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Homepage > Regions / Countries > Middle East & North Africa > Iraq, Iran & the Gulf > Iran > Iran and the P5+1: Solving the Nuclear Rubik’s Cube

Iran and the P5+1: Solving the Nuclear Rubik’s Cube

Middle East Report N°152 9 May 2014

This report is also available in Farsi.

EXECUTIVE SUMMARY AND RECOMMENDATIONS

In a region of troubles, the negotiations over Iran’s nuclear program stand out. The first-step agreement, signed in November 2013, broke a decade of futile diplomatic forays punctuated by mutual escalation. The product of a rare confluence of political calendars and actors, it set a framework for a balanced arms-control agreement that could form the basis of a comprehensive nuclear accord. But reasons for caution abound. It is easier to pause than to reverse the escalation pitting centrifuges against sanctions. Mistrust remains deep, time is short, and the process remains vulnerable to pressure from domestic and regional detractors. In bringing the sides together, the accord revealed the chasm that separates them. Success is possible only with political will to isolate the deal – at least for now – from its complex regional context. It will ultimately be sustainable only if the parties, building on its momentum, recognise that their rival’s legitimate interests need to be respected. But a far-reaching resolution of differences will be possible only after a relatively narrow, technical nuclear agreement.

The main objective of the P5+1 (the five permanent UN Security Council members plus Germany) is to constrain Iran’s nuclear program. In Geneva, where the agreement – officially known as the Joint Plan of Action – was signed, the group for the first time agreed to Iran maintaining some enrichment capacity. But it has demanded that Tehran significantly roll back its enrichment capabilities, close the bunkered enrichment facility in Fordow and heavy-water plant in Arak; and demonstrate the peaceful nature of its nuclear program by detailing past activities and allowing, for an extended period, intrusive monitoring. Fearing that it would be easier for Iran to reverse its nuclear concessions than for the West to renew its isolation, the group insists on retaining sanctions leverage, even through implementation of the final step of a comprehensive agreement.

Iran believes that the P5+1’s objective is to contain not simply its nuclear program, but also the Islamic Republic itself. It contends that it has been singled out, uniquely among signatories of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT), to prove a negative, that its nuclear program does not aim at weaponisation. Tehran insists on preserving a substantial part of its nuclear infrastructure, in view of the enormous cost it has paid for it. While willing to accept heightened verification measures in order to enable the International Atomic Energy Agency (IAEA) to establish the peaceful nature of its program, it insists that they be temporary and respectful of its national security requirements. It also demands significant and immediate Western reciprocation of any nuclear concession.

From these starting points, it would appear that the P5+1’s maximum – in terms of both what it considers a tolerable residual Iranian nuclear capability and the sanctions relief it is willing to provide – falls short of Iran’s minimum. Nevertheless, it is still possible to reach a comprehensive agreement on a limited nuclear program – though an uncomfortable one for sceptics like Saudi Arabia and Israel that object on principle to Iran retaining any enrichment capacity. Negotiators will not get far, however, by trying to define Iran’s “practical needs” for enriched uranium (an approach endorsed in Geneva), since needs are a matter of interpretation about which Iran and the P5+1 differ. Focusing on “breakout time” – the time required to enrich enough uranium for one weapon – will not stand them in better stead, as it is based on theoretical, unpredictable and plastic calculations.

What is needed, rather, is a compromise that satisfies both sides’ irreducible, bottom-line requirements: for Iran a meaningful enrichment program, continued scientific advancement and tangible sanctions relief; and for the P5+1, a firewall between Iran’s civilian and potential military nuclear capabilities, airtight monitoring mechanisms and sufficient time and Iranian cooperation to establish trust in the exclusively peaceful nature of the country’s nuclear program. Such a solution would enable them to sell the deal at home and serve as a springboard for developing a different kind of relationship.

This report presents a blueprint for achieving that agreement. It is guided by four objectives: building a firewall between Iran’s civilian and potential military nuclear capabilities by constraining the most proliferation-prone aspects of its nuclear program; enhancing transparency by establishing rigorous monitoring and verification mechanisms; ensuring implementation and deterring non-compliance by establishing objective and compulsory monitoring and arbitration mechanisms, as well as by devising, in advance, potential responses to breaches by either party; and bolstering the parties’ incentives to remain faithful to the agreement by introducing positive inducements rather than purely negative ones.

A comprehensive agreement based on these principles should be implemented in three phases, the first of which would start with steps that clearly demonstrate the parties’ commitment to the process and provide them with immediate tangible benefits, while delaying the heavy lifting until their investment in the process is greater, the costs for withdrawing higher and at least some sceptics have bought into the process.

