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The tension between Iran and the United States

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At the beginning of last summer, precisely on May 8, 2018, US President Donald J. Trump carried out one of his old projects, i.e. to explicitly walk out of the Joint Comprehensive Plan of Action (JCPOA) reached between Iran, the United States, China, France, Russia, the United Kingdom + Germany and the European Union on July 14, 2015.

 The IAEA inspectors spend 3,000 days a year, on average, checking Iran’s nuclear facilities, and so far they have not ascertained any particular Iranian infringement of the 2015 agreement.

 Immediately after the US action, the EU adopted a blocking statute, based on the fact that the USA had unilaterally stated that Iran had not publicly declared a previous nuclear programme, prior to the JCPOA.

  According to the 2015 Treaty, Iran had agreed to destroy its arsenal of medium-enriched uranium, as well as to eliminate 98% of its low-enriched uranium production, and to finally reduce the number of its gas centrifuges for the selection of isotopes by two thirds, for a period of 13 years starting from the signing of the agreement with the P5 + 1, namely the JCPOA.

 For the subsequent 15 years, in fact, Iran had committed to enrich its uranium by only 3.67% compared to the levels before the signing of the agreement, without building other centrifuges for the following 10 years as from the signing of the JCPOA, while the enriched uranium production had to be reduced to the activity of a single first-generation centrifuge.

 As previously mentioned, the EU put in place a blocking statute mainly to protect EU-based companies from the effects of US sanctions against Iran. In May 2019, however, IAEA established that Iran had basically complied with the JCPOA, except for some doubts about the number of centrifuges actually in operation.

 Immediately after the US withdrawal from the treaty, Iran reaffirmed its acceptance of the treaty of July 14, 2015, along with France, Germany and Great Britain, while the Russian Federation and China explicitly supported Iran, which stated that only the USA had unilaterally and illegally withdrawn from the agreement.

 According to President Trump, one of the political reasons for the US withdrawal from the JCPOA was the resulting strengthening of his positions during the negotiations with the North Korean leader, Kim Jong Un, while the former US President, Barack Obama, said that the US withdrawal from the treaty of July 14, 2015 left the USA torn between two equally suicidal choices: a completely nuclearized Iran or the quick breaking out of another war in the Middle East.

 The only countries supporting President Trump, against the nuclear agreement with Iran, were Saudi Arabia, the traditional enemy of the Iranian Shiites, and obviously Israel.

 The US President also added that the USA would cooperate with the EU to “put pressure” on Iran, but the European Union implemented a project, called Instrument in Support of Trade Exchanges (INSTEX), to avoid the negative effects of US sanctions on European companies. INSTEX, officially announced on 31 January 2019, is led by Per Fischer -former Head of Financial Institutions at Commerz bank -as President, and includes Simon McDonald, permanent undersecretary for foreign affairs of Great Britain, Miguel Berger, Head of the economic office at the German Foreign Ministry, and Maurice Gourdault de Montaigne, Secretary General of the French Foreign Ministry (“and of Europe”, as the official formula states). The whole body does not include senior managers of the banking system and of commercial institutions.

A political organization that has political purposes vis-à-vis Iran and the USA, not a real starting point for continuing to do business in Iran.

 Hence for many countries, including Iran, INSTEX is more a political move to differentiate themselves – with difficulty – from the USA than an effective and operational system against the US sanctions on Iran.

 On April 29, Iran announced it had set up the Special Trade and Finance Institute (STFI) to monitor the INSTEX activities and thus favour Iran-EU trade even during the US sanction regime.

 The Iranian President of STFI is Ali Askar Nouri, former consultant of Iran Zamin Bank and the Institute also includes Hamid Ghanbari, former director of the Central Bank of Iran, Farshid Farrokh, manager of the Refah Bank, and finally some other managers coming from the Iranian banking system.

 Given the low political level of the Iranian STFI, it is likely that the Iranian government does not trust the INSTEX system at all as a way to really solve the trade relations between the EU and Iran.

 The European system also implies that the profit generated from the purchase of Iranian oil by companies having their headquarters in the EU must be transferred to the INSTEX “special-purpose vehicle”.

 Nevertheless, considering the general US restrictions on the sale of Iranian oil, in all likelihood the EU “special-purpose vehicle” will be increasingly linked to ever smaller Iranian funds and hence will not be in a position to collect enough liquidity to justify reasonable trade with Europe.

 Moreover, considering that the major buyers of Iranian oil belong to non-European States, it is equally unlikely that these countries, namely China, India, Korea and Japan, will accept to transfer their payments to INSTEX.

 Moreover, considering the US regulations, even if the EU vehicle really worked, Iran could spend all the funds included in the EU mechanism only for medicines and- to a little extent – for food.

 Hence no mechanism to protect Iran-EU trade can be created unless agreements are also made with the USA.

 However, who is really hit by the US sanctions? Rather than the political and military actions of the Iranian government, what is really destroyed is Iran’s private economic sector.

 Currently the Iranian population is equal to 82 million inhabitants, with an economic ranking that places the Shiite Republic of Iran in the eighteenth position in the world.

 In the case of Iran, another reason for the economic crisis led by foreign countries is the devaluation of its national currency, namely the rial.

