the Additional Protocol once the 21 February deadline expires and will only contribute to the downward spiral when de-escalatory measures are needed.</p><p>The Iranian leadership is still holding on to the nuclear agreement in light of potential sanctions relief under the Biden administration. Tehran might not expect an economic collapse anytime soon, but it is aware of how sanctions continue to slow and hamper Iran’s overall economic development. This is still what makes the prospect of sanctions relief an effective incentive. However, the window of opportunity is closing.</p><p>Tehran will not take another leap of faith solely on the basis of Biden not being Trump. A clear sign from Washington is needed to remove serious doubts about the new administration’s intentions. Biden could start by <a href=";mc_eid=d50c2a10bb">easing Iran’s access to its foreign exchange reserves</a> to use for sanctions-exempt trade or even <a href="">revoke his predecessor’s executive order</a> to withdraw from the JCPOA to send a clear message. Europeans should encourage Washington to make the first move and to take concrete action, ideally before 21 February.</p><p>The deadline is a critical juncture, but it does not have to turn into the tipping point for the nuclear deal. It is not too late to bring all sides back into full compliance and build on the agreement through follow-on talks. While the process itself will take months, initiating it is a matter of days. The Supreme Leader may be the ultimate decision-maker in Iran, but he does not operate in a political vacuum. The nuclear debate in Iran is gradually shifting. The sooner the compliance process starts, the more it reduces the risk of domestic obstacles in Iran snowballing into an avalanche.</p><p><strong>Azadeh Zamirirad</strong> is Deputy Head of the Middle East and Africa Research Division at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin.</p><p><em>The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.</em></p><p><em>BANNER IMAGE: Ayatollah Ali Khamenei reading the Holy Quran. Courtesy of <span></span>/Wikimedia Commons/<a class="external free" href=""></a></em></p></div></div></div> Tue, 16 Feb 2021 12:33:00 +0000 34917 at The Plan to Save the Iran Deal Needs Private-Sector Buy-In <div class="field field--name-field-focus field--type-text-long field--label-hidden"><div class="field__items"><div class="field__item even">&quot;f the US and E3 hope to present renewed trade and investment as a credible and meaningful incentive for Iranian cooperation, it will be necessary to both address private sector concerns and manage Iranian expectations.&quot; </div></div></div><div class="field field--name-field-organisation field--type-link-field field--label-hidden"><div class="field__items"><div class="field__item even"><a href="">Bourse &amp; Bazaar</a></div></div></div> Fri, 22 Jan 2021 12:30:19 +0000 34577 at