The basic elements of the approach include:

  • permitting Iran a contingency enrichment program that could be dialled up in the event of nuclear fuel denial, though constrained enough that any breakout could be promptly detected and, through a defined response, thwarted;
  • converting the heavy-water research reactor in Arak to diminish the amount of plutonium it produces;
  • transforming the bunkered facility in Fordow into a proliferation-resistant research and development centre;
  • introducing transparency measures that exceed Iran’s existing obligations but conform with its legitimate security and dignity concerns and that the P5+1 should acknowledge will be temporary;
  • providing Iran significant but reversible sanctions relief in the early stages of the comprehensive agreement, followed by escalating further relaxation, including open-ended suspension or termination of restrictions in accordance with progress on the nuclear front;
  • establishing positive incentives by strengthening trade ties, and increasing civilian nuclear and renewable energy cooperation between the parties; and
  • coordinating messages to reassure both sides’ regional allies and rivals, and to avoid inciting hardliners as leaders sell the agreement at home.

The detailed recommendations that follow lay out this path in 40 actions. It is a path that carries risks for both sides. There is no guarantee that Iran will remain faithful to its commitments after international attention shifts. Nor is there certainty that the U.S. Congress will accept the deal and provide the president with the necessary authority on sanctions.

These risks notwithstanding, the alternatives are less attractive. A series of partial, interim deals would lessen the chances of reaching a final agreement, fall short of satisfying either party and strengthen hardline critics. A return to the status quo ante, with each side ratcheting up its leverage in the hope of forcing the other to capitulate, would very possibly lay the tracks for a scenario in which Iran attains a nuclear bomb while sanctions cause it grave harm. Most dangerous would be a military strike, which could set back Iran’s nuclear march temporarily, but at the cost of spurring it to rush toward the ultimate deterrent, while retaliating in a variety of asymmetric or non-conventional ways, with unpredictable but certainly tragic regional ramifications.

If odds of the talks collapsing are high, the stakes of failure are higher. At the very least, a breakdown would reduce the possibility of success later, as it would erode trust and stiffen positions. The region and the world will be a safer place for a compromise that protects everyone’s core interests, contains Iran’s nuclear program and rehabilitates the country’s economy and international standing.

RECOMMENDATIONS

Upon signing the comprehensive agreement

To the government of Iran:

1.  Reaffirm that in accordance with the Supreme Leader’s fatwa, it will never seek or develop nuclear weapons and will apply facility-specific safeguards, based on Information Circular 66 of the International Atomic Energy Agency (IAEA), to all its current and future enrichment and nuclear fuel fabrication facilities.

2.  Declare a policy of maintaining an Open Fuel Cycle; ie, refrain from reprocessing spent fuel.

3.  Accept to maintain a “zero-stockpile” of enriched uranium, by converting any stockpile of fissile material in the form of uranium hexafluoride or uranium oxide powder to nuclear fuel rods in a short period of time; and pledge not to build any reconversion lines.

To the P5+1 (China, France, Russia, the UK, U.S. plus Germany):

4.  Endorse the comprehensive agreement via a new UN Security Council resolution.

5.  Provide legally-binding guarantees to supply fuel for Iran’s nuclear power and research reactors.

6.  Refrain from imposing any additional nuclear-related sanctions.

Phase I: For a period of one to two years following the signing of a comprehensive agreement

To the government of Iran:

7.  Limit its uranium enrichment capacity to a contingency program capped at 6,400 SWU in one facility (Natanz). Relocate any excess centrifuges from Fordow and Natanz’s Hall A to Natanz’s Hall B for storage under the IAEA’s seal and video surveillance.

8.  Cooperate with the P5+1 on fuel manufacturing in Isfahan in order to convert Iran’s entire stockpile of 5 and 20 per cent low-enriched uranium into fuel rods by the end of this period.

9.  Convert Fordow into a research and development facility at which only individual machines could be tested. The net enrichment output should be zero, as products and tails are recombined at the end of the process. Other non-enrichment related nuclear research also could take place at the facility. More advanced machines could be tested in a maximum of two interconnected cascades in Natanz, with the IAEA allowed to evaluate their enrichment capacity. Also, limit enrichment capacity per centrifuge in the R&D sector at all facilities to 5 SWU/year.

10.  Modify the Arak heavy-water reactor, in cooperation with the P5+1, so that it operates, at a lower power level, on 5 per cent enriched uranium; allow either in-house inspectors or remote surveillance to monitor the facility upon introduction of nuclear material; agree to ship out its spent fuel as soon as it can be transported safely; and halt the production of natural uranium oxide fuel.

11.  Implement all elements of the Additional Protocol of the IAEA, modified Subsidiary Arrangement Code 3.1 and all the additional enhanced safeguards and transparency measures outlined in the 24 November 2013 Joint Plan of Action signed with the P5+1.