 The local government’s inflationary actions, the restriction of foreign currency assets and the related slowdown in growth, with an inflation rate at 13% and an unemployment rate at 12.3%, are drastic measures. This is official data from the Iranian government, which is apparently much more acceptable than real data.

 Furthermore, the Shiite regime has imposed restrictions for as many as 1,300 types of product, in addition to the escape from the dollar in transactions and the preferential use of the Euro in international trade.

 In the real exchange market, currently the rialis worth 90,000 as against the US dollar, while at the end of last year one dollar only was worth 42,840 rial. An induced Weimar-styleinflation, which is destabilizing for every social system.

 The Euro, however, is not a currency that has the characteristic of being a Lender of Last Resort, as Paolo Savona often says- hence its global use is inevitably very limited.

 Therefore the rial should still decrease by at least 10% in the exchange with the US dollar.

At official rates, bank interest is already at 24%. Hence, in these crisis contexts, the Euro is therefore not allocable, while the role of the Chinese renmimbi is growing, considering China’s vast purchases of Iranian oil – which will not last forever.

 If not to maintain a game of tensions with the USA, on the part of China, pending the trade war that inflames the two major players in global economy, namely the USA and China.

 Transfers abroad- to the EU in this specific case – cost the Iranian companies at least 20% of the total capital transferred.

 It should also be recalled that oil sales are worth only  40% of Iran’s total GDP, considering that the largest sector of the Iranian economy is services, which account for 51% of GDP, followed by tourism (12%), the real estate sector, and finally the mining sector (13%) and agriculture (still at 10%).

 What could be a possible solution? The greater economic correlation between Iran and China, considering that the commercial crisis between the United States and China is almost simultaneous to the crisis between Iran and the USA – and it has quite similar strategic potentials.

 Hence for the United States the effects will be the maximum pressure available against Iran, in addition to greater US military presence in the Middle East and the damage caused by the USA to the European allies still tied to the signing of the 2015 JCPOA.

  It is also impossible not to think about the inevitable negative reactions on the Nuclear Non-Proliferation Treaty, already under pressure from various parts.

 Moreover, the bilateral relations between China and Iran are still growing significantly, at economic, political and strategical levels.

 Furthermore, China currently imports 11% of its oil from Iran, in addition to an investment of over 5 billion US dollars for the technological upgrading of the refining and transport of oil and gas.

 China has also invested in the urban transport system, particularly in the Tehran subway, as well as in regional motorways and in the Mehran Petrochemical Complex, in addition to a credit line of the Chinese State financial holding (CITIC) to the Iranian government, amounting to over 10 billion US dollars.

 The China Development Bank has also guaranteed additional 15 billion US dollars – up to a transfer of capital – between Iran and China, which, as stated by Hassan Rouhani, the current leader of the Iranian government, are expected to reach 600 billion US dollars.

  Currently Iran is China’ second trading partner, after the United Arab Emirates, and is also capable of permanently supplying the Shiite republic with advanced weapons.

  Therefore, it is a real “substitution of Iran’s imports” both from the EU and, obviously, from the USA, which enables China to create an economic and military outpost in the Persian Gulf, capable of opposing – in a short lapse of time-the US strategic presence in the region. Not to mention the EU countries’ military set-up and arrangement in the Middle East.

 Moreover, also the USA knows that, considering the asymmetric structure of Iran’s military forces, a clash with Iran could be very costly and even burdensome for the United States, which probably could barely penetrate the Gulf, while it is still believed that a direct North American action on Iranian soil is currently ever more difficult.

 Meanwhile, Iran is struggling to create new markets for its oil, in areas that cannot be integrated into the JCPOA and the US system.

 The target countries of Iran’s expansion are Brazil, China – as usual – but also India, which can be decisive today, considering that the Iranian production reached only 400,000 barrels per day last May, less than half of the sales in the previous month and even below the 2.5 million barrels per day of April 2018.

Everything started with an annual income from Iranian oil of approximately 50 billion US dollars.

  Currently, however, according to US experts, oil proceeds have fallen by at least 10 billion US dollars, after the US re-imposing full sanctions last November.

 The situation is still better for Iranian exports – also to Turkey – of petroleum by-products, such as urea, but above all for the sales of natural gas, liquefied petroleum gas, biofuel, methanol, and even other non-oil energy products.

 Iran accepts payments either in currencies other than the dollar or with the old trade-in system, which is a traditional and widespread system in the oil world.

 However, let us revert to the bilateral political crisis between the USA and Iran.

 After the sanctions renewed by President Trump, Iran has started again to enrich uranium to 20% and has also announced it would update the Arak reactor, which was part of the Iranian military system and produced plutonium.

 Moreover, Iran claims that the Arak reactor is still subject to the JCPOA rules and that its productive activity will end soon.

 In Natanz, another important centre for the Iranian production of enriched uranium, the extraction of isotopes has increased significantly. As Iranian leaders themselves say, this extraction should be increased by 400% compared to the JCPOA rules.

 It should be recalled that the treaty of July 14, 2015 limits the production of uranium to 300 kilos of uranium hexafluoride (UF6), which has a real content of active and useful uranium to the tune of 202.8 kilos.

 On a strictly military level, the USA has already sent to the Persian Gulf region a group of warships, including the aircraft carrier Abraham Lincoln and four destroyers armed with missiles. Furthermore, some B-52 bombers have been deployed in the Al-Obeid US base, Qatar, in addition to over 120,000 soldiers, distributed in the various US facilities in the Middle East, although President Trump has said that the shipment of these troops is a fake news.

 Nevertheless, this shipment has recently been confirmed by the US Administration.

 However, on May 12 last, Iran’s Revolutionary Guards, the so-called Pasdaran, attacked four-seven large commercial ships in the port of Fujrairah, one of the great world hubs in oil maritime trade. Other data has not been provided to the press.

 Allegedly, they were vessels belonging to companies based in the United Arab Emirates.

 It is also likely that at least two of those ships were of Saudi nationality.

  Another attack of obscure Iranian origin occurred on May 19, when a Katjuscia rocket was fired against the US Embassy in Baghdad, but without causing victims.

 On May 14, however, Supreme Leader Ali Akhbar Khamenei said that “there would be no war against America”. At the same time, however, the Iranian Rahbar does not want to re-open the nuclear talks with the United States.

  Both because Khamenei does not want to give the impression of rapidly succumbing to the United States – and here the Shiite regime could even self-destruct – and because, in all likelihood, reopening negotiations would imply the end of Iran’s nuclear ambitions.

 It should be noted that there is also the oil issue for the USA itself.

 Tension in the Gulf leads to a fast and significant increase in all OPEC crude oil prices while, even considering its higher extraction costs, the US oil is also capable of producing profit, in a context of quick and uncontrollable growth in the OPEC oil barrel prices.

The United States has now reached a production of at least 2.5 million barrels per day, which makes the USA attentive to any possible useful hedging on OPEC oil, with a view to exploiting any geopolitical crisis that – in the oil market – always has immediate consequences on the oil barrel price.

  It should also be noted that the Strait of Hormuz is twenty miles wide. It is technically impossible for Iran to control or block it all.

 Iran, however, can use strong cyberattacks against the oil networks of the neighbouring States that, in various ways, are also all linked to Saudi Arabia.

 Nevertheless, Saudi Arabia and the United Arab Emirates have alternative pipelines that can easily bypass the Strait of Hormuz.

 Even in the case of an Iranian unconventional attack, Saudi Arabia can sell at least 6.5 million barrels per day and currently the USA is much less exposed to an oil shock like those of the 1970s, given that the American economy is less oil-dependent and particularly considering that the national production of American (and Canadian) oil and gas is such as to ensure an acceptable level of oil use, even without the North American purchases from OPEC countries.

 In 2019, however, China has agreed to keep on buying oil and gas at low prices in Iran, at a level ranging between 700,000 and 800,000 barrels per day.

 Iran has no interest in dealing with the United States, right now that a new presidential election cycle is starting.

  On June 8 last, Iran officially declared that it would break some other restrictions included in the JCPOA if the 2015 treaty continues not to provide the expected economic benefits to Iran.

 The remaining parties that adhered to the JCPOA have recommended Iran to comply – even unilaterally – with the agreement of July 14, 2015 – and these countries are China and the United Kingdom.

 The EU, however, will continue to carry out checks on Iran’s compliance with the JCPOA, both in the collection of heavy water and in the production of enriched uranium, which is essential for building nuclear weapons.

 On a strictly economic level, Iran has abolished the oil subsidy regime for the population – a cost of 38 billion US dollars a year, equal to approximately 20% of GDP.

 As both the International Monetary Fund and the World Bank have noted, this is the first aspect to be kept in mind.

 Nevertheless, in a context like the sanction regime, it is impossible to maintain a policy of internal liberalizations.

 However, on a purely strategic level, what could all this mean, insofar as a permanent geoeconomic clash is emerging between Iran and the United States?

 For example a much harder and more continuous war in the Lebanon than we have already experienced.

 Or a clash with Israel involving Assad’ Syrian Army, the Hezbollah, some units of Iran’s Revolutionary Guards and even Hamasin the South.

 A long-term war capable of slowly consuming both the material and soldiers of the Jewish State and its  international support.

 Or a new war in Syria, between the Golan Heights and the areas close to Damascus, forcing Russia to play a military role in Assad’ Syria and creating a clash between Israel and Russia, again on Syria alone.

Or another possibility could be a direct confrontation between Israel and Iran, with airstrikes on the territory of the Shiite republic and the whole panoply of means available for non-conventional actions.

 Or finally a clash throughout the Middle East, with the possible presence of Saudi Arabia and Iran’s coordination of all Shiite forces inside and outside the opposing countries.

 It is from this viewpoint that we must evaluate the above mentioned strengthening of the US military structure throughout the Middle East.

 It should also be noted that the 120,000 US military to be deployed in the various US bases in the region are more or less the same – in number – as those that were used in the attack on Saddam Hussein’s Iraq in 2003.

 Meanwhile, the economic crisis is tightening on Iran: last March oil exports fell drastically up to reaching only 1.1 million barrels on average, while Taiwan, Greece and Italy stopped their imports and the major importers, namely  China and India, reduced their purchases from Iran by 39% and 47% respectively.

 The more the crisis deepens in Iran, the more likely the option of a regional war – probably triggered by Iran – becomes.