12.  Manufacture, assemble and test centrifuges and their parts only in locations open to IAEA inspections; allow the agency to tag the produced centrifuges for accountancy purposes; and declare the stocks of raw material to the IAEA.

13.  Limit mining, milling and conversion of uranium to levels commensurate with enrichment activities, and allow the IAEA to conduct regular material accountancy measurements at the uranium conversion plant in Isfahan.

14.  Resolve satisfactorily with the IAEA all past and present issues related to the “possible military dimensions” of the nuclear program and take all necessary corrective measures.

15.  Ratify the 1994 IAEA Convention on Nuclear Safety, consistent with the respective prerogatives of the executive and legislative branches of the Iranian government.

To the P5+1:

16.  State that they reject categorically any armed attack or threat against nuclear facilities devoted exclusively to peaceful purposes and deem any such coercive action a violation of the principles of international law and specifically of the UN Charter and IAEA Statute.

17.  Extend and expand the suspension of all sanctions outlined in the Joint Plan of Action; and delist Iranian banks and nuclear organisations blacklisted by the UN Security Council resolutions.

18.  Release half of Iran’s frozen oil proceeds in monthly instalments, allow repatriation of future oil revenue and release Iran’s impounded assets under U.S. Executive Order 13599.

19.  Resume gradually European imports of Iranian petroleum and lift the EU transaction threshold on permissible trade with Iran.

20.  Lift the ban on providing financial messaging services to Iranian banks and permit trading in Iranian currency (the Rial); rescind designation of Iran as a jurisdiction of primary money laundering concern; and permit U-turn transactions in U.S. dollars.

21.  Facilitate further humanitarian trade with Iran.

22.  Cooperate with Iran to modify the Arak reactor, provide its fuel manufacturing technology or fuel upon completion and sell Iran medical isotopes at market prices.

23.  Confirm that any report by the IAEA regarding Iran’s past nuclear activities will be reported to the agency’s Board of Governors and the Security Council for information purposes only.

24.  Collaborate with Iran on issues of safety for nuclear power plants and research reactors, including assessment of risks, promotion of safety-oriented solutions and research on nuclear applications in medicine and agriculture.

Phase II: For a period of five to seven years after successful completion of Phase I

To the government of Iran:

25.  Ratify the 1996 Comprehensive Nuclear Test-Ban Treaty in accordance with the Supreme Leader’s fatwa against nuclear weapons.

26.  Increase its uranium enrichment capacity to a contingency program capped at 9,600 SWU; maintain the limit on enrichment capacity per centrifuge in the R&D sector at all facilities at 5 SWU/year

27.  Limit mining, milling, and conversion of uranium to enrichment needs.

28.  Sign the 2002 Hague Code of Conduct against Ballistic Missile Proliferation.

29.  Adhere to the Nuclear Suppliers Group guidelines, and collaborate with the P5+1 to establish export control programs.

To the P5+1:

30.  Obtain the authority for lifting, suspending with open-ended waivers or otherwise relaxing the sanctions outlined in Appendix B of this report based on an agreed schedule, contingent in all cases on Iran’s compliance with its commitments.

31.  Release incrementally the second half of Iran’s frozen oil proceeds and relax sanctions on investment and provision of goods and services to Iran’s petro-chemical sector.

32.  Provide firm guarantees for Iran’s access to advanced civilian nuclear research and power reactor technology in conformity with Articles I, II and IV of the NPT.

33.  Negotiate and conclude contracts for two additional light-water research reactors and two nuclear power plants; and pledge to provide the fuel for these reactors and to repatriate their spent fuel during their entire lifespans.

34.  Transfer cutting-edge technologies related to renewable energies to Iran.

Phase III: For a period of eight to ten years after successful completion of Phase II

To the government of Iran:

35.  Ratify the Additional Protocol of the NPT.

36.  Stop implementing transparency measures beyond its Comprehensive Safeguards Agreement, the Additional Protocol and modified Subsidiary Arrangement Code 3.1 gradually, upon the IAEA’s drawing “broader conclusions” that there are no undeclared nuclear activities and materials in Iran.

37.  Limit its uranium enrichment capacity voluntarily to a contingency program capped at 19,200 SWU and limit per centrifuge enrichment capacity in the R&D sector to 10 SWU/year.

To the P5+1:

38.  Upon the IAEA drawing its “broader conclusions”, lift the remaining UN Security Council sanctions, with the exception of restrictions on procurement and export of dual-use material and technologies that will be lifted at the end of this phase.

39.  Lift sanctions incrementally on investment in and provision of goods/services to Iran’s natural gas sector, followed by similar measures related to Iran’s oil sector.

40.  The EU and other willing partners will develop a strategic energy partnership through a Trade and Cooperation Agreement and declare Iran a long-term supplier of fossil energy.

Istanbul/Tehran/Geneva/Vienna/Brussels, 9 May 2014
 
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