 The probable clash between Iran and the United States, Israel and Saudi Arabia must be assessed in the framework of this very weak balance between a possible anti-Shiite war and a careful evaluation of the effects and results of a probable war against Iran and on how it will leave the Middle East.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Netanyahu-Pompeo secret meeting with MBS: A clear message to Joe Biden and Iran

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Israeli media reported on Monday, November 24, 2020, that Netanyahu had secretly traveled to Saudi Arabia on Sunday to meet with Saudi Crown Prince Mohammed bin Salman and US Secretary of State Mike Pompeo. According to some media reports, the meeting took place in the city of Neom on the Red Sea coast, and was attended by Yossi Cohen, the head of Mossad, the Israeli intelligence and security service, but Benny Gantz, the Minister of Defense, and Gabi Ashkenazi, the Israeli Foreign Minister, They were not during this trip. Although some claim that Netanyahu and Mohammed bin Salman have met before, this secret trip is very important in this sensitive situation. That means less than two months before the end of the Trump administration, the US move could have far-reaching implications for Middle East countries, regional security policies and the future of their relations with Israel.

On the other hand, the Donald Trump administration has helped mediate an Israel’s peace agreement with neighboring Saudi Arabia, the United Arab Emirates, Sudan and Bahrain. The normalization of relations between Israel and Saudi Arabia, as one of the most important Muslim countries in the Middle East, has always been on the agenda of the administration of US President Donald Trump and he hopes to lead Saudi Arabia and Israel to an agreement. About two months ago, the UAE and Bahrain signed a joint statement in Washington on a commitment to peace called the “Ibrahim Agreement” with Israel. The agreement has been described as a turning point in the official relations between the Arab states and Israel in recent decades. Following the announcement of the agreement, Mohammed bin Salman welcomed Saudi Arabia’s efforts to improve Israel’s relations with the Arab world, but stressed that his country wanted a permanent solution to the Palestinian question.Therefore, in this text, by examining the reasons for this secret trip, the possible consequences for the future security of the Middle East region as well as regional coalitions towards Iran have been explained.

The normalization of Arab countries’ relations with Israel has been largely due to their shared concerns about Iran. However, the interesting thing about this secret trip is that the Saudi authorities deny it. This means that Saudi Foreign Minister Faisal bin FarhanAl-Saud tweeted: “I have seen press reports about a purported meeting between HRH the Crown Prince and Israeli officials during the recent visit by @SecPompeo. No such meeting occurred. The only officials present were American and Saudi”.However, Saudi Arabia does not talk about this trip for various reasons, which could include the following: 1) Saudi Arabia is the cradle of the Islamic world and is not yet internally ready to establish open relations with Israel. However, Saudi Arabia is the most important country in the Arab world, and the normalization of relations with Israel will allow other Arab countries in the region to follow the path of other countries to establish relations with Israel. 2) Saudi Arabia stated in the Arab League that it does not allow direct flights to Israel and does not even allow Israeli planes to cross the skies of Riyadh, and if it does so and establishes a relationship with Israel, its credibility will be reduced. Saudi Arabia has said in the past that it will only recognize Israel if the Palestinians achieve an independent state. Israelis also usually travel to Saudi Arabia with a special permit or with foreign passports, most of whom are Muslims, a pilgrimage to Saudi Arabia.

Send a clear message to Joe Biden’s government

After the Trump administration came to power in 2016, the Israeli and Saudi sides were very happy. This means that the foreign policy of the Obama administration (2008-2016) in the Middle East was not very satisfactory for Saudi Arabia and Israel. That is why the actions of the Trump administration, and especially the efforts of Jared Kushner and Pompeo to improve relations with Israel, Saudi Arabia and other countries, have improved their regional situation. For Examples can mentioned US-Saudi military agreements and the withdrawal from the nuclear deal with Iran, maximum pressure on Iran, the Century Deal Plan to resolve the Israeli-Palestinian conflict, the relocation of the US Embassy from Tel Aviv to Jerusalem, and normalization Israel’s relations with Arab countries such as the UAE, Bahrain and Sudan. However, with the end of the Trump administration’s presidency in less than two months, concerns have grown for Joe Biden as the next US president for Israel, Saudi Arabia and other Middle Eastern countries.

Therefore, one of the main points of this trip is to send a clear message to the Biden administration to show that Israel and Saudi Arabia are in the same direction on regional issues, especially confronting Iran, and that the Biden administration must continue the path of the Trump administration. Although it should be noted that Israel’s relationship with the Democratic Party has warmed over the past half century, it is imperative that any government that wants to rule in the United States must pay special attention to Israel’s interests and security. Perhaps one of the levers of pressure on the US government is the powerful Zionist lobbies in the United States, which play a special role in US security strategy and foreign policy. Thus, the secret meeting between Mohammed bin Salman, Netanyahu and Pompeo means that Saudi Arabia considers the US presence in the Middle East necessary and to maintain security in the region.

Maintaining a regional coalition against Iran

Another reason for this trip is the issue of Iran. This means that during the four years of the Trump administration, the toughest measures were taken against Iran, which was acceptable to Saudi Arabia and Israel. These include the unilateral withdrawal from the nuclear deal in 2018, maximum pressure on Iran and further economic sanctions, the assassination of Qasem Soleimani in Iraq, the formation of a regional coalition against Iran, and attacks on Iranian forces in Syria and Iraq. Israel considers Iran its greatest enemy, and Saudi Arabia, which cut ties with Iran four years ago, sees the Islamic Republic as a serious rival and threat.

But in his remarks, Biden said a return to a nuclear deal with Iran had raised concerns in Saudi Arabia and Israel. Saudi Arabia and Israel have openly sent a message to Biden that Riyadh and Tel Aviv will continue the Trump-formed coalition against Iran, and that Biden must follow Trump’s lead, keep up the pressure on Iran, and respond to Iran’s regional presence, ballistic missiles, nuclear deal, and tensions in regional crises such as Iraq and Syria. On the other hand, Saudi Arabia and Israel, in order to maintain their security, want the United States to be present in the region and, as the leader of the region, to be able to reduce the growing influence of Iran and Russia. Therefore, the main demand of Saudi Arabia and Israel from the Biden government is that Iran must abide by all its obligations.

Netanyahu also met with Mohammed bin Salman and Mike Pompeo after the media reported about two weeks ago that the Trump administration was planning a series of new sanctions against Iran in the final weeks of its work, in coordination with Israel and several Gulf Arab states. The reason for such a move is the increase in non-nuclear sanctions and the increasing pressure on Iran to make it harder for the Biden administration to return to the nuclear deal. Both the United States and Saudi Arabia and Israel are waiting for the next government in Iran. It is unlikely that the Biden government will consider the Iran issue as one of its priorities in the next year. Economic problems and the Corona crisis will be the most important issues for the Biden government.

Changing the security balance in the Middle East

Less than two months after the end of the Trump administration, some believe that there is a possibility of changing the regional balance. This means that there is a possibility of a limited military attack and covert operation by the US-Israel-Saudi Arabia against Iran and the government of Bashar al-Assad. A claim that may be different from reality. Although some see, the transfers of the B-53 bomber to the region as an important reason for this, Israel and Saudi Arabia themselves know that entering into a limited war with Iran could make things difficult for them. Saudi Arabia and Tel Aviv believe that with the advent of the Biden government and its multilateral policy on regional issues and the possible return to a nuclear deal with Iran, crises in Iraq, Syria, and Yemen may continue, with the threat of Iran and its influence. Security will change the region to the detriment of Saudi Arabia and Israel.

Therefore, before the end of Trump’s presidency, they are trying to form a US-Israel-Saudi regional alliance to maintain the balance of power so that it can somehow intensify it during Biden. With Biden in office, the Middle East regional order appears to be moving toward security, and tensions between key regional actors such as Saudi Arabia and Israel and Iran are spreading. Finally, Russia’s mediating role should be mentioned. As an important regional player, it has been able to maintain the balance of power between the countries of the region and has been recognized as an important winner in regional crises. Russia’s relations with Iran, Saudi Arabia and Israel are going well, which is why Riyadh and Tel Aviv want US support to counter Iran. Although Russia is also pursuing its own national interests, it will try to take advantage of the tensions between these actors and undermine the US unilateral presence.The trip is for reasons such as sending a clear message to the next US administration and Joe Biden to cooperate fully with Riyadh and Tel Aviv, and on the other hand, to continue to put maximum pressure on Iran and balance regional powers in favor of Saudi Arabia and Israel.

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Iranian nuclear problem again: The storm clouds are gathering

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The nuclear problem of Iran is once again becoming the focus of global media attention, and there are several reasons for this.

First, US President-elect Joe Biden (although no official results of the November 3 vote have been announced yet), who generally rejects the foreign policy of the current President Donald Trump, said that he will make  America’s return to the landmark Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, one of his administration’s main priorities. The announcement was certainly not lost on political scientists, analysts and journalists, who started actively discussing the new situation around the Iranian nuclear problem.

Second, this renewed interest in the future of the 2015 accord is also explained by the “persistence” of the Trump administration, which, 60 days now left  before it will be moving out of the White House, is ramping up its  traditional “maximum pressure” on Iran by introducing a new set of sanctions…

Third, this is the internal political struggle in Iran, now that President Hassan Rouhani – one of the main authors of the JCPOA – is due to step down when his second term in office expires in 2021.

Rouhani’s upcoming departure has been a boost to the conservative radicals predominant in the government, who are all set to step up their fight against the JCPOA. Indeed, their discontent was directed not so much at Washington, as at President Rouhani, who in their opinion, which has been gaining popularity at home, made a mistake by joining President Barack Obama in creating the JCPOA. This means that Rouhani’s successor may be less open to communication with the West, and, to a certain extent, unwilling to abide by the terms of the agreement.

Throughout Donald Trump’s four years in the White House, President Rouhani has been trying hard to keep the JCPOA alive and give diplomacy a chance even though Supreme Leader Ayatollah Khamenei has increasingly warned against contacts with Washington, especially since President Trump unilaterally withdrew from the nuclear accord in 2018.

However, mindful of the Trump administration’s aggressive policy towards the Islamic Republic, exactly a year after the US pullout from the JCPOA, the Iranian leadership began to gradually scale back its commitments under the nuclear deal.

Meanwhile, the “nuclear situation” in Iran now looks rather alarming and even dangerous.

In a confidential report circulated to member states on November 10, the International Atomic Energy Agency (IAEA) said that, as of November 2, Iran’s stockpile of low-enriched uranium had reached 2,442.9 kilograms, which is 12 times the amount allowed under the JCPOA. Under the agreement, Iran is only allowed to produce up to 300kg of enriched uranium in a particular compound form (UF6), which is the equivalent of 202.8kg of uranium.

The IAEA added that Iran was continuing to enrich uranium to a purity of up to 4.5% – in violation of the 3.67% threshold agreed under the 2015 deal.

According to the UN nuclear watchdog’s latest quarterly report, Iran has completed the deployment of the first set of advanced uranium enrichment centrifuges at an underground facility in Natanz. Tehran had earlier informed the IAEA of its intention to transfer three cascades of advanced centrifuges to Natanz. The first cascade of IR-2m centrifuges, has already been installed and connected, but is not yet operational, since gaseous uranium hexafluoride, the feedstock for the production of enriched uranium, is not yet supplied to the system. The Iranians are also installing a second cascade of more efficient IR-4 centrifuges. A third cascade of IR-6 centrifuges is now in the pipeline.

Moving underground equipment previously located on the surface, and using more advanced centrifuges than the first generation IR-1 units is a violation of Tehran’s obligations under the JCPOA.

The Natanz nuclear facility, located about 200 kilometers south of Tehran, is an advanced complex, consisting of two main facilities – the Experimental Plant, commissioned in 2003, and the Industrial Plant, commissioned in 2007. The latter consists of two underground reinforced concrete buildings, each divided into eight workshops. The plant is well protected against air strikes with an almost eight-meter-thick high-strength concrete roof, covered with a 22-meter layer of earth.

In late October, IAEA Director General Rafael Grossi confirmed that Iran is also building an underground facility in Natanz to assemble centrifuges of a new generation, more productive and efficient. This is equally at variance with the terms of the JCPOA accord, which has suffered erosion and destabilization since the US withdrawal.

Just as Academician Alexey Arbatov very aptly noted in his article “Iranian Nuclear Perspective”: “There is no reason for such underground structures and, accordingly, for colossal additional costs if, as Tehran says, they are for peaceful nuclear energy generation. References to the threat of an Israeli air strike are equally unconvincing, since what we are talking about is ‘peaceful atom.’ Indeed, all other elements of the nuclear industry are not protected from an airstrike and can be destroyed if the enemy seeks to prevent the development of peaceful, rather than military, nuclear energy in Iran. History knows only two examples of similar underground nuclear power projects: an underground nuclear power plant (Atomgrad) built by the Soviet Union near Krasnoyarsk to produce weapons-grade plutonium, and a uranium enrichment complex, apparently being built in the mountains of North Korea. Both of a military nature, of course, meant to produce weapons-grade nuclear materials even during the war, despite air strikes.”

Judging by the latest IAEA report, the agency is also unsatisfied with Tehran’s explanations about the presence of nuclear materials at an undeclared facility in the village of Turkuzabad (about 20 km south of Tehran), where man-made uranium particles were found last year, and continues to consider the Iranian response “technically unreliable.”

In his November 13, 2020 report about the agency’s work to the UN General Assembly, IAEA Director General Rafael Grossi said that the IAEA continues to verify the non-proliferation of nuclear materials pledged by Iran in keeping with the terms of its Safeguards Agreement. In August, Grossi visited Tehran and met with President Rouhani and other senior Iranian officials. During the visit, the sides agreed to settle certain issues pertaining to the implementation of safeguards, including IAEA inspectors’ access to two facilities in Iran. Inspections have since been carried out at both locations and environmental samples taken by inspectors are being analyzed.

“I welcome the agreement between the agency and Iran, which I hope will reinforce cooperation and enhance mutual trust,” Rafael Grossi summed up.

Even though Iran is formally de jure involved in the nuclear deal, the hardline conservative majority in the country’s political elite opposed to the JCPOA has taken a new step towards Iran’s withdrawal from the NPT.

In a statement issued on November 11, 2020, Khojat-ol-eslam Mojtaba Zonnour, chairman of the National Security and Foreign Policy Committee of the Mejlis (Iranian parliament), said that the MPs had approved (but not yet passed as law) a “Strategic Plan for Countering Anti-Iranian Sanctions.”

According to the “Plan,” upon its approval in parliament, the government shall suspend within the next two months any access by IAEA inspectors outside the provisions of the Additional Protocol.  And also, if Iran’s banking relations with Europe and Iranian oil sales do not return to normal within three months after the adoption of the law, the government is to stop voluntary implementation of the Additional Protocol.

The Iranians insist that the level of cooperation that has in recent years been going on between Tehran and the IAEA in monitoring the country’s nuclear program was even higher than what is envisaged by the Additional Protocol, including their introduction of a special checkup regime for IAEA inspectors. Moreover, Tehran never misses a chance to remind that before the JCPOA, Europe was buying between 700,000 and one million barrels of Iranian oil a day, and that economic and banking relations were normal.

Mojtaba Zonnour emphasized that the United States walked out of the JCPOA in order to impose new sanctions on the Islamic Republic, adding that the Europeans had failed to meet their obligations under the JCPOA and had been cheating Iran for several years. He also noted that in keeping with the “Strategic Plan for Countering Anti-Iranian Sanctions” the IAEA will only be allowed to monitor the implementation of the Safeguards Agreement and the NPT requirements.

Upon its approval by the Mejlis, the “Plan” envisions a radical refusal by Iran to comply with a number of key obligations under the JCPOA.

Thus, the Fordow nuclear fuel enrichment plant, redesigned in line with the JCPOA requirements into a research center, will again become a plant for the production of enriched uranium. The number of new IR-6 centrifuges there will be increased to 1,000 by the end of the Iranian calendar year (March 20, 2021) to turn out up to 120 kg of uranium enriched to 20% a year.

The Iranians are also going to expand their enrichment capacities and bring the production of uranium enriched to 5% up to at least 500 kg per month, compared to just 300 kg allowed by the JCPOA.

Within four months from the date of the Strategic Plan’s entry into force, Tehran intends to restore the 40 megawatt heavy water reactor in Arak to the level it operated at prior to the conclusion of the JCPOA accord, which had it redesigned so that it would not be able to produce weapons-grade plutonium. In January 2016, the reactor core was dismantled.

As Mojtaba Zonnour quite frankly explained in his statement, “In the above-mentioned Plan, we determined the extent to which our nuclear activities would intensify and stated that we had abandoned the measures taken in accordance with the requirements of the JCPOA. For example, we decided to increase the level of uranium enrichment, increase the amount of uranium accumulation, bring the 40 megawatt heavy-water reactor in Arak to its pre-JCPOA state, install modern centrifuges, and the like. <…> The Plan singles out two very important points: one is that if, after we enact the law on the “Strategic Plan for Countering Anti-Iranian Sanctions,” the Europeans change their behavior and resume their commitments under the JCPOA, of if the US wants to return to the JCPOA, the Iranian government will no longer have the authority to unilaterally suspend the implementation of this law. It will need permission from parliament – it is the Majlis that makes the final decision. ”

It is worth mentioning here that in its draft law the Mejlis provides for  criminal responsibility for non-compliance by individuals and legal entities with the provisions of the law on the “Strategic Plan…” with violators facing  punishment of up to 20 years behind bars.

Enactment of the law on the “Strategic Plan for Countering Anti-Iranian Sanctions” and its implementation by the government is tantamount to Iran’s withdrawal from the JCPOA. Moreover, Mojtaba Zonnour said that the government could fast-track the adoption of the law on the “Plan,” as there is an administrative and legal opportunity for it to be formally considered by the parliamentary Commission on National Security and Foreign Policy within 10 days, and subsequently adopted by an open session of the Majlis.

This means that by the time US President-elect Joe Biden takes office on January 20, 2021, the “Plan” may have already been adopted. The Iranian authorities obviously had this date very much in mind when unveiling the “Plan” to the general public. 

On the one hand, the draft law on the “Strategic Plan for Countering Anti-Iranian Sanctions” can be seen as an attempt by Tehran to “blackmail” the new US administration, as well as Britain and the European Union, in order to achieve the main goal of lifting the sanctions even by restoring in some form the JCPOA accord (or drawing up JCPO-2), but on Iranian terms. On the other – to get a bargaining chip for a future dialogue, possibly with the very same P5+1 group of world powers (Russia, US, Britain, France, China and Germany), but now a dialogue from a position of strength.

No wonder the already familiar Khojat-ol-eslam Zonnour said: “In fact, the nature of [US] arrogance is such that when they see you weak, they put more pressure on you, and if our position against the system of domination and arrogance is weak, this does not serve our interests. Consequently, the Iranian people have the right to respond to questions from a position of dignity and strength.”

As for Khojat-al-eslam Zonnour, he is a radical politician and the fiercest opponent of the JCPOA and a rapprochement with the West in parliament.  The following statement tells it all: “Unfortunately, today some of our statesmen use expressions that are contrary to the dignity of the Iranian people, our authority and self-respect. The fact that in their tweets and comments our president and first vice president say that ‘God willing, the new US administration will return to the law and fulfill its obligations’ these are not correct or noble things to say. Such words encourage the enemy to defy its commitments, and when it doesn’t see our resolve and thinks we are passive and asking for a favor, it raises the bar and tries to score more points.

Mojtaba Zonnour’s activity can certainly be viewed as an example of a tough internal political struggle, but this way or another his views resonate with the overwhelming majority of members of the current parliament. And the issues of the JCPOA and general opposition to the United States and Europe were not invented by Zonnour alone.

Thus, we can state that the future of the JCPOA is now hanging in the balance as there are powerful forces in both Iran and the US opposed to nuclear deals between the Islamic Republic and the rest of the world.  There is still hope, however, that the economic crisis and the threat of social protests will eventually force Tehran to resume contacts with the United States and the other signatories to the JCPOA accord in order to work out conditions for lifting the sanctions.

In turn, as is evident from statements coming from US President-elect Joe Biden, his administration will be ready for a dialogue with Iran on the nuclear issue, and here the positions of Russia, China, the European Union and the UK are no less important for resolving the newly emerged Iranian nuclear problem.

Just how this negotiation process will be carried out and on what conditions is hard to say now, but there is absolutely no doubt that it is going to be extremely difficult, dramatic, contradictory and protracted. The stakes are too high, it is too important for Iran, its neighbors, the entire Near and Middle East, as well as for preserving the nuclear nonproliferation regime.

 From our partner International Affairs

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Middle East

World Powers Must Address the Nexus of Iran’s Terrorism and Diplomacy

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On coming Friday, a high-ranking Iranian diplomat will stand trial in Belgium along with three co-conspirators in a terrorist plot. The prosecution is an opportunity to hold these four individuals accountable for activities that could have harmed hundreds of advocates for democracy in the Middle East. More than that, it is also an opportunity for Western powers to reconsider their overall approach to the regime that enables and actively promotes such terrorist plots.

The trial concerns the attempted bombing of an international gathering, organized annually near Paris by the coalition of Iranian opposition groups and personalities, National Council of Resistance of Iran (NCRI). Collateral damage of the June 2018 plot could have easily included any number of the high-profile dignitaries who had traveled to the event from throughout Europe, the United States, and elsewhere. Among these were many members of parliament from across Europe, former US Ambassador to the UN Bill Richardson, former PM and Foreign Minister of Canada, Stephen Harper and John Baird, former Foreign Ministers of France and Italy, Bernard Kouchner and Giulio Terzi, and President Trump’s personal attorney, Rudy Giuliani.

This list of potential victims stands alongside the French venue as a reason why it is especially important for Western governments to offer an assertive reaction to the terror plot. Ideally, that reaction could have happened very soon after the plot’s details were revealed, particularly after it was announced that the third counsellor at Iran’s embassy in Vienna had been arrested in connection with it. But the trial of that terrorist-diplomat, Assadollah Assadi, represents another opportunity for a unified Western coalition to send a strong message to his handlers in Tehran.

Make no mistake, those handlers were guiding Assadi through the entire process. An initial, months-long investigation into the terror plot led to an announcement from the French Government which stated unequivocally that the plot had been approved at the highest levels of the Iranian regime. This finding has been corroborated every step of the way by the two-year Belgian investigation. Throughout that time, Tehran has explicitly stood behind its agent, as by trying to obstruct his extradition after he was arrested in Germany, just outside the bounds of his Austrian diplomatic immunity.

Despite those efforts to help him escape accountability, an alternative account of the terror plot has gradually emerged which suggests that Assadi was acting as a rogue agent, without the knowledge or consent of his own government. This is nonsense, and it has been appropriately and repeatedly debunked by persons with knowledge of the case, as well as by persons with a solid understanding of how the Iranian regime operates in general.

“The plan for the attack was conceived in the name of Iran and under its leadership,” wrote Jaak Raes, the head of Belgian state security services in recent communications with the media. “It was not a matter of Assadi’s personal initiative.”

It is not even clear why anyone would think otherwise, unless it is because the direct involvement of such a high-ranking diplomat doesn’t seem to be part of Iran’s usual modus operandi. This is a valid point, but the change in tactics should raise more questions about the perceived value of the target in 2018 than it does about who is ultimately responsible for setting that target. In fact, the Iranian regime’s attempted attack on the opposition gathering was predictable because Supreme Leader Ali Khamenei had personally acknowledged, that January, that the NCRI coalition was responsible for an ongoing, nationwide upsurge in unrest.

The January uprising inspired countless protests that carried the same anti-government message through the rest of the year, during which time Tehran became fixated on stamping out dissent both at home and abroad. That fixation called for more carefully managed terrorist activity than is usually channeled through the regime’s various terrorist proxies, such as Hezbollah. In essence, the 2018 terror plot only brought the role of Assadi and other Iranian diplomats into the foreground, putting him in a leadership position whereas once he might have simply channeled the regime’s instructions, financial and logistical assistance into the hands of third-party militants.

Now that the curtain has been drawn back on the regime’s existing terrorist infrastructure, the international community must carefully consider how to assure that it is never activated in this or any other way again. It will not be sufficient to just secure conviction for the 2018 conspirators, although this is certainly a step in the right direction. Major world powers should amplify the message of that conviction so the Iranian regime will have no doubts about the consequence of other such terror plots being thwarted in the future.

Many of those who attended the 2018 gathering have recently outlined some of the ways in which this message might be conveyed. In a number of online conferences they used the opportunity to advocate for enhanced economic sanctions on regime authorities, further diplomatic isolation for the regime as a whole and the application of formal terrorist designation of entities like the Islamic Revolutionary Guard Corps and the Iranian Ministry of Intelligence and Security.

Diplomatic isolation seems to be an especially contentious topic, especially when advocates raise the prospect of shuttering Iranian embassies and consulates altogether. But details of the Assadi case should receive a broader public airing next Friday and then it should become much easier for policymakers throughout the world to sign onto a foreign policy strategy that acknowledges the Islamic Republic is the furthest thing from an ordinary diplomatic partner.

Far from closing off a pathway for promoting moderation within the Iranian regime, embassy closures would actually limit the regime’s ability to convey terrorist extremism beyond its borders, sometimes even into the heart of Europe. In partnership with other assertive Western policies, this sort of diplomatic isolation can be expected to force the regime into a position where it must either fundamentally transform its behavior in order to survive or else focus exclusively on domestic affairs and risk overthrow by an increasingly restive population.

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